SETTLEMENT EXCHANGE AGREEMENT
THIS SETTLEMENT EXCHANGE AGREEMENT
(this "Agreement") is
made on June 25, 2008, between Earth Biofuels, Inc., a Delaware corporation
("EBOF"), and Radcliffe
SPC, Ltd. for and on behalf of the Class A Segregated Portfolio (the "Investor").
WHEREAS,
on or about June 5, 2008, PNG Ventures, Inc., a Nevada company (the "Issuer") issued a 12%
Convertible Promissory Note in a principal amount of $171,000 (the "Note," a copy of which has
been attached hereto as Exhibit A) to EBOF,
pursuant to and subject to the terms of, a Settlement Agreement (as defined in
the Note).
WHEREAS,
concurrently herewith, EBOF, Earth LNG, Inc., a wholly owned subsidiary of EBOF
and New Earth LNG, LLC, a Delaware limited liability company and a wholly owned
subsidiary of Earth LNG, Inc. ("LNG Sub") and the Issuer have
entered into that certain Share Exchange Agreement (the "Share Exchange Agreement")
pursuant to which EBOF will exchange (the "Share Exchange") 100% of the
membership interests of LNG Sub for 7,000,000 shares of common stock, $0.001 par
value of the Issuer (the "Common Stock").
WHEREAS,
concurrently herewith, the Investor and EBOF have entered into that certain
Amendment and Exchange Agreement (the "Amendment and Exchange
Agreement"), pursuant to which EBOF and the Investor have agreed to (i)
amend and restate the existing senior secured convertible notes of the EBOF and
(ii) issue certain additional senior secured subordinated convertible notes to
the EBOF (the indebtedness referred to in clauses (i) and (ii), collectively,
the "Subordinated
Debt"), (iii) amend and restate certain warrants of the EBOF, (iv) amend
and restate the security documents related to such Subordinated Debt and (v)
release certain liens on the capital stock, membership interests and assets of
LNG Sub, New Earth LNG and its subsidiaries and release said parties from
certain obligations described therein (the "Releases").
WHEREAS,
to induce the Investor to enter into the Amendment Exchange Agreement and the
Releases, EBOF agrees to exchange $6,428.57 in aggregate principal amount of the
Notes (the "Exchanged
Notes") , which is convertible into 71,429 shares of Common Stock as of
the Closing Date (as defined below) (the Conversion Shares") for
$6,428.57 of the Subordinated Debt of the Investor (the "Existing Debt Amount"), on the
basis of the representations, warranties and agreements contained in this
Agreement and upon the terms but subject to the conditions set forth
herein.
NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
Section
1 Exchange of Exchanged
Shares.
(a) Exchange of Exchanged
Shares. On the Closing Date (as defined below), EBOF hereby
agrees to exchange the Exchanged Notes of EBOF for the Existing Debt
Amount. For
the
avoidance of doubt, EBOF and the Investor hereby acknowledge that immediately
following the consummation of the foregoing exchange the amount of interest due
and outstanding under the Existing Primary Note of the Investor shall be reduced
by the Interest Exchange Amount.
(b) Closing. The date
and time of the Closing (the "Closing Date") shall be 10:00
a.m., New York City time, on the first business day after notification by the
EBOF to the Investor of the satisfaction or waiver of the condition to the
closing set forth in Section 1(c), (or such other date or time as the parties
may agree) at the office of Xxxxxxx Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
(c) Condition to
Closing.
(i) EBOF
shall have obtained from the Issuer or its agents the Exchanged Notes in such
name as the Investor shall request.
(ii) The
Issuer shall have executed and delivered to the Investor the Notice and
Acknowledgment of Transfer of Securities attached hereto as Exhibit A agreeing to
be bound by all of the provisions contained therein.
(iii) The
representations and warranties of the EBOF shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
specific date), and the EBOF shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the EBOF at or prior to
the Closing Date.
(d) Delivery of
Notes. On the Closing Date, EBOF shall have delivered to the
Investor the Exchanged Notes in such name as the Investor shall
request.
Section 2. EBOF Representations
And Warranties. EBOF hereby
represents, warrants and covenants to the Investor as follows as of the date
hereof and as of the Closing Date:
(a) This
Agreement has been duly authorized, executed and delivered by EBOF and
constitutes a valid and legally binding agreement of EBOF enforceable against
EBOF in accordance with its terms, except as such enforceability may be limited
by general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors' rights and
remedies.
