Document:

EXHIBIT
10.10

REGISTRATION
RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of January 30,
2006, is made by and between Earth Biofuels, Inc., a Delaware corporation
(the “Company”), and Marc Weill (the “Investor”).

WHEREAS:

A.            In
connection with the Convertible Promissory Note in the principal amount of $250,000
of even date herewith by and between the Company and the Investor (the “Note”), the Company has agreed to
issue to the Investor shares of the Company’s common stock (the “Common Stock”) upon the terms and
subject to the limitations and conditions set forth in the Note; and

B.            To
induce the Investor to execute the Note, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as amended, and
the rules and regulations thereunder (collectively, the “1933 Act”), and applicable state
securities laws;

NOW,
THEREFORE, in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Investor hereby agree as follows:

1.             DEFINITIONS.

As used in this Agreement,
the following terms shall have the following meanings:

(i)            “Investor”
means the Investor and any transferee or assignee who agrees to become bound by
the provisions of this Agreement in accordance with Section 9 hereof.

(ii)           “register,” “registered,” and “registration” refer to a
registration effected by preparing and filing a Registration Statement in compliance
with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any
successor rule providing for offering securities on a continuous basis (“Rule 415”), and the declaration
of effectiveness of such Registration Statement by the United States Securities
and Exchange Commission (the “SEC”).

(iii)         “Registrable Securities”
means the all of the shares of Common Stock issued or issuable upon conversion
pursuant to the Note.

(iv)          “Registration Statement”
means a registration statement of the Company under the 1933 Act.

2.             REGISTRATION.

a.             Mandatory
Registration. The
Investor shall be entitled to make written request for registration of the
Registrable Securities, no later than 90 days following conversion of the Note.
Provided that the Investor has made a timely request therefore, the Company
shall effect the registration of the Registrable Securities. Within forty-five
(45) days of receipt of written request from the Investor, the Company shall file
with the SEC a Registration Statement to effect the registration of the
Registrable Securities that the Company has been requested to register for
disposition as described in the request of the Investor.

b.             Piggy-Back
Registrations. Subject
to the last sentence of this Section 2(b), if at any time prior to the
expiration of the Registration Period (as hereinafter defined) the Company
shall determine to file with the SEC a Registration Statement relating to an
offering for its own account or the account of others under the 1933 Act of any
of its equity securities (other than on Form S-4 or Form S-8
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans), the Company
shall send to the Investor written notice of such determination and, if within
fifteen (15) days after the effective date of such notice, the Investor shall
so request in writing, the Company shall include in such Registration Statement
all or any part of the Registrable Securities the Investor requests to be
registered. If an offering in connection with which the Investor is entitled to
registration under this Section 2(b) is an underwritten offering,
then the Investor shall, unless otherwise agreed by the Company, offer and sell
such Registrable Securities in an underwritten offering using the same
underwriter or underwriters and, subject to the provisions of this Agreement,
on the same terms and conditions as other shares of Common Stock included in such
underwritten offering. Notwithstanding anything to the contrary set forth
herein, the registration rights of the Investor pursuant to this Section 2(b) shall
only be available in the event the Company fails to timely file, obtain
effectiveness or maintain effectiveness of any Registration Statement to be
filed pursuant to Section 2(a) in accordance with the terms of this
Agreement.

c.             Eligibility
for Form SB-2. The Company represents and warrants that it meets the requirements
for the use of SB-2 for registration of the sale by the Investor of the
Registrable Securities.  The Company
agrees to file all reports required to be filed by the Company with the SEC in
a timely manner so as to remain eligible or become eligible, as the case may
be, and thereafter to maintain its eligibility, for the use of Form SB-2.

3.             OBLIGATIONS
OF THE COMPANY.

In
connection with the registration of the Registrable Securities, the Company
shall have the following obligations:

a.             The Company shall keep the Registration
Statement effective pursuant to Rule 415 at all times until such date as
is the earlier of (i) the date on which all of the Registrable Securities
have been sold and (ii) the date on which the Registrable Securities (in
the opinion of counsel to the Investor) may be immediately sold to the public
without registration or restriction (including, without limitation, as to
volume by the holder thereof) under the 1933 Act (the “Registration
Period”), which Registration Statement (including any amendments
or 

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supplements thereto
and prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein,
or necessary to make the statements therein not misleading.

b.             The Company shall prepare and file with the
SEC such amendments (including post-effective amendments) and supplements to
the Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition thereof as set forth in the
Registration Statement.

