REAFFIRMATION AGREEMENT
EXECUTION
COPY
REAFFIRMATION
AGREEMENT, dated as of December __, 2008 (this "Agreement"), made by
Earth Biofuels, Inc., a
Delaware corporation ("EBOF"), and each of the
undersigned existing Subsidiaries (collectively, the "Existing Subsidiaries", and
together with EBOF, each a "Grantor" and, collectively,
the "Grantors"), in
favor of Castlerigg PNG
Investments LLC, a company organized under the laws of the British Virgin
Islands, in its capacity as collateral agent (in such capacity, the "Collateral Agent") for certain
of the holders (each a "Holder" and collectively, the
"Holders") of the 2008
Amendment Notes (as defined in the Security Agreement defined
below). Capitalized terms used herein but not specifically defined
herein shall have the meanings ascribed to them in the Security Agreement or the
Amendment Agreement referred to below, as applicable.
WHEREAS,
the Existing Subsidiaries and the Collateral Agent are parties to the Amended
and Restated Guaranty Agreement, dated as of June 25, 2008 (the "Guaranty") pursuant to which
the Existing Subsidiaries guaranteed the payment and performance of the
"Guaranteed Obligations" under the "Documents" (each as defined in the
Guaranty);
WHEREAS,
the Grantors and the Collateral Agent are parties to the Amended and Restated
Pledge and Security Agreement, dated as of June 25, 2008 (the "Security Agreement"), pursuant
to which the Grantors granted to the Collateral Agent a security interest in,
and lien on, certain assets of the Grantors to secure the payments and
performance of the "Obligations" under the "Transaction Documents" (each as
defined in the Security Agreement);
WHEREAS,
pursuant to an Amendment and Exchange Agreement, dated as of the date hereof
(the "Amendment
Agreement"), between EBOF and Castlerigg PNG Investments LLC (the "Investor"), EBOF and the
Investor have agreed to amend and restate a portion of the Investor's "Existing
Series A Note" as the "Series C Note", and to amend and restate the Investor's
"Existing Series B Note" as the "Series D Note", and to amend certain other
Transaction Documents, as such terms are used and defined in the Amendment
Agreement (all of the foregoing, collectively, and as the same may be amended,
restated, modified, supplemented, or replaced, the "Amended Transaction
Documents"); and
WHEREAS,
it is a condition precedent to the effectiveness of the Amended Transaction Documents
that each Grantor shall have executed and delivered to the Agent this
Agreement.
NOW
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the parties hereto hereby agree as follows:
1. Reaffirmation and
Confirmation. The Grantors hereby (i) acknowledge and reaffirm
their respective obligations as set forth in the Guaranty and the Security
Agreement, as applicable, (ii) agree to continue to comply with, and be subject
to, all of the terms, provisions, conditions, covenants, agreements and
obligations applicable to them set forth in the Guaranty and the Security
Agreement, which remain in full force and effect, (iii) acknowledge and agree
that, notwithstanding anything to the contrary in the Guaranty, the Security
Agreement or any of the other Transaction Documents, any obligations arising
under any of the Amended Transaction
(a) Documents
shall constitute Guaranteed Obligations under the Guaranty and Obligations under
the Security Agreement, and (iv) confirm, ratify and reaffirm that the security
interests and liens granted to Collateral Agent, for the benefit of the Holders,
pursuant to the Security Agreement, in all of their right, title, and interest
in all then existing and thereafter acquired or arising Collateral in order to
secure prompt payment and performance of the Obligations, is continuing and is
and shall remain unimpaired and continue to constitute a first priority security
interest (subject only to Permitted Liens) in favor of the Collateral Agent, for
the benefit of the Holders, with the same force, effect and priority in effect
both immediately prior to and after entering into this Agreement and the
Amended Transaction
Documents entered into on or as of the date hereof. The Collateral
Agent's security interest in and to the Collateral of the Grantors has attached
and continues to attach to all such Collateral and no further act on the part of
the Collateral Agent or the Grantors is necessary to continue such security
interest.
2. Agreement as a Document or a
Transaction Document. The parties acknowledge and agree that
this Agreement shall constitute (i) a "Document" under the Guaranty and (ii) a
"Transaction Document" under the Security Agreement.
3. General
Provisions.
(a) Each
of the Grantors hereby (i) acknowledges and consents to this Agreement, (ii)
confirms and agrees that each Transaction Document to which it is a party is,
and shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects. This Agreement does not and shall not
affect any of the obligations of the Grantors under or arising from any
Transaction Document (including, without limitation, the obligations arising
under any guaranty) to which it is a party, all of which obligations shall
remain in full force and effect. The execution, delivery and
effectiveness of this Agreement shall not operate as a waiver of any right,
power or remedy of the Collateral Agent or any Holder under the Guaranty, the
Security Agreement or any other Transaction Document, nor constitute a waiver of
any provision of the Guaranty, the Security Agreement or any other Transaction
Document.
(b) Representations and
Warranties. Each Grantor further represents and warrants that
(i) the execution, delivery and performance of this Agreement have been duly
authorized by all necessary action, (ii) it has duly executed and delivered this
Agreement, and (iii) this Agreement is a legal, valid and binding obligation of
such Person, enforceable against such Person in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement is sought by
proceedings at law or in equity).
(c) Costs and
Expenses. The Grantors hereby jointly and severally agree to
pay or reimburse the Collateral Agent for all of its reasonable and customary
out-of-pocket costs and expenses incurred in connection with the preparation,
negotiation and execution of this Agreement, including, without limitation, the
reasonable fees and disbursements of counsel.
(d) Counterparts. This
Agreement may be executed by one or more of the parties hereto in any number of
separate counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of an
executed counterpart of this
Agreement
by facsimile or electronic mail shall be equally effective as delivery of an
original executed counterpart.
(e) CHOICE OF
LAW. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE CONFLICTS OR
CHOICE OF LAW PRINCIPLES THEREOF.
(f) JURY
TRIAL WAIVER. THE PARTIES HERETO
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THE GUARANTY, THE SECURITY AGREEMENT OR ANY
OF THE TRANSACTION DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. THE PARTIES HERETO REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT
OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
delivered by its officer thereunto duly authorized, as of the date first above
written.
|
Earth
Biofuels, Inc.
By:
Name:
Title:
|
|
|
Earth
Biofuels Technology Co., LLC
By:
Name:
Title:
|
|
|
The
Wing Sail Company
d/b/a
Earth Biofuels Distribution Company
By:
Name:
Title:
|
|
|
Earth
Biofuels of Cordele, LLC
By:
Name:
Title:
|
|
|
B20
Customs, LLC
By:
Name:
Title:
|
|
|
Earth
Biofuels Operating, Inc.
By:
Name:
Title:
|
|
|
Earth
Biofuels Retail Fuel Company, LLC
By:
Name:
Title:
|
|
|
Earth
Ethanol, Inc.
By:
Name:
Title:
|
|
|
Xxxxxx
Biofuels, LLC
By:
Name:
Title:
|
|
|
Earth
Ethanol of Washington L.L.C.
By:
Name:
Title:
|
ACCEPTED
BY:
Castlerigg
PNG Investments LLC,
as
Collateral Agent
By:
Castlerigg Master Investments Ltd.,
its managing member and sole
member
By:
Name:
Title:
