Document:

Filed by Bowne Pure Compliance

Exhibit 10.2

BIOGOLD FUELS CORPORATION

SECURITIES

PURCHASE AGREEMENT

This Securities Purchase Agreement (the “Agreement”) is made as of the 2nd day of
September, 2008, by and between BioGold Fuels Corporation, a Nevada corporation (the
“Company”), and Heritage Opportunity Fund, 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 convertible promissory note in substantially the form attached as Exhibit B (the
“First Note”) and (ii) warrants to purchase common stock in substantially the form
attached as Exhibit C (the “First Warrant”). The Purchaser shall also have the
right to purchase from the Company two additional senior secured convertible promissory notes in
substantially the form of the First Note (the “Second Note” and “Third Note”,
respectively, and collectively with the First Note, the “Notes”) and Warrants in connection
with the Second Note and the Third Note (the Second Warrant and the “Third Warrant” respectively,
and collectively with the First Warrant, the “Warrants”). The Notes, the Warrants and any
securities issuable upon conversion of the Notes or exercise of the Warrants are collectively
referred to herein as the “Securities.” Any capitalized term not defined herein shall have
the meaning ascribed to it in the Notes, the Warrants, or the Security Agreement (as defined below)
(taken together, the “Ancillary Agreements”). This Agreement and the Ancillary Agreements
shall be referred to collectively as the “Transaction Documents”. In connection with
entering into this Agreement, the parties also wish to amend the Senior Secured Promissory Note,
dated March 3, 2008, held by Heritage Holding Group, LLC (the “Prior Note”).

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 Notes.

(a) Sale and Issuance of Notes. Subject to the terms and conditions of this
Agreement, the Purchaser agrees to purchase at the First Closing (as defined below) and the Company
agrees to sell and issue to the Purchaser (i) a Note in the principal amount of $287,500 and (ii) a
Warrant to purchase 1,437,500 shares of the Company’s common stock.

 

 

 

(b) Closing; Delivery.

(i) The purchase and sale of the First Note and the First Warrant shall take place at the
offices of BioGold Fuels Corporation, 1800 Century Park E, Suite 600, Los
Angeles, CA 90067, on September 2, 2008, or at such other time and place as the Company and the
Purchaser mutually agree upon, orally or in writing (which time and place are designated as the
“First Closing”).

(ii) At the First Closing, the Company shall deliver to Purchaser the executed First Note and
First Warrant along with signed copies of the Ancillary Agreements against (1) payment of the
Purchase Price (as defined below) 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 “Purchase Price” for the First Note and First Warrant shall equal the
principal amount of the First Note minus the Loan Origination Fee. The “Loan Arrangement
Fee” shall equal 15% of the principal amount of the First Note. 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 First
Note.

(c) Additional
Closings.

(i) Purchaser shall have the option, in its sole discretion, to purchase from the Company the
Second Note and the Third Note in the principal amounts set forth opposite Purchaser’s name on
Exhibit A and the Second Warrant and the Third Warrant. At each Closing, the Company shall
deliver to Purchaser the executed Note against payment of the Purchase Price therefor by check
payable to the Company or by wire transfer to a bank designated by the Company.

(ii) The “Purchase Price” for each subsequent Note and Warrant shall equal the
principal amount of the Note minus the Loan Origination Fee. The “Loan Arrangement Fee”
shall equal 15% of the principal amount of such Note. 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 such Note.

2. Security Interest. The indebtedness represented by the Notes 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 D (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.

 

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(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 Securities, 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.

(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.

 

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(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.

(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,
except as set forth in Section 7(d) below. 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.

 

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(e) Legends. The Purchaser understands that the Securities may bear a legend
substantially in the following form:

(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.

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 Purchase the Second Note. The
Purchaser has determined, in its sole discretion, that the Company is making sufficient progress in
its business, affairs and prospects, on or before October 1, 2008.

(e)  Conditions of the Purchasers’ Obligations to Purchase the Third Note. The
Purchaser has determined, in its sole discretion, that the Company is making sufficient progress in
its business, affairs and prospects, on or before November 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.

 

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(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 and Warrants 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.

7. Additional Agreements; Covenants.

(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.

 

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(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 Notes and Warrants 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.