(b) EBOF
is not an affiliate of the Issuer and has not been an affiliate of the Issuer
for the three month period immediately preceding the Closing Date
(c) The
Exchanged Notes are free of any transfer restrictions or legends. The
Exchanged Notes are, and upon issuance in accordance with the Exchanged Notes,
the Conversion Shares shall be, unrestricted securities issued pursuant to
Section 3(a)(10) of the Securities Act (subject only to the Settlement Agreement
and Order (as defined in the Settlement
Agreement)
relating to the same). The Exchanged Shares, when issued, shall be
freely tradable on the NASDAQ OTC Bulletin Board without restriction and will
not contain any restrictive legend.
(d) All
government and other consents that are required to have been obtained by EBOF
with respect to this Agreement have been obtained and are in full force and
effect and all conditions of any such consents have been complied
with. EBOF has complied and will comply with all applicable
disclosure or reporting requirements in respect of the transaction contemplated
hereby.
(e) EBOF
has good and valid title to the Exchanged Notes free and clear of lien,
mortgage, security interest, pledge, charge or encumbrance of any kind ("Liens") subject only to the
Settlement Agreement and Order. Delivery of the Exchanged Notes to
the Investor will pass to the Investor good and valid title to the Exchanged
Notes, free and clear of Liens.
(f) The
execution and delivery by EBOF of this Agreement, the exchange of the Exchanged
Notes and the performance by EBOF of its obligations under this Agreement do not
and will not violate or conflict with any law applicable to EBOF, any order or
judgment of any court or other agency of government applicable to EBOF or any of
EBOF's assets or any contractual restriction binding on or affecting EBOF or any
of EBOF's assets.
(g) EBOF
is acting solely for EBOF's own account, and has made EBOF's own independent
decision to enter into this Agreement and as to whether this Agreement is
appropriate or proper for EBOF based upon EBOF's own judgment and upon advice of
such advisors as EBOF deems necessary. EBOF acknowledges and agrees
that EBOF is not relying, and has not relied, upon any communication (written or
oral) of the Investor or any affiliate, employee or agent of the Investor with
respect to the legal, accounting, tax or other implications of this Agreement
and that EBOF has conducted EBOF's own analyses of the legal, accounting, tax
and other implications hereof and thereof; it being understood that information
and explanations related to the terms and conditions of this Agreement shall not
be considered investment advice or a recommendation to enter into this
Agreement. EBOF acknowledges that neither the Investor nor any
affiliate, employee or agent of the Investor is acting as a fiduciary for or an
advisor to EBOF in respect of this Agreement.
Section 3. Investor Representations And
Warranties. The Investor hereby represents and warrants to
EBOF as follows as of the date hereof and as of the Closing Date:
(a) The
Investor has all requisite power and authority to execute, deliver and perform
its obligations under this Agreement. The Investor is not acting in
connection with or as part of a group with respect to this Agreement or its
acquisition of the Note or any shares of Issuer issued thereon. The Investor is
acting for its own account and has made its own independent decision to enter
into this Agreement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Investor and shall
constitute the legal, valid and binding obligation of the Investor enforceable
against it in accordance with its terms, except as such enforceability may be
limited by general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors' rights and
remedies.
(b) The
Investor (a) is a sophisticated person with respect to the exchange of the
Exchanged Notes; (b) has adequate information concerning the business and
financial condition of Issuer to make an informed decision regarding the
purchase of the Exchanged Notes; and (c) has independently and without reliance
upon EBOF, and based on such information as the Investor has deemed appropriate,
made its own analysis and decision to enter into this Agreement, except that the
Investor has relied upon EBOF's express representations, warranties and
covenants in this Agreement. The Investor acknowledges that EBOF has
not given the Investor any investment advice, credit information or opinion on
whether the purchase of the Exchanged Notes is prudent.
Section 4. Payment of
Expenses. Each party to this
Agreement shall bear its own expenses in connection with the exchange of the
Exchanged Notes to the Investor.
(a) EBOF,
for good and valuable consideration, effective as of the Closing Date, hereby
assigns, transfers, conveys and delivers to the Investor all of its right, title
and interest in and to the Exchanged Notes.
