Document:

Unassociated Document

     

    THIS
      HAS
      NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
      SECURITIES COMMISSION OF ANY STATE, IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
      TO
      SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
      COMPANY. THIS NOTE MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
      OR OTHER LOAN SECURED BY SUCH SECURITIES.

     

     

    Original
      Issue Date: March 3, 2008

     

    $550,000

     

    SENIOR
      SECURED PROMISSORY NOTE

    DUE
      

    December
      31, 2008

     

        FOR
      VALUE
      RECEIVED, BioGold Fuels Corporation, a Nevada corporation (the “Company”)
      promises to pay to Heritage Holding Group, LLC, a California limited liability
      company or its registered assigns (the “Holder”), the outstanding principal sum
      of up to $550,000 on or before December 31, 2008 as set forth below (the
“Maturity Date”). This Note is issued pursuant to the Senior Secured Note
      Purchase Agreement, dated the date hereof, and is subject to the following
      additional provisions:

     

        Section
      1. Definitions.
      For the
      purposes hereof, the following terms shall have the following
      meanings:

     

        “Business
      Day” means any day except Saturday, Sunday and any day which shall be a federal
      legal holiday in the United States or a day on which banking institutions in
      the
      State of California are authorized or required by law or other government action
      to close.

     

    “Event
      of
      Default” shall have the meaning set forth in Section 6.

     

    “Maturity
      Date” shall have the meaning set forth in Section 4 of this Note.

     

    “Original
      Issue Date” shall mean the date of the first issuance of this Note regardless of
      the number of transfers of this Note and regardless of the number of instruments
      which may be issued to evidence this Note.

    
      
        
        

      

      
        Page
          1

        
          

        

      

      
        
        

      

    

    “Principal”
      shall mean the following:

     

    
      	 	
              a)

            	
              $110,000
                as of the Original Issue Date;

            

    

     

    
      	 	
              b)

            	
              $375,000
                upon the Second Closing through the Third Closing as defined in the
                Senior
                Secured Note Purchase Agreement; or

            

    

     

    
      	 	
              c)

            	
              $550,000
                upon and after the Third Closing as defined in the Senior Secured
                Note
                Purchase Agreement.

            

    

     

    “Parties”
      means BioGold Fuels Corporation and Heritage Holding Group, LLC.

     

    “Person”
      means a corporation, an association, a partnership, organization, a business,
      an
      individual, a government or political subdivision thereof or a governmental
      agency.

     

    “Trading
      Day” means a day on which the Common Stock is traded on a Trading
      Market.

     

    “Trading
      Market” means the following markets or exchanges on which the Common Stock is
      listed or quoted for trading on the date in question: the Nasdaq SmallCap
      Market, the American Stock Exchange, the New York Stock Exchange, the Nasdaq
      National Market or the OTC Bulletin Board.

    
      
        
        

      

      
        Page
          2

        
          

        

      

      
        
        

      

    

     

    Section
      2. Interest.  

     

    (a)
      Payment of Interest. The Company shall pay interest to the Holder on the
      aggregate outstanding Principal amount of this Note at the annual rate of 15%,
      payable upon the Maturity Date (except that, if any such date is not a Business
      Day, then such payment shall be due on the next succeeding Business Day) (each
      such date, an "Interest Payment Date"). 

     

    (b)
      Interest Calculations. Interest shall be calculated on the basis of a 360-day
      year and shall accrue daily commencing on the Original Issue Date based upon
      the
      Principal outstanding until payment in full of the Principal sum, together
      with
      all accrued and unpaid interest has been made. 

     

    Section
      3. Origination
      Fee. 

     

    As
      additional consideration beyond interest, Holder shall be entitled to withhold
      10% of all Principal payments to Company as an origination fee for the
      origination of this Note.

     

    Section
      4. Maturity.
      

     

    On
      December 31, 2008 (the “Maturity Date”), the entire outstanding Principal
      balance of this Note shall mature and be due and payable to the Holder by the
      Company. 

     

    Section
      5. Prepayment.
      

