Document:

Exhibit
4.4

LOAN AGREEMENT

THIS LOAN AGREEMENT (the
“Agreement”), is executed as of February 15, 2007, by and among Better
Biodiesel, Inc., a Colorado corporation (the “Company”), and Sausalito Capital
Partners I, LLC, a Nevada limited liability company (the “Lender”)
(collectively, the “Parties”).

WHEREAS, the Company is
seeking to raise at least Three Million Dollars ($3,000,000.00) through a
private placement or placements of a combination of debt and/or common stock of
the Company (the “Common Stock”) (the “Private Placement”);

WHEREAS, in order to fund
Company’s operations until the closing of funds from the Private Placement,
Lender advanced One Hundred Thousand Dollars ($100,000.00) to the Company as a
short-term bridge loan on or around November 15, 2006 (the “Effective Date”)
(the “Loan”), with the understanding that the Parties would negotiate and
execute an agreement at a later date to memorialize the terms and conditions of
the Loan;

WHEREAS, in return for
the Loan, the Company agrees to provide Lender with a warrant to acquire Five
Thousand (5,000) shares of Common Stock at a price of Five Dollars ($5.00) per
share; and

 WHEREAS, the Lender and the Company now wish
to memorialize the terms and conditions of the Loan, set forth herein.

NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Lender, intending to be legally bound,
agree as follows:

ARTICLE 1

DEFINITIONS

1.1           Defined terms.  Certain capitalized terms used in this
Agreement shall have the specific meanings defined below:

 “Business Day” shall mean a day other
than a Saturday, Sunday, or other day on which commercial banks are authorized
or required by law to close.

“Closing Date”
shall mean the date of execution of this Agreement.

“Encumbrance”
means any lien, charge, security interest, mortgage, deed of trust, pledge or
other encumbrance of any nature whatsoever.

“Excluded Securities”
shall mean (i) securities issued in connection with the Private Placement; (ii)
securities issued upon conversion of any securities outstanding on the Closing
Date; (iii) securities issued pursuant to the acquisition of another business
or business segment of any such entity by the Company by merger, purchase of
substantially all the assets or other reorganization whereby the Company will
own more than fifty percent (50%) of the voting power of such business entity
or business segment of any such entity; (iv) securities issued to employees,
consultants, officers, directors or advisors of the Company pursuant to any
stock option, stock purchase or stock bonus plan, agreement or arrangement
approved by the Board of Directors of the Company; (v) securities issued in
connection with obtaining lease financing, whether issued to Lender, lessor,
guarantor or other person and approved by the Board of Directors of the
Company; (vi) securities issued to leasing companies, landlords and other
providers of goods and services to the Company and approved by the Board of
Directors; (vii) securities issued in connection with any stock split, stock
dividend or recapitalization of the Company; (viii) securities issued in
connection with strategic transactions involving the Company and other
entities, including (A) joint ventures, manufacturing, marketing or
distribution arrangements or (B) technology license, transfer or development
arrangements; provided that such strategic transactions and the issuance of
shares therein, have been approved by the Board of Directors of

the Company; and (ix) any
right, option or warrant to acquire any security convertible into the
securities pursuant to subsections (i) through (viii) above.

“Proprietary Rights”
means all patents, trademarks, service marks, copyrights, trade names and all
registrations and applications and renewals for any of the foregoing and all
goodwill associated therewith.

ARTICLE 2

THE LOAN

2.1           Loan.  Lender made the Loan with the understanding
that the Loan would be subject to the terms and conditions of this
Agreement.  The Loan shall be evidenced
by a promissory note in the form attached hereto as Exhibit A (“Note”),
duly executed on behalf of the Company and dated as of the Closing Date.

2.2           Interest.  The Loan shall bear interest at a rate of six
percent (6%) per annum (“Default Interest Rate”), compounded annually
(“Interest”) from the Effective Date, as defined in the Note, and continuing
until payment in full of the Loan.  Upon the occurrence of a default event
(“Event of Default”) and for so long as such Event of Default continues,
Interest shall accrue on the outstanding Loan amount at the Default Interest
Rate.

2.3           Prepayment of the Loan.  The Company may from time to time prepay all
or any portion of the Loan without premium or penalty of any type.  The Company shall give the Lender at least 3
Business Days prior written notice of its intention to prepay the Loan,
specifying the date of payment and the total amount of the Loan to be paid on
such date.

2.4           Maturity Date.  Unless the Loan is earlier accelerated
pursuant to the terms hereof, the Loan and all accrued Interest thereon shall
be due and payable in full on the earlier of (a) 12 months following the
Closing Date or (b) two (2) days following the closing of a total of at least
Three Million Dollars ($3,000,000.00) from the Private Placement.  In the event that the Private Placement is
not consummated within 90 days after the Closing Date, the Lender may, at the
Lender’s option, extend the Maturity Date on such terms and conditions as
determined by the Lender in its sole discretion.

ARTICLE 3

REPRESENTATIONS
AND WARRANTIES

3.1           Organization, qualification and
Authority.  The Company is a
corporation duly organized and validly existing under the laws of the State of
Colorado. The Company has the requisite corporate power and authority to own,
lease and operate its facilities and assets as presently owned, leased and
operated, and to carry on its respective business as it is now being conducted.  The Company owns no capital stock, security,
interest or other right, or any option or warrant convertible into the same, of
any Person.  The Company has the
requisite or individual right, power and authority to execute, deliver and
carry out the terms of this Agreement and all documents and agreements
necessary to give effect to the provisions of this Agreement and to consummate
the transactions contemplated hereunder. The execution, delivery and
consummation of this Agreement, and all other agreements and documents executed
in connection herewith by the Company, have been duly authorized by all
necessary action on the part of the Company. 
No other action, consent or approval on the part of the Company or any
other Person or entity, is necessary to authorize the Company’s due and valid
execution, delivery and consummation of this Agreement and all other agreements
and documents executed in connection hereto. 
This Agreement and all other agreements and documents executed in connection
herewith by the Company, upon due execution and delivery thereof, shall
constitute the valid and binding obligations of the Company, enforceable in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally and by general principles of equity.

3.2           Capitalization.  There are no outstanding obligations of the
Company to repurchase, redeem or otherwise acquire any securities of the
Company or pay any dividend or make any other distribution in respect
thereof.  Except as set forth in Section
3.3, the Company owns no securities of any other entity and no rights to
acquire any securities from any other entity. 
All outstanding Company Securities have been duly authorized and validly
issued and are fully paid, non-assessable and free and clear of all Encumbrances.  Upon issuance, the

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Warrant issued to the Lender pursuant to Section 7.1 will be duly
authorized, validly issued, fully paid, non-assessable and free and clear of
all Encumbrances.

3.3           Subsidiaries.   Domestic Energy Partners, LLC, a Utah
limited liability company, is a wholly-owned subsidiary of the Company.

3.4           Compliance with Laws.  The nature and transaction of the Company’s
business and operations and the use of its properties and assets do not, and
during the term of this Agreement shall not, violate or conflict with in any
material respect any applicable law, statute, ordinance, rule, regulation or
order of any kind or nature.

3.5           Absence of Conflicts.  The execution, delivery and performance by
the Company of this Agreement, and the transactions contemplated hereby, do not
constitute a breach or default, or require consents under, any agreement,
permit, contract or other instrument to which the Company is a party, or by
which the Company is bound or to which any of the assets of the Company is
subject, or any judgment, order, writ, decree, authorization, license, rule,
regulation, or statute to which the Company is subject, and, except as set
forth in the Security Agreement, will not result in the creation of any lien
upon any of the assets of the Company.

3.6           Litigation and Taxes.  There
is no litigation or governmental proceeding pending, or to the best knowledge
of the Company after due inquiry, threatened, against the Company. The Company
has duly filed all applicable income or other tax returns and has paid all
material income or other taxes when due. 
There is no controversy or objection pending, or to the best knowledge
of the Company after due inquiry, threatened in respect of any tax returns of
the Company.

3.7           Intellectual Property.  No proceedings have been instituted or are
pending or, to the Company’s knowledge, threatened which challenge the validity
of the ownership by the Company of any such Proprietary Rights.  The Company has not licensed anyone to use
any such Proprietary Rights and, to the Company’s knowledge, there has been no
use or infringement of any of such Proprietary Rights by any other person.

3.8           Company’s SEC Reports.  The Company has timely filed with the Securities
and Exchange Commission (the “SEC”) all forms, reports, definitive proxy
statements, schedules and registration statements (the “ Company SEC Reports”)
required to be filed by it with the SEC pursuant to the Securities Act of 1933,
as amended (the “Securities Act”), or the Securities Exchange Act of
1934, as amended (the “Exchange Act”). 
As of their respective filing dates or, if amended, as of the date of
the last amendment, none of the Company SEC Reports contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.  The Company SEC Reports (including, without
limitation, any financial statements and schedules included therein) when filed
or, if amended, as of the date of the last amendment, complied in all material
respects with the applicable requirements of the Securities Act and the
Exchange Act.

3.9           No Omissions or Misstatements.  None of the information included in this
Agreement, other documents or information furnished or to be furnished by the
Company, or any of its representations, contains any untrue statement of a
material fact or is misleading in any material respect or omits to state any
material fact.  Copies of all documents
referred to in herein have been delivered or made available to the Lender and
constitute true and complete copies thereof and include all amendments,
schedules, appendices, supplements or modifications thereto or waivers
thereunder.

ARTICLE 4

COVENANTS

4.1           Negative Covenants of the Company.  The Company covenants and agrees that, from
the Closing Date until the Maturity Date (and, in any event, during such time
as any portion of the Loan or any Interest thereon is outstanding), without the
consent of the Lender, the Company will not:

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(a)           merge or consolidate with or into any
other corporation or sell or otherwise convey 50% or more of its assets;

(b)           in a single transaction or series of
related transactions, effect a significant acquisition of any business or
entity (for purposes hereof, a “significant” acquisition shall be determined in
accordance with Instructions 2, 3 and 4 or Item 2 of Form 8-K of the Securities
and Exchange Commission); provided, however, that notwithstanding anything in
this Agreement, the Note, or the Security Agreement to the contrary, the
Company shall not be prohibited from consummating the Merger;

(c)           declare, set aside or pay any
dividend or other distribution on any of its capital stock;

(d)           engage in any transaction with any
Affiliate (as such term is defined in Rule 501(b) of the Securities Act of
1933, as amended) on terms less favorable to the Company than could be obtained
from an unrelated party; or

(e)           amend its Certificate of
Incorporation or Bylaws in any manner that adversely affects the rights
associated with this Agreement, the Warrant issued to the Lender pursuant to
Section 6.1 hereof or the Common Stock.

The Company will
give notice to the Lender of any default under any provisions of this Agreement
within three business days after the discovery by the Company of such default.

