SUBORDINATION AND INTERCREDITOR AGREEMENT
THIS SUBORDINATION AND INTERCREDITOR
AGREEMENT (this “Agreement”)
is entered into as of this June ___, 2008, by and among (i) BLACK FOREST
INTERNATIONAL, LLC (“Subordinated
Creditor”; and any references herein to “each” or “any” Subordinated
Creditor or to the “Subordinated Creditor” (or similar words) shall mean and
refer to Subordinated Creditor and its successors and permitted assigns), (ii)
FOURTH THIRD LLC, a Delaware limited liability
company (“Fourth
Third”), as Agent for all Senior
Lenders party to the Senior Credit Agreement described below and as a Senior
Lender, (iii) PNG VENTURES, INC., a Nevada corporation (“PNG”),
(iv) NEW EARTH LNG, LLC, a Delaware limited liability company (“Earth”)
and (v) the subsidiaries of Earth listed under “Companies” on the signature
pages hereto (together with PNG and Earth the “Companies”
or a “Company”).
R
E C I T A L S
A. The
Agent, Senior Lenders (as hereinafter defined) and the Companies have entered
into an Amended and Restated Credit Agreement, dated as of June __, 2008 (as the
same may be amended, supplemented or otherwise modified from time to time as
permitted hereunder, the “Senior
Credit Agreement”) pursuant to which, among other things, Senior Lenders
are making certain loans and financial accommodations to Earth.
B. The
Agent and the Companies have entered into a Guarantee and Collateral Agreement,
dated as of June __, 2008 (as the same may be amended, supplemented or otherwise
modified from time to time as permitted hereunder, the “Senior
Guarantee and Collateral Agreement”) pursuant to which, among other
things, the Companies (other than Earth, but including PNG) have guaranteed the
debts of Earth to Senior Lenders arising pursuant to the Senior Credit Agreement
and all Companies (including Earth and PNG) have granted security interests in
the Collateral (as hereinafter defined).
C. PNG
has issued to Subordinated Creditor its 12% Subordinated Secured Convertible
Promissory Note, dated June 3, 2008 in the principal amount of $626,250 (as the
same may be amended, supplemented or otherwise modified from time to time as
permitted hereunder, the “Subordinated
Note”).
D. Payment
of the Subordinated Note is guaranteed by each of the Companies (other than PNG)
pursuant to a Guaranty Agreement, dated as of June __, 2008 (as the same may be
amended, supplemented or otherwise modified from time to time as permitted
hereunder, the “Subordinated
Guaranty”).
E. The
Companies, including PNG, have made in favor of Subordinated Creditor, a General
Security Agreement, dated as of June __, 2008 (as the same may be amended,
supplemented or otherwise modified from time to time as permitted hereunder, the
“Subordinated
Security Agreement”).
F. It
is a condition to any extensions of credit being made to Earth under the Senior
Credit Agreement that the Subordinated Note, the Subordinated Guaranty and the
Subordinated Security Agreement shall have been made subordinate, in right of
payment and claim, to the
rights
and claims of the Senior Lenders under the Senior Credit Agreement and the
Senior Guarantee and Collateral Agreement.
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto hereby agree as follows:
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1.
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Definitions. The following terms
shall have the following meanings in this
Agreement:
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“Agent” shall mean Fourth Third
LLC, as Agent for the Senior Lenders, or any other Person appointed by the
holders of the Senior Debt as administrative agent for purposes of the Senior
Debt Documents and this Agreement.
“Bankruptcy
Code” shall
mean Chapter 11 of Title 11 of the United States Code, as amended from time to
time and any successor statute and all rules and regulations promulgated
thereunder.
“Business
Day” shall mean
“Business Day” as defined in the Senior Credit Agreements.
“Collateral”
shall mean all real and personal property of any Company in which a lien,
security interest or mortgage has been or hereafter may be granted or created in
favor or the Agent or any Senior Lender as collateral security for the payment
or performance of any Senior Debt.
