Document:

Unassociated Document

     

    SECURITY
      AGREEMENT

     

    This
      SECURITY AGREEMENT, dated as of March 3, 2008 (as the same may from time to
      time
      be amended, supplemented or otherwise modified, this “Security
      Agreement”),
      by
      and between the individuals and entities set forth on the signature pages hereto
      (the “Secured
      Party”)
      and
      BioGold Fuels Corporation, a Nevada corporation and
      all
      of the subsidiaries of the Company
      (collectively, the “Debtor”).

     

    
      W
        I T
        N E S S E T H:

       

    WHEREAS,
      the Company is engaged in an offering (the “Offering”)
      of up
      to $550,000 aggregate principal amount of its senior secured notes
      (collectively, the “Notes”);
      and

     

    WHEREAS,
      the Secured Party has agreed to purchase Notes; and

     

    WHEREAS,
      it is a condition precedent to the obligations of each Secured Party to acquire
      Notes that, inter alia,
      the
      Debtor execute and deliver this Security Agreement to the Secured
      Party.

     

    NOW,
      THEREFORE, the parties hereto hereby agree as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    1.1 Defined
      Terms.
      As used
      herein, capitalized terms defined in this Agreement and not otherwise defined
      herein are used herein as so defined.

     

    “Account
      Debtor”
shall
      mean the person who is obligated on a Receivable.

     

    “Accounts”
shall
      mean “accounts” as such term is defined in the UCC.

     

    “Chattel
      Paper”
shall
      mean “chattel paper” as such term is defined in the UCC.

     

    “Collateral”
shall
      have the meaning assigned to it in Article II hereof.

     

    “Collateral
      Records”
shall
      mean books, records, computer software, computer printouts, customer lists,
      blueprints, technical specifications, manuals, and similar items which relate
      to
      any Collateral other than such items obtained under license or franchise
      security agreements which prohibit assignment or disclosure of such
      items.

     

    “Commercial
      Tort Claims”
shall
      mean “commercial tort claims” as defined in the UCC.

     

    “Deposit
      Account”
shall
      mean a “deposit account” as defined in the UCC.

     

    “Documents”
shall
      mean “documents” as defined as in the UCC.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    “Equipment”
shall
      mean “equipment” as defined in the UCC.

     

    “Event
      of Default”
shall
      have the meaning assigned to it in the Notes. 

     

    “Financial
      Assets”
shall
      mean “financial assets” as defined in the UCC.

     

    “General
      Intangibles”
shall
      mean “general intangibles” as such term is defined in the UCC.

     

    “Goods”
shall
      mean “goods” as defined in the UCC.

     

    “Instruments”
shall
      mean instruments as defined in the UCC.

     

    “Inventory”
shall
      mean “inventory” as such term is defined in the UCC, including without
      limitation, all goods (whether such goods are in the possession of the Debtor
      or
      of a bailee or other Person for sale, lease, storage, transit, processing,
      use
      or otherwise and whether consisting of whole goods, spare parts, components,
      supplies, materials or consigned or returned or repossessed goods), including
      without limitation, all such goods which are held for sale or lease or are
      to be
      furnished (or which have been furnished) under any contract of service or which
      are raw materials or work in progress or materials used or consumed in the
      Debtor’s business.

     

    “Investment
      Property”
shall
      mean “investment property” as such term is defined in the UCC.

     

    “Lien”
shall
      mean any mortgage, pledge, hypothecation, assignment, deposit arrangement,
      encumbrance, lien (statutory or other), or preference, priority or other
      security agreement of any kind or nature whatsoever, including, without
      limitation, the filing of any financing statement or similar instrument under
      the UCC or comparable law of any jurisdiction, domestic or foreign.

     

    “Permitted
      Liens”
shall
      mean any of the following (1) Liens for taxes, fees, assessments or other
      governmental charges which are not yet due and payable or which are being
      contested in good faith with a reserve or other appropriate provision having
      been made therefor; (2)  Liens incurred or deposits made in the ordinary
      course of business in connection with workers’ compensation, unemployment
      insurance and other types of social security; (3) easements, reservations,
      rights of way, restrictions, minor defects or irregularities in title and other
      similar Liens not interfering in any material respect with the ordinary conduct
      of the business of the Debtor and not adversely affecting the Lien of the
      Secured Party in the Collateral; and (4) Liens in favor of the Secured
      Party.

     

    “Person”
shall
      mean and include any individual, partnership, joint venture, firm, corporation,
      association, trust or other enterprise or any government or political
      subdivision or agency, department or instrumentality thereof. 

     

    “Proceeds”
shall
      mean “proceeds” as such term is defined in the UCC.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    “Receivables”
shall
      mean all rights to payment for goods sold or leased or services rendered,
      whether or not earned by performance and all rights in respect of the Account
      Debtor, including without limitation, all such rights in which the Debtor has
      any right, title or interest by reason of the purchase thereof by the
      Debtor.

