AMENDED AND RESTATED GUARANTY AGREEMENT
THIS
AMENDED AND RESTATED GUARANTY AGREEMENT (the "Guaranty") is
executed as of June 26, 2008, by the subsidiaries of Earth Biofuels, Inc., a
Delaware corporation (the "Company") listed on
the SCHEDULE OF EBOF
SUBSIDIARIES attached hereto as Exhibit A (each, a
"Guarantor,"
and collectively, the "Guarantors"), for the
ratable benefit of the lenders listed that are signatories hereto (collectively,
the "Lenders").
W I T N E S S E T H:
WHEREAS,
Radcliffe SPC, Ltd. for and on behalf of the Class A Convertible Crossover
Segregated Portfolio ("Radcliffe"),
Castlerigg Master Investments Ltd. ("Castlerigg"), and
Capital Ventures International ("CVI"; collectively,
the "Initial Bridge
Lenders") are parties to a Securities Purchase Agreement, dated as of
June 7, 2006 (the "Initial Bridge
Securities Purchase Agreement")
with Earth Biofuels, Inc. ("EBOF"), pursuant to
which EBOF issued, among other things, warrants to purchase 1,500,000 shares of
common stock, $0.001 par value (the "Common Stock"), of
EBOF at the exercise price of $2.93 (the "Initial Bridge
Warrants") and in connection with the Initial Bridge Securities Purchase
Agreement, EBOF executed a Registration Rights Agreement (the "Initial Bridge Registration
Rights Agreement," collectively with the Initial Bridge Securities
Purchase Agreement and the Initial Bridge Warrants, the "Initial Bridge Transaction
Documents") under which it agreed to cooperate in the registration of the
securities under the Initial Bridge Securities Purchase Agreement;
WHEREAS,
Castlerigg (the "Second Bridge
Lender") is a party to a Securities Purchase Agreement, dated as of July
10, 2006 (the "Second
Bridge Securities Purchase Agreement")
with EBOF, pursuant to which EBOF issued, among other things, warrants to
purchase 1,500,000 shares of Common Stock at the exercise price of $2.50 (the
"Second Bridge
Warrants") and in connection with the Second Bridge Securities Purchase
Agreement, EBOF executed a Registration Rights Agreement (the "Second Bridge Registration
Rights Agreement," collectively with the Second Bridge Securities
Purchase Agreement, Second Bridge Warrants, the "Second Bridge Transaction
Documents") under which it agreed to cooperate in the registration of the
securities under the Second Bridge Securities Purchase Agreement;
WHEREAS,
Radcliffe, Castlerigg, CVI, YA Global Investments, L.P. (formerly known as
Cornell Capital, L.P. ("Yorkville")),
Cranshire Capital L.P. ("Cranshire"), Portside
Growth and Opportunity Fund ("Portside"), Evolution
Master Fund Ltd. SPC, Segregated Portfolio M ("Evolution"), and
Kings Road Investments Ltd. ("Kings Road";
collectively, the "Noteholders") are
parties to a Securities Purchase Agreement, dated as of July 24, 2006 (the
"Securities Purchase Agreement")
with EBOF, pursuant to which EBOF issued (i) 8% Senior Convertible Notes
(collectively, the "Existing Notes") in
the aggregate principal amount of $52.5 million, which were unsecured and
convertible into shares of Common Stock at $2.90 per share, and (ii) warrants to
purchase in excess of 9,000,000 shares of common stock of EBOF at the exercise
price of $2.90 (the "Existing Warrants")
and in connection with the Securities Purchase Agreement, EBOF executed a
Registration Rights Agreement (the "Registration Rights
Agreement," collectively with the Initial Bridge Transaction Documents,
the Second Bridge Transaction Documents, the Securities Purchase Agreement,
Notes, and Warrants, the
"Transaction
Documents") under which it agreed to cooperate in the registration of the
securities under the Securities Purchase Agreement;
WHEREAS,
Xxxxxx Xxxxxxxxxx and certain Buyers (as defined in the Exchange Agreement, as
defined below) are parties to an Interim Restructuring Agreement, dated as of
November 13, 2007 (the "Restructuring
Agreement") with EBOF, pursuant to which, among other things, EBOF
granted to each Noteholder a perfected security interest in certain assets of
EBOF and the stock, equity interests and assets of certain of EBOF's
subsidiaries as evidenced by (i) a Pledge and Security Agreement, dated as of
December 20, 2007 (the "Existing Security
Agreement") and (ii)a certain Guaranty Agreement, dated as of November
13, 2007, of EBOF's subsidiaries (the "Existing
Guaranties");
WHEREAS,
EBOF has authorized a new series of senior subordinated secured convertible
exchangeable notes of EBOF, in the form attached as Exhibit A to the Exchange