“Collection
Action “ shall mean (a) to initiate or join in any suit, action or
proceeding against any Company or Collateral to enforce payment of or make
demand for all or any part of the Subordinated Debt, (b) to seek monetary
damages against any Company, or (c) to take from or for the account of any
Company, by set-off or in any other matter, all or any part of any moneys which
may now or hereafter be owing by such Company with respect to the Subordinated
Debt, but shall not include or mean any action by Subordinated Creditor with
respect to enforcement of any right to convert the Subordinated Note as provided
therein or with respect to its enforcement of any similar equity rights not
deemed part of the Subordinated Debt (as hereinafter defined).
“Distribution”
means, with respect to any indebtedness or obligation, (a) any payment or
distribution by any Company (including any Company in its capacity as a debtor
or debtor-in-possession in a Proceeding) of cash, securities or other property,
by set-off or otherwise, on account of such indebtedness or obligation or (b)
any redemption, purchase or other acquisition of such indebtedness or obligation
by any Company.
“Enforcement
Action” shall mean (a) to take from or for the account of any Company or
any other obligor on the Subordinated Debt, by set-off or in any other manner,
the whole or any part of any moneys which may now or hereafter be owing by any
Company or any such other obligor with respect to the Subordinated Debt, (b) to
xxx for payment of, or to initiate or participate with others in any suit,
action or proceeding against any Company or any such other obligor to (i)
enforce payment of or to collect the whole or any part of the Subordinated Debt
or (ii) commence judicial enforcement of any of the rights and remedies under
the Subordinated Debt Documents or applicable law with respect to the
Subordinated Debt, (c) to notify account debtors or directly collect accounts
receivable or other payment rights of any Company or any such other obligor or
(d) take any action under the provisions of any state or federal law, including,
without limitation, the UCC, or under any
contract or agreement, to enforce against, foreclose upon, take possession of or
sell any property or assets of any Company or any Collateral; provided, however, that the
term “Enforcement Action” shall not include (i) an exercise of rights and
remedies for specific performance or equitable relief to compel any Company to
comply with any non-payment
obligations
under the Subordinated Debt Documents so long as it is not accompanied by (a) a
Collection Action or (b) a claim for relief or any other Enforcement Action
against or with respect to any Collateral, or (ii) any suit or action initiated
or maintained by the Subordinated Creditor solely to prevent the running of any
applicable statute of limitations or other similar restriction on
claims.
“Fourth
Third Loan
Documents” shall mean the Senior
Credit Agreement, the Senior Guarantee and Collateral Agreement, and all other
agreements, documents and instruments executed from time to time in connection
therewith, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the terms hereof.
“Permitted
Refinancing” shall mean any
refinancing of the outstanding Senior Debt under the Fourth Third Loan Documents provided
that the financing documentation entered into by the Companies in connection
with such Permitted Refinancing constitutes Permitted
Refinancing Senior Debt Documents.
“Permitted
Refinancing Senior Debt Documents” shall mean any financing
documentation which replaces the Fourth
Third Loan Documents and pursuant to which the outstanding Senior Debt
under the Fourth Third Loan Documents is
refinanced, as such financing documentation may be amended, supplemented or
otherwise modified from time to time in compliance with this Agreement, but
specifically excluding any such financing documentation to the extent that it
contains provisions violating Section 3.1
hereof.
“Person” means any natural
person, corporation, general or limited partnership, limited liability company,
firm, trust, association, government, governmental agency or other entity,
whether acting in an individual, fiduciary or other capacity.
“Proceeding”
shall mean any voluntary or involuntary insolvency, bankruptcy, receivership,
custodianship, liquidation, dissolution, reorganization, assignment for the
benefit of creditors, appointment of a custodian, receiver, trustee or other
officer with similar powers or any other proceeding for the liquidation,
dissolution or other winding up of a Person.
“Reorganization
Subordinated Securities” shall mean any debt or equity securities issued
in substitution of all or any portion of the Subordinated Debt, in each case
that are subordinated in right of payment, performance, liens and otherwise to
the Senior Debt (or any debt and/or equity securities issued in substitution of
all or any portion of the Senior Debt) to at least the same extent that the
Subordinated Debt (and the liens securing the Subordinated Debt) are
subordinated to the Senior Debt (and the liens securing the Senior Debt)
pursuant to the terms of this Agreement.