     

    “Receivables
      Records”
shall
      mean (a) all original copies of all documents, instruments or other
      writings evidencing the Receivables, (b) all books, correspondence, credit
      or other files, records, ledger sheets or cards, invoices, and other papers
      relating to Receivables, including without limitation all tapes, cards, computer
      tapes, computer discs, computer runs, record keeping systems and other papers
      and documents relating to the Receivables, whether in the possession or under
      the control of the Debtor or any computer bureau or agent from time to time
      acting for the Debtor or otherwise, (c) all evidences of the filing of
      financing statements and the registration of other instruments in connection
      therewith and amendments, supplements or other modifications thereto, notices
      to
      other creditors or secured parties, and certificates, acknowledgments, or other
      writings, including without limitation lien search reports, from filing or
      other
      registration officers, (d) all credit information, reports and memoranda
      relating thereto, and (e) all other written or non-written forms of
      information related in any way to the foregoing or any Receivable.

     

    “Secured
      Obligations”
shall
      mean all obligations, liabilities and indebtedness of every nature of the Debtor
      to the Secured Party, now existing or hereafter incurred, arising under or
      in
      connection with the Notes and this Security Agreement, as they may be amended,
      restated, supplemented or otherwise modified from time to time.

     

    “UCC”
shall
      mean the Uniform Commercial Code as the same may, from time to time, be in
      effect in the State of California; provided, however, in the event that any
      or
      all of the attachment, perfection or priority of the Secured Party’s security
      interest in any Collateral is governed by the Uniform Commercial Code as in
      effect in a jurisdiction other than the state of incorporation of the Debtor,
      the term “UCC” shall mean the Uniform Commercial Code as in effect in such other
      jurisdiction for purposes of the provisions hereof relating to such attachment,
      perfection of priority and for purposes of definitions related to such
      provisions.

     

    ARTICLE
      II

     

    GRANT
      OF
      SECURITY INTERESTS

     

    As
      security for the timely and complete payment and performance in full of all
      the
      Secured Obligations, the
      Debtor hereby unconditionally
      and irrevocably assigns,
      conveys, mortgages, pledges, hypothecates and transfers to the Secured Party
      and
      hereby grants to the Secured Party a continuing and perfected first priority
      senior security interest in and to, a lien on and a right of set-off against
      all
      of the Debtor’s right, title and interest in, to and under the following, in
      each case, whether now owned or existing or hereafter acquired or arising,
      and
      wherever located (all of which being hereinafter collectively called the
“Collateral”):

     

    All
      Goods
      (including, without limitation, Inventory and Equipment, Accounts, Receivables
      Records, Collateral Records, Investment Property, Financial Assets, Deposit
      Accounts, money,
      General
      Intangibles, Chattel Paper, Commercial Tort Claims
      and
      Proceeds
      of any
      and all of the foregoing).

     

    
      
         

      

      
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    ARTICLE
      III

     

    RIGHTS
      OF
      THE SECURED PARTY; COLLECTION OF ACCOUNTS.

     

    (a) The
      Secured Party may, at any time following the occurrence and during the
      continuance of any Event of Default which remains uncured for thirty (30) days
      after its occurrence, without
      notice to
      Debtor,
      notify
      Account Debtors of Debtor that the Accounts and the right, title and interest
      of
      the Debtor in and under such Accounts have been assigned to the Secured Party
      and that payments shall be made directly to the Secured Party. Upon the request
      of the Secured Party, the Debtor shall so notify such Account Debtors. Following
      the occurrence and during the continuance of any Event of Default, the Secured
      Party may, in its name or in the name of others, communicate with such Account
      Debtors to verify with such parties, to the Secured Party’s reasonable
      satisfaction, the existence, amount and terms of any such Accounts.

     

    ARTICLE
      IV

     

    REPRESENTATIONS
      AND WARRANTIES

     

    The
      Debtor hereby represents and warrants to the Secured Party, which
      representations and warranties shall survive execution and delivery of this
      Security Agreement, as follows:

     

    4.1 Validity,
      Perfection and Priority.

     

    (a) The
      security interests in the Collateral granted to the Secured Party hereunder
      constitute valid and continuing security interests in the Collateral;
      and

     

    (b) upon
      (i) filing financing statements (on Form UCC-1) naming the Debtor as
“debtor” and the Secured Party as “Secured Party” in the filing offices of the
      Secretary of State of the State of California, the security interests in the
      Collateral (other than money, registered copyrights, deposit accounts or
      letter-of-credit rights) granted to the Secured Party hereunder will constitute
      perfected security interests superior and prior to all Liens, rights or claims
      with respect to the Collateral of all other Persons, except for Permitted
      Liens.