c.             The Company shall furnish to the Investor (i) promptly
(but in no event more than two (2) business days) after the same is
prepared and publicly distributed, filed with the SEC, or received by the
Company, one copy of each Registration Statement and any amendment thereto,
each preliminary prospectus and prospectus and each amendment or supplement
thereto, and (ii) promptly (but in no event more than two (2) business
days) after the Registration Statement is declared effective by the SEC, such
number of copies of a prospectus, including a preliminary prospectus, and all
amendments and supplements thereto and such other documents as the Investor may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by the Investor. The Company will immediately notify the Investor
by facsimile of the effectiveness of each Registration Statement or any
post-effective amendment. The Company will promptly (but in no event more than
five (5) business days) respond to any and all comments received from the
SEC (which comments shall promptly be made available to the Investor upon
request), with a view towards causing each Registration Statement or any
amendment thereto to be declared effective by the SEC as soon as practicable,
shall promptly file an acceleration request as soon as practicable (but in no
event more than two (2) business days) following the resolution or
clearance of all SEC comments or, if applicable, following notification by the
SEC that any such Registration Statement or any amendment thereto will not be
subject to review and shall promptly file with the SEC a final prospectus as
soon as practicable (but in no event more than two (2) business days)
following receipt by the Company from the SEC of an order declaring the Registration
Statement effective.

d.             The Company shall use reasonable efforts to (i) register
and qualify the Registrable Securities covered by the Registration Statement
under such other securities or “blue sky” laws of such jurisdictions in the
United States as the Investor reasonably requests, (ii) prepare and file
in those jurisdictions such amendments (including post-effective amendments)
and supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv) take
all other actions reasonably necessary or advisable to qualify the Registrable
Securities for sale in such jurisdictions; provided, however,
that the Company shall not be required in connection therewith or as a
condition thereto to (a) qualify to do business in any jurisdiction where
it would not otherwise be required to qualify but for this Section 3(d), (b) subject
itself to general taxation in any such jurisdiction, (c) file a general

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consent to service
of process in any such jurisdiction, or (d) provide any undertakings that
cause the Company undue expense or burden.

e.             As promptly as practicable after becoming
aware of such event, the Company shall notify the Investor of the happening of
any event, of which the Company has knowledge, as a result of which the
prospectus included in any Registration Statement, as then in effect, includes
an untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and use its best efforts promptly to prepare a supplement or
amendment to any Registration Statement to correct such untrue statement or
omission, and deliver such number of copies of such supplement or amendment to the
Investor as the Investor may reasonably request.

f.              The Company shall use its best efforts to
prevent the issuance of any stop order or other suspension of effectiveness of
any Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest possible moment and to notify the Investor
of the issuance of such order and the resolution thereof.

g.             The Company shall take all other reasonable
actions necessary to expedite and facilitate disposition by the Investor of
Registrable Securities pursuant to a Registration Statement.

4.             OBLIGATIONS
OF THE INVESTOR.

In
connection with the registration of the Registrable Securities, the Investor
shall have the following obligations:

a.             The Investor shall furnish to the Company
such information regarding himself, the Registrable Securities held by him and
the intended method of disposition of the Registrable Securities held by him as
shall be reasonably required to effect the registration of such Registrable
Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. At least three (3) business
days prior to the first anticipated filing date of the Registration Statement,
the Company shall notify the Investor of the information the Company requires
from the Investor.

b.             The Investor agrees to cooperate with the
Company as reasonably requested by the Company in connection with the
preparation and filing of the Registration Statement hereunder.

c.             The Investor agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in Section 3(e) or
3(f), the Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until the Investor’s receipt of the copies of a supplemented or
amended prospectus and, if so directed by the Company, the Investor shall
deliver to the Company or destroy (and deliver to the Company a certificate of
destruction) all copies in the Investor’ possession, of the prospectus covering
such Registrable Securities current at the time of receipt of such notice.

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5.             EXPENSES OF REGISTRATION.

All
reasonable expenses, other than underwriting discounts and commissions,
incurred in connection with registrations, filings or qualifications pursuant
to Sections 2 and 3, including, without limitation, all registration, listing
and qualification fees, printers and accounting fees, and the fees and
disbursements of counsel for the Company, shall be borne by the Company.