“Secured
Claim” shall mean a “secured claim” within the meaning of such term in
Section 506(a) of the Bankruptcy Code (as presently in effect).
“Senior
Debt” shall mean all obligations, liabilities and indebtedness of every
nature of any Company or any other obligor (other than Earth Biofuels) under the
Senior Debt Documents from time to time owed to Agent or any Senior Lender under
the Senior Debt Documents, including, without limitation, the principal amount
of all debts, claims and indebtedness, credit exposure and related obligations
arising from any hedging agreements, accrued and unpaid interest and all fees,
costs and expenses, whether primary, secondary, direct, contingent, fixed or
otherwise, heretofore, now and from time to time hereafter owing, due or
payable, whether before or after the filing of a Proceeding under the Bankruptcy
Code together with (a) any amendments, modifications, renewals or extensions
thereof to the extent not prohibited by the terms of this
Agreement
and (b) any interest accruing thereon after the commencement of a Proceeding,
without regard to whether or not such interest is an allowed claim; provided, however, that in no
event shall the principal amount of the Senior Debt (excluding any interest or
fees added to principal) exceed the amount that is the excess of (i)
$35,000,000, over (ii) the amount of any prepayments or repayments under the
Senior Credit Agreements (specifically excluding, however, any such prepayments
or repayments occurring solely as a result of a Permitted Refinancing) (the
“Senior
Debt Limit”). The sum of the amount of principal outstanding
under the Senior Debt Documents that is in excess of the Senior Debt Limit
(including pursuant to any refinancing other than a Permitted Refinancing),
together with interest on such excess principal and fees attributable to such
excess principal shall not be considered Senior Debt for purposes of this
Agreement (such amount, “Excluded
Senior Debt”).
“Senior
Debt Documents” shall mean the Fourth Third Loan Documents and, after the
consummation of any Permitted Refinancing, the Permitted Refinancing Senior Debt
Documents.
“Senior
Default” shall mean any “Event of Default” under the Senior Debt
Documents in respect of, or resulting from, the non-payment of any money when
due to Agent or any Senior Lender.
“Senior
Lenders” shall mean the holders
of the Senior Debt.
“Subordinated
Debt” shall mean all of the obligations of any Company under the
Subordinated Debt Documents to the Subordinated Creditor or evidenced by or
incurred pursuant to the Subordinated Debt Documents, but shall not be deemed to
include any right to convert the Subordinated Note into equity as provided in
the Subordinated Note, any anti-dilution adjustment rights or rights to
conversion of the Subordinated Note, rights to receive replacement securities
for or to an adjustment of the convertibility provisions and conversion ratios
as set forth in the Subordinated Note (whether upon merger, sale of the company
or otherwise), or other rights to receive securities from time to time upon
conversion of the Subordinated Note, so long as none of the foregoing involves
the payment of money by any Company.
“Subordinated
Debt Documents”
shall mean the Subordinated Note, the Subordinated Guaranty, the Subordinated
Security Agreement, and all other documents, agreements and instruments now
existing or hereinafter entered into by any Company to, with or in favor of the
Subordinated Creditor in connection therewith.
“UCC”
shall mean the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
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2.
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Subordination.
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2.1. Subordination
of Subordinated Debt to Senior Debt. Each Company
covenants and agrees, and each Subordinated Creditor by its acceptance of the
Subordinated Debt Documents (whether upon original issue or upon transfer or
assignment) likewise covenants and agrees, notwithstanding anything to the
contrary contained in any of the Subordinated Debt Documents, that the payment
of any and all of the Subordinated Debt shall be subordinate and subject in
right and time of payment, to the extent and in the manner hereinafter set
forth, to the prior payment in full in cash (or other consideration acceptable
to Agent in its sole discretion) of all Senior Debt (but, for avoidance of any
doubt, not any Excluded Senior Debt). Each holder of Senior Debt,
whether now outstanding or hereafter created, incurred, assumed or guaranteed,
shall be deemed to have acquired Senior Debt in reliance upon the provisions
contained in this Agreement.