Agreement (as defined below) (the "Series B Notes"),
which Series B Notes shall be convertible into EBOF's Common Stock (as
converted, the "Series
B Conversion Shares") and exchangeable into PNG Shares (as defined in the
Exchange Agreement, as defined below), in accordance with the terms of the
Series B Notes;
WHEREAS,
Castlerigg desires to enter into an Amendment and Exchange Agreement (the "Exchange Agreement"),
with EBOF, pursuant to which, among other things, (i) EBOF and Castlerigg shall
amend and restate all of Castlerigg's Existing Notes into a senior secured
convertible exchangeable note in the form attached as Exhibit B to the Exchange
Agreement (the "Amended and Restated
Notes", and together with the Series B Notes, the "2008 Amendment
Notes"), which shall be convertible into Common Stock (as converted, the
"Amended and Restated
Conversion Shares", and together with the Series B Conversion Shares, the
"2008 Amendment
Conversion Shares") and exchangeable into PNG Shares (as defined in the
Exchange Agreement), in accordance with the terms thereof and which principal
amount of Amended and Restated Notes to be issued to the Investors (as defined
below), in the aggregate, shall equal $65,000,000; and (ii) EBOF and Castlerigg
shall amend and restate (w) all of Castlerigg's Initial Bridge Warrants, if any,
for warrants in the form attached as Exhibit C-1 to the Exchange Agreement (the
"Amended and Restated
Initial Bridge Warrants"), which shall be exercisable into Common Stock
(as exercised, the "Amended and Restated Initial
Bridge Warrant Shares") in accordance with the terms thereof, (x) all of
Castlerigg's Second Bridge Warrants, if any, for warrants in the form attached
as Exhibit C-2 to the Exchange Agreement (the "Amended and Restated Second
Bridge Warrants"), which shall be exercisable into Common Stock (as
exercised, the "Amended and Restated Second
Bridge Warrant Shares") in accordance with the terms thereof, (y) all of
Castlerigg's Existing Warrants for warrants in the forms attached as Exhibit C-3
(in the case of the Existing Primary Series A Warrants, as defined in the
Exchange Agreement) and Exhibit C-4 (in the case of the Existing Primary Series
B Warrants, as defined in the Exchange Agreement) to the Exchange Agreement (the
"Amended and Restated
Existing Warrants", and together with the Amended and Restated Initial
Bridge Warrants and the Amended and Restated Second Bridge Warrants, the "2008 Amendment
Warrants") which shall be exercisable into Common Stock (as exercised,
the "Amended and
Restated Existing Warrant Shares", and together with the Amended and
Restated Initial Bridge Warrant Shares and the Amended and Restated Second
Bridge Warrant Shares, the "2008 Amendment Warrant
Shares") in accordance with the terms thereof, and (iii) as
additional
consideration
for the transaction contemplated in the Exchange Agreement, immediately prior to
the Share Exchange Date (as defined in the Exchange Agreement) the Company shall
transfer a portion of the EBOF Note (as defined in the Exchange Agreement) to
Castlerigg, which is convertible into shares of PNG Common Stock (as defined in
the Exchange Agreement) (the "Investor PNG Note") pursuant to an acknowledgement
and transfer agreement in the form attached as Exhibit J to the Exchange
Agreement (the "Investor PNG Note Transfer Agreement"), and (iv) as
reimbursement of legal fees and expenses of Castlerigg (the "Investor Legal Fee
Amount"), EBOF shall issue to Castlerigg, upon the terms and conditions
stated in the Exchange Agreement, a Series B Note in an aggregate principal
amount equal to the Investor Legal Fee Amount;
WHEREAS,
the Series B Notes will rank junior to the Amended and Restated Notes and the
Series B Notes will rank senior to all outstanding and future indebtedness of
EBOF, other than Permitted Senior Indebtedness (as defined in the Amended and
Restated Notes), and will be secured by a perfected security interest in all of
the assets of EBOF and the stock, equity interests and assets of certain of
EBOF's subsidiaries and the PNG Shares (as defined in the Exchange Agreement),
as evidenced by (i) an amended and restated pledge and security agreement, in
the form attached as Exhibit D to the Exchange Agreement (as amended or modified
from time to time in accordance with its terms, the "Amended and Restated
Security Agreement"), and (ii) this Guaranty (as amended or modified from
time to time in accordance with their terms, the "Amended and Restated