6.             INDEMNIFICATION.

In
the event any Registrable Securities are included in a Registration Statement
under this Agreement:

a.             To the extent permitted by law, the Company
will indemnify, hold harmless and defend (i) the Investor who holds such
Registrable Securities and (ii) the directors, officers, partners,
employees, agents and each person who controls the Investor within the meaning
of the 1933 Act or the Securities Exchange Act of 1934, as amended (the “1934 Act”), if any, (each, an “Indemnified Person”), against any
joint or several losses, claims, damages, liabilities or expenses
(collectively, together with actions, proceedings or inquiries by any
regulatory or self-regulatory organization, whether commenced or threatened, in
respect thereof, “Claims”) to
which any of them may become subject insofar as such Claims arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or the omission or alleged omission
to state therein a material fact required to be stated or necessary to make the
statements therein not misleading; (ii) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus if
used prior to the effective date of such Registration Statement, or contained
in the final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or
alleged omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under which the
statements therein were made, not misleading; or (iii) any violation or
alleged violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities (the matters in the foregoing clauses (i) through (iii) being,
collectively, “Violations”). The Company
shall reimburse the Indemnified Person, promptly as such expenses are incurred
and are due and payable, for any reasonable legal fees or other reasonable
expenses incurred by the Indemnified Person in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i) shall
not apply to a Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by any Indemnified Person expressly for use in connection with the
preparation of such Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c) hereof; (ii) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
prior written consent of the Company, which consent shall not be unreasonably
withheld; and (iii) with respect to any preliminary prospectus, shall not
inure to the benefit of any Indemnified Person if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus, as then amended or supplemented, such
corrected prospectus was timely made available by the Company pursuant to Section 3(c) hereof,
and the Indemnified Person was promptly advised in writing not to use the
incorrect prospectus prior to the use giving rise to a Violation and such 

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Indemnified Person,
notwithstanding such advice, used it. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the
Indemnified Person.

b.             In connection with any Registration Statement
in which the Investor are participating, the Investor agrees to indemnify, hold
harmless and defend, to the same extent and in the same manner set forth in Section 6(a),
the Company, each of its directors, each of its officers who signs the
Registration Statement, each person, if any, who controls the Company within
the meaning of the 1933 Act or the 1934 Act, any underwriter and any other
shareholder selling securities pursuant to the Registration Statement or any of
its directors or officers or any person who controls such shareholder or
underwriter within the meaning of the 1933 Act or the 1934 Act (collectively
and together with an Indemnified Person, an “Indemnified
Party”), against any Claim to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim
arises out of or is based upon any Violation by such Investor, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished to the Company by such
Investor expressly for use in connection with such Registration Statement; and such
Investor will reimburse any legal or other expenses (promptly as such expenses
are incurred and are due and payable) reasonably incurred by them in connection
with investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this Section 6(b) shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent shall not be
unreasonably withheld; provided, further, however, that such
Investor shall be liable under this Agreement (including this Section 6(b) and
Section 7) for only that amount as does not exceed the net proceeds to such
Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented.

c.             Promptly after receipt by an Indemnified
Person or Indemnified Party under this Section 6 of notice of the
commencement of any action (including any governmental action), such
Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is
to be made against any indemnifying party under this Section 6, deliver to
the indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however,
that an Indemnified Person or Indemnified Party shall have the right to retain
its own counsel with the fees and expenses to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or Indemnified
Party and any other party represented by such counsel in such proceeding. The
indemnifying party shall pay for only one separate legal counsel for the
Indemnified Persons or the Indemnified Parties, as applicable, and such legal
counsel shall be selected by the Investor if the Investor is entitled to
indemnification

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hereunder, or the
Company, if the Company is entitled to indemnification hereunder, as applicable.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying
party is actually prejudiced in its ability to defend such action. The
indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due and
payable.

7.             CONTRIBUTION.

To
the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section 6
to the fullest extent permitted by law; provided, however, that (i) no
contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in Section 6,
(ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation, and (iii)contribution
(together with any indemnification or other obligations under this Agreement)
by any seller of Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such Registrable
Securities.

8.             REPORTS
UNDER THE 1934 ACT.

With
a view to making available to the Investor the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of
the SEC that may at any time permit the Investor to sell securities of the
Company to the public without registration (“Rule 144”),
the Company agrees to:

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

b.             file with the SEC in a timely manner all
reports and other documents required of the Company under the 1933 Act and the
1934 Act so long as the Company remains subject to such requirements and the
filing of such reports and other documents is required for the applicable
provisions of Rule 144; and

c.             furnish to the Investor so long as the Investor
owns Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting requirements
of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may
be reasonably requested to permit the Investor to sell such securities pursuant
to Rule 144 without registration.