2.2. Liquidation,
Dissolution, Bankruptcy. In the event of
any Proceeding involving any Company but subject to Section 2.7(b) which shall
control in the event of any inconsistency between its provision and the
following:
(a) All
Senior Debt shall first be paid in full in cash (or other consideration
acceptable to Agent in its sole discretion) before any Distribution (other than
Reorganization Subordinated Securities), whether in cash, securities or other
property, shall be made to the Subordinated Creditor on account of
any Subordinated Debt.
(b) Any
Distribution (other than Reorganization Subordinated Securities), whether in
cash, securities or other property which would otherwise, but for the terms
hereof, be payable or deliverable in respect of the Subordinated Debt shall be
paid or delivered directly to Agent (to be held and/or applied by Agent in
accordance with the terms of the Senior Debt Documents) until all Senior Debt is
paid in full in cash (or other consideration acceptable to Agent in its sole
discretion). Each Subordinated Creditor irrevocably authorizes, empowers and
directs any debtor, debtor in possession, receiver, trustee, liquidator,
custodian, conservator or other Person having authority, to pay or otherwise
deliver all such Distributions to Agent. Each Subordinated Creditor also
irrevocably authorizes and empowers Agent and appoints Agent its
attorney-in-fact, in the name of such Subordinated Creditor, to demand, xxx for,
collect and receive any and all such Distributions, at Companies’
expense. This power of attorney is coupled with an interest and is
irrevocable.
(c) Each
Subordinated Creditor agrees not to initiate, prosecute or participate in any
claim, action or other proceeding challenging the enforceability, validity,
perfection or priority of the Senior Debt or any liens and security interests
securing the Senior Debt. Agent agrees not to initiate, prosecute or
participate in any claim, action or other proceeding challenging the
enforceability, validity, perfection or priority of the Subordinated Debt or any
liens and security interests securing the Subordinated Debt.
(d) Each
Subordinated Creditor, in its capacity as the holder of a Secured Claim, agrees
that Agent and Senior Lenders may consent to the use of cash collateral or
provide (or consent to any other Person providing) financing to any Company (or
trustee) on such terms and conditions and in such amounts as Agent and Senior
Lenders, in their sole discretion, may decide and, in connection therewith, each
Company (or trustee) may grant to Agent and Senior Lenders (or such other Person
providing financing) liens and security interests upon all of its property,
which liens and security interests (i) shall secure payment of all Senior Debt
(whether such Senior Debt arose prior to the commencement of any Proceeding or
at any time thereafter) and all other financing provided by Senior Lenders (or
such other Persons providing financing) during the Proceeding and (ii) shall be
superior in priority to the liens and security interests, if any, in favor of
such Subordinated Creditor on the property of any Company, provided, that (A)
the financing (x) does not compel such Company to seek confirmation of a
specific plan of reorganization for which all or substantially all of the
material terms are set forth in the financing documentation or a related
document or (y) that the financing documentation or cash collateral order does
not expressly require the liquidation of the Collateral prior to a default under
the financing documentation or cash collateral order. Each
Subordinated Creditor, in its capacity as the holder of Secured Claim, agrees
that it will not object to or oppose, and will consent to, a sale or other
disposition of any property securing all of any part of the Senior Debt free and
clear of security interests, liens or other claims of such Subordinated Creditor
under Section 363 of the Bankruptcy Code or any other provision of the
Bankruptcy Code if Agent and Senior Lenders have consented to such sale or
disposition, provided that such Subordinated Creditor shall have the right to
object to the further use of the proceeds of such sale or other disposition
unless such
proceeds
are applied to permanently reduce the amount of Senior Debt
outstanding. Each Subordinated Creditor, in its capacity as the
holder of a Secured Claim, agrees not to: (1) assert any rights, to
the extent adverse, in the commercially reasonable opinion of the Agent, to the
interests of the Agent and the Senior Lenders, under Sections 362, 363 or 364 of
the Bankruptcy Code with respect to the Collateral, including any rights it may
have to “adequate protection” of such Subordinated Creditor’s interest in any
Collateral in any Proceeding or objecting to or opposing any use of cash,
financing, security or priority described in clauses (i) and (ii) above; provided, if the