Guaranties" and, together the Amended and Restated Security Agreement and
any ancillary documents related thereto, collectively the "Security Documents"),
which amends and restates the Existing Guaranties;
WHEREAS,
as a closing condition to the transactions contemplated in the Exchange
Agreement, each of the other holders of Existing Notes (the "Other Investors", and
together with Castlerigg, the "Investors") are
executing agreements identical to the Exchange Agreement (the "Other Agreements",
and together with the Exchange Agreement, the "Amendments") (other
than proportional changes in the numbers reflecting the (i) different principal
amount of such Other Investor's Existing Notes , (ii) different number of
Existing Primary Series A Warrant Shares (as defined in the Exchange Agreement)
underlying such Other Investor's Existing Primary Series A Warrants (as defined
in the Exchange Agreement), (iii) different number of Existing Primary Series B
Warrant Shares (as defined in the Exchange Agreement) underlying such Other
Investor's Existing Primary Series B Warrants (as defined in the Exchange
Agreement) (iv) different number of Existing Initial Bridge Warrant Shares (as
defined in the Exchange Agreement) underlying such Other Investor's Initial
Bridge Warrants, if any, (v) different number of Existing Second Bridge Warrant
Shares (as defined in the Exchange Agreement) underlying such Other Investor's
Second Bridge Warrants, if any, and (vi) different principal amount of such
Other Investor's Series B Notes, if any, in each case, being issued in such 2008
Amendment Note or 2008 Amendment Warrant, as applicable, to such Other Investor
("Proportionate
Changes"));
WHEREAS,
each of the Lenders have agreed to release certain of the Company's subsidiaries
from their respective obligations under the Existing Guaranty and the Existing
Security Agreement, pursuant to separate Release, Consent and Waivers (each a
"Release Agreement", and collectively, the "Release Agreements") by and among
each Lender, the Company, Earth LNG, Inc., Arizona LNG, L.L.C., Fleet Star,
Inc., Earth Leasing, Inc. f/k/a
Alternative
Dual Fuels, Inc. and Applied LNG Technologies USA, L.L.C, effective upon the
closing of the transactions contemplated by the Exchange Agreement;
WHEREAS,
the Guarantors have agreed to guarantee (i) the full, aggregate amount of the
outstanding amount due and owing by EBOF to the Lenders (in their respective
capacity or capacities as Investors, Initial Bridge Lenders, Second Bridge
Lender, Noteholders or otherwise), plus fees, costs and expenses, such amount
being payable to the Lenders without setoff, counterclaim, deduction offset or
defense and (ii) all obligations of EBOF arising under the 2008 Amendment Notes,
the other Transaction Documents, the Security Documents, the Restructuring
Agreement, the Exchange Agreement, the Investor PNG Note Transfer Agreement, and
the Other Agreements (collectively, and as the same may be amended, restated,
modified, supplemented, or replaced, the "Documents") for the
ratable benefit of the Lenders (all obligations under the Documents are,
collectively, the "Guaranteed
Obligations"); and
WHEREAS,
each of the parties hereto desires to amend the Existing Guaranties in order to
reflect the creation of Series B Notes and the amendment and restatement of the
terms and provisions of the Existing Notes as set forth in the Exchange
Agreement.
NOW,
THEREFORE, as an inducement to the Lenders to enter into the Exchange Agreement,
and for other good and valuable consideration, the receipt and legal sufficiency
of which are hereby acknowledged, the parties do hereby agree as
follows:
ARTICLE
I
NATURE
AND SCOPE OF GUARANTY
Section
1.1 Guaranty of
Debt. Each Guarantor hereby irrevocably, unconditionally, and
jointly and severally guarantees for the ratable benefit1
of each Lender the prompt payment of each such
Lender's Pro Rata Share of the Guaranteed Obligations, which shall be
immediately due and payable upon demand after the occurrence of any default or
event of default under any of the Documents.
Section
1.2 Nature of
Guaranty. This Guaranty is an irrevocable, absolute,
continuing guaranty of payment and performance and not a guaranty of
collection. The obligations of each Guarantor to the Lenders under
this Guaranty shall be joint and several. This Guaranty shall not be
discharged by the assignment or negotiation of all or part of the
Notes.