4.2           Affirmative Covenants of the
Company.  The Company covenants and
agrees that, from the Closing Date until the Maturity Date (and, in any event,
during such time as any portion of the Loan or any Interest thereon is
outstanding), the Company shall:

(a)           operate its business only in the
ordinary course and maintain its properties and assets in good repair, working
order and condition;

(b)           cause to be done all things
reasonably necessary to maintain, preserve and renew its corporate existence
and all material licenses, authorizations and permits necessary to the conduct
of its businesses;

(c)           comply with all applicable laws, rules
and regulations of all governmental authorities, the violation of which could
reasonably be expected to have a material adverse effect on its business,
properties or prospects;

(d)           deliver to the Lender the Company’s
audited annual financial statements and the Company’s annual budget, and allow
the Lender reasonable access during normal business hours to visit the Company
and inspect the financial records of the Company; and

(e)           provide the Lender with at least 10
days’ written notice of any meeting of the Board of Directors of the Company
and permit the Lender to designate an individual to attend such meeting,
including any adjournment thereof, as an observer.  In addition, the Lender’ designee shall
receive all written material disseminated to the Board of Directors in advance,
during or following any meeting, whether or not the designee was in
attendance.  The Lender’ designee shall
receive the same compensation as is paid to the members of the Board of Directors
in connection with such designee’s attendance of meetings of the Board of
Directors.

ARTICLE 5

DEFAULT

5.1           Events of Default.  The occurrence of any of the following events
(each an “Event of Default”), not cured in the applicable cure period,
if any, shall constitute and Event of Default of the Company:

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(a)           a breach of any representation,
warranty, covenant or other provision of this Agreement, the Note, or the
Security Agreement, which, if capable of being cured, is not cured within three
days following notice thereof to the Company;

(b)           the failure to make when due any
payment described in this Agreement or the Note, whether on or after the
Maturity Date, by acceleration or otherwise; and

(c)           (i) the application for the
appointment of a receiver or custodian for the Company or the property of the
Company, (ii) the entry of an order for relief or the filing of a petition by
or against the Company under the provisions of any bankruptcy or insolvency
law, (iii) any assignment for the benefit of creditors by or against the
Company, or (iv) the Company becomes insolvent.

5.2           Effect of Default.  Upon the occurrence of any Event of Default
that is not cured within any applicable cure period, the Lender may elect, by
written notice delivered to the Company, to take any or all of the following
actions: (i) declare this Agreement terminated and the outstanding amounts
under the Note to be forthwith due and payable, whereupon the entire unpaid
Loan, together with accrued and unpaid Interest thereon (including the Default
Interest Rate), and all other cash obligations hereunder, shall become
forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the Company,
anything contained herein or in any of the Note to the contrary notwithstanding,
and (ii) exercise any and all other remedies provided hereunder or available at
law or in equity upon the occurrence and continuation of an Event of
Default.  In addition, during the
occurrence of any Event of Default, the Company shall not pay make any payment
on any other outstanding indebtedness of the Company (other than indebtedness
of the Company to which the Lender has agreed in writing to subordinate this
Agreement and the Note hereunder).

ARTICLE 6

ISSUANCE OF STOCK

6.1           Issuance of Warrant.  On the Closing Date, the Company shall issue
to the Lender a cash or cashless warrant to purchase in the aggregate 5,000
shares of the Common Stock, in the form attached hereto as Exhibit B
(the “Warrant”).  The Warrant
shall be immediately exercisable by the Lender (and its assignee) at an
exercise price of Five Dollars ($5.00) per share.  The right to exercise the Warrant shall
expire on the date that is two years following the Effective Date.

6.2           Registration of Common Stock
Underlying the Warrant.

(a)           Lender shall be entitled to
“piggy-back” registration rights for (i) the Common Stock on all registrations
of the Company, except for registrations filed on Form S-4 or Form S-8, or on
any demand registrations of any other investor subject to the right, however,
of the Company and its underwriters to reduce the number of shares proposed to
be registered pro rata in view of market conditions.  The Company shall bear registration expenses
(exclusive of underwriting discounts and commissions) of all such demands,
piggy-backs, and S-3 or SB-2 registrations.

(b)           All expenses incident to the filing
of any registration statement required by Section 6.2, including without
limitation all registration and filing fees, fees and expenses of compliance
with securities or blue sky laws, printing expenses, messenger and delivery
expenses, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding discounts and
commissions) and other professionals retained by the Company will be borne by
the Company.  In no event shall the
Company be obligated to pay any discounts or commissions with respect to the
shares sold by any holder of Registrable Securities.  In connection with any registration
statement, the Company shall reimburse the holders of Registrable Securities
covered by such registration for the reasonable fees and disbursements of one
counsel chosen by the holders of a majority of the Registrable Securities
initially requesting such registration.

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ARTICLE 7

MISCELLANEOUS

7.1           Successors and Assigns; Third
Party Beneficiary.  Subject to the
exceptions specifically set forth in this Agreement, the terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the
respective executors, administrators, heirs, successors and permitted assigns
of the parties.  This Agreement may not
be assigned (whether by operation of law or otherwise) by the Company without
the prior written consent of the Lender. 
This Agreement may be assigned by the Lender without the consent of the
Company.

7.2           Titles and Subtitles.  The titles and subtitles of the Sections of
this Agreement are used for convenience only and shall not be considered in
construing or interpreting this agreement.

7.3           Notices.  Any notice, request or other communication
required or permitted hereunder shall be in writing and shall be delivered
personally or by facsimile (receipt confirmed electronically) or shall be sent
by a reputable express delivery service or by certified mail, postage prepaid
with return receipt requested, addressed as follows:

if to the Company, to:

355 South 1550 West

Spanish Fork, UT 84660

Attn:       Ron Crafts

Fax:         (801)
225-8635

with a copy to:

The Otto Law Group, PLLC

601 Union Street, Suite
4500

Seattle, WA 98101

Attn:
      David M. Otto

Fax:         (206)
262-9513

if to the Lender, to:

Sausalito Capital
Partners I, LLC

369B Third Street, #269

San Rafael, CA 94901

Attn:       John LiSanti

Fax:         (415) 454-2046

Either
party hereto may change the above specified recipient or mailing address by
notice to the other party given in the manner herein prescribed.  All notices shall be deemed given on the day
when actually delivered as provided above (if delivered personally or by
facsimile, provided that any such facsimile is received during regular business
hours at the recipient’s location) or on the day shown on the return receipt
(if delivered by mail or delivery service).

7.4           Governing Law.  This Agreement shall be governed in all
respects by the laws of the State of Washington as applied to agreements
entered into and performed entirely within the State of Washington by residents
thereof, without regard to any provisions thereof relating to conflicts of laws
among different jurisdictions.

7.5           Waiver and Amendment.  Any term of this Agreement may be amended,
waived or modified with the written consent of the Company and the Lender.

7.6           Remedies.  No delay or omission by the Lender in
exercising any of its rights, remedies, powers or privileges hereunder or at
law or in equity and no course of dealing between the Lender and the
undersigned or any

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other person shall be deemed a waiver by the Lender of any such rights,
remedies, powers or privileges, even if such delay or omission is continuous or
repeated, nor shall any single or partial exercise of any right, remedy, power
or privilege preclude any other or further exercise thereof by the Lender or
the exercise of any other right, remedy, power or privilege by the Lender.  The rights and remedies of the Lender
described herein shall be cumulative and not restrictive of any other rights or
remedies available under any other instrument, at law or in equity.

7.8           Right of Participation.  For a period of three years following the
date hereof, the Company shall provide the Lender with a first right to
purchase up to 25% of any equity or equity linked securities (including
derivative and convertible securities) to be issued by the Company on the same
terms as such securities are offered to all other parties (related or
otherwise) during such three year period. 
The right of participation set forth in this Section 7.7 shall not apply
to any Excluded Securities.

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

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IN WITNESS
WHEREOF, the Parties have caused this Agreement to be signed on the date first
set forth above.

	
  BETTER BIODIESEL, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Ron Crafts

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Ron Crafts

  	
   

  	
   

  
	
   

  	
  Chief Executive Officer

  	
   

  	
   

  
					

 

	
  SAUSALITO CAPITAL PARTNERS
  I, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John LiSanti

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  John LiSanti

  	
   

  	
   

  
	
   

  	
  Member

  	
   

  	
   

  
					

 

 

EXHIBIT A

PROMISSORY NOTE

THE
SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR UNDER THE
PROVISIONS OF ANY APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED BY
THE REGISTERED HOLDER HEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON
STATUTORY EXEMPTIONS UNDER THE 1933 ACT, AND UNDER ANY APPLICABLE STATE
SECURITIES LAWS.  THESE SECURITIES MAY
NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT IN A TRANSACTION WHICH IS
EXEMPT UNDER THE PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT.

6%
PROMISSORY NOTE

San Rafael,
California

February 15, 2007

FOR
VALUE RECEIVED, Better Biodiesel, Inc., a Colorado corporation (“Borrower”),
hereby promises to pay to the order of Sausalito Capital Partners I, LLC
(“Lender”), a Nevada limited liability company, in lawful money of the United
States at the address of Lender set forth herein, the principal amount of One
Hundred Thousand Dollars ($100,000.00) (the “Loan”), together with
Interest.  This Promissory Note (“Note”)
has been executed by Borrower on the date set forth above in for the Loan which
was made from the Lender to the Company on or around November 15, 2006 (the
“Effective Date”).

1.             Interest.  The Loan shall bear interest at a rate of six
percent (6%) per annum (“Default Interest Rate”), compounded annually
(“Interest”) from the Effective Date and continuing until payment in full of
the Loan.  Upon the occurrence of a default event (“Event of Default”) and for so
long as such Event of Default continues, Interest shall accrue on the
outstanding Loan amount at the Default Interest Rate.

2.             Maturity Date.  The Loan and all accrued Interest thereon
shall be due and payable in full on the earlier of (a) twelve (12) months from
the Effective Date or (b) within two (2) days following the closing of a total
of at least Three Million Dollars ($3,000,000) pursuant to a private placement
or private placements of the Company’s common stock (the “Private Placement”).

3.             Application of Payments.

3.1.          Except as otherwise expressly provided
herein, payments under this Note shall be applied (i) first to the repayment of
any sums incurred by Lender for the payment of any expenses in enforcing the
terms of this Note, (ii) then to the payment of the Default Interest Rate,
(iii) then to the payment of the Interest, and (iv) then to the reduction of
the Loan.

3.2.          Upon payment in full of the Loan and
applicable accrued and unpaid Interest thereon, this Note shall be marked “Paid
in Full” and returned to Borrower.

4.             Waiver of Notice.  Borrower hereby waives diligence, notice,
presentment, protest and notice of dishonor.

5.             Transfer.  This Note may be transferred by Lender at any
time, provided that such transfer complies with applicable securities laws.

6.             Events
of Default.  The occurrence of any of
following events, not cured in any applicable cure period, shall constitute an
Event of Default of Borrower:

6.1.          The
failure to make when due any payment described in this Note or the Loan
Agreement, whether on or after the Maturity Date, by acceleration or otherwise;
and

6.2.          A
breach of any representation, warranty, covenant or other provision of this
Note or the Loan Agreement, which, if capable of being cured, is not cured
within three days following notice thereof to the Company;

6.3.          (i)
The application for the appointment of a receiver or custodian for Borrower or
the property of Borrower, (ii) the entry of an order for relief or the filing
of a petition by or against Borrower under the provisions of any bankruptcy or
insolvency law, (iii) any assignment for the benefit of creditors by or against
Borrower, or (iv) the insolvency of Borrower.