Agent or any Senior Lender is granted adequate protection in the form of
additional collateral in connection with any cash collateral use or
debtor-in-possession financing, then the Subordinated Creditor may seek or
request adequate protection in the form of a Lien on such additional collateral,
which Lien will be subordinated to the Liens securing the Senior Debt (and such
cash collateral use or debtor-in-possession financing on the same basis) as the
other Liens securing the Subordinated Debt are so subordinated to the Senior
Debt under this Agreement; (2) oppose or object to any adequate protection
sought by or granted to Agent or any Senior Lender with respect to the
Collateral; (3) initiate or prosecute or join with any other Person to
initiate or prosecute any claim, action or other proceeding opposing a motion by
Agent to lift the automatic stay; (4) vote in favor of any chapter 11 plan
that seeks confirmation under Section 1129(b)(2)(A) of the Bankruptcy Code,
solely to the extent such vote is required to satisfy Section 1129(a)(10) of the
Bankruptcy Code (i.e., each Subordinated Creditor agrees not to vote in favor of
such plan if its allowed secured claim is deemed impaired and no other impaired
class has accepted the plan, determined without including acceptance of the plan
by any insider); (5) seek the dismissal or conversion of a Proceeding,
(6) seek the appointment of a trustee, receiver or examiner in a
Proceeding; or (7) seek to have the automatic stay of Section 362 of the
Bankruptcy Code (or any similar stay under any other applicable law) lifted or
modified with respect to the Collateral; provided, however, that each
Subordinated Creditor may object to any financing under Section 364 in its
capacity as the holder of a Secured Claim to the extent that the principal
amount, together with the aggregate principal amount of Senior Debt outstanding
immediately after giving effect to any payment thereof with the proceeds of such
financing, exceeds the Senior Debt Limit. Any claim of any
Subordinated Creditor arising during a Proceeding, including a claim under
Section 507(b) of the Bankruptcy Code, shall constitute Subordinated Debt under
this Agreement. Except for any claim based upon a breach of this
Agreement, each Subordinated Creditor waives any claim it may now or hereafter
have arising out of Agent’s or Senior Lenders’ election, in any Proceeding
instituted under the Bankruptcy Code, of the application of Section 1111(b)(2)
of the Bankruptcy Code, and/or any borrowing or grant of a security interest
under Section 364 or use of cash collateral under Section 363 of the Bankruptcy
Code by any Company, as debtor in possession. Notwithstanding
anything in this Section 2.2(d) to the contrary but subject to the other
provisions of this Agreement (including Section 2.2(c)), in any Proceeding
involving any Company, a Subordinated Creditor may exercise rights and remedies
generally available to holders of unsecured claims against any of the Companies
and otherwise in accordance with the Subordinated Debt Documents and applicable
law. In furtherance of the foregoing, each Subordinated Creditor shall be
entitled to file any pleadings, objections, motions or agreements which assert
rights or interests available to unsecured creditors of the Companies arising
under either the Bankruptcy Code or applicable non-bankruptcy law, in each case
if not otherwise in contravention of the express terms of this Agreement,
including any right to object to the sale or use of property under Section 363
of the Bankruptcy Code and/or any financing under Section 364 of the Bankruptcy
Code solely to the extent such objection could be asserted by the holder of an
unsecured claim against any Company.
(e) Each
Subordinated Creditor agrees to execute, verify, deliver and file any proofs of
claim in respect of the Subordinated Debt requested by Agent in connection with
any
such
Proceeding and hereby irrevocably authorizes, empowers and appoints Agent its
agent and attorney-in-fact to execute, verify, deliver and file such proofs of
claim upon the failure of any Subordinated Creditor promptly to do so prior to
ten (10) days before the expiration of the time to file any such proof of claim;
provided, that
Agent shall have no obligation to execute, verify, deliver, and/or file any such
proof of claim.
(f) The
Senior Debt shall continue to be treated as Senior Debt and the provisions of
this Agreement shall continue to govern the relative rights and priorities of
Senior Lenders and the Subordinated Creditor even if all or part of the Senior
Debt or the security interests securing the Senior Debt are subordinated, set
aside, avoided, invalidated or disallowed in connection with any such Proceeding
and this Agreement shall be reinstated if at any time any payment of any of the
Senior Debt is rescinded or must otherwise be returned by any holder of Senior
Debt or any representative of such holder.