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9.             ASSIGNMENT OF REGISTRATION
RIGHTS.

The
rights under this Agreement shall be automatically assignable by the Investor
to any transferee of all or any portion of the Note if: (i) the Investor
agrees in writing with the transferee or assignee to assign such rights, and a copy
of such agreement is furnished to the Company within a reasonable time after
such assignment, (ii) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of the name and
address of such transferee or assignee, (iii) at or before the time the
Company receives the written notice contemplated by clause (ii) of this
sentence, the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions contained herein, and (iv) such transferee
shall be an “accredited investor” as that
term defined in Rule 501 of Regulation D promulgated under the 1933 Act.

10.          AMENDMENT
OF REGISTRATION RIGHTS.

Provisions
of this Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with written consent of the Company and the Investor. Any
amendment or waiver effected in accordance with this Section 10 shall be
binding upon the Investor and the Company.

11.          MISCELLANEOUS.

a.             A person or entity is deemed to be a holder
of Registrable Securities whenever such person or entity owns of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more persons or entities with respect to the
same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities.

b.             All notices and other communications hereunder
shall be in writing or by telecopy, and shall be deemed to have been duly made
when delivered in person or sent by telecopy, same day or overnight courier, or
72 hours after having been deposited in the United States registered or
certified mail return receipt requested, postage prepaid, to a party at the
address set forth below (which may be changed in accordance with these notice
procedures):

If to
the Company:

Earth Biofuels, Inc.

3001 Knox Street, Suite 403

Dallas, TX 75205

Fax Number: (214) 389-9805

Attention:  Chief Executive Officer

With a copy to:

Roger A. Crabb

Scheef & Stone, LLP

5956 Sherry Lane, Suite 1400

Dallas, TX 
75225

Fax
number:  (214) 706-4242

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If to the Investor:

Marc Weill

440 Roundhill Road

Greenwich, CT 
06831-2639

Fax number: (203) 629-0679

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

d.              This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas. In the event of a
dispute involving this Agreement or any other instruments executed in
connection herewith, the parties irrevocably agree that exclusive venue for
such dispute shall lie in any court of competent jurisdiction in Dallas County,
Texas, and the parties waive any claim that such forum is inappropriate or
inconvenient.

e.             In the event that any provision of this
Agreement is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any provision hereof which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other
provision hereof.

f.              This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof. There
are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof.

g.             Subject to the requirements of Section 9
hereof, this Agreement shall be binding upon and inure to the benefit of the
parties and their successors and assigns.

h.             The headings in this Agreement are for
convenience of reference only and shall not form part of, or affect the
interpretation of, this Agreement.

i.              This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other parties.
This Agreement, once executed by a party, may be delivered to the other parties
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.

j.              Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other parties may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

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IN WITNESS WHEREOF,
the Company and the Investor have caused this Agreement to be duly executed as
of the date first above written.

	
  EARTH BIOFUELS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ DENNIS G. MCLAUGHLIN, III

  	
   

  
	
  Name:

  	
  Dennis G. McLaughlin, III

  	
   

  
	
  Title:

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MARC
  WEILL

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ MARC WEILL

  	
   

  	
   

  
	
  Marc Weill,
  individually

  	
   

  
				

 

 10EXHIBIT
10.11

THIS CONVERTIBLE PROMISSORY NOTE AND THE SHARES ISSUABLE
UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE “SECURITIES ACT”) OR ANY
SECURITIES LAW OF ANY STATE OF THE UNITED STATES. THIS
CONVERTIBLE PROMISSORY NOTE AND THE SHARES ISSUABLE UPON CONVERSION HEREOF MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY PURSUANT
TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM REGISTRATION.

CONVERTIBLE
PROMISSORY NOTE

	
  $250,000.00

  	
  Dallas, Texas

  	
  January 30, 2006

  

 

FOR
VALUE RECEIVED, the undersigned, Earth Biofuels, Inc., a Delaware
corporation (“Borrower”), promises to pay to
the order of Marc Weill (“Lender”),
the sum of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00), with
interest from the date of advancement on the unpaid balance hereof from time to
time remaining unpaid at a rate of 8% per annum, in (i) lawful money of
the United States of America or (ii) equity securities of the Borrower as
provided herein, both principal and interest being payable at the address
designated in numbered paragraph 15 below or at such other place as Lender may,
from time to time, designate in writing. All interest under this Note shall be
computed on the basis of the actual number of days elapsed over an assumed year
consisting of three hundred sixty-five (365) days.