(d) Registration Rights. On or before December 31, 2008, the Company shall file a
registration statement with the Securities and Exchange Commission (the “SEC”) to register
the shares of stock issuable to the Purchaser upon conversion of the Notes (including the Senior
Secured Promissory Note issued to Heritage Holding Group, LLC in the aggregate principal amount of
$550,000 on March 3, 2008, as amended) or exercise of the Warrants. The Company shall respond to
initial SEC comments within ten (10) business days after receipt of such initial comments and
within five (5) business days after receipt of any subsequent comments. The Company shall use its
best efforts to ensure that such registration statement be declared effective by no later than
January 30, 2009 (the “Effective Date”). The Company shall pay the Purchaser a penalty of
5% of the aggregate outstanding amount under all outstanding Notes (the “Penalty”) for each
30 day period (or portion thereof) if either (i) the registration statement is not filed by
December 31, 2008 or (ii) the registration statement is not declared effective by the Effective
Date. The Penalty is payable in either cash or shares of common stock of the Company, at the
option of the Purchaser. The Company shall bear all its expenses incurred in connection with the
registration statement, including the reasonable fees and disbursements of a single special legal
counsel for the Purchaser, not to exceed $10,000.

(e) Furnishing of Information. With a view to making available to the Purchaser the
benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may
at any time permit the Purchaser to sell shares of Common Stock issued or issuable upon conversion
of the Notes or the Prior Note or exercise of the Warrants (collectively, the “Conversion
Stock”) to the public without registration, the Company covenants and agrees so long that it is
subject to the requirements of the Securities Exchange Act of 1934, as amended (the “1934
Act”) to: (i) make and keep public information available, as those terms are understood and
defined in Rule 144, until the earlier of (A) six months after such date as all of the shares of
Conversion Stock may be resold pursuant to Rule 144(k) or any other rule of similar effect or (B)
such date as all of the shares of the Conversion Stock shall have been resold; (ii) file with the
SEC in a timely manner all reports and other documents required of the Company under the 1934 Act;
and (iii) furnish to Purchaser upon request, (A) a written statement by the Company that it has
complied with the reporting requirements of the 1934 Act and (B) such other information as may be
reasonably requested in order to avail Purchaser of any rule or regulation of the SEC that permits
the selling of any such shares of Conversion Stock without registration.

 

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(f) Listing of Common Stock. The Company hereby agrees to use its reasonable best
efforts to maintain the listing of the Common Stock on a Trading Market. The Company covenants to
use reasonable best efforts to take all action necessary to continue the listing and trading of its
Common Stock on a Trading Market and comply in all respects with the Company’s reporting, filing
and other obligations under the bylaws or rules of the Trading Market. For the purposed of this
Section, “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 OTC Bulletin Board, the American Stock
Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or
the New York Stock Exchange.

(g) Insurance. The Company hereby agrees to maintain insurance issued by insurers of
recognized financial responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which the Company is engaged, including, but not limited
to, directors and officers insurance coverage.

(h) Use of Proceeds. The Company hereby agrees to use the net proceeds from the sale
of the Securities hereunder for working capital and general corporate purposes.

(i) Expenses. The Company hereby agrees to reimburse the reasonable legal fees and
expenses of the Purchaser’s counsel, not to exceed $10,000, in connection with the negotiation and
review of this Agreement and the Ancillary Agreements.

(j) Amendment of Racoosin Employment Agreement. On or prior to September 9, 2008, the
Company and Steve Racoosin (“Racoosin”) agree to amend the existing Employment Agreement, dated May
1, 2008, by and between the Company and Racoosin and to enter into an amended Employment Agreement
with terms and conditions and in a form approved by the Purchaser.

(k) Amendment of Barsness Employment Agreement. On or prior to September 9, 2008, the
Company and Chris Barsness (“Barsness”) agree to amend the existing Employment Agreement, dated May
1, 2008, by and between the Company and Barsness and to enter into an amended Employment Agreement
with terms and conditions and in a form approved by the Purchaser.

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]

 

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(d) 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.

(e) 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.

(f) 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.

(g) 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.

(h) 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.

(i) 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.

(j) 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.