     

    The
      Company may prepay this Note at any time without prior consent of the Holder
      and
      all obligations of the Company under this Note of shall terminate at such time.
      Notwithstanding the above, prepayment shall not affect the Parties’ ongoing
      rights and obligations under the Senior Secured Note of even date
      herewith.

     

    Section
      6. Events
      of Default.
      

     

    (a) “Event
      of
      Default”, wherever used herein, means any one of the following events (whatever
      the reason and whether it shall be voluntary or involuntary or effected by
      operation of law or pursuant to any judgment, decree or order of any court,
      or
      any order, rule or regulation of any administrative or governmental
      body):

     

    (i) any
      default in the payment of the principal amount of this Note, as and when the
      same shall become due and payable (whether on the Maturity Date or by
      acceleration or otherwise) which default is not cured, within 5 Trading
      Days;

     

    (ii) the
      Company shall fail to observe or perform any other covenant or agreement
      contained in this Note which failure is not cured, if possible to cure, within
      5
      Trading Days after notice of such default sent by the Holder;

     

    (iii) any
      representation or warranty made herein shall be untrue or incorrect in any
      material respect as of the date when made or deemed made;

    
      
        
        

      

      
        Page
          3

        
          

        

      

      
        
        

      

    

    (iv) (i) the
      Company shall commence, or there shall be commenced against the Company, a
      case
      under any applicable bankruptcy or insolvency laws as now or hereafter in effect
      or any successor thereto, or the Company commences any other proceeding under
      any reorganization, arrangement, adjustment of debt, relief of debtors,
      dissolution, insolvency or liquidation or similar law of any jurisdiction
      whether now or hereafter in effect relating to the Company or (ii) there is
      commenced against the Company any such bankruptcy, insolvency or other
      proceeding which remains undismissed for a period of 60 days; or (iii) the
      Company is adjudicated by a court of competent jurisdiction insolvent or
      bankrupt; or any order of relief or other order approving any such case or
      proceeding is entered; or (iv) the Company suffers any appointment of any
      custodian or the like for it or any substantial part of its property which
      continues undischarged or unstayed for a period of 60 days; or (v) the
      Company makes a general assignment for the benefit of creditors; or
      (vi) the Company shall state that it is unable to pay, or shall be unable
      to pay, its debts generally as they become due; or (vii) the Company shall
      call a meeting of its creditors with a view to arranging a composition,
      adjustment or restructuring of its debts; or (viii) the Company shall by
      any act or failure to act expressly indicate its consent to, approval of or
      acquiescence in any of the foregoing; or (ix) any corporate or other action
      is taken by the Company for the purpose of effecting any of the foregoing;
      or

     

    (v) except
      with respect to those liabilities set forth on Schedule 6(a)(v), attached
      hereto, the Company shall default in any of its obligations under any mortgage,
      credit agreement or other facility, indenture agreement, factoring agreement
      or
      other instrument under which there may be issued, or by which there may be
      secured or evidenced any indebtedness for borrowed money or money due under
      any
      long term leasing or factoring arrangement of the Company in an amount exceeding
      $100,000, whether such indebtedness now exists or shall hereafter be created
      and
      such default shall result in such indebtedness becoming or being declared due
      and payable prior to the date on which it would otherwise become due and
      payable. 

     

    (b) Remedies
      Upon Event of Default.
      If any
      Event of Default occurs, the full principal amount of this Note to the date
      of
      acceleration shall become, at the Holder’s election, immediately due and payable
      in full. The Holder need not provide and the Company hereby waives any
      presentment, demand, protest or other notice of any kind (with the exception
      of
      the notice and opportunity to cure provided in Section 6(a)(ii) above), and
      the
      Holder may immediately and without expiration of any grace period enforce any
      and all of its rights and remedies hereunder and all other remedies available
      to
      it under applicable law. Such declaration may be rescinded and annulled by
      the
      Holder at any time prior to payment hereunder and the Holder shall have all
      rights as a Note holder until such time, if any, as the full payment under
      this
      Section shall have been received by it. No such rescission or annulment shall
      affect any subsequent Event of Default or impair any right consequent
      thereon.