Upon the occurrence of any Event of Default that
is not cured within any applicable cure period, if any, Lender may elect, by
written notice delivered to Borrower, to take at any time any or all of the
following actions: (i) declare this Note to be forthwith due and payable,
whereupon the entire unpaid Loan, together with all accrued and unpaid Interest
thereon (including the Default Interest Rate), and all other cash obligations
hereunder, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by Borrower, anything contained herein to the contrary notwithstanding,
and (ii) exercise any and all other remedies provided hereunder or available at
law or in equity.

7.             Miscellaneous.

7.1.          Successors
and Assigns.  Subject to the
exceptions specifically set forth in this Note and the Loan Agreement, the
terms and conditions of this Note shall inure to the benefit of and be binding
upon the respective executors, administrators, heirs, successors and permitted
assigns of the parties.  This Note (or a
portion hereof) may be assigned by Lender without the consent of Borrower.

7.2.          Loss
or Mutilation of Note.  Upon receipt
by Borrower of evidence satisfactory to Borrower of the loss, theft,
destruction or mutilation of this Note, together with indemnity reasonably
satisfactory to Borrower, in the case of loss, theft or destruction, or the
surrender and cancellation of this Note, in the case of mutilation, Borrower
shall execute and deliver to Lender a new promissory note of like tenor and
denomination as this Note.

7.3.          Notices.  Any notice, demand, offer, request or other
communication required or permitted to be given pursuant to the terms of this
Note shall be in writing and shall be deemed effectively given the earlier of
(i) when received, (ii) when delivered personally, (iii) one business day after
being delivered by facsimile (with receipt of appropriate confirmation), (iv)
one business day after being deposited with an overnight courier service, or
(v) four days after being deposited in the U.S. mail, First Class with postage
prepaid, and addressed to the recipient at the addresses set forth below unless
another address is provided to the other party in writing:

If to Borrower, to:

Better
Biodiesel, Inc.

355 South 1550 West

Spanish Fork, UT 84660

Attn:       Ron
Crafts

with a copy to:

The Otto Law Group, PLLC

601 Union Street, Suite
4500

Seattle, WA 98101

Attn:
      David M. Otto

Fax:         (206) 262-9513

if
to Lender, to:

Sausalito Capital
Partners I, LLC

369B Third Street, #269

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San Rafael, CA 94901

Attn: John LiSanti

7.4           Governing Law.  This
Note shall be governed in all respects by the laws of the State of Washington
as applied to agreements entered into and performed entirely within the State
of Washington by residents thereof, without regard to any provisions thereof
relating to conflicts of laws among different jurisdictions.

7.5           Waiver
and Amendment.  Any term of this Note
may be amended, waived or modified only with the written consent of Borrower
and Lender.

7.6           Remedies;
Costs of Collection; Attorneys’ Fees. 
No delay or omission by Lender in exercising any of its rights,
remedies, powers or privileges hereunder or at law or in equity and no course
of dealing between Lender and the undersigned or any other person shall be
deemed a waiver by Lender of any such rights, remedies, powers or privileges,
even if such delay or omission is continuous or repeated, nor shall any single
or partial exercise of any right, remedy, power or privilege preclude any other
or further exercise thereof by Lender or the exercise of any other right,
remedy, power or privilege by Lender. 
The rights and remedies of Lender described herein shall be cumulative
and not restrictive of any other rights or remedies available under any other
instrument, at law or in equity.  If an
Event of Default occurs, Borrower agrees to pay, in addition to the Loan and
Interest payable thereon, reasonable attorneys’ fees and any other reasonable
costs incurred by Lender in connection with its pursuit of its remedies under
this Note.

IN WITNESS
WHEREOF, Borrower has caused this Note to be signed on the 15th day of February, 2007.

	
  

  	
  BORROWER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BETTER BIODIESEL, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ron Crafts

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ron Crafts

  	
   

  	
   

  
	
   

  	
   

  	
  Chairman and Chief Executive Officer

  	
   

  	
   

  

 

 4

 

exhibit B

Warrant

WARRANT

THIS WARRANT AND THE SHARES OF COMMON STOCK WHICH MAY BE PURCHASED UPON THE EXERCISE OF THIS WARRANT HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH SALE, OFFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS.

Warrant To
Purchase 5,000 Shares of Common Stock

BETTER
BIODIESEL, INC.

Date of Issuance:
February 15, 2007

No.

THIS CERTIFIES that, for value received, Sausalito
Capital Partners I, LLC, a Nevada limited liability company, or its assigns (in
either case, the “Holder”) is entitled to purchase, subject to the provisions
of this warrant (the “Warrant”), from Better Biodiesel, Inc., a Colorado
corporation (the “Company”), at the price per share set forth in Section 8
hereof, that number of shares of the Company’s common stock (the “Common
Stock”) set forth in Section 7 hereof. 
The shares of Common Stock issuable pursuant to the terms hereof are
sometimes referred to herein as “Warrant Shares.”

1.             Holder Exercise of Warrant.  This Warrant shall only be exercisable in
whole.  To exercise this Warrant in
whole, the Holder shall deliver to the Company at its principal office, (a) a
written notice, in substantially the form of the exercise notice attached
hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to
exercise this Warrant, which notice shall specify the number of shares of
Common Stock to be purchased and (b) this Warrant.  The Company shall as promptly as practicable,
and in any event within twenty (20) days after delivery to the Company of (i)
the Exercise Notice, (ii) and this Warrant, execute and deliver or cause to be
executed and delivered, in accordance with such notice, a certificate or
certificates representing the aggregate number of shares of Common Stock
specified in such notice, provided this Warrant has vested on or prior to the
date such notice is delivered.  Each
certificate representing Warrant Shares shall bear the legend or legends
required by applicable securities laws as well as such other legend(s) the
Company requires to be included on certificates for its Common Stock.  The Company shall pay all expenses and other
charges payable in connection with the preparation, issuance and delivery of
such stock certificates except that, in case such stock certificates shall be
registered in a name or names other than the name of the Holder, funds
sufficient to pay all stock transfer taxes that are payable upon the issuance of
such stock certificate or certificates shall be paid by the Holder at the time
of delivering the Exercise Notice.  All
shares of Common Stock issued upon the exercise of this Warrant shall be
validly issued, fully paid, and nonassessable. 

The Warrant shall
expire on the date that is two (2) years following the Date of Issuance (the
“Expiration Date”).  The Investor may
exercise the Warrant at any time prior to the Expiration Date; however, the
Investor is required to comply with all state and U.S. laws and regulations
relating to security sales and transfers. 
The Company has no restriction on the lawful sale or transfer of the
Warrant or Warrant Shares, except that the Warrant or Warrant Shares are
subject to the equivalent restrictions placed on other shares of Common Stock
issued by the Company during the two-year period (the “Period”) following the
date of this Warrant to the extent that the Company, in its sole discretion,
deems it necessary to facilitate financing opportunities offered during the Period.  

2.             Reservation of Shares. The Company hereby
covenants that at all times during the term of this Warrant there shall be
reserved for issuance such number of shares of its Common Stock as shall be
required to be issued upon exercise of this Warrant. 

 

3.             Fractional Shares.  This Warrant may be exercised only for a
whole number of shares of Common Stock, and no fractional shares or scrip
representing fractional shares shall be issuable upon the exercise of this
Warrant. 

4.             Transfer of Warrant and Warrant
Shares.  The Holder may sell, pledge,
hypothecate, or otherwise transfer this Warrant, in whole, in accordance with
and subject to the terms and conditions set forth in the Subscription Agreement
and then only if such sale, pledge, hypothecation, or transfer is made in
compliance with the Act or pursuant to an available exemption from registration
under the Act relating to the disposition of securities.

5.             Loss of Warrant.  Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, or destruction of this Warrant, and of
indemnification satisfactory to it, or upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new warrant of
like tenor. 

6.             Rights of the Holder.  No provision of this Warrant shall be
construed as conferring upon the Holder the right to vote, consent, receive
dividends or receive notice other than as expressly provided herein.  Prior to exercise, no provision hereof, in
the absence of affirmative action by the Holder to exercise this Warrant, and
no enumeration herein of the rights or privileges of the Holder, shall give
rise to any liability of the holder for the purchase price of any warrant
shares or as a stockholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company. 

7.             Number of Warrant Shares.  This Warrant shall be exercisable for 5,000
shares of the Company’s Common Stock, as adjusted in accordance with this
Agreement. 

8.             Registration Rights.  Holder shall be entitled to “piggy-back”
registration rights for (i) the Common Stock on all registrations of the
Company, except for registrations filed on Form S-4 or Form S-8, or on any
demand registrations of any other investor subject to the right, however, of
the Company and its underwriters to reduce the number of shares proposed to be
registered pro rata in view of market conditions.  The Company shall bear registration expenses
(exclusive of underwriting discounts and commissions) of all such demands,
piggy-backs, and S-3 or SB-2 registrations.

9.             Exercise Price; Adjustment of
Warrants. 

a.            Determination of Exercise Price.  The per share purchase price (the “Exercise
Price”) for each of the Warrant Shares purchasable under this Warrant shall be
equal to Five Dollars ($5.00), payable in cash or on a cashless basis. 

b.            Adjustment for Mergers or
Reorganization, etc.  In case of any
consolidation or merger of the Company with or into another corporation or the
conveyance of all or substantially all of the assets of the Company to another
corporation, this Warrant shall be exercisable into the number of shares of
stock or other securities or property to which a holder of the number of shares
of Common Stock of the Company deliverable upon exercise of this Warrant would
have been entitled upon such consolidation, merger or conveyance; and, in any
such case, appropriate adjustment (as determined by the Board of Directors of
the Company) shall be made in the application of the provisions herein set
forth with respect to the rights and interest thereafter of the holder of this
Warrant, to the end that the provisions set forth herein shall thereafter be
applicable, as nearly as reasonable may be, in relation to any shares of stock
or other property thereafter deliverable upon the exercise of this Warrant. 

c.            NO IMPAIRMENT.  THE COMPANY WILL NOT, THROUGH ANY
REORGANIZATION, TRANSFER OF ASSETS, CONSOLIDATION, MERGER, DISSOLUTION, ISSUE
OR SALE OF SECURITIES OR ANY OTHER VOLUNTARY ACTION, AVOID OR SEEK TO AVOID THE
OBSERVANCE OR PERFORMANCE OF ANY OF THE TERMS TO BE OBSERVED OR PERFORMED
HEREUNDER BY THE COMPANY, BUT WILL AT ALL TIMES IN GOOD FAITH ASSIST IN THE
CARRYING OUT OF ALL THE PROVISIONS OF THIS SECTION AND IN THE TAKING OF ALL
SUCH ACTION AS MAY BE NECESSARY OR APPROPRIATE IN ORDER TO PROTECT THE EXERCISE
RIGHTS OF THE HOLDER OF THIS WARRANT AGAINST IMPAIRMENT. 