     

    4.2 No
      Liens; Other Financing Statements.
      

     

    (a) The
      Debtor is the sole legal and equitable owner of each item of Collateral in
      which
      it purports to grant a security interest hereunder, and, as to all Collateral
      whether now existing or hereafter acquired, will continue to own each item
      of
      the Collateral free and clear of any and all Liens, rights or claims of all
      other Persons, except for Permitted Liens, and the Debtor shall defend the
      Collateral against all claims and demands of all Persons at any time claiming
      the same or any interest therein materially adverse to the Secured
      Party.

     

    
      
         

      

      
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    (b) No
      financing statement or other evidence of Lien covering or purporting to cover
      any of the Collateral is on file in any public office other than
      (i) financing statements filed in connection with the security interests
      granted to the Secured Party hereunder, (ii) financing statements for which
      proper termination statements have been delivered to the Debtor for filing
      and
      (iii) financing statements evidencing Permitted Liens set forth on
      Schedule A.

     

    (c) This
      Security Agreement creates a legal, valid and continuing security interest
      on
      and in all of the Collateral in which Debtor now has rights and, except with
      respect to money, registered copyrights, deposit accounts and letter-of-credit
      rights, all filings and other actions necessary or desirable to perfect and
      protect such security interest have been duly taken. Accordingly, except for
      Permitted Liens, the Secured Parties have a fully perfected first priority
      security interest in all of the Collateral in which Debtor now has rights.
      Except for Permitted Liens, this Security Agreement will create a legal, valid,
      continuing and fully perfected first priority security interest in the
      Collateral in which Debtor later acquires rights, when Debtor acquires those
      rights. 

     

    4.3 Representations
      and Covenants Related to Perfection.
      The
      Debtor represents and warrants to the Secured Party as follows: (a) the
      Debtor’s exact legal name is as indicated on page 1 of this Security Agreement
      and on the signature page hereof; (b) the Debtor is an organization of the
      type and is organized in the jurisdiction set forth on page 1 of this Security
      Agreement; and (c) each of the Subsidiaries’ exact legal name is indicated in
      the signature page hereof.

     

    ARTICLE
      V

     

    COVENANTS

     

    The
      Debtor covenants and agrees with the Secured Party that from and after the
      date
      of this Security Agreement:

     

    5.1 Further
      Assurances.
      The
      Debtor will from time to time at the expense of the Debtor, promptly execute,
      deliver, file and record all further instruments, endorsements and other
      documents, and take such further action as the Secured Party may deem reasonably
      desirable in obtaining the full benefits of this Security Agreement and of
      the
      rights, remedies and powers herein granted, including, without limitation,
      the
      following:

     

    (i) Cooperate
      with the filing of any financing statements (on Form UCC-1), in a form
      reasonably acceptable to the Secured Party under the Uniform Commercial Code
      in
      effect in any jurisdiction with respect to the Liens and security interests
      granted hereby. The Debtor also hereby authorizes the Secured Party to file
      any
      such financing statements, including without limitation continuation statements,
      and amendments thereto, in all jurisdictions and with all filing offices as
      the
      Secured Party may determine, in its reasonable discretion, are necessary or
      advisable to perfect the security interests granted to the Secured Party in
      connection herewith, without the signature of the Debtor to the extent permitted
      by applicable law. Such financing statements may describe the Collateral in
      the
      same manner as described in this Agreement or may contain an indication or
      description of Collateral that describes such property in any other manner
      as
      the Secured Party may determine, in its reasonable discretion, is necessary,
      advisable or prudent to ensure the perfection of the security interests in
      the
      Collateral granted to the Secured Party in connection herewith. A photocopy
      or
      other reproduction of this Security Agreement shall be sufficient as a financing
      statement and may be filed in lieu of the original to the extent permitted
      by
      applicable law. The Debtor will pay or reimburse the Secured Party for all
      filing fees and related expenses reasonably incurred in connection therewith;
      and

     

    (ii) furnishing
      to the Secured Party from time to time of statements and schedules further
      identifying and describing the Collateral and such other reports in connection
      with the Collateral as the Secured Party may reasonably request, all in
      reasonable detail and in form reasonably satisfactory to the Secured
      Party.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    5.2 Change
      of Name; Identity; Corporate Structure; Chief Executive Office; or Location
      of
      Inventory.
      The
      Debtor will not change its name, identity, corporate structure or the location
      of its chief executive office or location of its Inventory (other than sales
      of
      Inventory in the ordinary course of business) without (i) giving the
      Secured Party at least thirty (30) days’ prior written notice clearly describing
      such new name, identity, corporate structure or new location and providing
      such
      other information in connection therewith as the Secured Party may reasonably
      request, and (ii) taking all action satisfactory to the Secured Party as
      the Secured Party may reasonably request to maintain the security interest
      of
      the Secured Party in the Collateral intended to be granted hereby at all times
      fully perfected with the same or better priority and in full force and effect.
      