The
principal of this Note shall mature and be due and payable on April 28,
2007. Simple interest payable on this Note shall be payable upon each
Conversion Date (as defined below), July 28, 2006, October 28, 2006, January 28,
2007, and on the maturity date, when the principal and remaining accrued but
unpaid interest shall be due and payable.

All
past due principal and accrued interest on this Note shall bear interest from
maturity until paid at the highest (non-usurious) rate for which Borrower may
legally contract under applicable law. All payments on past due principal and
accrued interest hereunder shall be payable in lawful money of the United
States of America which shall be legal tender for public and private debts at
the time of payment. As used herein, the term “Holder”
shall initially mean Lender, and shall subsequently mean each person or entity
to which this Note is duly assigned.

This
Note evidences indebtedness incurred by Borrower for interim financing provided
to Borrower.

1.             Conversion Option. All or
any portion of the unpaid principal of this Note, plus accrued interest hereon,
shall be convertible, at the option of Lender, into shares of Common Stock,
$0.001 par value, issued by Borrower (the “Common Stock”).
At the time of any such conversion of the aggregate of the principal amount and
accrued interest, or a portion thereof, the rights of the Lender with respect
to such portion of the aggregate of the principal amount and accrued interest
so converted shall cease and the Lender shall be deemed to have become the

 1
 

 

record holder of the Common
Stock issuable upon such conversion. The Borrower covenants with the Lender
that it will at all times reserve and keep available out of its authorized Common
Stock and solely for the purpose of conversion as provided herein, and
conditionally allot to the Lender, such number of shares of Common Stock as
shall then be issuable upon the conversion of this Note. The Borrower covenants
with the Lender that all shares of Common Stock which shall be so issuable
shall be duly and validly issued as fully-paid and non-assessable.

The Common Stock into which
this Note may be converted shall be referred to herein as the “Conversion Shares.”  The number of Conversion Shares shall be
determined by dividing the Conversion Amount (defined below) by the Conversion
Price Per Share (defined below). Upon any such conversion, the Lender shall
execute any and all customary and appropriate documents to implement the
foregoing. Additionally, the Lender shall be entitled to demand registration
rights and piggyback registration rights pursuant to the Registration Rights
Agreement of even date herewith, executed by Borrower and Lender (“Registration Rights Agreement”).

1.1           Definitions. Unless otherwise
specified, for purposes hereof, the following terms shall have the following
meanings:

1.1.1        “Conversion
Amount” means an amount equal to the then outstanding principal
plus any accrued but unpaid interest under this Note, or such lesser amount as
Holder shall determine.

1.1.2        “Conversion Price Per Share” means a price per share of
Common Stock equal to the lower of (i) $0.50 per share or (ii) 70% of
the volume weighted average price per share of the Common Stock (“VWAP”). Notwithstanding the
foregoing, the price set forth in part (i) of the preceding sentence shall
be lowered from $0.50 per share to $0.30 per share if both of the following
shall have occurred within the 10-month time frame commencing 60 days
from the date of this note and ending 12 months from the date of this
note:  (A) the VWAP shall have
fallen below $0.50 per share and (B) Borrower shall have more than
200,000,000 shares of Common Stock issued and outstanding. The VWAP shall be determined
as follows:  (x) the daily volume
weighted average price of the Common Stock for such date on the OTC Bulletin
Board as reported by Bloomberg Financial L.P. (based on a trading day from 9:30 a.m.
Eastern Time to 4:02 p.m. Eastern Time); (y) if the Common Stock is
not then listed or quoted on the OTC Bulletin Board and if prices for the
Common Stock are then reported in the “Pink Sheets” published by the Pink
Sheets, LLC (or a similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per share of the Common Stock so
reported; or (z) in all other cases, the fair market value of a share of
Common Stock as determined by an independent appraiser selected in good faith
by the Holder and reasonably acceptable to the Borrower.

1.2           Conversion Procedures.

1.2.1        Holder may exercise
its conversion right by giving written notice (in the form attached hereto, the
“Conversion Notice”)
to the Borrower of the exercise of such right. The conversion of this Note (or
such portion thereof as Holder shall determine) will be deemed to have been
effected as of the date of receipt of the Conversion Notice

 2
 

 

(the “Conversion Date”).
If Holder has exercised its conversion right, the outstanding principal (or
such portion thereof as Holder shall determine) and any accrued but unpaid
interest under this Note shall be automatically converted into such number of
shares of the Common Stock to be issued by Borrower equaling the quotient of (i) the
Conversion Amount, and (ii) the Conversion Price Per Share.