 2
 

d.            Issue Taxes.  The Company shall pay issue taxes that may be
payable in respect of any issue or delivery of shares of Common Stock on
exercise of this Warrant, in whole; provided, however, that the Company shall
not be obligated to pay any transfer taxes resulting from any transfer
requested by any holder in connection with any such exercise. 

e.             Reservation of Stock Issuable
Upon Conversion.  The Company shall at
all times reserve and keep available out of its authorized but unissued shares
of common stock, solely for the purpose of effecting the exercise of this
Warrant, such number of its shares of common stock as shall from time to time
be sufficient to effect the exercise of this Warrant; and if at any time the
number of authorized but unissued shares of common stock shall not be
sufficient to effect the exercise of this Warrant, the Company will take all
appropriate corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of common stock to
such number of shares as shall be sufficient for such purpose. 

f.             Adjustment.  The Exercise Price shall be adjusted downward
in the event the Company issues common stock (or securities exercisable for or
convertible into or exchangeable for common stock) at a price below the
Exercise Price, to a price equal to such issue price.

10.           Certain Distributions.  In case the Company shall, at any time, prior
to the Expiration Date, declare any distribution of its assets to holders of
its common stock as a partial liquidation, distribution or by way of return of
capital, other than as a dividend payable out of earnings or any surplus
legally available for dividends, then the Holder shall be entitled, upon the
proper exercise of this Warrant in whole prior to the effecting of such
declaration, to receive, in addition to the shares of common stock issuable on
such exercise, the amount of such assets (or at the option of the Company a sum
equal to the value thereof at the time of such distribution to holders of
common stock as such value is determined by the Board of Directors of the
Company in good faith), which would have been payable to the Holder had it been
a holder of record of such shares of common stock on the record date for the
determination of those holders of Common Stock entitled to such distribution. 

11.           Dissolution or Liquidation.  In case the Company shall, at any time prior
to the Expiration Date, dissolve, liquidate or wind up its affairs, the Holder
shall be entitled, upon the proper exercise of this Warrant in whole and prior
to any distribution associated with such dissolution, liquidation, or winding
up, to receive on such exercise, in lieu of the shares of Common Stock to which
the Holder would have been entitled, the same kind and amount of assets as
would have been distributed or paid to the Holder upon any such dissolution,
liquidation or winding up, with respect to such shares of Common Stock had the
Holder been a holder of record of such share of Common Stock on the record date
for the determination of those holders of Common Stock entitled to receive any
such dissolution, liquidation, or winding up distribution. 

12.           Reclassification or Reorganization.
 In case of any reclassification, capital
reorganization or other change of outstanding shares of common stock of the
Company (other than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of an issuance of common
stock by way of dividend or other distribution or of a subdivision or
combination), the Company shall cause effective provision to be made so that
the Holder shall have the right thereafter by exercising this Warrant, to
purchase the kind and amount of shares of stock and other securities and
PROPERTY RECEIVABLE UPON SUCH RECLASSIFICATION, CAPITAL REORGANIZATION OR OTHER
CHANGE, BY A HOLDER OF THE NUMBER OF SHARES OF COMMON STOCK WHICH MIGHT HAVE
BEEN PURCHASED UPON EXERCISE OF THIS WARRANT IMMEDIATELY PRIOR TO SUCH
RECLASSIFICATION OR CHANGE. ANY SUCH PROVISION SHALL INCLUDE PROVISION FOR
ADJUSTMENTS WHICH SHALL BE AS NEARLY EQUIVALENT AS MAY BE PRACTICABLE TO THE
ADJUSTMENTS PROVIDED FOR IN THIS WARRANT. THE FOREGOING PROVISIONS OF THIS SECTION
12 SHALL SIMILARLY APPLY TO SUCCESSIVE RECLASSIFICATIONS, CAPITAL
REORGANIZATIONS AND CHANGES OF SHARES OF COMMON STOCK. IN THE EVENT THAT IN ANY
SUCH CAPITAL REORGANIZATION, RECLASSIFICATION, OR OTHER CHANGE, ADDITIONAL
SHARES OF COMMON STOCK SHALL BE ISSUED IN EXCHANGE, CONVERSION, SUBSTITUTION OR
PAYMENT, IN WHOLE, FOR OR OF A SECURITY OF THE COMPANY OTHER THAN COMMON STOCK,
ANY AMOUNT OF THE CONSIDERATION RECEIVED UPON THE ISSUE THEREOF BEING
DETERMINED BY THE BOARD OF DIRECTORS OF THE COMPANY SHALL BE FINAL AND BINDING
ON THE HOLDER. 

 3
 

13.           Miscellaneous.

a.             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, except to the extent otherwise provided herein.
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.             Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Washington without regard
to the principles of conflict of laws thereof. 

c.             Counterparts; Delivery by Facsimile.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  Delivery of this Agreement may be effected by
facsimile. 

d.             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. 

e              Notices.  Any notice, request or other communication
required or permitted hereunder shall be in writing and shall be delivered
personally or by facsimile (receipt confirmed electronically) or shall be sent
by a reputable express delivery service or by certified mail, postage prepaid
with return receipt requested, addressed as follows:

if
to the Company, to:

Better
Biodiesel, Inc.

355 South 1550 West

Spanish Fork, UT 84660

Attn:       Ron Crafts

Fax:         (801) 225-8635

with a copy to:

The Otto Law Group, PLLC

601 Union Street, Suite 4500

Seattle, WA 98101

Attn:       David
M. Otto

Fax:         (206)
262-9513

if to the Holder, to:

Sausalito Capital Partners I, LLC

369B Third Street, #269

San Rafael, CA 94901

Attn:       John LiSanti

Fax:         (415) 454-2046

f.              Amendments and Waivers.  Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either prospectively or retroactively), only with
the written consent of the Company and a majority in interest of the Holders. 

g.             Entire Agreement.  This Agreement, the Memorandum (including the
appendices and schedules thereto) by and between the Company and the Holder,
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties hereto. 

 4
 

IN WITNESS WHEREOF,
the Company has caused this Warrant to purchase Common Stock to be duly
executed as of the Issuance Date set out above.

 

Better Biodiesel, Inc. 

 

	
  By:

  	
  /s/ Ron Crafts

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Ron Crafts

  	
   

  	
   

  
	
   

  	
  Title: Chief Executive Officer

  	
   

  	
   

  

 

	
  Investor Name:

  	
  Sausalito
  Capital Partners I, LLC

  	
   

  
	
   

  	
  Attn: John LiSanti,
  Member

  	
   

  
	
   

  	
   

  	
   

  
	
  Investor
  Address:

  	
  369B Third
  Street, #269

  	
   

  
	
   

  	
  San Rafael, CA
  94901

  	
   

  

 

 

 5

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

(To be signed only upon exercise of the Warrant)

 

TO:  Better Biodiesel, Inc.

 

The undersigned, hereby
irrevocably elects to exercise the purchase rights represented by the Warrant
granted to the undersigned on
                        
and to purchase thereunder 5,000 shares, subject to subsection 8(f) of the
Warrant, of Common Stock of Better Biodiesel, Inc., a Colorado corporation (the
“Company”).

Dated: 

The Undersigned elects to
exercise the Warrant (choose one): [     ] for cash
[     ] on a cashless basis

 

	
  

  	
   

  	
   

  
	
   

  	
   

  	
  Entity

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature must conform in all respects to name

  
	
   

  	
   

  	
  of holder as specified on the face of the Warrant)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Please Print Name)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Title)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Address)

  

 

 

*Insert here the number of shares being exercised, without making any
adjustment for additional Common Stock of the Company, other securities or
property which, pursuant to the adjustment provisions of the Warrant, may be
deliverable upon exercise.Exhibit
4.5

SUBSCRIPTION
AGREEMENT

PROPOSED
INVESTOR’S NAME:  

AGREEMENT
NUMBER:                         

 

DATED AS OF                                  ,
2007

BY AND BETWEEN

BETTER BIODIESEL,
INC.

AND

EACH OF THE SUBSCRIBERS
LISTED IN

SCHEDULE A ANNEXED HERETO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) OR THE SECURITIES
COMMISSION OF ANY STATE OR THE ANY PROVINCIAL SECURITIES REGULATORY BODIES IN
CANADA, NOR HAS ANY SUCH COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS SUBSCRIPTION AGREEMENT OR ITS APPENDICES OR SCHEDULES (THE “PURCHASE
AGREEMENT”). ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

THE PURCHASE OF
THE SECURITIES OFFERED HEREBY AND DESCRIBED IN THIS SUBSCRIPTION AGREEMENT
INVOLVES A HIGH DEGREE OF RISK.  SEE
“RISK FACTORS” SET FORTH IN THE DISCLOSURE MEMORANDUM (THE “MEMORANDUM”) TO
WHICH THIS SUBSCRIPTION AGREEMENT IS ATTACHED. 
PROSPECTIVE INVESTORS SHOULD CAREFULLY READ THIS SUBSCRIPTION AGREEMENT
AND THE MEMORANDUM IN ORDER TO EVALUATE THE RISKS INVOLVED IN LIGHT OF THEIR
INVESTMENT OBJECTIVES AND FINANCIAL RESOURCES. IN MAKING AN INVESTMENT
DECISION, PROSPECTIVE INVESTORS MUST RELY ON THEIR OWN EVALUATION OF THE
COMPANY, THE SECURITIES OFFERED HEREBY AND THE TERMS OF THIS OFFERING (THIS
“OFFERING”), INCLUDING THE MERITS AND RISKS INVOLVED.  THIS SUBSCRIPTION AGREEMENT AND MEMORANDUM
AND ITS APPENDICES AND SCHEDULES CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER (THE “SECURITIES ACT”) AND THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (THE “EXCHANGE ACT”), AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER.  THE
COMPANY’S ACTUAL RESULTS AND ACTIVITIES COULD DIFFER MATERIALLY FROM THOSE
PROJECTED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF THE RISK FACTORS
DESCRIBED IN “RISK FACTORS” SET FORTH IN THE MEMORANDUM AND OTHER FACTORS
INCLUDED ELSEWHERE IN THIS SUBSCRIPTION AGREEMENT AND THE MEMORANDUM.