 

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

[Signature Pages Follow]

 

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The parties have executed this Securities Purchase Agreement as of the date first written
above.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	COMPANY	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	BIOGOLD FUELS CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Chris Barsness	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	Chris Barsness	 	 
	 	 	 	 	Title:	 	CFO	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Address:
	 	1800 Century Park East, Suite 600	 	 
	 

	 	 	 	 	 	 	 	Los Angeles, CA 90067	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	HERITAGE OPPORTUNITY FUND, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Ryan Bowers	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Address:
	 	13520 Evening Creek Drive North,	 	 
	 

	 	 	 	 	 	 	 	Suite 100, San Diego, CA 92128	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	/s/ Steve Racoosin	 	 
	 	 	 	 	 
	 	 	STEVE RACOOSIN	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	/s/ Chris Barsness	 	 
	 	 	 	 	 
	 	 	CHRIS BARSNESS	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Address:	 	 

 

 

 

EXHIBITS

	 	 	 
	Exhibit A-
	 	Purchase Schedule

	 	 	 

	Exhibit B-
	 	Form of Senior Secured Promissory Note

	 	 	 

	Exhibit C-
	 	Form of Warrant

	 	 	 

	Exhibit D-
	 	Form of Security Agreement

 

 

 

EXHIBIT A

PURCHASE SCHEDULE

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Principal Amount	 	 	Proceeds to	 	 	 	 
	Note	 	Date	 	of Note	 	 	Company*	 	 	Warrants***	 
	First Note
	 	September 2, 2008	 	$	287,500.00	 	 	$	244,375.00	 	 	 	1,437,500	 
	Second Note**
	 	October 1, 2008	 	$	287,500.00	 	 	$	244,375.00	 	 	 	1,437,500	 
	Third Note**
	 	November 1, 2008	 	$	287,500.00	 	 	$	244,375.00	 	 	 	1,437,500	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL
	 	 	 	$	862,500.00	 	 	$	733,125.00	 	 	 	4,312,500	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 
	*	 	After payment of Origination
Fee.

	 
	**	 	The purchase of the Second Note and the Third Note shall be at the option of Purchaser.

	 
	***	 	The exercise price per share for the Second Warrant and the Third Warrant shall equal the
exercise price per share for the First Warrant.

 

 

 

EXHIBIT B

FORM OF SENIOR SECURED PROMISSORY NOTE

 

 

 

EXHIBIT C

FORM OF WARRANT

 

 

 

EXHIBIT D

FORM OF SECURITY AGREEMENT

 

 

 

Schedule 3(d)Filed by Bowne Pure Compliance

Exhibit 10.3

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

Amended and Restated Date: September 2, 2008

$550,000

AMENDED AND RESTATED SENIOR SECURED PROMISSORY NOTE

DUE

December 31, 2009

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,
2009 as set forth below (the “Maturity Date”). This Amended and Restated Note (the “Note”) is
issued pursuant to the Senior Secured Note Purchase Agreement, dated March 3, 2008.

RECITALS

WHEREAS, on March 3, 2008, the Company issued a Senior Secured Promissory Note to Holder in
the aggregate principal amount of $550,000 (the “Original Note”); and

WHEREAS, Maker and Holder now desire to amend and restate the Original Note in its entirety
and enter into this Note.

 

Page 1

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

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.

“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.

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.

 

Page 2

 

Section 3. Conversion.

(a) Conversion Right. The Holder shall have the right from time to time, and at any time on
or prior to the Maturity Date, to convert all or any part of the outstanding and unpaid
principal amount and interest of this Note into fully paid and non-assessable shares of the
Company’s common stock (the “Stock”) at the conversion price (the “Conversion Price”) determined as
provided herein (a “Conversion”). The number of shares of Stock to be issued upon conversion of
this Note shall be determined by dividing the Conversion Amount (as defined below) by the
applicable Conversion Price then in effect on the date specified in the notice of conversion, in
the form attached hereto as Exhibit B (the “Notice of Conversion”), delivered to the Company by the
Holder in accordance with Section 3(d) below; provided that the Notice of Conversion is submitted
by facsimile (or by other means resulting in, or reasonably expected to result in, notice) to the
Company before 5:00 p.m. California Time on such conversion date (the “Conversion Date”). The term
“Conversion Amount” means, with respect to any conversion of this Note, the sum of (i) the
principal amount of this Note to be converted in such conversion plus (ii) accrued and unpaid
interest.