1.2.2        Within five business
days of the Conversion Date, the Holder shall surrender this Note at the
principal office of the Borrower, for replacement or cancellation.

1.2.3        Within five business
days of the surrender of the Note by Holder, the Borrower will deliver to the
converting Holder (a) a certificate or certificates representing
Conversion Shares and (b) a replacement note for the unconverted principal
balance (if any) of this Note. Borrower agrees that its issuance of this Note
shall constitute full authority to its officers, agents, and transfer agents
who are charged with the duty of executing and issuing stock certificates to execute
and issue the necessary certificates for shares of Common Stock upon the
conversion of this Note.

1.2.4        On the Conversion
Date, the rights of the Holder of this Note to receive payment of such portion
of the principal and interest as Holder has converted hereunder will cease and
the person or persons in whose name or names any certificate or certificates
for Conversion Shares are to be issued upon such conversion will be deemed to
have become the holder or holders of record of the shares represented thereby.

1.2.5        The issuance of
certificates for the Conversion Shares will be made without charge to the
Holder for any issuance tax in respect thereof or other cost incurred by the
Borrower in connection with such conversion and the related issuance of Conversion
Shares.

1.2.6        If any fractional
interest in Conversion Shares would, except for the provisions of this Section 1,
be deliverable upon any conversion of this Note, in lieu of delivering the
fractional share therefor, the number of Conversion Shares shall be rounded to
the nearest whole number.

2.             Adjustment of Conversion Price
Per Share. The Conversion Price Per Share, the number of Conversion Shares,
and the number and kind of shares or other securities to be issued upon
conversion determined pursuant to Section 1.2, shall be subject to
adjustment from time to time upon the happening of certain events while this
conversion right remains outstanding, as follows:

2.2.1        Merger, Sale of Assets. If the Borrower
at any time shall consolidate with or merge into or sell or convey all or
substantially all its assets to any other corporation, this Note, as to the
unpaid principal portion thereof and accrued interest thereon, shall thereafter
be deemed to evidence the right to purchase such number and kind of shares or
other securities and property as would have been issuable or distributable on
account of such consolidation,

 3
 

 

merger,
sale or conveyance, upon or with respect to the securities subject to the
conversion or purchase right immediately prior to such consolidation, merger,
sale or conveyance. The foregoing provision shall similarly apply to successive
transactions of a similar nature by any such successor or purchaser. Without
limiting the generality of the foregoing, the anti-dilution provisions of this Section shall
apply to such securities of such successor or purchaser after any such
consolidation, merger, sale or conveyance.

2.2.2        Reclassification. If the Borrower at any
time shall, by reclassification or otherwise, change the Common Stock into the
same or a different number of securities of any class or classes that may be
issued or outstanding, this Note, as to the unpaid principal portion thereof
and accrued interest thereon, shall thereafter be deemed to evidence the right
to purchase an adjusted number of such securities and kind of securities as
would have been issuable as the result of such change with respect to the
Common Stock immediately prior to such reclassification or other change.

2.2.3        Stock Splits, Combinations and Dividends.
If the shares of Common Stock are subdivided or combined into a greater or
smaller number of shares of Common Stock, or if a dividend is paid on the
Common Stock in shares of Common Stock, the Conversion Price shall be
proportionately reduced in case of subdivision of shares or stock dividend or
proportionately increased in the case of combination of shares, in each such
case by the ratio which the total number of shares of Common Stock outstanding
immediately after such event bears to the total number of shares of Common
Stock outstanding immediately prior to such event.

Whenever the Conversion Price
Per Share is adjusted pursuant to this Section 2.2, the Borrower shall
promptly mail to the Holder a notice setting forth the Conversion Price Per
Share after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.

3.             Optional Prepayment. This
Note may be prepaid by Borrower in whole or in part without the consent of the
Lender and without prepayment penalty of any kind.