Section
1.3 Guaranteed Obligations Not
Reduced by Offset. The Guaranty and obligations of the
Guarantors to the Lenders shall not be reduced, discharged or released because
or by reason of any existing or future offset, claim or defense of EBOF or any
of its Subsidiaries, or any other party, against the Lenders.
[Missing Graphic Reference]
1 The
ratable benefit will be determined by calculating the Lender's pro rata share
("Pro Rata
Share"), which means the ratio determined by dividing (x) the face amount
of the Notes then held by such Lender by (y) the face amount of Notes then held
by all Lenders.
Section
1.4 Payment By
Guarantor. If all or any part of the obligations under this
Guaranty shall not be punctually paid when due, the Guarantors shall,
immediately upon demand by the Lenders pay in lawful money of the United States
of America, the amounts due to the Lenders at the addresses as set forth herein
for the Lenders. Such demand shall be deemed made, given and received
in accordance with the notice provisions hereof.
Section
1.5 No Duty To Pursue
Others. It shall not be necessary for the Lenders (and the
Guarantors hereby waive any rights that the Guarantors may have to require the
Lenders), in order to enforce the obligations of the Guarantors hereunder, first
to (a) institute suit or exhaust its remedies against EBOF or any Subsidiary or
others liable under any of the Documents, or any other person, (b) enforce the
Lenders' rights against any collateral which shall ever have been given to
secure any of the obligations of EBOF or its Subsidiaries, (c) enforce the
Lenders' rights against any other guarantors, (d) join EBOF or its Subsidiaries
or any others liable on the Guaranteed Obligations in any action seeking to
enforce this Guaranty, or (f) resort to any other means of obtaining payment of
the Guaranteed Obligations. The Lenders shall not be required to
mitigate damages or take any other action to reduce, collect or enforce the
Guaranteed Obligations.
Section
1.6 Payment of
Expenses. In the event that any Guarantor should breach or
fail to timely perform any provision of this Guaranty, the Guarantors shall,
immediately upon demand by the Lenders, pay the Lenders all reasonable
out-of-pocket costs and expenses (including court costs and attorneys' fees)
incurred by the Lenders in the enforcement hereof or the preservation of the
Lenders' rights hereunder. For the avoidance of doubt, the foregoing
payment obligation shall be a joint and several obligations of the
Guarantors.
Section
1.7 Effect of
Bankruptcy. In the event that, pursuant to any insolvency,
bankruptcy, reorganization, receivership or other debtor relief law, or any
judgment, order or decision thereunder, the Lenders must rescind or restore any
payment, or any part thereof, received by the Lenders in satisfaction of the
obligations hereunder, any prior release or discharge from the terms of this
Guaranty given to Guarantors by the Lenders shall be without effect, and this
Guaranty shall remain in full force and effect. It is the intention
of the Guarantors that the Guarantors' obligations hereunder shall not be
discharged except by the Guarantors' indefeasible payment of such obligations
and then only to the extent of such performance.
Section
1.8 Waiver of Subrogation,
Reimbursement and Contribution. Notwithstanding anything to
the contrary contained in this Guaranty, each Guarantor hereby unconditionally
and irrevocably waives, releases and abrogates any and all rights it may now or
hereafter have under any agreement, at law or in equity (including, without
limitation, any law subrogating the Guarantor to the rights of the Lenders), to
assert any claim against or seek contribution, indemnification or any other form
of reimbursement from EBOF, its Subsidiaries, or any other party liable for
payment of any or all of the Guaranteed Obligations for any payment made by any
Guarantor under or in connection with this Guaranty or otherwise.
ARTICLE
II
EVENTS
AND CIRCUMSTANCES NOT REDUCING
OR
DISCHARGING GUARANTOR'S OBLIGATIONS
Each
Guarantor hereby consents and agrees to each of the following, and agrees that
the Guarantors' obligations under this Guaranty shall not be released,
diminished, impaired, reduced or adversely affected by any of the following, and
waives any common law, equitable, statutory or other rights (including without
limitation rights to notice) except as otherwise expressly provided herein which
the Guarantors might otherwise have as a result of or in connection with any of
the following:
Section
2.1 Modifications. Any
renewal, extension, increase, modification, alteration or rearrangement of all
or any part of the Guaranteed Obligations under any of the
Documents.