(b) Conversion Price. Subject to adjustment as provided for in Section 3(f), the initial
conversion price in effect on any Conversion Date shall be the lesser of (i) $0.10 per share of
common stock or (ii) the price per share of common stock sold by the Company in any equity
financing (not including stock sales or issuances to employees, consultants, directors or strategic
partners).

(c) Authorized Shares. The Company covenants that during the period the conversion right
exists, the Company will reserve from its authorized and unissued Stock a sufficient number of
shares, free from preemptive rights, to provide for the issuance of Stock upon the full conversion
of this Note. The Company represents that such shares, upon issuance, will be duly and validly
issued, fully paid and non-assessable. In addition, if the Company shall issue any securities or
make any change to its capital structure which would change the number of shares of Stock into
which the Note shall be convertible at the then current Conversion Price, the Company shall at the
same time make proper provision so that thereafter there shall be a sufficient number of shares of
Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Note.
The Company (i) acknowledges that it will irrevocably instruct its transfer agent to issue
certificates for the Stock issuable upon conversion of this Note, and (ii) agrees that its issuance
of this Note shall constitute full authority to its officers and agents who are charged with the
duty of executing stock certificates to execute and issue the necessary certificates for shares of
Stock in accordance with the terms and conditions of this Note.

(d) Method of Conversion.

(i) Mechanics of Conversion. This Note may be converted by the Holder in whole or in part at
any time from time to time by (A) submitting to the Company a Notice of Conversion (by facsimile or
other reasonable means of communication dispatched on the Conversion Date prior to 5:00 p.m.
California Time) and (B) subject to Section 3(d)(ii), surrendering this Note at the principal
office of the Company.

 

Page 3

 

(ii) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth
herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be
required to physically surrender this Note to the Company unless the entire unpaid principal amount
of this Note is so converted. The Holder and the Company shall maintain records showing the
principal amount so converted and the dates of such conversions or shall use
such other method, reasonably satisfactory to the Holder and the Company, so as not to require
physical surrender of this Note upon each such conversion. In the event of any dispute or
discrepancy, such records of the Company shall be controlling and determinative in the absence of
manifest error; provided that the Holder shall provide the Company with all such records and
related calculations and documents for review by the Company. Notwithstanding the foregoing, if
any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless
the Holder first physically surrenders this Note to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered as
the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing
in the aggregate the remaining unpaid principal amount of this Note. The Holder and any assignee,
by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this
paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal
amount of this Note represented by this Note may be less than the amount stated on the face hereof.

(iii) Payment of Taxes. The Company shall not be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of shares of Stock or other
securities or property on conversion of this Note in a name other than that of the Holder (or in
street name), and the Company shall not be required to issue or deliver any such shares or other
securities or property unless and until the person or persons (other than the Holder or the
custodian in whose street name such shares are to be held for the Holder’s account) requesting the
issuance thereof, or the transferee or transferees of such transfer, shall have paid to the Company
the amount of any such tax or shall have established to the satisfaction of the Company that such
tax has been paid.

(iv) Delivery of Stock Upon Conversion. Upon receipt by the Company from the Holder of a
facsimile transmission (or other reasonable means of communication) of a Notice of Conversion
meeting the requirements for conversion as provided in this Section 3(d), the Company shall issued
and deliver to the Holder certificates for the Stock issuable upon such conversion within five (5)
business days after such receipt (and, solely in the case of conversion of the entire unpaid
principal amount hereof, surrender of this Note) in accordance with the terms hereof.

(v) Obligation of Company to Cause Delivery of Stock. Upon receipt by the Company of a Notice
of Conversion in accordance with this Section 3(d), the Holder shall be deemed to be the holder of
record of the Stock issuable upon such conversion, the outstanding principal amount and the amount
of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and,
unless the Company defaults on its obligations under this Section 3, all rights with respect to the
portion of this Note being so converted shall forthwith terminate except the right to receive the
Stock or other securities, cash or other assets, as herein provided, on such conversion. If the
Holder shall have given a Notice of Conversion as provided herein, the Company’s obligation to
issue and deliver the certificates for Stock shall be absolute and unconditional, irrespective of
the absence of any action by the Holder to enforce the same, any waiver or consent with respect to
any provision thereof, the recovery of any judgment against any person or any action to enforce the
same, any failure or delay in the enforcement of any other obligation of the Company to the holder
of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or
alleged breach by the Holder of any obligation to the Company, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the Holder in connection
with such conversion. The Conversion Date specified in
the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is
received by the Company before 5:00 p.m. California Time, on such date.