NO
REPRESENTATIONS, WARRANTIES, OR ASSURANCES OF ANY KIND ARE MADE OR SHOULD BE
INFERRED WITH RESPECT TO THE ECONOMIC RETURN OR THE TAX CONSEQUENCES WHICH MAY
BE REALIZED BY A PURCHASER OF THE CONVERTIBLE DEBENTURES OFFERED HEREBY.  PROSPECTIVE INVESTORS SHOULD NOT CONSTRUE THE
CONTENTS OF THIS SUBSCRIPTION AGREEMENT OR MEMORANDUM OR ANY COMMUNICATION,
WHETHER WRITTEN OR ORAL, FROM THE COMPANY OR ITS OFFICERS, DIRECTORS, EMPLOYEES
OR AGENTS, AS LEGAL, TAX, ACCOUNTING OR OTHER EXPERT ADVICE.  PROSPECTIVE INVESTORS SHOULD CONSULT THEIR
COUNSEL, ACCOUNTANTS AND OTHER PROFESSIONAL ADVISORS AS TO THE LEGAL, TAX,
ACCOUNTING AND RELATED MATTERS CONCERNING THEIR INVESTMENT IN THE SECURITIES
OFFERED HEREBY.

THE CONVERTIBLE
DEBENTURES ARE BEING OFFERED ONLY TO ACCREDITED INVESTORS OR INVESTORS WHO ARE
NOT “U.S. PERSONS’ UNDER THE DEFINITION SET FORTH IN REGULATION S, WHO ARE
CAPABLE OF BEARING THE ECONOMIC RISKS OF THIS INVESTMENT, INCLUDING THE RISK OF
LOSING THEIR ENTIRE ORIGINAL INVESTMENT, AND WHO, INDIVIDUALLY OR THROUGH A
PURCHASER REPRESENTATIVE, HAVE SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND
BUSINESS MATTERS THAT THEY ARE CAPABLE OF EVALUATING THE MERITS AND RISKS OF AN
INVESTMENT IN THESE SECURITIES.

THE SECURITIES
OFFERED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR AN EXEMPTION
THEREFROM.  PROSPECTIVE INVESTORS SHOULD
BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THEIR
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

EACH
RECIPIENT OF THIS SUBSCRIPTION AGREEMENT IS ENCOURAGED TO AVAIL ITSELF OF THE
OPPORTUNITY TO ASK QUESTIONS OF, AND RECEIVE ANSWERS FROM, THE COMPANY
CONCERNING ITS BUSINESS OPERATIONS, THE TERMS AND CONDITIONS OF THIS OFFERING,
AND TO OBTAIN ADDITIONAL INFORMATION, TO THE EXTENT THAT IT IS POSSESSED OR
OBTAINABLE WITHOUT UNREASONABLE EFFORT OR EXPENSE, NECESSARY TO VERIFY THE
ACCURACY OF THE INFORMATION IN THIS PURCHASE AGREEMENT.  ANY PROSPECTIVE INVESTORS HAVING ANY
QUESTIONS REGARDING THIS OFFERING OR DESIRING ANY ADDITIONAL INFORMATION OR
DOCUMENTS TO VERIFY OR SUPPLEMENT THE INFORMATION CONTAINED HEREIN SHOULD
CONTACT RON CRAFTS, CHIEF EXECUTIVE OFFICER AT BETTER BIODIESEL, INC., 355
South 1550 West, SANISH FORK, UTAH 84660.

 2
 

 

NO PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED
IN THIS SUBSCRIPTION AGREEMENT, AND ANY INFORMATION OR REPRESENTATIONS NOT
CONTAINED HEREIN OR IN THE DOCUMENTS FURNISHED BY THE COMPANY AS CONTEMPLATED
HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY OR ON BEHALF OF THE
COMPANY.  THE DELIVERY OF THIS
SUBSCRIPTION AGREEMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

THE DISTRIBUTION
OF THIS SUBSCRIPTION AGREEMENT AND MEMORANDUM AND THE OFFERING OF THE
SECURITIES OFFERED THEREBY IN CERTAIN JURISDICTIONS MAY BE RESTRICTED BY LAW.  PERSONS INTO WHOSE POSSESSION THIS
SUBSCRIPTION AGREEMENT COMES ARE REQUIRED BY THE COMPANY TO INFORM THEMSELVES
ABOUT AND OBSERVE ANY SUCH RESTRICTIONS. 
THIS SUBSCRIPTION AGREEMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT LAWFUL, OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO.

NO ACTION HAS BEEN
OR WILL BE TAKEN BY THE COMPANY THAT WOULD PERMIT A PUBLIC OFFERING OF THE
SECURITIES OFFERED HEREBY OR THE CIRCULATION OR DISTRIBUTION OF THIS
SUBSCRIPTION AGREEMENT OR ANY OFFERING MATERIAL IN RELATION TO THE SECURITIES
OFFERED HEREBY IN ANY COUNTRY OR JURISDICTION WHERE ACTION FOR THAT PURPOSE IS
REQUIRED.

THIS SUBSCRIPTION
AGREEMENT AND MEMORANDUM HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF
PROSPECTIVE INVESTORS INTERESTED IN THE PROPOSED PRIVATE PLACEMENT OF THE
CONVERTIBLE DEBENTURES AND CONSTITUTES AN OFFER ONLY IF THE NAME OF THE
PROSPECTIVE INVESTOR APPEARS IN THE APPROPRIATE SACE PROVIDED ON THE COVER
HEREOF.  DISTRIBUTION OF THIS
SUBSCRIPTION AGREEMENT OR MEMORANDUM TO ANY PERSON OTHER THAN SUCH PROSPECTIVE
INVESTOR AND THOSE PERSONS RETAINED TO ADVISE SUCH PROSPECTIVE INVESTOR WITH
RESPECT THERETO IS UNAUTHORIZED, AND ANY REPRODUCTION OF THIS SUBSCRIPTION
AGREEMENT OR MEMORANDUM, IN WHOLE OR IN PART, OR THE DIVULGENCE OF ANY OF ITS
CONTENTS, WITHOUT THE PRIOR WRITTEN CONSENT OF BETTER BIODIESEL, INC. IS
PROHIBITED.

 3
 

 SUBSCRIPTION AGREEMENT

 

THIS
SUBSCRIPTION AGREEMENT (the “Agreement”) is made as of the       
day of                         
200   , by and among Better BioDiesel, Inc., a Colorado
corporation (the “Company”), and the investor(s) listed on Schedule A
attached hereto and made a part hereof (the “Investors”).  Capitalized terms used but not defined in
this Agreement shall have the respective meanings given such terms in the
Private Placement Memorandum dated as of the same date herewith (the
“Memorandum”).

W I T N E S S E T
H

WHEREAS,
the Company desires to sell to the Investors units (the “Unit” or “Units”)
consist of (1) Convertible Debentures with a 10% coupon (the “Convertible
Debenture” or “Debentures”) and (2) Warrants for a value equal to the dollar
amount set forth opposite each such Investor’s name on Schedule A
attached hereto;

WHEREAS,
each of the Investors has been furnished with a Memorandum; and 

WHEREAS,
the Investors, after carefully reviewing the Memorandum, desire to purchase
such Debentures on the terms and conditions contained in this Agreement.

NOW,
THEREFORE, IN CONSIDERATION FOR THE MUTUAL COVENANTS AND AGREEMENTS SET FORTH
HEREIN, AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES HERETO HEREBY AGREE
AS FOLLOWS:

1.    Purchase
and Sale of Units.

a.  Sale
of Units.  Subject to the terms and
conditions of this Agreement, each Investor agrees, severally but not jointly,
to purchase at the Closing (as hereinafter defined), and the Company agrees to
sell at the Closing to each Investor that number of Units as is set forth
opposite such Investor’s name on Schedule A attached hereto, for the
aggregate purchase price set forth on Schedule A (the “Purchase Price”),
reflecting a per Unit purchase price of Two hundred thousand United States
Dollars ($200,000).  The Purchase Price
is to be paid by wire transfer or check, and delivered to the Company or by
wire (instructions follow) upon execution and delivery hereof by Investor.

b.  Description
of Units.  Each Unit shall consist
of:

(i)  10% Convertible Debenture.  Each Convertible Debenture shall become due
on March 31, 2007 (the “Maturity Date”), and the accrued interest of which
shall be compounded annually from the Company’s execution of the Convertible
Debenture, attached to the Memorandum as Exhibit C, and payable on all
interest accrued at the Maturity Date in cash unless otherwise converted.  At the Maturity Date, solely at the option of
the Company, all principal and accrued interest due on this Convertible
Debenture (the “Convertible Amount”) may be converted into common shares of the
Company’s common stock (the “Conversion Shares”), deliverable within 15 days of
conversion.  The price per share of the
Conversion Shares shall be equal to the greater of either Five Dollars ($5) or
seventy-five (75%) of the most current 10-day trailing average bid price; and

 

(ii)
Warrants.  One (1) warrant to
purchase 3,125 shares of common stock of the Company with an exercise price of
Eight Dollars ($8) per share, zero par value, on the terms and conditions set
forth in the form of warrant attached to the Memorandum as Exhibit D
(each a “Warrant” and collectively, the “Warrants”). 

 

c.  Delivery of Units.  The Warrants subscribed for herein shall be
issued at Closing (hereinafter defined).

 4
 

 

1.     Purchase
and Sale of Debentures.

 

a.  Sale of Convertible Debenture.  Subject to the terms and conditions of this
Agreement, each Investor agrees, severally but not jointly, to purchase at the
Closing (as hereinafter defined), and the Company agrees to sell at the Closing
to each Investor a Convertible Debenture for a value equal to the dollar amount
as is set forth opposite such Investor’s name on Schedule A attached
hereto (the “Purchase Price”).  The
Purchase Price is to be paid by wire transfer or check, and delivered to the
Company upon execution and delivery hereof by Investor, or by wire, to:

Central Bank at 415 North
State Street, Orem UT  84057, routing
number is 124300327, account number is 101114726 (Contact number at the bank is
801.224.1420)

b.  Delivery of Convertible Debenture.  The Convertible Debenture subscribed for
herein shall be evidenced by an executed convertible debenture, the form of
which is attached to the Memorandum as Exhibit C, shall be issued at
Closing (hereinafter defined).  

c. Closings.  The consummation of the purchase and sale of
the Debentures contemplated by this Agreement shall take place at the Company
officers upon receipt of subscriptions acceptable by the Company in an amount
equal to or greater than the Minimum Amount and at such time as is mutually
agreeable to the Company, or at such other time and place as the Company may
designate (the “Closing” or “Closings”); provided, however, that
all Closings shall take place no later than the Offering Termination Date.  At each Closing, the Company shall deliver to
the Investors the Debentures in accordance with paragraph (c) above, against
delivery to the Company by each such Investor of its Purchase Price, a fully
completed Subscription Agreement attached to the Memorandum as Exhibit A,
and an Accredited Investor Questionnaire attached to the Memorandum as Exhibit
B and signature pages to these Agreements. 
Execution and delivery of this Agreement and the other documents to be
delivered at Closing may be by facsimile or electronic transmission.

d. Binding
and Enforceable.  This Subscription
Agreement will be binding upon and enforceable 

against the
Company only when countersigned by an authorized agent of the Company and
delivered to Investors who have agreed to purchase at least the Minimum Amount.