(b) The
Investor shall execute and deliver to EBOF and Issuer the Notice and
Acknowledgment of Transfer of Securities attached hereto as Exhibit A agreeing to
be bound by all of the provisions contained therein.
Section 6. Notices. All
communications hereunder shall be in writing and shall be mailed, hand delivered
or telecopied and confirmed to the parties hereto as follows:
If to the
Investor, to its address and facsimile number set forth in the Existing Primary
Securities Purchase Agreement (as defined in the Amendment and Exchange
Agreement), with copies to the Investor's representatives as set forth on the
Existing Primary Securities Purchase Agreement or on the signature page to this
Agreement,
with a
copy (for informational purposes only) to:
Xxxxxxx
Xxxx & Xxxxx LLP
000 Xxxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
X. Xxxxx, Esq.
If to
EBOF:
Earth
Biofuels, Inc.
0000 Xxxx
Xxxxxx, Xxxxx 000,
Xxxxxx,
Xxxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxx
XxXxxxxxxx III
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with
a copy (for informational purposes only)
to:
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Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
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00
Xxxxxxxx
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00xx
Xxxxx
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Xxx
Xxxx, XX 00000
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Telephone: (000)
000-0000
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Facsimile: (000)
000-0000
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Attention: Xxxxxxx
Xxxxxxxxx, Esq.
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Any party
hereto may change the address for receipt of communications by giving written
notice to the others.
Section 7. Governing Law; Submission to
Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAW PRINCIPLES. EACH PARTY AGREES THAT ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT SHALL BE
BROUGHT IN A U.S. FEDERAL OR STATE COURT OF COMPETENT JURISDICTION SITTING IN
THE COUNTY, CITY, AND STATE OF NEW YORK. EACH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO THE JURISDICTION OF SUCH COURT AND
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY DEFENSE OF AN INCONVENIENT
FORUM OR A LACK OF PERSONAL JURISDICTION TO THE MAINTENANCE OF ANY ACTION OR
PROCEEDING AND ANY RIGHT OF JURISDICTION OR VENUE ON ACCOUNT OF THE PLACE OF
RESIDENCE OR DOMICILE OF ANY PARTY HERETO. EACH PARTY 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 AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
Section 8. Entire Agreement; Amendments.
This Agreement, the Share Exchange Agreement, the Amendment and Exchange
Agreement and such other documents contemplated thereby supersedes all other
prior oral or written agreements among the Investor, EBOF, their affiliates and
Persons acting on their behalf with respect to the matters discussed herein, and
this Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither EBOF
nor the Investor makes any representation, warranty, covenant or undertaking
with respect to such matters. No provision hereof may be waived other
than by an instrument in writing signed by the party against whom enforcement is
sought.
Section 9. Severability. If
any provision of this Agreement is prohibited by law or otherwise determined to
be invalid or unenforceable by a court of competent jurisdiction,
the
provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement so long as this Agreement
as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).
Section 10. No Third Party
Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person.
Section 11 Further
Assurances. Each party shall use its commercially reasonable
efforts to 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 any other party 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.
Section 12 Counterparts. This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.
Section 13 Successors. This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns, including any purchasers of the Exchanged
Notes.
[The
remainder of the page is intentionally left blank]
IN WITNESS WHEREOF, the
Investor and EBOF have caused this signature page to the Settlement Exchange
Agreement to be duly executed as of the date first written above.
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EBOF:
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EARTH
BIOFUELS, INC.
By:
Name:
Xxxxxx X. XxXxxxxxxx, III
Title: Chief
Executive Officer
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IN WITNESS WHEREOF, the
Investor and EBOF have caused this signature page to the Settlement Exchange
Agreement to be duly executed as of the date first written above.
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INVESTOR:
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RADCLIFFE
SPC, LTD. FOR AND ON BEHALF OF THE CLASS A SEGREGATED
PORTFOLIO
By:
Name:
Title:
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EXHIBIT
A
TRANSFER
OF SECURITIES ACKNOWLEDGMENT AND AGREEMENT
THIS
TRANSFER OF SECURITIES ACKNOWLEDGMENT AND AGREEMENT (this "Agreement") is made as of June
25, 2008, between PNG Ventures,
Inc., a Nevada corporation (the "Company"), and Radcliffe SPC, Ltd. for and on behalf
of the Class A Segregated Portfolio (the "Investor").