     

    (a) Maintain
      Records.
      The
      Debtor will keep and maintain at its own cost and expense reasonably
      satisfactory and complete records of the Collateral.

     

    5.3 Insurance.
      The
      Debtor will maintain, with financially sound and reputable insurers insurance
      with respect to the Collateral and its use, against loss or damage of the kinds
      customarily insured against by reputable companies in the same or similar
      businesses, similarly situated, such insurance to be of such types and in such
      amounts (with such deductible amounts) as is customary for such companies under
      the same or similar circumstances

     

    5.4  Payment
      Obligations.
      The
      Debtor will pay promptly when due all taxes, assessments and governmental
      charges or levies imposed upon the Collateral, as well as all claims of any
      kind
      (including, without limitation, claims for labor, materials, supplies and
      services) against or with respect to the Collateral, except that no such charge
      need be paid if (i) the validity thereof is being contested in good faith
      by appropriate proceedings, (ii) the Debtor has promptly notified the
      Secured Party of the existence of such proceedings and such proceedings do
      not
      involve, in the good faith and reasonable opinion of the Secured Party, any
      material danger for the sale, forfeiture or loss of any material portion of
      the
      Collateral or any material interest therein and (iii) such charge is
      adequately reserved against on the Debtor’s books in accordance with generally
      accepted accounting principles.

     

    5.5 Negative
      Pledge.
      Without
      the consent of the Secured Party, the Debtor will not create, incur or permit
      to
      exist, will defend the Collateral against, and will take such other action
      as is
      necessary to remove, any Lien or claim on or to the Collateral, other than
      the
      Liens created hereby and other than Permitted Liens.

     

    5.6 Limitations
      on Dispositions of Collateral.
      Without
      the consent of the Secured Party, the Debtor will not sell, transfer, lease
      or
      otherwise dispose of any of the Collateral, or attempt, offer or contract to
      do
      so, except for sales of Inventory in the ordinary course of its
      business.

     

    
      
         

      

      
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    ARTICLE
      VI

     

    REMEDIES;
      RIGHTS UPON DEFAULT

     

    6.1 Rights
      and Remedies Generally.
      If an
      Event of Default shall occur and be continuing, then and in every such case,
      the
      Secured Party shall have all the rights of a secured party under the UCC, shall
      have all rights now or hereafter existing under all other applicable laws,
      and,
      subject to any mandatory requirements of applicable law then in effect, shall
      have all the rights set forth in this Security Agreement and the
      Notes.

     

    6.2 Assembly
      of Collateral.
      If an
      Event of Default shall occur and be continuing, upon five days’ notice to the
      Debtor, the Debtor shall, at its own expense, assemble the Collateral (or from
      time to time any portion thereof) and make it available to the Secured Party
      at
      any place or places designated by the Secured Party which is reasonably
      convenient to both parties.

     

    6.3 Disposition
      of Collateral.
      The
      Secured Party will give the Debtor reasonable notice of the time and place
      of
      any public sale of the Collateral or any part thereof or the time after which
      any private sale or any other intended disposition thereof is to be made. The
      Debtor agrees that the requirements of reasonable notice to it shall be met
      if
      such notice is mailed, postage prepaid to its address specified in
      Section 7.4 of this Security Agreement (or such other address that the
      Debtor may provide to the Secured Party in writing) at least ten (10) days
      before the time of any public sale or after which any private sale may be made.
      The proceeds of any sale, disposition or other realization upon all or any
      part
      of the Collateral shall be distributed by the Secured Party in the following
      order of priorities: First, to the Secured Party in an amount sufficient to
      pay
      in full the reasonable costs of the Secured Party in connection with such sale,
      disposition or other realization, including all fees, costs, expenses,
      liabilities and advances reasonably incurred or made by the Secured Party in
      connection therewith, including, without limitation, reasonable attorneys’ fees;
      Second, to the Secured Party in an amount equal to the then unpaid Secured
      Obligations (with each Secured Party receiving its pro rata share based upon
      such Secured Party’s principal amount of Notes acquired pursuant to the
      Offering; and finally, upon payment in full of the Secured Obligations, to
      the
      Debtor or its representatives, in accordance with the UCC or as a court of
      competent jurisdiction may direct.

     

    6.4 Recourse.
      The
      Debtor shall remain liable for any deficiency if the proceeds of any sale or
      other disposition of the Collateral are insufficient to satisfy the Secured
      Obligations. The Debtor shall also be liable for all expenses of the Secured
      Party reasonably incurred in connection with collecting such deficiency,
      including, without limitation, the reasonable fees and disbursements of one
      firm
      of attorneys employed by the Secured Party to collect such
      deficiency.