 

Page 4

 

(e) Concerning the Shares. The shares of Stock issuable upon conversion of this Note may not
be sold or transferred unless (i) such shares are sold pursuant to an effective registration
statement under the Act or (ii) the Company or its transfer agent shall have been furnished with an
opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of
counsel in comparable transactions) to the effect that the shares to be sold or transferred may be
sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold
or transferred pursuant to Rule 144 under the Act (or a successor rule) (“Rule 144”) or (iv) such
shares are transferred to an “affiliate” (as defined in Rule 144) of the Company who agrees to sell
or otherwise transfer the shares only in accordance with this Section 3(e) and who is an accredited
investor. Until such time as the shares of Stock issuable upon conversion of this Note have been
registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as
to the public sale of such securities, each certificate for shares of Stock issuable upon
conversion of this Note that has not been so included in an effective registration statement or
that has not been sold pursuant to an effective registration statement or an exemption that permits
removal of the legend, shall bear a legend substantially in the following form, as appropriate:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID
ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY
FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 OR
REGULATION S UNDER SAID ACT.”

The legend set forth above shall be removed and the Company shall issue to the Holder a new
certificate therefor free of any transfer legend if (i) the Company or its transfer agent shall
have received an opinion of counsel, in form, substance and scope customary for opinions of counsel
in comparable transactions, to the effect that a public sale or transfer of such Stock may be made
without registration under the Act and the shares are so sold or transferred, (ii) such Holder
provides the Company or its transfer agent with reasonable assurances that the Stock issuable upon
conversion of this Note (to the extent such securities are deemed to have been acquired on the same
date) can be sold pursuant to Rule 144 or (iii) in the case of the Stock issuable upon conversion
of this Note, such security is registered for sale by the Holder under an effective registration
statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction
as to the public sale of such securities. Nothing in this Note shall affect in any way the
Holder’s obligations to comply with applicable prospectus delivery requirements upon the resale of
the securities referred to herein.

 

Page 5

 

(f) Effect of Certain Events.

(i) Adjustment Due to Merger, Consolidation, Etc.

(A) If, at any time when this Note is issued and outstanding and prior to conversion of the
Note, there shall be any merger, consolidation, exchange of shares, recapitalization,
reorganization, or other similar event, as a result of which shares of Stock of the Company shall
be changed into the same or a different number of shares of another class or classes of stock or
securities of the Company or another entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Company other than in connection with a plan of complete
liquidation of the Company, then the Holder of this Note shall thereafter have the right to receive
upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and
in lieu of the shares of Stock immediately theretofore issuable upon conversion, such stock,
securities or assets which the Holder would have been entitled to receive in such transaction had
this Note been converted in full immediately prior to such transaction (without regard to any
limitations on conversion set forth herein), and in any such case appropriate provisions shall be
made with respect to the rights and interests of the Holder of this Note to the end that the
provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price
and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable,
as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon
the conversion hereof.

(B) The Company shall not effect any transaction described in this Section 3(f)(i)(A) unless
the resulting successor or acquiring entity (if not the Company) assumes by written instrument the
obligations of this Section 3(f)(i). The above provisions shall similarly apply to successive
consolidations, mergers, sales, transfers or share exchanges.

(ii) Adjustment Due to Distribution. If the Company shall declare or make any distribution of
its assets (or rights to acquire its assets) to holders of Stock as a dividend or stock repurchase,
by way of return of capital, or otherwise (including any dividend or distribution to the Company’s
shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any
conversion of this Note after the date of record for determining shareholders entitled to such
Distribution, to receive the amount of such assets which would have been payable to the Holder with
respect to the shares of Stock issuable upon such conversion had such Holder been the holder of
such shares of Stock on the record date for the determination of shareholders entitled to such
Distribution.