WHEREAS, reference is hereby
made to (i) that certain Settlement Exchange Agreement (the "Settlement Exchange
Agreement"), dated as of June 25, 2008, pursuant to which, Earth
Biofuels, Inc., a Delaware corporation (the "EBOF") has sold 12%
Convertible Promissory Note of PNG Ventures, Inc., a Nevada corporation (the
"Company") having an
aggregate principal amount of $6,428.57 (the "Exchanged Notes"), which are
convertible into shares of common stock, $0.001 par value of the Company (the
"Conversion Shares"), to
Radcliffe SPC, Ltd. for and on behalf of the Class A Segregated Portfolio (the
"Investor") and (ii)
that certain Release and Acknowledgement Agreement by and between the Investor
and the Company with respect to the release without prejudice, of the Company
and its subsidiaries being acquired in the Share Exchange (as hereinafter
defined) of any and all indebtedness, penalties, liabilities or other
obligations (the "Release").
WHEREAS, concurrently
herewith, EBOF, Earth LNG, Inc., a wholly owned subsidiary of EBOF and New Earth
LNG, LLC, a Delaware limited liability company and a wholly owned subsidiary of
Earth LNG, Inc. ("LNG
Sub") and the Issuer have entered into that certain Share Exchange
Agreement (the "Share Exchange
Agreement") pursuant to which EBOF will exchange (the "Share Exchange") 100% of the
membership interests of LNG Sub for 7,000,000 shares of common stock, $0.001 par
value of the Issuer (the "Common Stock").
WHEREAS, the Company desires
to enter into this Agreement as a condition to closing of the Share Exchange and
in order to induce the Investor to enter into the Release.
NOW, THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the adequacy of which is hereby acknowledged, the parties hereto agree as
follows:
1. The
Company hereby agrees to take all actions necessary to effect the transfer of
the Exchanged Notes to the Investor, including, without limitation, having new
notes (in such denominations as the Investor may reasonably request)
representing the Exchanged Notes registered in the name of the Investor;
provided, that the Company and the Investor hereby agree that until the Closing
Date (as defined in the Share Exchange Agreement), the Company shall not effect
any conversion of the Exchanged Notes, and the Investor shall not have the right
to convert any portion of the Exchanged Note, pursuant to Section 4 of the
Exchanged Note or otherwise.
2. The
Company hereby represents and warrants to the Investor as
follows:
(a) The
Company is a corporation duly organized and validly existing in good standing
under the laws of the State of Nevada, and has the requisite corporate power and
authorization to own its properties and to carry on its business as now being
conducted. The Company is duly qualified as a foreign corporation to do business
and is in good standing in every jurisdiction in which its ownership of property
or the nature of the business conducted by it prior to the Share Exchange makes
such qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not reasonably be expected to have a
Material Adverse Effect. As used in this Agreement, "Material Adverse
Effect" means any material adverse effect on the business, properties, assets,
operations, results of operations, condition (financial or otherwise) or
prospects of the Company, taken as a whole, or on the transactions contemplated
hereby, under the Exchanged Notes and the Share Exchange Agreement or by the
agreements and instruments to be entered into in connection herewith or
therewith (collectively, the "Transaction Documents"), or on
the authority or ability of the Company to perform its obligations under the
Transaction Documents.
(b) The
Company has the requisite power and authority to enter into and perform its
obligations under the Transaction Documents and to issue the Exchanged Notes and
Conversion Shares in accordance with the terms hereof and
thereof. The execution and delivery of the Transaction Documents by
the Company and the consummation by the Company of the transactions contemplated
hereby and thereby, including, without limitation, the issuance of the Exchanged
Notes and the reservation and issuance of the Conversion Shares into escrow as
well as the release from escrow upon conversion of the Exchanged Notes have been
duly authorized by the Company's Board of Directors and no further consent or
authorization is required by the Company, its Board of Directors or its
stockholders. This Agreement and the other Transaction Documents have
been duly executed and delivered by the Company, and constitute the legal, valid
and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of applicable creditors' rights and
remedies.
(c) The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby will not (i) result in a violation of the Certificate of Incorporation
of the Company, any capital stock of the Company or the Bylaws of the Company or
(ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company is a party, except
(solely with respect to clause (ii) above) as would not be reasonably be
expected to have a Material Adverse Effect, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and the rules and regulations of Pink
Sheets LLC or the OTC Bulletin Board (as applicable, the "Principal Market")) applicable
to the Company or by which any property or asset of the Company is bound or
affected.