     

    6.5 Expenses;
      Attorneys’ Fees.
      The
      Debtor shall reimburse the Secured Party for all their reasonable expenses
      in
      connection with the exercise of their rights hereunder, including, without
      limitation, all reasonable attorneys’ fees and legal expenses of one firm of
      attorneys incurred by the Secured Party. Expenses of retaking, holding,
      preparing for sale, selling or the like shall include the reasonable attorneys’
fees and legal expenses of one firm of attorneys of the Secured Party. All
      such
      expenses shall be secured hereby.

     

    
      
         

      

      
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    6.6 Limitation
      on Duties Regarding Preservation of Collateral.
      The
      Secured Party’ sole duty with respect to the custody, safekeeping and physical
      preservation of the Collateral in their possession, under Section 9-207 of
      the UCC or otherwise, shall be to deal with it in the same manner as the Secured
      Party deal with similar property for their own account.

     

    (a) The
      Secured Party shall have no obligation to take any steps to preserve rights
      against prior parties to any Collateral.

     

    (b) None
      of
      the Secured Party nor any of their directors, officers, employees or agents
      shall be liable for failure to demand, collect or realize upon all or any part
      of the Collateral or for any delay in doing so or shall be under any obligation
      to sell or otherwise dispose of any Collateral upon the request of the Debtor
      or
      otherwise.

     

    ARTICLE
      VII

     

    MISCELLANEOUS

     

    7.1 Limitation
      on the Secured Party’s Duty in Respect of Collateral.
      The
      Secured Parties shall be deemed to have acted reasonably in the custody,
      preservation and disposition of any of the Collateral if they take such action
      as the Debtor requests in writing, but failure of the Secured Party to comply
      with any such request shall not in itself be deemed a failure to act reasonably,
      and no failure of the Secured Party to do any act not so requested shall be
      deemed a failure to act reasonably.

     

    7.2 Reinstatement.
      This
      Security Agreement shall remain in full force and effect and continue to be
      effective should any petition be filed by or against the Debtor for liquidation
      or reorganization, should the Debtor become insolvent or make an assignment
      for
      the benefit of creditors or should a receiver or trustee be appointed for all
      or
      any significant part of the Debtor’s property and assets, and shall continue to
      be effective or be reinstated, as the case may be, if at any time payment and
      performance of the Secured Obligations, or any part thereof, is, pursuant to
      applicable law, rescinded or reduced in amount, or must otherwise be restored
      or
      returned by any obligee of the Secured Obligations, whether as a “voidable
      preference,” “fraudulent conveyance,” or otherwise, all as though such payment
      or performance had not been made. In the event that any payment, or any part
      thereof, is rescinded, reduced, restored or returned, the Secured Obligations
      shall be reinstated and deemed reduced only by such amount paid and not so
      rescinded, reduced, restored or returned.

     

    7.3 Governing
      Law.
      THIS
      SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
      SHALL
      BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE INTERNAL LAWS OF THE
      STATE OF CALIFORNIA.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    7.4 Notices.
      All
      notices shall be given in accordance with the provisions of the Subscription
      Agreements.

     

    7.5 Successors
      and Assigns.
      This
      Security Agreement shall be binding upon and inure to the benefit of the Debtor,
      the Secured Party, all future holders of the Secured Obligations and their
      respective successors and assigns, except that the Debtor may not assign or
      transfer any of its rights or obligations under this Security Agreement without
      the prior written consent of the Secured Party.

     

    7.6 Waivers
      and Amendments.
      Any
      provisions in this Security Agreement may be waived, amended, supplemented
      or
      otherwise modified with the written consent of the Company and the Secured
      Party
      holding at least 51% in aggregate principal amount of the Notes issued in the
      Offering.

     

    7.7 No
      Waiver; Remedies Cumulative.
      No
      failure or delay on the part of the Secured Party in exercising any right,
      power
      or privilege hereunder and no course of dealing between the Debtor shall operate
      as a waiver thereof; nor shall any single or partial exercise of any right,
      power or privilege hereunder preclude any other or further exercise thereof
      or
      the exercise of any other right, power or privilege. A waiver by the Secured
      Party of any right or remedy hereunder on any one occasion shall not be
      construed as a bar to any right or remedy which the Secured Party would
      otherwise have on any future occasion. The rights and remedies herein expressly
      provided are cumulative and may be exercised singly or concurrently and as
      often
      and in such order as the Secured Party deem expedient and are not exclusive
      of
      any rights or remedies which the Secured Party would otherwise have whether
      by
      security agreement or now or hereafter existing under applicable law. No notice
      to or demand on the Debtor in any case shall entitle the Debtor to any other
      or
      further notice or demand in similar or other circumstances or constitute a
      waiver of the rights of the Secured Party to any other or future action in
      any
      circumstances without notice or demand.