(g) The
parties acknowledge and agree that (i) the claims and interests of Agent and the
Senior Lenders under the Senior Debt Documents are substantially different from
the claims and interests of the Subordinated Creditor under the Subordinated
Debt Documents and such claims and interests should be treated as separate
classes for purposes of Section 1122 of the Bankruptcy Code.
(h) It
is acknowledged and agreed that this Agreement shall constitute a “subordination
agreement” within the meaning of Section 510(a) of the Bankruptcy
Code.
2.3. Subordinated
Debt Payment Restrictions.
(a) Notwithstanding
the terms of the Subordinated Debt Documents, each Company hereby agrees that it
may not make, directly or indirectly, and each Subordinated Creditor hereby
agrees that it will not accept, any Distribution (other than Reorganization
Subordinated Securities) with respect to the Subordinated Debt until the Senior
Debt is paid in full in cash (or other consideration acceptable to Agent in its
sole discretion).
(b) The
provisions of this Section 2.3 shall not apply to a payment with respect to
which Section 2.3(b) or Section 2.7(b) is applicable.
(c) Nothing
contained in this Agreement shall prevent PNG from making, or the Subordinated
Creditor from receiving, at any time or from time to time, any payments of
accrued interest on the Subordinated Note (but for avoidance of any doubt, no
payments of principal, regardless of stated maturity or demand for payment,
except as expressly permitted under subsection (d) below) as and when due and
payable in accordance with the terms of the Subordinated Note as in effect on
the date hereof (without giving effect to any provisions of the Subordinated
Notes which would have the effect of increasing the amount or frequency of
payment thereof, including the imposition of any default rate thereunder) except: (i) during
the pendency of any Proceeding or (ii) if prior to any such payment being made
the Subordinated Creditor and PNG have received written notice from Agent that a
Senior Default has occurred and is continuing, unless and until Subordinated
Creditor and PNG have received written notice from Agent that such Senior
Default has been waived (which Agent agrees to provide promptly after the Senior
Lenders have waived such Senior Default).
(d) Notwithstanding
the foregoing provisions of subsection (a) above or any other term of this
Agreement to the contrary, upon the consummation of any private investment in
the public equity of PNG, or any similar transaction involving the sale or
exchange of equity
securities,
debt or convertible debt of PNG occurring subsequent to the date hereof, provided that the
Senior Lenders receive from PNG sufficient proceeds therefrom in prepayment of
the Senior Debt, to cause the unpaid principal amount of the Senior Debt to be
reduced to Thirty Million Dollars ($30,000,000) or less; then, PNG shall pay to
Subordinated Creditor, to the extent of any remaining proceeds, the then
outstanding amount of the Subordinated Debt.
(e) Nothing
contained herein shall prevent Subordinated Credit at any time in accordance
with the terms of Subordinated Note from exercising any right to convert the
Subordinated Note into equity as provided in the Subordinated Note, any
anti-dilution adjustment rights or rights to conversion of the Subordinated
Note, rights to receive replacement securities for or to an adjustment of the
convertibility provisions and conversion ratios as set forth in the Subordinated
Note (whether upon merger, sale of the company or otherwise), or other rights to
receive securities from time to time upon conversion of the Subordinated Note,
so long as none of the foregoing involves the payment of money by any
Company.
2.4. Subordinated
Debt Standstill Provisions.
(a) Until
the Senior Debt is paid in full in cash (or other consideration acceptable to
Agent in its sole discretion), no Subordinated Creditor shall, without the prior
written consent of Agent, take any Enforcement Action with respect to the
Subordinated Debt or any Collateral, provided, however, that the
Subordinated Creditor may take any Collection Action with respect to the
Subordinated Debt (but not against any Collateral or any other property or
assets securing Subordinated Debt) upon the acceleration of all or any portion
of the Senior Debt.