(d) The
issuance of the Exchanged Notes are duly authorized and, upon issuance shall be
free from all taxes, liens and charges with respect to the issue
thereof. As of date hereof, a number of shares of Common Stock shall
have been duly authorized and reserved for issuance which equals or exceeds 100%
of the aggregate of the maximum number of shares of Common Stock issuable upon
conversion of the Notes. Upon conversion in accordance with the
Exchanged Notes, the Conversion Shares will be validly issued, fully paid and
nonassessable and free from all preemptive or similar rights, taxes, liens and
charges with respect to the issue thereof, with the holders being entitled to
all rights accorded to a holder of Common Stock.
(e) The
Exchanged Notes are, and upon issuance in accordance with the Exchanged Notes,
the Conversion Shares shall be, unrestricted securities issued pursuant to
Section 3(a)(10) of the Securities Act (in accordance with the Settlement
Agreement and Order (as defined in the Settlement Agreement) relating to the
same). The Conversion Shares, when issued, shall be freely tradable
on the NASDAQ OTC Bulletin Board without restriction and will not contain any
restrictive legend.
(f) The
Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court, governmental agency or any
regulatory or self-regulatory agency or any other person in order for it to
execute, deliver or perform any of its obligations under or contemplated by the
Transaction Documents, in each case in accordance with the terms hereof or
thereof. All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof, and the
Company and is unaware of any facts or circumstances which might prevent the
Company from obtaining or effecting any of the registration, application or
filings pursuant to the preceding sentence. The Company is not in
violation of the listing requirements of the Principal Market and has no
knowledge of any facts which would reasonably lead to delisting or suspension of
the Common Stock in the foreseeable future.
(g) There
is no action, suit, proceeding, or to the knowledge of the Company, inquiry or
investigation before or by either Principal Market, any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company, threatened against or affecting the Company, the
Common Stock or any of the
Company's
officers or directors in their capacities as such, that is expected to have a
Material Adverse Effect.
(h) To
the Company's knowledge, neither this Agreement, the other Transaction
Documents, nor any other written statements or certificates made or delivered in
connection herewith, when taken as a whole, contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made.
(i) The
Company represents and warrants to the Investor all of the representations and
warrants of the Company set forth in the Share Exchange Agreement, as if such
representations and warranties are set forth herein, mutatis
mutandis.
(j) The
Company represents and warrants that (A) the individuals set forth on Table I of
Schedule 2(j) hereto hold the offices set forth opposite their names on Table I
of Schedule 2(j) hereto at the Company and (B) the individuals set
forth on Table II of Schedule 2(j) hereto are the only directors of the
Company.
Notwithstanding
anything to the contrary in this Agreement, under no circumstances shall the
foregoing covenants or warranties or other provisions herein, be deemed to cause
the Company in any way to assume or otherwise be or become, directly or
indirectly, liable or responsible for the indebtedness or any other liabilities
or obligations of the EBOF or any of its Subsidiaries owed to Investor, as more
fully set out in the Release or, to cause the Release to be
invalidated.
3. The
Investor hereby represents and warrants to the Company all of the
representations and warrants of the Investor set forth in the Settlement
Exchange Agreement, as if such representations and warranties are set forth
herein, mutatis
mutandis.
4. On
or before 8:30 a.m., New York City time, on the fourth (4th) Business Day
following the date of the Share Exchange, the Company shall file a Current
Report on Form 8-K describing the terms of the transactions contemplated by the
Share Exchange Agreement and the Settlement Exchange Agreement in the form
required by the 1934 Act and attaching the material documents related thereto
not previously filed (including, without limitation, this Agreement, the Share
Exchange Agreement, the Settlement Exchange Agreement, the Releases and the
Exchanged Note (including all attachments, the "8-K Filing"). From
and after the filing of the 8-K Filing with the SEC, the Investor shall not be
in possession of any material, nonpublic information received from the Company,
any of its subsidiaries or any of its respective officers, directors, employees
or agents, that is not disclosed in the 8-K Filing. The Company shall
not, and shall cause each of its subsidiaries and its and each of their
respective officers, directors, employees and agents, not to, provide the
Investor with any material, nonpublic information regarding the Company or any
of its subsidiaries from and after the filing of the 8-K Filing with the SEC
without the express written consent of the Investor or as may be required under
the terms of this Agreement. Subject to the foregoing, neither the
Company, its subsidiaries nor the Investor shall issue any press releases or any
other public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior
approval of the Investor, to make any press release or other public disclosure
with respect to such transactions (i) in substantial conformity with the 8-K
Filing and
contemporaneously
therewith and (ii) as is required by applicable law and regulations (provided
that in the case of clause (i) the Investor shall be consulted by the Company in
connection with any such press release or other public disclosure prior to its
release). Without the prior written consent of the Investor, neither
the Company nor any of its subsidiaries or affiliates shall disclose the name of
the Investor in any filing, announcement, release or otherwise, unless such
disclosure is required by law, subpoena, court order, government agency, or self
regulatory organization investigation or rule or regulation or the Eligible
Market in which the Common Stock is then traded or listed.