     

    7.8 Termination;
      Release.
      When
      the Secured Obligations have been indefeasibly paid and performed in full this
      Security Agreement shall terminate, and the Secured Party, at the request and
      sole expense of the Debtor, will execute and deliver to the Debtor the proper
      instruments (including UCC termination statements) acknowledging the termination
      of this Security Agreement, and will duly assign, transfer and deliver to the
      Debtor, without recourse, representation or warranty of any kind whatsoever,
      such of the Collateral as may be in the possession of the Secured Party and
      has
      not theretofore been disposed of, applied or released.

     

    7.9 Headings
      Descriptive.
      The
      headings of the several Sections and subsections of this Security Agreement
      are
      inserted for convenience only and shall not in any way affect the meaning or
      construction of any provision of this Security Agreement.

     

    7.10 Additional
      Secured Party.
      Additional parties acquiring Notes pursuant to the Offering after the date
      hereof may become parties to this Agreement by executing the signature page
      hereto, whereupon such parties shall be included in the definition of “Secured
      Party” for all purposes under this Agreement

     

    
      
         

      

      
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    7.11 Action
      by Secured Party.
      Any
      action required or permitted to be taken under this Agreement or with respect
      to
      the Collateral by the Secured Party, including but not limited to the granting
      of consents, amending or waiving any provision of this Agreement or declaring
      an
      Event of Default, may only be taken if consented to each of the Secured Party.
      

     

    7.12 Severability.
      In case
      any provision in or obligation under this Security Agreement or the Secured
      Obligations shall be invalid, illegal or unenforceable in any jurisdiction,
      the
      validity, legality and enforceability of the remaining provisions or
      obligations, or of such provision or obligation in any other jurisdiction,
      shall
      not in any way be affected or impaired thereby.

     

    [Signature
      Page Follows]

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the Debtor and the Secured Party have caused this Security
      Agreement to be duly executed and delivered as of the date first above
      written.

    
       

        
          	
                  SECURED
                    PARTY:

                
	 
	
                  HERITAGE
                    HOLDING GROUP, LLC

                
	 	 	 
	
                  By:                         

                	 	 
	
                  Name:
                                           

                	
                   

                	 
	
                  Title:  
                                           

                	
                   

                	 
	 	 	 
	
                  Address:                     

                	 	 
	                      
	 	 
	                         
	 	 
	 	 	 
	 	 	 
	
                  DEBTOR(s)

                	 	 
	 	 	 
	
                  BIOGOLD
                    FUELS CORPORATION

                	 	 
	 	 	 
	 	 	 
	
                  By:                         

                	 	 
	
                  Name:  
                                         
                    

                	
                   

                	 
	
                  Title:   
                                          

                	
                   

                	 
	
                  Address:
                    1800 Century Park East, Suite 600

                	 	 
	
                  Los
                    Angeles, CA 90067

                	 	 

        

      

       

       

    

    BIOGOLD
      OPERATIONS, INC.

    

    By:
      BIOGOLD FUELS CORPORATION (Sole Shareholder)

    

    By:                         

    Chris
      Barsness, CFO

    

    FULL
      CIRCLE INDUSTRIES, INC.   

    

    

    By:
      BIOGOLD FUELS CORPORATION (Sole Shareholder)

    

    By:                         

    Chris
      Barsness, CFO

    

    FCWS,
      LLC

    

    By:
      BIOGOLD FUELS CORPORATION (Sole Manager & Member)

    

    By:                         

    Chris
      Barsness, CFO

    
      
         

      

      
        11TERMINATION
      AND RELEASE AGREEMENT

    

    This
      Termination and Release Agreement (the “Agreement”)
      is
      entered into by and between Anthony J. Nightingale a/k/a Tony Nightingale
      (“Nightingale”),
      a
      resident of Luxembourg with an address 16 rue Hamen, L-5219 Sandweiler, and
      Premier Wealth Management, Inc. (collectively with its subsidiaries, assigns,
      and affiliates, the “Company”),
      a
      Delaware corporation, as of February 29, 2008 (the “Effective
      Date”)
      relating to the resignation of Mr. Nightingale from all positions with the
      company and termination of any and all consulting arrangements with Nightingale
      or his affiliates. 

    

    WHEREAS,
      Nightingale has entered into a consulting arrangement with the Company, dated
      September 5, 2007 (the “Consulting
      Agreement”)
      which
      the Company has failed to honor in terms of meeting the financial commitments
      contained therein and was also a director of the Company until mid February
      12,
      2008; 

     

    WHEREAS,
      Nightingale has resigned from the Company and the Company and Nightingale wish
      to amicably resolve all disputes relating to amounts due or allegedly due to
      Nightingale; 

     

    NOW,
      THEREFORE,
      based
      on the mutual premises and full and valid consideration of the parties, the
      receipt and sufficiency of which is hereby acknowledged, the Company and
      Nightingale hereby agree as follows: 

     

    1. 
Resignation
      as Director.
      Nightingale hereby confirms his resignation as a director of the Company
      effective as of February 12, 2008 and the Company hereby guarantees that a
      full
      indemnity is supplied to Nightingale in respect of the full period of office
      in
      accordance with Section
      5
      below,
      and the By-laws of the Corporation and Delaware law. 