4.             Default; Remedies. For the
purposes of this Agreement, an Event of Default (herein so called) shall have
occurred if (i) Borrower shall fail to pay when due any principal of or
interest on this Note, and such failure shall continue for a period of ten (10) days
after the due date, (ii) Borrower shall have failed to perform any
covenant or other obligation contained herein or in the Registration Rights
Agreement, and such failure shall continue for a period of ten (10) business
days after Lender shall have given Borrower written notice of such failure, (iii) Borrower
shall commence a voluntary case or other proceeding seeking liquidation or
reorganization with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or shall make
a general assignment for the benefit of creditors, and such case or other
proceeding shall remain undismissed and unstayed for a period of 30 consecutive
days; or (iv) an involuntary case or other proceeding shall be commenced
against Borrower seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other similar
now or hereafter in effect or seeking the appointment of a trustee, liquidator,
receiver, custodian or other similar

 4
 

 

official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 consecutive days.

If
Borrower fails or refuses to pay any part of the principal of or interest upon
this Note as the same becomes due, or upon the occurrence of an Event of
Default hereunder, then in any such event the Holder hereof may, at its option (i) declare
the entire unpaid balance of principal and accrued interest on this Note to be
immediately due and payable without notice, (ii) reduce any claim to
judgment, and/or (iii) demand, pursue and enforce any of Lender’s rights
and remedies, pursuant to any applicable law or agreement. Each right and
remedy available to Lender shall be cumulative of and in addition to each other
such right and remedy. No delay on the part of Lender in the exercise of any
right or remedy available to Lender shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude other or further exercise
thereof or exercise of any other such right or remedy.

5.             Representations, Warranties and
Covenants of Borrower. Borrower represents and warrants that Borrower has
authority and has obtained all approvals and consents necessary to enter into
this Note and Borrower’s execution, delivery, and performance of this Note will
not violate or conflict with the terms of Borrower’s Certificate of
Incorporation. Borrower will use of the proceeds of this Note for development
of Borrower’s biodiesel plant located in Durant, Oklahoma, and for fees
associated with this Note. Subject
to the provisions of Regulation FD, upon request of Lender, Borrower shall
provide to Lender such information and materials as Lender may request,
including unaudited monthly and quarterly and audited yearly financial
statements, an annual budget, internal management documents, reports of
operations, reports of adverse developments, copies of any management letters,
communications with shareholders or directors, press releases and registration
statements, and access to all senior managers.

6.     Representations and
Warranties of Lender.

6.1  Suitability. The
Lender is an “accredited investor” as such term is defined in Regulation D issued
by the Securities and Exchange Commission, and such Lender’s financial
condition is such that it is able to bear the economic risk of its investment
in the Note. Lender has such knowledge and experience in financial and business
matters as is necessary to make an investment in the Note.

6.2  Purchase for Own Account. This Note is
being acquired by Lender for investment purposes only and not with a view to
the distribution of all or any part thereof. Lender has no present intention of
selling, transferring, disposing or granting any participation in the Note and
is not a party to any contract, agreement or understanding that would result in
any such sale, transfer or disposition of all or any portion of this Note.

7.             No Waiver; Cumulative Rights.
No delay on the part of the Holder of this Note in the exercise of any power or
right under this Note shall operate as a waiver thereof, nor shall a single or
partial exercise of any power or right preclude other or further exercise
thereof or the exercise of any other power or right.

 5
 

 

8.             Waiver. Borrower waives
demand, presentment, protest, notice of dishonor, notice of nonpayment, notice
of intention to accelerate, notice of acceleration, notice of protest and any
and all lack of diligence or delay in collection or the filing of suit hereon
which may occur, and agrees to all extensions and partial payments, before or
after maturity, without prejudice to the Holder hereof.

9.             Collection Costs. In the
event that, upon an Event of Default, any amount under this Note is collected
in whole or in part through suit, arbitration or mediation, then and in any
such case there shall be added to the unpaid principal balance hereof all costs
of collection, (including, but not limited to, reasonable attorneys’ fees and
expenses) whether or not suit is filed.

10.           Governing Law. This Note shall
be governed by and construed in accordance with the laws of the State of Texas.
In the event of a dispute involving this Note or any other instruments executed
in connection herewith, the parties irrevocably agree that exclusive venue for
such dispute shall lie in any court of competent jurisdiction in Dallas County,
Texas, and the parties waive any claim that such forum is inappropriate or
inconvenient.

11.           Headings. The headings of the
sections of this Note are inserted for convenience of reference only and shall
not be deemed to constitute a part hereof.