Section
2.2 Adjustment. Any
adjustment, indulgence, forbearance or compromise that might be granted or given
by the Lenders to EBOF.
Section
2.3 Condition of EBOF,
Subsidiaries, or Guarantors. The insolvency, bankruptcy,
arrangement, adjustment, composition, liquidation, disability, dissolution or
lack of power of EBOF or any Subsidiary or any other party at any time liable
for the payment of all or part of the Guaranteed Obligations; or any dissolution
of EBOF or any Subsidiary, or any sale, lease or transfer of any or all of the
assets of EBOF or any Subsidiary, or any changes in the shareholders, partners
or members of EBOF or any Subsidiary; or any reorganization of EBOF, any
Subsidiary, or the Guarantors.
Section
2.4 Invalidity of Guaranteed
Obligations. The invalidity, illegality or unenforceability of
all or any part of the Guaranteed Obligations, or any document or agreement
executed in connection with the Guaranteed Obligations, for any reason
whatsoever is illegal, uncollectible or unenforceable.
Section
2.5 Release of
Obligors. Any full or partial release of the liability of EBOF
or any Subsidiary on the Guaranteed Obligations or any part thereof, or of any
co-guarantors, or any other person or entity now or hereafter liable, whether
directly or indirectly, jointly, severally, or jointly and severally, to pay,
perform, guarantee or assure the payment of the Guaranteed Obligations, or any
part thereof.
Section
2.6 Other
Collateral. The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part of
the Guaranteed Obligations.
Section
2.7 Offset. Any
existing or future right of offset, claim or defense of EBOF or any Subsidiary
against Lenders, or any other person, or against payment of the Guaranteed
Obligations, whether such right of offset, claim or defense arises in connection
with the Guaranteed Obligations or otherwise.
Section
2.8 Merger. The
reorganization, merger or consolidation of EBOF or any Subsidiary into or with
any other corporation or entity.
Section
2.9 Preference. Any
payment by EBOF or any Subsidiary to Lenders is held to constitute a preference
under bankruptcy laws, or for any reason Lenders are required to refund such
payment or pay such amount to EBOF or any Subsidiary or someone
else.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
To induce
the Lenders to enter into the Exchange Agreement, each Guarantor represents and
warrants to the Lenders as follows:
Section
3.1 Benefit. EBOF
is the direct or indirect owner of interests in each Guarantor (as the case may
be), and each Guarantor has received, or will receive, direct and indirect
benefits from the making of this Guaranty.
Section
3.2 Familiarity and
Reliance. Each Guarantor is familiar with, and has
independently reviewed books and records regarding, the financial condition of
EBOF and its Subsidiaries; however, no Guarantor is relying on such financial
condition as an inducement to enter into this Guaranty.
Section
3.3 No Representation By
Lenders. None of the Lenders, or any other party has made any
representation, warranty or statement to any Guarantor in order to induce a
Guarantor to execute this Guaranty.
Section
3.4 Guarantors' Financial
Condition. As of the date hereof, and after giving effect to
this Guaranty and the contingent obligation evidenced hereby, each Guarantor is,
and will be, solvent, and has and will have assets which, fairly valued, exceed
its obligations, liabilities (including contingent liabilities) and debts, and
has and will have property and assets sufficient to satisfy and repay all of its
obligations and liabilities.
Section
3.5 Legality. The
execution, delivery and performance by each Guarantor of this Guaranty and the
consummation of the transactions contemplated hereunder do not, and will not,
contravene or conflict with any law, statute or regulation whatsoever to which
such Guarantor is subject or constitute a default (or an event which with notice
or lapse of time or both would constitute a default) under, or result in the
breach of, any indenture, mortgage, deed of trust, charge, lien, or any
contract, agreement or other instrument to which such Guarantor is a party or
which may be applicable to such Guarantor. This Guaranty is a legal
and binding obligation of each Guarantor and is enforceable in accordance with
its terms, except as limited by bankruptcy, insolvency or other laws of general
application relating to the enforcement of creditors' rights.
Section
3.6 Survival. All
representations and warranties made by the Guarantors herein shall survive the
execution hereof.
ARTICLE
IV
MISCELLANEOUS
Section
4.1 Effective
Date. This Guaranty shall be placed into escrow pursuant to an
escrow agreement (the form of which is attached hereto as Exhibit B) and shall
be released from escrow and become effective as of the Dismissal
Date.