(b) Notwithstanding
the foregoing, (i) each Subordinated Creditor may file proofs of claim against
the Companies in any Proceeding involving the Companies. Any
Distributions or other proceeds of any Enforcement Action obtained by any
Subordinated Creditor (other than Reorganization Subordinated Securities) shall
in any event be held in trust by it for the benefit of Agent and Senior Lenders
and promptly be paid or delivered to Agent for the benefit of Senior Lenders in
the form received until all Senior Debt is paid in full in cash (or other
consideration acceptable to Agent in its sole discretion).
(c) Notwithstanding
anything contained herein to the contrary, if within 20 days of any acceleration
of the Senior Debt by Senior Lenders such acceleration is rescinded (whether or
not any existing Senior Default has been cured or waived), then all Collection
Actions taken by the Subordinated Creditor in reliance on such acceleration
shall likewise be rescinded.
(d) Notwithstanding
anything in this Agreement to the contrary, no provision herein shall prevent
any Subordinated Creditor from furnishing a notice under the Subordinated Debt
Documents or this Agreement to any Company or Agent to preserve or enforce its
rights with respect thereto, including (without limitation) notices to the
Companies of the existence of a Subordinated Default.
2.5. Incorrect
Payments. If any Distribution on account of the Subordinated
Debt is made by the Companies or accepted by any Subordinated Creditor in
violation of this Agreement, such Distribution shall not be commingled with any
of the assets of such Subordinated Creditor, shall be held in trust by such
Subordinated Creditor for the benefit of Agent and Senior Lenders and shall be
promptly paid over to Agent for application (in accordance with the Senior Debt
Documents) to the payment of the Senior Debt then remaining unpaid, until all of
the Senior Debt is paid in full.
2.6. Subordination
of Liens and Security Interests; Agreement Not to Contest; Agreement to Release
Liens. Until the Senior Debt has been paid in full in cash (or
other consideration acceptable to Agent in its sole discretion), all liens and
security interests of the Subordinated Creditor in the Collateral shall be and
hereby are subordinated for all purposes and in all respects to the liens and
security interests of Agent and Senior Lenders in the Collateral, regardless of
the time, manner or order of perfection of any such liens and security interests
and whether such liens and security interests of Agent are set aside, avoided or
unperfected. Each Subordinated Creditor agrees that it will not at
any time contest the validity, perfection, priority or enforceability of the
Senior Debt, the Senior Debt Documents, or the liens and security interests of
Agent and Senior Lenders in the Collateral securing the Senior
Debt. In the event that Agent or Senior Lenders release or agree to
release any of their liens or security interests in the Collateral in connection
with the sale or other disposition thereof or any of the Collateral is sold,
disposed of or retained pursuant to a foreclosure or similar action, each
Subordinated Creditor shall (or shall cause its agent to) promptly deliver (and
execute as appropriate) to Agent such termination statements and releases as
Agent shall reasonably request to effect the termination or release of the liens
and security interests of such Subordinated Creditor in such Collateral so long
as, subject to Section 2.7(b), (A) the net proceeds of such sale, disposition,
foreclosure or similar action are applied to the permanent payment of the Senior
Debt, (B) any proceeds from such sale or other disposition received by the Agent
in excess of the Senior Debt Limit shall be promptly delivered to the
Subordinated Creditor (subject to any prior rights of third parties) and (C)
such release by the Subordinated Creditor shall not extend to the proceeds from
such sale or other disposition. In furtherance of the foregoing, each
Subordinated Creditor hereby irrevocably appoints Agent its attorney-in-fact,
with full authority in the place and stead of such Subordinated Creditor and in
the name of such Subordinated Creditor or otherwise, to deliver (and execute as
appropriate) any document or instrument which such Subordinated Creditor may be
required to deliver pursuant to this subsection 2.6.
2.7. Application
of Proceeds from Sale or other Disposition of the Collateral.