2.  Representations and Warranties of the
Company.  The Company hereby
represents and warrants to each Investor as follows:

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 Colorado, and has all requisite power and authority to
carry on its business as now conducted. 
The Company is duly qualified to transact business, and is in good
standing, in each U.S. jurisdiction in which the failure to so qualify would
have a material adverse effect on its business.

b.  Capitalization.  The authorized capital of the Company
consists of 200,000,000 shares of common stock and 5,000,000 shares of
preferred stock.  Prior to this Offering,
30,500,001 shares of Common Stock and zero shares of Preferred Stock are issued
and outstanding.

c. Authorization.  All action on the part of the Company
necessary for the authorization, execution and delivery of this Agreement, the
performance of all obligations of the Company hereunder and the authorization,
issuance and delivery of the Debentures being sold hereunder, to the extent
that the foregoing requires performance on or prior to the Closing, has been
taken or will be taken on or prior to the Closing, and the Company has all
requisite power and authority to enter into this Agreement.

3.  Representations and Warranties of
Investors.  Each Investor hereby
represents and warrants to the Company as follows:

 5
 

 

a.  Organization; Good Standing; Power and
Authority; Binding Obligation. 
Investor has full power and authority to enter into this Agreement, and,
for those Investors which are corporations (i) such Investor is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has all requisite power and authority to
carry on its business as now conducted, and (ii) all action on the part of the
Investor necessary for the authorization, execution and delivery of this
Agreement, the performance of all obligations of the Investor hereunder,
including, without limitation, the payment of the purchase price for the
Debentures being sold such Investor hereunder has been taken, and the Investor
has all requisite power and authority to enter into this Agreement.  This Agreement has been duly executed and
delivered by Investor and, assuming due authorization, execution and delivery
by the Company, constitutes Investor’s valid and legally binding obligation
enforceable against the Investor in accordance with its terms, subject to the
effect of any applicable bankruptcy, reorganization, insolvency (including,
without limitation, all laws relating to fraudulent transfers), moratorium or
similar laws affecting creditors’ rights generally, subject, as to
enforceability, to the effect of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and subject to the effect of applicable securities laws as to rights of
indemnification.

b.  Purchase Entirely for Own Account.  The Debentures and Conversion Shares to be
purchased by Investor hereunder will be acquired for investment for Investor’s
own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof. 
Investor has no present intention of selling, granting any participation
in, or otherwise distributing the Debentures or Conversion Shares.  Investor does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or
grant participations to any person with respect to the Debentures or Conversion
Shares.  The Investor has not construed
the contents of this Agreement, or any additional agreement with respect to the
proposed investment in the Debentures or any prior or subsequent communications
from the Company, or any of its officers, employees or representatives, as
investment, tax or legal advice or as information necessarily applicable to
such Investor’s particular financial situation. 
The Investor has consulted its own financial advisor, tax advisor, legal
counsel and accountant, as necessary or desirable, as to matters concerning his
investment in the Debentures or Conversion Shares.

c.  Disclosure.  Investor has received or reviewed all the
information which such Investor has requested for the purposes of determining
the merits of the Debentures as an investment. 
Investor has read and understands the Risk Factors and other information
presented in the Memorandum.

Investor
has had an opportunity to ask questions and receive answers from the Company
regarding the Company and its respective business, operations and financial
condition and the terms and conditions of this Offering of Debentures, and
answers have been provided to Investor’s full satisfaction.  Investor has fully reviewed all corporate and
governance documents of the Company and such other documents, which Investor
feels is necessary or appropriate prior to purchase of the Debentures,
understands all relevant terms and has asked all questions and received answers
thereto to Investor’s full satisfaction. 
If deemed necessary by Investor, Investor has consulted with a
professional advisor who has provided Investor with advice concerning
terms.  INVESTOR ACKNOWLEDGES AND AGREES
THAT THE PURCHASE OF THE DEBENTURES INVOLVES A HIGH DEGREE OF RISK, INCLUDING,
WITHOUT LIMITATION, THOSE SET FORTH IN THE MEMORANDUM, AND MAY RESULT IN A LOSS
OF THE ENTIRE AMOUNT INVESTED.  EACH
INVESTOR FURTHER ACKNOWLEDGES AND AGREES THAT THERE IS NO ASSURANCE THAT THE
COMPANY’S OPERATIONS WILL RESULT IN REVENUES OR BE PROFITABLE.

d.  Accredited Investor.  Investor is an “accredited investor” as
defined in Rule 501(a) of Regulation D promulgated under the 1933 Act.  The information provided by Investor on the
Accredited Investor Questionnaire, attached to the Memorandum as Exhibit C,
is true, correct and complete in all respects. 
Investor is capable of bearing the economic risk of an investment in the
Debentures, including the possible loss of Investor’s entire investment.  Investor has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of an investment in the Debentures offered hereby.  If other than an individual, Investor has not
been organized solely for the purpose of acquiring the Debentures.

e.  Restricted Securities.  Investor understands that the Conversion
Shares being purchased hereunder are “restricted securities” as defined in the
Securities Act, and that under federal and state securities laws the Debentures
and Conversion Shares may be resold without registration under the Securities
Act only in certain limited circumstances. 
Investor is familiar with Rule 144 promulgated by the SEC under the
Securities Act, and

 6
 

understands the
resale limitations imposed thereby and by the Securities Act generally.  Investor also acknowledges that the
Conversion Shares are subject to significant restrictions on transfer, pledge
or hypothecation.

f.  Legends.  It is understood that certificates or other
evidence of the Debentures or Conversion Shares may bear the following legend,
as well as any legend required by the laws of any state:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933.  THEY MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED PURSUANT TO A VALID EXEMPTION THEREFROM UNDER THE SECURITIES ACT
OF 1933.”

g.  Consents and Approvals; No Conflict.  (i) The execution and delivery of this
Agreement by the Investor does not, and the performance of this Agreement by
the Investor will not, require any consent, approval, authorization or other
action by, or filing with or notification to, any governmental or regulatory
authority.

(i)  The execution, delivery and performance of
this Agreement by the Investor does not (A) in the case of any Investor that is
not an individual, conflict with or violate the charter or by-laws, partnership
or other governing documents of such Investor, or (B) conflict with or violate
any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award applicable to the Investor.

4.  Covenant of Investors.  Each Investor hereby covenants with the
Company that, without in any way limiting the representations set forth in
Section 3 above, Investor shall not make any disposition of all or any portion
of the Debentures or Conversion Shares unless and until: 

(i) there is then in effect a registration statement under the
Securities Act covering such proposed disposition, and such disposition is made
in accordance with such registration statement; or

(ii) such Investor shall have notified the
Company of the proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed disposition,
and, if requested by the Company, such Investor shall have furnished the
Company with an opinion of counsel, in form and substance satisfactory to the
Company, that such disposition will not require registration of the Conversion
Shares as the case may be, under the Securities Act.

5.  Conditions of Investor’s Obligations at
Closing.  The obligations of each
Investor hereunder are subject to, and contingent upon, the fulfillment, on or
before each Closing, of each of the following conditions, the waiver of which
shall not be effective against any Investor who does not consent in writing
thereto:

a.  Representations and Warranties.  The representations and warranties of the
Company contained in Section 2 hereof shall be true and correct 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 such

Closing.

b.  Performance.  The Company shall have performed and complied
with all agreements, obligations and covenants contained in this Agreement that
are required to be performed or complied with by it on or before the Closing, provided,
however, that the obligations of the Investors shall not be subject to
or contingent upon the issuance by the Company of the Debentures to the persons
or entities set forth on Schedule A attached hereto who have not
performed or tendered the performance of their obligations required to be performed
under this Agreement on or prior to the Closing.

6.  Conditions of the Company’s Obligations at
Closing.  The obligations of the
Company to each Investor hereunder are subject to and contingent upon the
fulfillment by such Investor, on or before the Closing, of each of the
following conditions:

 7
 

 

a.  Representations and Warranties.  The representations and warranties of each
Investor contained herein shall be true and correct 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 such Closing.

b.  Payment of Purchase Price by Investors.  Each Investor shall have delivered to the
Company the Purchase Price specified in Schedule A attached hereto, in
the manner specified in this Agreement and, in the event Investor pays by
check, the Purchase Price shall have been credited to the Company Account.

c.  Statement of Accredited Investor.  Each Investor shall have delivered to the
Company a Statement of Accredited Investor in the form set forth in Exhibit
C attached to the Memorandum, and the information provided therein shall be
true, correct and complete on and as of the Closing with the same effect as
though such information had been provided as of the date of such Closing.

7.  Miscellaneous.

a.  Survival of Warranties.  The representations, warranties and covenants
of the Investors contained in this Agreement shall survive the execution and
delivery of this Agreement and the Closing.

b.  Successors and Assigns.  This Agreement may not be assigned by any
party hereto.  The terms and conditions
of this Agreement shall inure to the benefit of, and be binding upon, the
respective successors 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,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.

c.  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado, without regard
to the principles of conflict of laws thereof.

d.  Counterparts; Delivery by Facsimile.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  Delivery of this Agreement may be effected by
facsimile.

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.  Unless otherwise provided, any notice
required or permitted hereunder shall be given by personal service upon the
party to be notified, by nationwide overnight delivery service or upon deposit
with the United States Post Office, by certified mail, return receipt requested
and:

(i) if to the Company,
addressed to Better BioDiesel, Inc., 5300 355 South 1550 West, Spanish Fork,
Utah 84660, or at such other address as the Company may designate by notice to
each of the Investors in accordance with the provisions of this Section; and

(ii) if to the Investors,
at their respective addresses indicated on the signature pages hereof, or at
such other addresses as any one or more Investors may designate by notice to
the Company in accordance with the provisions of this Section.

g.  Expenses.  Irrespective of whether a Closing is
effected, the Company and the Investors shall pay all of their own costs and
expenses incurred with respect to the negotiation, execution, delivery and
performance of this Agreement.  If any
action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorney’s
fees, costs and necessary disbursements in addition to any other relief to
which such party may be entitled.

h.  Amendments and Waivers.  Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either prospectively or retroactively), only with
the written consent of the Company and a majority in interest of the Investors.

 8
 

 

i.  Severability.  If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provisions shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded, and this Agreement shall be
otherwise enforceable in accordance with its terms.

j.  Entire Agreement.  This Agreement (including the appendices and
schedules hereto) constitutes the entire agreement among the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties hereto.

 

                IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the date first above written.

 

	
  BETTER BIODIESEL, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Ron Crafts

  	
   

  	
   

  
	
  Name:

  	
  Ron Crafts

  	
   

  	
   

  
	
  Its:

  	
  Chief Executive Officer

  	
   

  	
   

  

 

 

	
  NATIONAL REAL ESTATE
  SOLUTIONS GROUP

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ William C. Cannon, Jr.

  	
   

  	
   

  
	
  Name:

  	
  /s/ William C. Cannon, Jr

  	
   

  	
   

  
	
  Its:

  	
  Vice President

  	
   

  	
   

  

 

 9
 

 

SCHEDULE A

 

NAME OF INVESTOR(S)                                                   PURCHASE
PRICE OF CONVERTIBLE DEBENTURE

 

 

National Real Estate Solutions Group Inc.