Section
4.2 Limitation of
Liability. Each Guarantor hereby confirms that it intends that
its obligations under this Guaranty will not constitute fraudulent transfers or
conveyances under the Bankruptcy Code, the Uniform Fraudulent Conveyance Act,
the Uniform Fraudulent Transfer Act, or any similar foreign, federal, or state
law. To the extent necessary to effectuate the foregoing intention,
each Guarantor irrevocably agrees that its obligations under this Guaranty at
any time shall be limited to the maximum amount as will result in such
obligations not constituting a fraudulent transfer or conveyance under such
foreign, federal, or state law.
Section
4.3 Other Contractual
Obligations. To the extent that any provision of this Guaranty
results in an event of default under any agreement entered between any Guarantor
and a third party before the effective date of this Guaranty, such provision of
this Guaranty shall become null and void only to the extent such provision
results in the event of default.
Section
4.4 Waiver. No
failure to exercise, and no delay in exercising, on the part of the Collateral
Agent or Lenders, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right. The rights of
the Lenders hereunder shall be in addition to all other rights provided by
law. No modification or waiver of any provision of this Guaranty, nor
consent to departure therefrom, shall be effective unless in writing and no such
consent or waiver shall extend beyond the particular case and purpose
involved. No notice or demand given in any case shall constitute a
waiver of the right to take other action in the same, similar or other instances
without such notice or demand.
(a) Notices. Any
written notice required to be given under this Guaranty shall be sent to the
following by mail, electronic mail or facsimile, and shall be deemed given upon
such mailing and sending by facsimile [NEED TO CONFIRM NOTICE INFORMATION
BELOW]:
If to
EBOF or the Guarantors:
0000
Xxxx Xxxxxx, Xxxxx 000
Xxxxxx,
Xxxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxx
XxXxxxxxxx
with a
copy to:
Akin
Gump Xxxxxxx Xxxxx & Xxxx LLP
0000
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
X. Xxxxx, Esq.
If to
Castlerigg (to the extent a signatory hereto)
00
Xxxx 00xx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Telephone: (000)
000-0000
Facsimile:
(000)
000-0000
Attention:
Cem Hacioglu (xxxxxxxxx@xxxxxxxxxxx.xxx)
Xxxxxxx
Xxxxxxx (xxxxxxxx@xxxxxxxxxxx.xxx)
with a
copy to:
Xxxxxxx
Xxxx & Xxxxx LLP
000
Xxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Telephone: (000)
000-0000
Facsimile:
(000) 000-0000
Attention: Xxxxx
X. Xxxxxxx, Esq.(xxxxx.xxxxxxx@xxx.xxx)
Xxxxxxx
X. Xxxxx, Esq.(xxxxxxx.xxxxx@xxx.xxx)
If to
Radcliffe (to the extent a signatory hereto):
c/o
RG Capital Management, L.P.
0
Xxxx Xxxxx - Xxxx, Xxxxx 000
Xxxx
Xxxxxx, XX 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxx
X. Xxxxxxxxxx
(xxxxxxxxxxx@xxxxxxxxxxxxxx.xxx)
with a
copy to:
Xxxxxx
Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
000
Xxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxx
X. Xxxxx, Esq. (Xxxxxx.Xxxxx@xxxxxxxxxx.xxx)
If to
Yorkville (to the extent a signatory hereto):
000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx
Xxxx, Xxx Xxxxxx 00000
Attention: Xxxx
Xxxxxx,
Esq. (xxxxxxx@xxxxxxxxxxxxxxxxx.xxx)
with a
copy to:
Xxxxx
Xxxxx L.L.P.
0000
Xxxx Xxxxxx
Xxxxxx,
Xxxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: X.
Xxxxxx XxXxxxxx, Esq. (xxxxxx.xxxxxxxx@xxxxxxxxxx.xxx)
If to
Portside (to the extent a signatory hereto):
c/o
Ramius Capital Group, L.L.C.
000
Xxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
Xxxxx (xxxxxx@xxxxxx.xxx)
Xxxxx
Xxxx (xxxxx@xxxxxx.xxx)
Xxxx
Xxxxxxx (xxxxxxxx@xxxxxx.xxx)
with a
copy to:
Xxxxxxxx,
Xxxxxxx & Xxxxxx
000 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxx
Xxxxxxx, Esq. (xxxxxxxx@xxxxxxxxxx.xxx)
Section
4.5 Governing Law, Jurisdiction,
Jury Trial. All questions concerning the construction,
validity, enforcement and interpretation of this Guaranty shall be governed by
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdiction other than the State of New York. Each Guarantor hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each Guarantor
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this Guaranty and agrees
that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by
law. EACH GUARANTOR
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION
WITH OR ARISING OUT OF THIS GUARANTY OR ANY TRANSACTION CONTEMPLATED
HEREBY.