    

    2. 
Termination
      of All Agreements.
      The
      parties acknowledge and agree that the Consulting Agreement and any and all
      other consulting agreements, consulting relationships, business agreements
      or
      arrangements, agreements or other arrangements between Nightingale or any of
      his
      affiliated entities and the Company or its subsidiaries or affiliates, in each
      case whether written or oral, implied or otherwise, are terminated, deemed
      satisfied and discharged in full with prejudice. Notwithstanding the foregoing,
      the provisions of Article V and VI of the Consulting Agreement shall continue
      and remain in full force and effect. Nightingale and the Company have agreed
      that no amounts remain due under such agreements and that the only amounts
      payable to Nightingale shall be as set forth in Section
      3
      below.

    

    3. 
Payments
      to Nightingale.
      The
      Company shall: 

    

    (a)
       
immediately
      reimburse Nightingale for certain expenses which have already been verified
      as
      valid, in the amount of approximately €155.95 and $171.10; 

    

    (b)
       
pay
      to
      Nightingale (in respect of the monthly remuneration validly due under his
      consulting agreement) : 

    (i)
      (U.S.) $25,000 on or before March 13, 2008 ($1,000 of which has been paid on
      February 22, 2008); and 

    (ii)
      (U.S.) $17,500 payable on or before March 31st,
      2008;
      and 

    (iii)
      (U.S.) $17,500 payable on or before April 30, 2008. 

    

    Any
      late
      payments to be subject to accumulating interest of LIBOR + 1% on a monthly
      basis. The requirement to make the above payments are unconditional (other
      then
      in the event of an actual and material breach by Nightingale causing actual
      harm
      to the Company). 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.
       
Disagreements
      with Management.
      Nightingale has been provided with a copy of this Agreement along with an
      Amended Current Report on Form 8-K (the “Amended
      Report”),
      which
      he has had an opportunity to review with his counsel and states that he agrees
      with the statements set forth therein and that he does not object to the filing
      of such report as expeditiously as possible. Nightingale hereby further confirms
      and reiterates that his disputes with management did not relate to financial
      or
      accounting matters or improprieties or improprieties of any member of management
      or the board that related to or implicated the Company in any way or to the
      Company’s internal controls over financial reporting or disclosure and further,
      did not relate to any
      matter relating to the Company’s operations, policies or practices, but
      rather, related to his position that he did not receive certain financial
      records on a readily available basis in preparation for Board meetings or per
      request. Nightingale understands that, in connection with the preparation of
      future financial statements, due diligence or the preparation of reports or
      registration statements to be filed with the Securities and Exchange Commission
      (the “SEC”),
      that
      he may be called upon by the Company’s auditors or others to respond to
      questions relating to his activities as a director or verifying the foregoing
      and that he will cooperate in a truthful and honest manner.

     

    5. 
General
      Releases.
      

     

    (a)    Company
      Releases.
      For
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, including without limitation the mutual promises set forth in
      this
      Agreement, the Company, for itself and themselves, its and their parents,
      affiliates, subsidiaries, divisions, groups and past and present officers,
      directors, employees, agents, representatives, attorneys, accountants, auditors,
      consultants, administrators, beneficiaries, predecessors, successors and assigns
      (collectively, “Company
      Release Parties”)
      and
      any person or entity claiming by or through any of the foregoing hereby RELEASE
      AND DISCHARGE Nightingale, any corporation with which he is an affiliate, their
      parents, affiliates, subsidiaries and past and present officers, directors,
      employees, agents, representatives, attorneys, accountants, auditors,
      consultants, successors and assigns in any capacity whatsoever (collectively,
      “Nightingale
      Release Parties”)
      of and
      from all actions, causes of action, suits, debts, dues, sums of money, claims
      for breaches of contract, claims for breaches of fiduciary duties or conflicts
      of interest, claims of entitlement to securities, claims for violations of
      securities laws or regulations, compensation, accounts, reckonings, bonds,
      bills, specialties, covenants, contracts, controversies, agreements, promises,
      variances, trespasses, damages (compensatory, consequential, liquidated,
      special, punitive or otherwise), judgments, extents, executions, claims, and
      demands (including attorneys’ fees and costs) of any nature whatsoever, in law,
      admiralty or equity, against the Nightingale Release Parties that the Company
      Release Parties ever had, now have or hereafter can, shall or may have, whether
      known or unknown, for, upon, or by reason of any matter, cause or thing
      whatsoever from the beginning of the world to the Effective Date of this
      Agreement, provided only that nothing herein shall release or otherwise affect
      the Nightingale Release Parties’ obligations under this Agreement.