127 Church St., Ste #103

Orlando, FL 32801

EIN# 20-4273804

 

 10

Exhibit
B

(Omitted
From Filing Copy)

 11
 

 

Exhibit
C

BETTER BIODIESEL, INC.

10%
CONVERTIBLE DEBENTURE

$200,000                                                                                                                                                                  February
15, 2007

                                                                                                                                                                    SPANISH
FORK, UTAH

 

 

BETTER BIODIESEL, INC. (“Maker” or the “Company”) hereby
promises to pay to the order of National Real Estate Solutions Group
Inc. (“Holder”), at 127 W Church St
Ste 103, Orlando Fl 32801, the sum of two
hundred thousand  and 00/100 dollars
($200,000), with interest at the rate of ten percent (10%) per term.  All outstanding principal and accrued and
unpaid interest shall become due upon March 31, 2007 (the “Maturity
Date”).  All payments due and owning
under this 10% Convertible Debenture (the “Debenture”) shall be subject to the
terms and conditions set forth herein. 

1.               Agreement.

The Debenture is issued pursuant
to that certain Subscription Agreement (the “Agreement”), dated the same date
as first set forth herein, by and between Maker and Holder, which is hereby
incorporated by reference.

2.               Register.

The Company shall keep at its
principal office a register in which the Company shall provide for the
registration of the Holder of the Debenture or for the registration of a
transfer of the Debenture to a different Holder.

3.               Loss Theft, Destruction or Mutilation of the
Debenture.

Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of the Debenture and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity bond in such reasonable amount as the
Company may determine (or if such Debenture is held by the original Holder, of
an unsecured indemnity agreement reasonably satisfactory to the Company) or, in
the case of any such mutilation, upon surrender and cancellation of such
Debenture, the Company will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Debenture, a new Debenture of like tender and unpaid
principal amount and dated as of the date to which interest has been paid on
the Debenture so lost, stolen, destroyed or mutilated.

4.               Registered
Holder.

The Company may deem and treat the person in
whose name any Debenture is registered as the absolute owner and Holder of such
Debenture for the purpose of receiving payment of the principal of and interest
on such Debenture and for the purpose of any notices, waivers or consents
thereunder, whether or not such Debenture shall be overdue, and the Company
shall not be affected by notice to the contrary.  Payments with respect to any Debenture shall
be made only to the registered Holder thereof.

5.               Surrender of the Debenture.

The Company may, as a condition
of payment of all or any of the principal of, and interest on, the Debenture,
or its conversion, require Holder to present the Debenture for notation of such
payment and, if the Debenture be paid in full or converted at the election of
Holder as herein provided, require the surrender hereof.

6.               Subordination.

 12
 

The Company, in its sole
discretion, may subordinate the Debenture to any Senior Debt of the
Company.  For purposes of the Debenture,
“Senior Debt” shall mean all indebtedness for all principal, fees,
expenses, interest, penalties, post-bankruptcy petition interest, and all other
amounts payable for money borrowed.

7.               Conversion.

At
the Maturity Date, at the sole option of the Company, all principal and any
accrued interest due on this Debenture (the “Convertible Amount”) may be
converted to common shares of the Company’s common stock at a share price equal
to the greater of either Five Dollars ($5) or seventy-five percent (75%) of the
most current 10-day trailing average bid price (the “Conversion Price”).  Interest compounded may be converted to
common stock at the Conversion Price or in cash, solely at the Company’s
option.

If,
upon the expiration of the Maturity Date, the Company elects NOT to convert
this Debenture, all outstanding principal and accrued and unpaid interest shall
become due and payable.  Maker shall
deliver payment in cash or shares of common stock within fifteen (15) days
following the Maturity Date.

8.               Mechanics of Conversion.

Upon the Company’s election to convert the Debenture, the principal
amount of this Debenture plus any accrued interest shall be deemed converted
into such number of shares of the Company’s Common Stock as determined pursuant
to Section 7, and no further payments shall thereafter accrue or be owing under
the Debenture.  The entire principal due
and owing under the Debenture must be converted to Common Stock; no partial
conversions will be allowed.  Holder
shall return this Debenture to the Company at the address set forth below, or
such other place as the Company may require in writing.  Within fifteen (15) days after receipt of
this Debenture, the Company shall cause to be issued in the name of and
delivered to Holder at the address set forth above, or to such other address as
to which Holder shall have notified the Company in writing, a certificate
evidencing the securities to which Holder is entitled.  No fractional securities will be issued upon
conversion of the Debenture.  If on
conversion of the Debenture a fraction of a security results, the Company shall
round up the total number of securities to be issued to Holder to the nearest
whole number.

9.               Notice.

Any notice required or desired
to be given under this Agreement shall be in writing and shall be deemed given
when personally delivered, sent by an overnight courier service, or sent by
certified or registered mail to the addresses set forth below, or such other
address as to which one party may have notified the other in such manner.

10.         Default.

The following will
be “Events of Default” under the Debenture: 
(a) the Company shall default on the payment of principal or interest on
the Debenture or on any other indebtedness of the Company when due; (b) the
Company shall default on the observance or performance of any other covenant
set forth in the Debenture; (c) the Company shall become insolvent or file a
voluntary petition in bankruptcy (or have such a petition filed against it) or
have an assignment for the benefit of creditors or other creditor arrangement
or similar event occur with respect to it or its assets; or (e) failure to
comply with any other term or condition of the Debenture, which shall not have
been cured within ten (10) business days receipt of written notice to the
Company.

Upon Default, and at the option of Holder, or Holder’s
successors or assigns, with fifteen (15) days written notice to the
Company, demand or presentment, Holder may (i) accelerate all amounts due and
owing under this Debenture and demand payment immediately and/or (ii) declare
the right to exercise any and all remedies available to Holder under applicable
law.

 13
 

11.         Miscellaneous.

                (a)           Interest on the principal at the rate
of 10% per Term, unless otherwise converted to common stock in the
Company.

                (b)           The Company agrees that all Conversion
Shares shall be fully paid and non-assessable. 
Maker shall pay upon demand any and all expenses, including reasonable
attorney fees, incurred or paid by Holder of this Debenture without suit or
action in attempting to collect funds due under this Debenture or in connection
with the issuance of the Conversion Shares. 
In the event an action is instituted to enforce or interpret any of the
terms of this Debenture including but not limited to any action or participation
by Maker in, or in connection with, a case or proceeding under the Bankruptcy
Code or any successor statute, the prevailing party shall be entitled to
recover all expenses reasonably incurred at, before and after trial and on
appeal or review, whether or not taxable as costs, including, without
limitation, attorney fees, witness fees (expert and otherwise), deposition
costs, copying charges and other expenses.

                (c)           All parties to this Debenture hereby
waive presentment, dishonor, notice of dishonor and protest.  All parties hereto consent to, and Holder is
hereby expressly authorized to make, without notice, any and all renewals,
extensions, modifications or waivers of the time for or the terms of payment of
any sum or sums due hereunder, or under any documents or instruments relating
to or securing this Debenture, or of the performance of any covenants,
conditions or agreements hereof or thereof or the taking or release of
collateral securing this Debenture.  Any
such action taken by Holder shall not discharge the liability of any party to
this Debenture.

                (d)           This Debenture shall be governed by
and construed in accordance with the laws of the state of Colorado without
regard to conflict of law principles.

                (e)           All payments due and owing under this
Debenture shall be delivered to the following: 

	
  

  	
  National Real Estate Solutions Group Inc.

  	
   

  	
   

  
	
   

  	
  127 W Church St
  Ste 103

  	
   

  	
   

  
	
   

  	
   Orlando Fl
  32801

  	
   

  	
   

  
	
   

  	
  EIN # 20-5714416

  	
   

  	
   

  

 

IN WITNESS WHEREOF, the parties
hereto execute this Convertible Debenture as of this 15th day of
February, 2007.

	
  

  	
  Maker:

  	
  BETTER BIODIESEL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
      /s/ Ron Crafts

  	
   

  
	
   

  	
   

  	
  By: Ron Crafts

  
	
   

  	
   

  	
  Its: CEO

  

 

Holder:    /s/
National Real Estate Solutions Group Inc

Holder’s address: 127 W
Church St Ste 103

 Orlando Fl 32801

EIN # 20-5714416

 

Maker’s address: Better
BioDiesel, Inc.

355 South 1550 West

Spanish Fork, UT 84660

 14
 

 

	
  With a copy to

  	
  The Otto Law Group, PLLC

  	
   

  
	
   

  	
  Attn: David M. Otto

  	
   

  
	
   

  	
  601 Union Street, Suite 4500

  	
   

  
	
   

  	
  Seattle, Washington 98101

  	
   

  

 

 

Exhibit
D

 

FORM OF WARRANT AGREEMENT

WARRANT

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933 (THE “ACT”) OR APPLICABLE STATE SECURITIES LAWS, AND THE
TRANSFER THEREOF IS PROHIBITED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S UNDER THE ACT, PURSUANT TO REGISTRATION UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
SUCH REGISTRATION.  HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
ACT

Warrant To 3,125
Shares of Common Stock 

BETTER BIODIESEL, INC.

Date of Issuance: February
15, 2007

No.        1      

THIS CERTIFIES that, for value received, National Real
Estate Solutions Group Inc, or its assigns (in either case, the “Holder”)
is entitled to purchase, subject to the provisions of this Warrant, from Better
BioDiesel, Inc., a Colorado corporation (the “Company”), at the price per share
set forth in Section 8 hereof, that number of shares of the Company’s common
stock (the “Common Stock”) set forth in Section 7 hereof.  This Warrant is referred to herein as the
“Warrant” and the shares of Common Stock issuable pursuant to the terms hereof
are sometimes referred to herein as “Warrant Shares.”

1.             Holder Exercise of Warrant.  This Warrant shall only be exercisable in
whole.  To exercise this Warrant in
whole, the Holder shall deliver to the Company at its principal office, (a) a
written notice, in substantially the form of the exercise notice attached hereto
as Exhibit A (the “Exercise Notice”), of the Holder’s election to
exercise this Warrant, which notice shall specify the number of shares of
Common Stock to be purchased and (b) this Warrant.  The Company shall as promptly as practicable,
and in any event within twenty (20) days after delivery to the Company of (i)
the Exercise Notice, (ii) and this Warrant, execute and deliver or cause to be
executed and delivered, in accordance with such notice, a certificate or
certificates representing the aggregate number of shares of Common Stock
specified in such notice, provided this Warrant has vested on or prior to the
date such notice is delivered.  Each
certificate representing Warrant Shares shall bear the legend or legends
required by applicable securities laws as well as such other legend(s) the
Company requires to be included on certificates for its Common Stock.  The Company shall pay all expenses and other
charges payable in connection with the preparation, issuance and delivery of
such stock certificates except that, in case such stock certificates shall be
registered in a name or names other than the name of the Holder, funds
sufficient to pay all stock transfer taxes that are payable upon the issuance
of such stock certificate or certificates shall be paid by the Holder at the
time of

 15
 

delivering the
Exercise Notice.  All shares of Common
Stock issued upon the exercise of this Warrant shall be validly issued, fully
paid, and nonassessable.  