Section
4.6 Amendments. This
Guaranty may be amended only by an instrument in writing executed by either the
party or an authorized representative of the party against whom such amendment
is sought to be enforced, or by the holders of a majority of the then
outstanding principal amount of the 2008 Amendment Notes.
Section
4.7 Parties Bound; Assignment;
Joint and Several. This Guaranty shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
assigns and legal representatives; provided, however, that no
Guarantor may, without the prior written consent of the Lenders, assign any of
its rights, powers, duties or obligations hereunder.
Section
4.8 Headings. Section
headings are for convenience of reference only and shall in no way affect the
interpretation of this Guaranty.
Section
4.9 Recitals. The
recital and introductory paragraphs hereof are a part hereof, form a basis for
this Guaranty and shall be considered prima facie evidence of the facts and
documents referred to therein.
Section
4.10 Rights and
Remedies. The exercise by the Lenders of any right or remedy
hereunder or under any other instrument, or at law or in equity, shall not
preclude the concurrent or subsequent exercise of any other right or
remedy.
Section
4.11 Intentionally
Omitted.
Section
4.12 Extensions of Deadlines and
Notice of Trigger Events. Any deadline under this Guaranty may
be extended by the mutual written agreement of the Lenders and EBOF (on behalf
of the Guarantors). In the event of any default under this Guaranty,
the defaulting party shall be entitled to three (3) business days' notice of the
default and the opportunity to cure such default.
Section
4.13 Recovery by
Lenders. Any proceeds recovered by any Lender under this
Guaranty in excess of its Pro Rata Share of the Guaranteed Obligations shall be
held by such Lender in trust for the pro rata benefit of the other Lenders and
distributed accordingly. This provision shall survive termination of
this Guaranty.
Section
4.14 After Acquired
Claims. In the event that a Lender acquires (and continues to
hold) the Notes and Warrants (the "Excluded Securities")
under the Transaction Document of a Noteholder that is not a signatory hereto
(an "Excluded
Noteholder"), such Excluded Securities acquired (and held) by such Lender
shall be deemed to be Notes and Warrants of such Lender governed by the terms
and conditions of this Guaranty and the Collateral Documents (and the benefits
thereunder) as if such Excluded Securities were held by such Lender as of the
date of this Guaranty (but only for so long as such Excluded Securities are held
by such Lender). The Pro Rata Share of any Lender that acquires Notes
from an Excluded Noteholder (or that transfers any portion of its Notes) shall
be adjusted accordingly.
Section
4.15 Entirety. THIS
GUARANTY EMBODIES THE FINAL AND ENTIRE AGREEMENT OF THE GUARANTORS WITH RESPECT
TO THE GUARANTORS' GUARANTY OF THE GUARANTEED OBLIGATIONS AND SUPERSEDES ANY AND
ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF. THIS GUARANTY
IS INTENDED BY GUARANTORS AS A
FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO COURSE OF
DEALING BETWEEN OR AMONG THE GUARANTORS AND THE LENDERS, NO COURSE OF
PERFORMANCE, NO TRADE PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY
NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS
GUARANTY. THERE ARE NO ORAL AGREEMENTS BETWEEN OR AMONG THE
GUARANTORS AND ANY LENDER.
Section
4.16 No
Novation. The Guarantors hereby acknowledge and agree that
this Guaranty shall modify, extend, renew and continue the terms and provisions
contained in the Existing Guaranties and shall not extinguish or release the
Guarantors from any liability under such Existing Guaranties or otherwise
constitute a novation of the obligations thereunder.
Section
4.17 Reaffirmation. Each
Grantor (as defined in the Amended and Restated Security Agreement) hereby
confirms, ratifies and reaffirms that the liens granted pursuant to the Existing
Security Agreement are valid and continuing and are and shall remain unimpaired
and continue to constitute fully perfected liens in favor of Castlerigg for the
benefit of the Noteholders, with the same force, effect and priority in effect
both immediately prior to and after entering into the Amended and Restated
Security Agreement and the Documents. Each
Grantor
affirms and agrees that such liens granted pursuant to the Existing Security
Agreement will continue to secure all of the Guaranteed
Obligations.