     

    
      
        
        

      

      
        Page
          4

        
          

        

      

      
        
        

      

    

     

    Section
      7. Miscellaneous.

     

    (a) Notices.
      Any and
      all notices or other communications or deliveries to be provided by the Holder
      hereunder by facsimile, sent by a nationally recognized overnight courier
      service, addressed to the Company, at BioGold Fuels Corporation, 1800 Century
      Park East, Suite 600, Los Angeles, CA 90067, facsimile number, (310) 564-7611,
      Attn: CEO and CFO, or such other address or facsimile number as the Company
      may
      specify for such purposes by notice to the Holder delivered in accordance with
      this Section. Any and all notices or other communications or deliveries to
      be
      provided by the Company hereunder shall be in writing and delivered personally,
      by facsimile, sent by a nationally recognized overnight courier service
      addressed to the Holder at the facsimile telephone number or address of such
      Holder appearing on the books of the Company, or if no such facsimile telephone
      number or address appears, at the principal place of business of the Holder.
      Any
      notice or other communication or deliveries hereunder shall be deemed given
      and
      effective on the earliest of (i) the date of transmission, if such notice
      or communication is delivered via facsimile at the facsimile telephone number
      specified in this Section prior to 5:30 p.m. (local time in Los Angeles,
      California), (ii) the date after the date of transmission, if such notice
      or communication is delivered via facsimile at the facsimile telephone number
      specified in this Section later than 5:30 p.m. (local time in Los Angeles,
      California) on any date and earlier than 11:59 p.m. (local time in Los Angeles,
      California) on such date, (iii) the second Business Day following the date
      of mailing, if sent by nationally recognized overnight courier service, or
      (iv) upon actual receipt by the party to whom such notice is required to be
      given. 

     

    (b) Absolute
      Obligation.
      Except
      as expressly provided herein, no provision of this Note shall alter or impair
      the obligation of the Company, which is absolute and unconditional, to pay
      the
      principal of this Note at the time, place, and rate, and in the coin or
      currency, herein prescribed. This Note is a direct debt obligation of the
      Company. 

     

    (c) Lost
      or Mutilated Note.
      If this
      Note shall be mutilated, lost, stolen or destroyed, the Company shall execute
      and deliver, in exchange and substitution for and upon cancellation of a
      mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed
      Note, a new Note for the principal amount of this Note so mutilated, lost,
      stolen or destroyed but only upon receipt of evidence of such loss, theft or
      destruction of such Note, and of the ownership hereof, and indemnity, if
      requested, all reasonably satisfactory to the Company.

     

    (d) Security
      Interest.
      This
      Note is a direct debt obligation of the Company and is secured by a first
      priority perfected security interest in all of the assets of the Company for
      the
      benefit of the Holder. The Holder and the Company have agreed to and more fully
      provided the Holder’s Security Interest in that certain Security Agreement, by
      and among the Parties hereto, of even date herewith, attached hereto as Exhibit
      A (the “Security Agreement”). The Security Agreement is incorporated by
      reference herein in its entirety.

     

    (e) Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Note shall be governed by and construed and enforced in accordance
      with
      the internal laws of the State of California, without regard to the principles
      of conflicts of law thereof. 

     

    (f) Waiver.
      Any
      waiver by the Company or the Holder of a breach of any provision of this Note
      shall not operate as or be construed to be a waiver of any other breach of
      such
      provision or of any breach of any other provision of this Note. The failure
      of
      the Company or the Holder to insist upon strict adherence to any term of this
      Note on one or more occasions shall not be considered a waiver or deprive that
      party of the right thereafter to insist upon strict adherence to that term
      or
      any other term of this Note. Any waiver must be in writing.