(iii) Subdivision or Combination of Stock. If the Company at any time subdivides (by any
stock split, stock dividend, recapitalization, reorganization, reclassification or otherwise) the
shares of Stock acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Conversion Price in effect immediately prior to such
subdivision will be proportionately reduced. If the Company at any time combines (by reverse stock
split, recapitalization, reorganization, reclassification or otherwise) the shares of Stock
acquirable hereunder into a smaller number of shares, then, after the date of record for effecting
such combination, the Conversion Price in effect immediately prior to such combination will be
proportionately increased.

 

Page 6

 

(iv) Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the
Conversion Price as a result of the events described in this Section 3(f), the
Company, at its expense, shall promptly compute such adjustment or readjustment and prepare
and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon
the written request at any time of the Holder, furnish to such Holder a like certificate setting
forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and
(iii) the number of shares of Stock and the amount, if any, of other securities or property which
at the time would be received upon conversion of the Note.

(v) Minimum Adjustment of Conversion Price. No adjustment of the Conversion Price shall be
made in an amount of less than 1% of the Conversion Price in effect at the time such adjustment is
otherwise required to be made, but any such lesser adjustment shall be carried forward and shall be
made at the time and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such Conversion Price.

(g) Status as Shareholder. Upon submission of a Notice of Conversion by a Holder in
accordance with Section 3(d) hereof, (i) the shares covered thereby shall be deemed converted into
shares of Stock and (ii) the Holder’s rights as a Holder of such converted portion of this Note
shall cease and terminate, excepting only the right to receive certificates for such shares of
Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder
because of a failure by the Company to comply with the terms of this Note.

Section 4. Maturity.

On December 31, 2009 (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 note prepay this Note at any time without the prior written consent of the
Holder and all obligations of the Company under this Note of shall terminate at such time.

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;

 

Page 7

 

(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;

(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 8

 

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 9

 

(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 10

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized
officer as of September 2, 2008.

	 	 	 	 	 	 	 
	 	 	BIOGOLD FUELS CORPORATION
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Chris Barsness
	 	 	 	 	 
	 

	 	 	 	Name:	 	Chris Barsness
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	Chief Financial Officer

AGREED AND ACKNOWLEDGED

HERITAGE HOLDING GROUP, LLC

	 	 	 	 	 	 	 
	By:	 	/s/ Ryan Bowers	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

 

Page 11

 

EXHIBIT A

Security Agreement

 

Page 12

 

EXHIBIT B

NOTICE OF CONVERSION

(To be Executed by the Registered Holder

in order to Convert the Note)

The undersigned hereby irrevocably elects to convert $                     principal amount of the Note
(defined below) into shares of stock (“Stock”), of BioGold Fuels Corporation, a Nevada corporation
(the “Company”) according to the conditions of the Amended and Restated Senior Secured Promissory
Note of the Company dated as of September 2, 2008 (the “Note”), as of the date written below. If
securities are to be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering herewith such
certificates. No fee will be charged to the Holder for any conversion, except for transfer taxes,
if any. A copy of each Note is attached hereto (or evidence of loss, theft or destruction
thereof).

The undersigned hereby requests that the Company issue a certificate or certificates for the number
of shares of Stock set forth below (which numbers are based on the Holder’s calculation attached
hereto) in the name(s) specified immediately below or, if additional space is necessary, on an
attachment hereto:

	 	 	 	 	 
	Name:
	 	 	 	 
	Address:

	 	 

	 	 
	 

	 	 

	 	 

The undersigned represents and warrants that all offers and sales by the undersigned of the
securities issuable to the undersigned upon conversion of the Note shall be made pursuant to
registration of the securities under the Securities Act of 1933, as amended (the “Act”), or
pursuant to an exemption from registration under the Act.

	 	 	 	 	 	 	 	 	 	 	 
	Date of Conversion:	 	 	 	 	 	 	 	 
	 	 	
 
	 	 
	Applicable Conversion Price:	 	 	 	 	 	 	 	 
	 	
 
	 	 
	Number of Shares of Stock to be Issued Pursuant to Conversion of the Note:	 	 	 	 
	Signature:

	 	 	 	 

	 	 
	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	Address:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 

The Company shall issue and deliver shares of Stock to an overnight courier not later than three
business days following receipt of the original Note(s) to be converted, and shall make payments
pursuant to the Note for the number of business days such issuance and delivery is late.

 

Page 13

 

Schedule 6(a)(v)

 

Page 14

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