    

    (b)    Nightingale
      Releases.
      For
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, including without limitation the mutual promises set forth in
      this
      Nightingale, for and of itself and any of the Nightingale Release Parties,
      hereby RELEASES AND DISCHARGES the Company Release Parties of and from all
      actions, causes of action, suits, debts, dues, sums of money, claims for
      breaches of contract, claims for breaches of fiduciary duties or conflicts
      of
      interest, claims of entitlement to securities, claims for violations of
      securities laws or regulations, compensation, accounts, reckonings, bonds,
      bills, specialties, covenants, contracts, controversies, agreements, promises,
      variances, trespasses, damages (compensatory, consequential, liquidated,
      special, punitive or otherwise), judgments, extents, executions, claims, and
      demands (including attorneys’ fees and costs) of any nature whatsoever, in law,
      admiralty or equity, against the Company Release Parties that any of the
      Nightingale Release Parties, now have or hereafter can, shall or may have,
      whether known or unknown, for, upon, or by reason of any matter, cause or thing
      whatsoever from the beginning of the world to the Effective Date of this
      Agreement, provided only that nothing herein shall be
      deemed
      a release of Nightingale’s right to payment herein under Section 3 or as a
      limitation on Nightingale’s enforcement rights thereto or otherwise be
      release or affect the Company Release Parties’ obligations under this
      Agreement. 

    

    (c)    No
      Initiation of Claims.
      Subject
      to satisfactory compliance with Section
      3,
      the
      parties agree not to institute, instigate, urge, support, encourage, voluntarily
      participate in or profit from any lawsuit, complaint or other action or
      proceeding of any kind relating to any matter to which these general releases
      pertain. Notwithstanding
      the foregoing, nothing herein shall be deemed to prohibit any party from
      providing, after taking reasonable measures to ensure the confidentiality of
      information provided, information or explanations to third party regulatory
      agencies or the Company’s auditors or accountants, seeking such information in
      response to comment letters or inquiries, or in response to civil or
      administrative subpoenas or court order,
      or from
      discussing
      the
      provisions hereof and factual circumstances surrounding the events leading
      to
      this Agreement in disclosure
      document filings made with the Securities and Exchange Commission from time
      to
      time. Each party warrants and acknowledges that he/it
      has
      received a copy of this Agreement for review and study, has read the Agreement
      carefully and
      has
      had an opportunity to do so with their counsel, and agrees to abide by
      all of its provisions.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    6.    Miscellaneous.
      (a) If
      any provision of this Agreement is held invalid for any reason, the other
      provisions of this Agreement will remain in full force and effect.

     

    
      	
            	(b)	
              The
                parties agree that this Agreement shall be subject to, and enforceable
                under, the laws of the State of New York. The Parties shall have
                the right
                to bring suit to enforce this Agreement in such jurisdiction. THE
                PARTIES
                HERETO AGREE TO WAIVE A TRIAL BY JURY.

            

    

     

    
      	
            	(c)	
              This
                Agreement contains the complete understanding of the Parties and
                any
                changes must be in writing and signed by the
                parties.

            

    

     

    
      	
            	(d)	
              In
                the event that the Company fails to make any of the above listed
                payments
                in a timely manner for any reason, Nightingale’s sole and exclusive remedy
                shall be limited to collection of the above amounts (plus accumulating
                interest at a rate of LIBOR + 1%) and neither party may set aside
                or
                cancel this Agreement or any part hereof. Any amounts owed will be
                deemed
                by the Company as an accumulative financial accounts payable debt
                from the
                Company to Nightingale.

            

    

     

    
      	
            	(e)	
              The
                parties agree that they will endeavor to use their best efforts to
                insure
                that any future public statements or releases in respect of this
                Agreement
                and/or related matters concerning the relationship between them will
                be
                provided to one another in advance for reasonable review and approval,
                and
                shall not conflict with the Amended Report. Said consents shall be
                presumed given if such information is substantially similar to the
                Amended
                Report, as approved hereby, and said consent to not be withheld if
                such
                disclosure is not otherwise inconsistent with the Amended Report.
                

            

    

     

    

    IN
      WITNESS WHEREOF, the parties have executed this Termination and Release
      Agreement effective as of the Effective Date set forth above. 

    
      	 	 	 
	 	PREMIER WEALTH MANAGEMENT,
              INC.
              
	 
 	 
 	 
 
	
            	By:  	/s/ Nigel Gregg
	 	Nigel Gregg 
	 	 
	 	/s/ Anthony J. Nightingale
	 	Anthony J.
              Nightingale

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