Section
4.18 Effectiveness. This
Agreement shall not become effective unless and until the "Waiver Effective
Date" (as defined in the Release Agreements) shall have occurred.
EXECUTED
as of the day and year first above written.
|
Earth
Biofuels Technology Co., LLC
By:
/s/ Xxxxxx X. XxXxxxxxxx,
III
Name:
Xxxxxx X. XxXxxxxxxx, III
Title:
CEO of Member, Earth Biofuels, Inc.
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|
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The
Wing Sail Company
d/b/a Earth
Biofuels Distribution Company
By:
/s/ Xxxxxx X. XxXxxxxxxx,
III
Name:
Xxxxxx X. XxXxxxxxxx, III
Title:
Chief Executive Officer
|
|
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Earth
Biofuels of Cordele, LLC
By: /s Xxxxxx X. XxXxxxxxxx,
III
Name:
Xxxxxx X. XxXxxxxxxx, III
Title:
Chief Executive Officer
|
|
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B20
Customs, LLC
By:
/s/ Xxxxxx X. XxXxxxxxxx,
III
Name:
Xxxxxx X. XxXxxxxxxx, III
Title:
CEO of Member, Earth Biofuels, Inc.
|
|
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Earth
Biofuels Operating, Inc.
By:
/s/ Xxxxxx X. XxXxxxxxxx,
III
Name:
Xxxxxx X. XxXxxxxxxx, III
Title:
Chief Executive Officer
|
|
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Earth
Biofuels Retail Fuel Company, LLC
By:
/s/ Xxxxxx X. XxXxxxxxxx,
III
Name:
Xxxxxx X. XxXxxxxxxx, III
Title:
CEO of Member, Earth Biofuels, Inc.
|
|
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Earth
Ethanol, Inc.
By: /s/ Xxxxxx X. XxXxxxxxxx,
III
Name:
Xxxxxx X. XxXxxxxxxx, III
Title:
Chief Executive Officer
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Xxxxxx
Biofuels, LLC
By:
/s/ Xxxxxx X. XxXxxxxxxx,
III
Name:
Xxxxxx X. XxXxxxxxxx, III
Title:
Chief Executive Officer
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|
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Earth
Ethanol of Washington L.L.C.
By:
/s/ Xxxxxx X. XxXxxxxxxx,
III
-
Name:
Xxxxxx X. XxXxxxxxxx, III
Title:
Chief Executive Officer
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SUBSIDIARY
GUARANTY
|
IN WITNESS
WHEREOF, the Lenders below have caused their respective signature page to this
Guaranty to be duly executed as of the date first written above.
Creditors:
CASTLERIGG
MASTER INVESTMENTS LTD.
by: Xxxxxxx
Asset Management Corp.
By: /s/ Xxxxxxx X.
Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Senior Managing Director
PORTSIDE
GROWTH AND OPPORTUNITY FUND
By: /s/ Xxxxxxx X.
Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Authorized Signatory
RADCLIFFE
SPC, LTD. for and on behalf of the Class A Convertible Crossover Segregated
Portfolio
By: RG
Capital Management Company, L.P.
By: RGC
Management Company, LLC
By: /s/ Xxxxxx X.
Xxxxxxxxxx
Name:
Xxxxxx X. Xxxxxxxxxx
Title:
Managing Director
YA
GLOBAL INVESTMENTS, L.P.,
By:
Yorkville Advisors, LLC, its General Partner
By: /s/ Xxxxx Xxxxx
Name:
Xxxxx Xxxxx
Title:
Managing Member
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SUBSIDIARY
GUARANTY
|
EXHIBIT
A
SCHEDULE OF EBOF
SUBSIDIARIES
|
Subsidiary
|
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Xxxxxx
Biofuels, LLC
|
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Earth
Biofuels, Technology Co, LLC
d/b/a
Advanced Biofuels Technology, LLC
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Earth
Biofuels Distribution Co
|
|
Earth
Biofuels of Cordele, LLC
|
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B20
Customs LLC
|
|
Earth
Biofuels Operating, Inc.
|
|
Earth
Biofuels Retail Fuels, Co.
|
|
Earth
Ethanol, Inc.
|
|
Earth
LNG, Inc.
|
|
Earth
Ethanol of Washington LLC
|
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SUBSIDIARY
GUARANTY
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