12.           Usury. All agreements between
Borrower and the Holder of this Note, whether now existing or hereafter arising
and whether written or oral, are expressly limited so that in no contingency or
event whatsoever, whether by acceleration of the maturity of this Note or
otherwise, shall the amount paid, or agreed to be paid, to the Holder hereof
for the use, forbearance or detention of the money to be loaned hereunder or
otherwise, exceed the maximum amount permissible under applicable law. If from
any circumstances whatsoever fulfillment of any provision of this Note, at the
time performance of such provision shall be due, shall involve transcending the
limit of validity prescribed by law, then ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such validity, and
if from any such circumstances the Holder of this Note shall ever receive
anything of value as interest or deemed interest by applicable law under this
Note or otherwise in an amount that would exceed the highest lawful rate, such
amount that would be excessive interest shall be applied to the reduction of
the principal amount owing under this Note, and not to the payment of interest,
or if such excessive interest exceeds the unpaid balance of principal of this
Note, such excess shall be refunded to Borrower. In determining whether or not
the interest paid or payable with respect to any indebtedness of Borrower to
the Holder hereof, under any specific contingency, exceeds the highest lawful
rate, Borrower and the Holder hereof shall, to the maximum extent permitted by
applicable law, (i) characterize any nonprincipal payment as an expense,
fee or premium rather than as interest, (ii) amortize, prorate, allocate
and spread the total amount of interest throughout the full term of such
indebtedness so that the actual rate of interest on account of such
indebtedness is uniform throughout the term thereof, and/or (iii) allocate
interest between portions of such indebtedness, to the end that no such portion
shall bear interest at a rate greater than that permitted by law. The terms and
provisions of this paragraph shall control and supersede every other
conflicting provision of all agreements between Borrower and the Holder hereof.

 6
 

 

13.           Successors and Assigns. All of
the stipulations, promises and agreements in this Note made by or on behalf of
Borrower shall bind the successors and assigns of Borrower, whether so expressed
or not, and inure to the benefit of the successors and assigns of Borrower and
Lender. Any assignee of Borrower or Lender shall agree in writing prior to the
effectiveness of such assignment to be bound by the provisions hereof. The
Lender from time to time also may sell to one or more financial institutions,
institutional investors or other persons a participation interest in all or any
undivided portion of the rights, powers, privileges, remedies and interests of
the Lender under this Note.

14.           Severability. In the event any
one or more of the provisions contained in this Note shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision hereof, and
this Note shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.

15.           Notices. All notices and other
communications hereunder shall be in writing or by telecopy, and shall be
deemed to have been duly made when delivered in person or sent by telecopy,
same day or overnight courier, or 72 hours after having been deposited in the
United States registered or certified mail return receipt requested, postage
prepaid, to a party at the address set forth below (which may be changed in
accordance with these notice procedures):

If to Lender:

Name:  Marc Weill

Address:
440 Roundhill Road

Greenwich,
CT  06831-2639

Fax number: (203) 629-0679

If to Borrower:

Earth Biofuels, Inc.

3001 Knox Street, Suite 403

Dallas, TX  75205

Fax Number: (214) 389-9805

Attention:  Chief Executive Officer

With a copy to:

Roger A. Crabb

Scheef & Stone, LLP

5956
Sherry Lane, Suite 1400

Dallas,
TX  75225

Fax number:  (214) 706-4242

 7
 

 

THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN
BORROWER AND LENDER CONCERNING THE MATTERS HEREIN AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

IN
WITNESS WHEREOF, the undersigned have executed this Convertible Promissory Note
on and as of the date first set forth above.

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  EARTH BIOFUELS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DENNIS G. MCLAUGHLIN, III

  	
   

  
	
   

  	
  Name:

  	
  Dennis G. McLaughlin, III

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  Marc Weill

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ MARC WEILL

  	
   

  
	
   

  	
  Marc Weill, individually

  
					

 

 8
 

 

FORM OF

NOTICE OF
CONVERSION

(To be Executed by
the Registered Holder in order to Convert the Note)

The undersigned hereby
irrevocably elects to convert $ 250,000.00 of the principal amount of the above
Note into shares of Common Stock of Earth Biofuels, Inc. according to the
conditions of such Note, as of the date written below.

	
  Date of Conversion

  	
   

  	
   

  
	
   

  
	
  Applicable Conversion Price $0.50

  
	
   

  
	
  Signature:

  	
   

  	
   

  
					

Printed Name: Marc Weill

	
  Address:

  	
  440 Round Hill Road

  
	
   

  	
  Greenwich, CT 06831

  

 

 9

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