5. For
the purposes of Rule 144, the Company acknowledges that the holding period of
the Note (as defined in the Settlement Exchange Agreement) (including the
corresponding shares of Common Stock issuable upon conversion of the Note) may
be tacked onto the holding period of the Exchanged Notes (including the
corresponding Conversion Shares issuable upon conversion of the Exchanged
Notes), and the Company agrees not to take a position contrary to this Section
5. The Company agrees to take all actions, including, without
limitation, the issuance by its legal counsel of any necessary legal opinions,
necessary to issue the Conversion Shares as defined in the Settlement Exchange
Agreement) that (other than as to "Affiliates" of the Company as used in Rule
144, which shall be subject to such rules and restrictions set forth in Rule
144) are freely tradable on the NASDAQ OTC Bulletin Board without
restriction and not containing any restrictive legend without the
need for any action by the Investor.
6. So
long as the Investor owns any Exchanged Notes or Conversion Shares (the "Registrable Securities"), with
a view to making available to the Investor the benefits of 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 the Company Registrable Securities,
promptly upon request, (i) a written statement by the Company, if true, 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 report of the Company and such
other reports and documents so filed by the Company (but only if such reports
are not publicly available on the XXXXX system), (iii) a written statement of
the number of shares of Common Stock then outstanding and (iv) such other
information as may be reasonably requested to permit the Investor to sell such
securities pursuant to Rule 144 without registration.
7. [Intentionally
Omitted]
8. This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective
when
counterparts
have been signed by each party and delivered to the other party; provided that a
facsimile signature shall be considered due execution and shall be binding upon
the signatory thereto with the same force and effect as if the signature were an
original, not a facsimile signature.
9. The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
10. If
any provision of this Agreement is prohibited by law or otherwise determined to
be invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement so long as this Agreement
as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).
11. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement 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 jurisdictions other than the State of
New York. Each party 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 party 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 Agreement 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. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other
jurisdiction. EACH
PARTY 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 HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
12. This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.
13. 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 party 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.
14. The
language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction will
be applied against any party.
15. This
Agreement supersedes all other prior oral or written agreements between the
Investor, the Company, their affiliates and Persons acting on their behalf with
respect to the matters discussed herein, and this Agreement (other than the
Release, which shall remain in full force and effect) and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Investor makes any
representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be amended other than by
an instrument in writing signed by the Company and the Investor. No
provision hereof may be waived other than by an instrument in writing signed by
the party against whom enforcement is sought.
16. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns in accordance with the terms of the
Settlement Exchange Agreement.
[Signature
Page Follows]
IN WITNESS WHEREOF, the
Investor and the Company have caused their respective signature page to this
Agreement to be duly executed as of the date first written above.
|
COMPANY:
|
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PNG
VENTURES, INC.
By:
Name:
Xxxxx Xxxxxx
Title: Chief
Executive Officer
|
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Copy
to:
Xxxxxxx
Xxxx, LLP
0000
Xxxxxxxx
00xx
Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxxx Xxxx, Esq.
|
IN WITNESS WHEREOF, the
Investor and the Company have caused their respective signature page to this
Agreement to be duly executed as of the date first written above.
|
INVESTOR:
|
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RADCLIFFE
SPC, LTD. FOR AND ON BEHALF OF THE CLASS A SEGREGATED
PORTFOLIO
By:
Name:
Title:
|
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Copy
to:
Xxxxxx
Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
0000
Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxx
X. Xxxxxx, Esq.
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