     

    
      
        
        

      

      
        Page
          5

        
          

        

      

      
        
        

      

    

    (g) Severability.
      If any
      provision of this Note is invalid, illegal or unenforceable, the balance of
      this
      Note shall remain in effect, and if any provision is inapplicable to any Person
      or circumstance, it shall nevertheless remain applicable to all other Persons
      and circumstances. If it shall be found that any interest or other amount deemed
      interest due hereunder violates applicable laws governing usury, the applicable
      rate of interest due hereunder shall automatically be lowered to equal the
      maximum permitted rate of interest. The Company covenants (to the extent that
      it
      may lawfully do so) that it shall not at any time insist upon, plead, or in
      any
      manner whatsoever claim or take the benefit or advantage of, any stay, extension
      or usury law or other law which would prohibit or forgive the Company from
      paying all or any portion of the principal of or interest on this Note as
      contemplated herein, wherever enacted, now or at any time hereafter in force,
      or
      which may affect the covenants or the performance of this Note, and the Company
      (to the extent it may lawfully do so) hereby expressly waives all benefits
      or
      advantage of any such law, and covenants that it will not, by resort to any
      such
      law, hinder, delay or impede the execution of any power herein granted to the
      Holder.

     

    (h) Next
      Business Day.
      Whenever any payment or other obligation hereunder shall be due on a day other
      than a Business Day, such payment shall be made on the next succeeding Business
      Day.

     

    (i) Headings.
      The
      headings contained herein are for convenience only, do not constitute a part
      of
      this Note and shall not be deemed to limit or affect any of the provisions
      hereof.

     

    (j) Seniority.
      This Note is senior in right of payment to any and all other indebtedness of
      the
      Company.

     

    *********************

    
      
        
        

      

      
        Page
          6

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the Company has caused this Note to be duly executed by a
      duly
      authorized officer as of the date first above indicated.

     

    
      	 	
              BIOGOLD
                FUELS CORPORATION

               

               

              By:                    

              Name: ________________________ 
                

              Title:   
                Chief
                Financial Officer

               

            

    

     

     

    AGREED
      AND ACKNOWLEDGED

    

    HERITAGE
      HOLDING GROUP, LLC

    

    By:
      

     

                           

    Name:                     

    Title:       

     

    
      
        
        

      

      
        Page
          7

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    Security
      Agreement

     

     

    
      
        
        

      

      
        Page
          8

        
          

        

      

      
        
        

      

    

    Schedule
      6(a)(v)

     

     

    
      
        
        

      

      
        Page
          9Unassociated Document

     

    BIOGOLD
      FUELS CORPORATION

     

    SENIOR
      SECURED NOTE

    PURCHASE
      AGREEMENT

     

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

     

    RECITALS

     

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

     

    AGREEMENT

     

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

     

    1. Purchase
      and Sale of Note.

     

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

     

    (b) Closing;
      Delivery.

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (c) Knowledge.
      The
      Purchaser is aware of the Company’s business affairs and financial condition and
      has acquired sufficient information about the Company to reach an informed
      and
      knowledgeable decision to acquire the Securities. The Purchaser has had the
      opportunity to request and review any business materials, marketing
      documentation, financial statements, corporate books and records, and accounting
      records that it deems necessary to acquire sufficient information about the
      Company to be knowledgeable about the Securities and the Company.

     

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

     

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

     

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

     

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

     

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

    

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

     

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

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    7. Additional
      Agreements

     

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

     

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

     

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

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    8. Miscellaneous.

     

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

     

    (b) [reserved]

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    

    [Signature
      Pages Follow]

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

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

     

    COMPANY

     

    BIOGOLD
      FUELS CORPORATION

     

    

    By:                         

     

    Name:                           
       
   

     

    Title:                             
      

    Address:
      1800 Century Park East, Suite 600

    Los
      Angeles, CA 90067

     

    

    PURCHASER:

     

    HERITAGE
      HOLDING GROUP, LLC

     

     

    By:
      _______________________________

    Name:                       
      

    Title:                        
        

    
 

    Address:                 

                            

                            

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBITS

     

    Exhibit A- Form
      of
      Senior Secured Promissory Note

     

    Exhibit
      B- Form
      of
      Security Agreement

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

     

    FORM
      OF SENIOR SECURED PROMISSORY NOTE

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    FORM
      OF SECURITY AGREEMENT

     

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    Schedule
      3(d)

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