The
Warrant shall expire three (3) years after the date of execution thereof (the
“Expiration Date”).  The Investor may
exercise the warrant at any time prior to the Expiration Date.  The Company has no restriction on the sale or
transfer of the Warrant or Warrant Shares; however, the Investor is required to
comply with all state and U.S. laws and regulations relating to security sales
and transfers.

2.             Reservation of Shares. The
Company hereby covenants that at all times during the term of this Warrant
there shall be reserved for issuance such number of shares of its Common Stock
as shall be required to be issued upon exercise of this Warrant. 

3.             Fractional Shares.  This Warrant may be exercised only for a
whole number of shares of Common Stock, and no fractional shares or scrip
representing fractional shares shall be issuable upon the exercise of this
Warrant. 

4.             Transfer of Warrant and Warrant
Shares.  The Holder may sell, pledge,
hypothecate, or otherwise transfer this Warrant, in whole, in accordance with
and subject to the terms and conditions set forth in the Subscription Agreement
and then only if such sale, pledge, hypothecation, or transfer is made in
compliance with the Act or pursuant to an available exemption from registration
under the Act relating to the disposition of securities.

5.             Loss of Warrant.  Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, or destruction of this Warrant, and of
indemnification satisfactory to it, or upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new warrant of
like tenor. 

6.             Rights of the Holder.  No provision of this Warrant shall be
construed as conferring upon the Holder the right to vote, consent, receive
dividends or receive notice other than as expressly provided herein.  Prior to exercise, no provision hereof, in
the absence of affirmative action by the Holder to exercise this Warrant, and
no enumeration herein of the rights or privileges of the Holder, shall give
rise to any liability of the holder for the purchase price of any warrant shares
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company. 

7.             Number of Warrant Shares.  This Warrant shall be exercisable for 3,125 shares
of the Company’s Common Stock, as adjusted in accordance with this Agreement. 

8.             Exercise Price; Adjustment of
Warrants. 

                                a.             Determination of Exercise
Price.  The per share purchase price (the
“Exercise Price”) for each of the Warrant Shares purchasable under this
Warrant shall be equal to $8. 

                                b.             Adjustment for Mergers or
Reorganization, etc.  In case of any
consolidation or merger of the Company with or into another corporation or the
conveyance of all or substantially all of the assets of the Company to another
corporation, this Warrant shall be exercisable into the number of shares of
stock or other securities or property to which a holder of the number of shares
of Common Stock of the Company deliverable upon exercise of this Warrant would
have been entitled upon such consolidation, merger or conveyance; and, in any
such case, appropriate adjustment (as determined by the Board of Directors of
the Company) shall be made in the application of the provisions herein set
forth with respect to the rights and interest thereafter of the holder of this Warrant,
to the end that the provisions set forth herein shall thereafter be applicable,
as nearly as reasonable may be, in relation to any shares of stock or other
property thereafter deliverable upon the exercise of this Warrant. 

                                c.
            NO
IMPAIRMENT.  THE COMPANY WILL
NOT, THROUGH ANY REORGANIZATION, TRANSFER OF ASSETS, CONSOLIDATION, MERGER,
DISSOLUTION, ISSUE OR SALE OF SECURITIES OR ANY OTHER VOLUNTARY ACTION, AVOID
OR SEEK

 16
 

TO AVOID
THE OBSERVANCE OR PERFORMANCE OF ANY OF THE TERMS TO BE OBSERVED OR PERFORMED
HEREUNDER BY THE COMPANY, BUT WILL AT ALL TIMES IN GOOD FAITH ASSIST IN THE
CARRYING OUT OF ALL THE PROVISIONS OF THIS SECTION AND IN THE TAKING OF ALL
SUCH ACTION AS MAY BE NECESSARY OR APPROPRIATE IN ORDER TO PROTECT THE EXERCISE
RIGHTS OF THE HOLDER OF THIS WARRANT AGAINST IMPAIRMENT. 

d.             Issue Taxes.  The Company shall pay issue taxes that may be
payable in respect of any issue or delivery of shares of Common Stock on
exercise of this Warrant, in whole; provided, however, that the Company shall not
be obligated to pay any transfer taxes resulting from any transfer requested by
any holder in connection with any such exercise. 

e.             Reservation of Stock Issuable
Upon Conversion.  The Company shall
at all times reserve and keep available out of its authorized but unissued
shares of common stock, solely for the purpose of effecting the exercise of
this Warrant, such number of its shares of common stock as shall from time to
time be sufficient to effect the exercise of this Warrant; and if at any time the
number of authorized but unissued shares of common stock shall not be
sufficient to effect the exercise of this Warrant, the Company will take all
appropriate corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of common stock to
such number of shares as shall be sufficient for such purpose. 

f.              Adjustment.  The Exercise Price shall be adjusted downward
in the event the Company issues common stock (or securities exercisable for or
convertible into or exchangeable for common stock) at a price below the
Exercise Price, to a price equal to such issue price.

9.             Certain Distributions.  In case the Company shall, at any time, prior
to the Expiration Date, declare any distribution of its assets to holders of
its common stock as a partial liquidation, distribution or by way of return of
capital, other than as a dividend payable out of earnings or any surplus
legally available for dividends, then the Holder shall be entitled, upon the
proper exercise of this Warrant in whole prior to the effecting of such
declaration, to receive, in addition to the shares of common stock issuable on
such exercise, the amount of such assets (or at the option of the Company a sum
equal to the value thereof at the time of such distribution to holders of
common stock as such value is determined by the Board of Directors of the
Company in good faith), which would have been payable to the Holder had it been
a holder of record of such shares of common stock on the record date for the
determination of those holders of Common Stock entitled to such distribution. 

10.           Dissolution or Liquidation.  In case the Company shall, at any time prior
to the Expiration Date, dissolve, liquidate or wind up its affairs, the Holder
shall be entitled, upon the proper exercise of this Warrant in whole and prior
to any distribution associated with such dissolution, liquidation, or winding
up, to receive on such exercise, in lieu of the shares of Common Stock to which
the Holder would have been entitled, the same kind and amount of assets as
would have been distributed or paid to the Holder upon any such dissolution,
liquidation or winding up, with respect to such shares of Common Stock had the
Holder been a holder of record of such share of Common Stock on the record date
for the determination of those holders of Common Stock entitled to receive any
such dissolution, liquidation, or winding up distribution. 

11.           Reclassification or Reorganization.  In case of any reclassification, capital
reorganization or other change of outstanding shares of common stock of the
Company (other than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of an issuance of common
stock by way of dividend or other distribution or of a subdivision or
combination), the Company shall cause effective provision to be made so that
the Holder shall have the right thereafter by exercising this Warrant, to
purchase the kind and amount of shares of stock and other securities and PROPERTY RECEIVABLE UPON SUCH RECLASSIFICATION, CAPITAL REORGANIZATION
OR OTHER CHANGE, BY A HOLDER OF THE NUMBER OF SHARES OF COMMON STOCK WHICH
MIGHT HAVE BEEN PURCHASED UPON EXERCISE OF THIS WARRANT IMMEDIATELY PRIOR TO
SUCH RECLASSIFICATION OR CHANGE. ANY SUCH PROVISION SHALL INCLUDE PROVISION FOR
ADJUSTMENTS WHICH SHALL BE AS

 17
 

NEARLY
EQUIVALENT AS MAY BE PRACTICABLE TO THE ADJUSTMENTS PROVIDED FOR IN THIS
WARRANT. THE FOREGOING PROVISIONS OF THIS SECTION 12 SHALL SIMILARLY APPLY TO
SUCCESSIVE RECLASSIFICATIONS, CAPITAL REORGANIZATIONS AND CHANGES OF SHARES OF
COMMON STOCK. IN THE EVENT THAT IN ANY SUCH CAPITAL REORGANIZATION,
RECLASSIFICATION, OR OTHER CHANGE, ADDITIONAL SHARES OF COMMON STOCK SHALL BE
ISSUED IN EXCHANGE, CONVERSION, SUBSTITUTION OR PAYMENT, IN WHOLE, FOR OR OF A
SECURITY OF THE COMPANY OTHER THAN COMMON STOCK, ANY AMOUNT OF THE
CONSIDERATION RECEIVED UPON THE ISSUE THEREOF BEING DETERMINED BY THE BOARD OF
DIRECTORS OF THE COMPANY SHALL BE FINAL AND BINDING ON THE HOLDER. 

12.           Miscellaneous. 

a.             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, except to the extent otherwise provided herein.
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.             Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Utah without regard to
the principles of conflict of laws thereof. 

c.             Counterparts; Delivery by
Facsimile.  This Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.  Delivery of this Agreement
may be effected by facsimile. 

d.             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. 

                e.             Notices. 
Unless otherwise provided, any notice required or permitted hereunder
shall be given by personal service upon the party to be notified by certified
mail, return receipt requested and: (i) if to the Company, addressed to Better
BioDiesel, Inc., 355 South 1550 West, Spanish Fork, Utah 84660, or at such
other address as the Company may designate by notice to each of the Investors
in accordance with the provisions of this Section; and (ii) if to the Warrant
holder, at the address indicated on the signature page hereof, or at such other
addresses as such Holder may designate by notice to the Company in accordance
with the provisions of this Section. 

f.              Amendments and Waivers.  Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either prospectively or retroactively), only with
the written consent of the Company and a majority in interest of the Holders. 

g.             Entire Agreement.  This Agreement, the Memorandum (including the
appendices and schedules thereto) by and between the Company and the Holder,
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties hereto. 

IN WITNESS WHEREOF, the undersigned
hereby sets is hand and seal this 15th day of February, 2007. 

 18
 

Better BioDiesel, Inc. 

	
  By: 

  	
        /s/
  Ron Crafts

  	
   

  	
   

  
	
   

  	
  Name: Ron Crafts

  	
   

  	
   

  
	
   

  	
  Title: Chief Executive Officer

  	
   

  	
   

  

 

 

	
  Investor Name: 

  	
  National Real Estate
  Solutions Group Inc

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Investor Address:

  	
  127 Church St., Ste
  #103

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Orlando, FL 32801

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EIN# 20-4273804

  	
   

  	
   

  	
   

  	
   

  
											

 

 19
 

EXHIBIT
A

              NOTICE
OF EXERCISE

(To be signed only upon exercise of the Warrant)

TO:  Better BioDiesel, Inc.

The undersigned,
hereby irrevocably elects to exercise the purchase rights represented by the
Warrant granted to the undersigned on                            
and to purchase thereunder                       *
shares of Common Stock of Better BioDiesel, Inc. (the “Company”).

Dated:                      

	
  

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature must conform in all respects to name

  
	
   

  	
   

  	
  of holder as specified on the face of the Warrant)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Please Print Name)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Address)

  

 

* Insert here the number
of shares being exercised, without making any adjustment for additional Common
Stock of the Company, other securities or property which, pursuant to the
adjustment provisions of the Warrant, may be deliverable upon exercise. 

 20

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