(a) In
the event of any sale, transfer or other disposition (including a casualty loss
or taking through eminent domain) of the Collateral, the proceeds resulting
therefrom (including insurance proceeds) shall be distributed and applied as
follows: (a) first, to Agent to be
applied in accordance with the terms of the Senior Debt Documents until such
time as the Senior Debt (other than Excluded Senior Debt) is paid in full in
cash (or other consideration acceptable to Agent in its sole discretion); (b)
second, to the
Subordinated Creditor to be applied in accordance with the Subordinated Debt
Documents (as if demand for such payment shall have been made under the
Subsidiary Guaranty, whether or not such demand has been made) until the
Subordinated Debt (subject to the limitation set forth in Section 3.2 below) is
paid in full in cash (or other consideration acceptable to each Subordinated
Creditor in its sole discretion); (c) third, to Agent to be
applied in accordance with the terms of the Senior Debt Documents until such
time as all other Senior Debt not paid pursuant to clause (a) is paid in full in
cash (or such other consideration acceptable to Agent in its sole discretion);
and (d) fourth,
to the Subordinated Creditor to be applied in accordance with the Subordinated
Debt Documents until such time as all other Subordinated Debt not paid pursuant
to clause (b) is paid in full in cash (or such other consideration acceptable to
Subordinated Creditor in its sole discretion).
(b) Notwithstanding
the foregoing provisions of subsection (a) above, or any other provision of this
Agreement to the contrary, in the event of (i) the sale, transfer or other
disposition of the Collateral by Agent on behalf of the Senior Lenders pursuant
to any foreclosure or similar action initiated by Agent as provided in Section
2.6, or (ii) any Distribution in connection with the sale, transfer or other
disposition of the Collateral pursuant to any Proceeding, at any time while any
Subordinated Debt is then outstanding, it is the parties’ intent that the cash
proceeds derived therefrom (net of all costs and expenses incurred by Agent in
giving effect to such foreclosure or other proceeding) shall be shared between
Senior Lenders and Subordinated Creditor, upon final collection and receipt,
thereof, on a pro rata basis, based
on the
respective amounts of the Senior Debt (other than, for avoidance of doubt, any
Excluded Senior Debt) and the Subordinated Debt then outstanding (excluding
therefrom any not issued and outstanding on the date of this Agreement) in
relation to the aggregate amount of all such Senior Debt and such Subordinated
Debt then outstanding; and, in furtherance thereof, coincident with such final
collection of such proceeds occurring, the Subordinated Creditor shall be deemed
to have purchased and sold, and the Senior Lenders shall be deemed to have sold
and purchased, respectively, participations in the Senior Debt and the
Subordinated Debt in pro rata amounts equal to such shared
proceeds. Any such participations (i) shall be at “par”; (ii) shall
not give any consent or other rights to the buyer of such participation other
than to receive proceeds of Collateral derived from foreclosure or other
proceeding (whether initiated by Agent or Subordinated Creditor) or made as a
Distribution pursuant to any Proceeding; (iii) and shall be wholly without
recourse to, or any representation or warranty from, the seller of such
participations.
2.8. Sale,
Transfer or other Disposition of Subordinated Debt.
(a) No
Subordinated Creditor shall sell, assign, pledge, dispose of or otherwise
transfer all or any portion of the Subordinated Debt or any Subordinated Debt
Document: (i)
unless, prior to the consummation of any such action, the transferee thereof
shall execute and deliver to Agent an agreement substantially identical to this
Agreement, providing for the continued subordination of the Subordinated Debt
and liens securing same to the Senior Debt and the liens, security interests and
mortgages securing same as provided herein and for the continued
effectiveness of all of the rights of Agent and Senior Lenders arising under
this Agreement and (ii) unless, following the consummation of any such action,
there shall be no
more than ten holders of the Subordinated Debt; provided, that for
purposes of this clause (ii) holders of the Subordinated Debt that are
affiliates of each other shall be considered one holder.
(b) Notwithstanding
the failure of any transferee to execute or deliver an agreement substantially
identical to this Agreement, the subordination effected hereby shall survive any
sale, assignment, pledge, disposition or other transfer of all or any portion of
the Subordinated Debt, and the terms of this Agreement shall be binding upon the
successors and assigns of the Subordinated Creditor, as provided in Section 10
hereof.
2.9. Legends.
Until the termination of this Agreement in accordance with Section 16 hereof,
each Subordinated Creditor will cause to be clearly, conspicuously and
prominently inserted on the face of any Subordinated Debt Document, as well as
any renewals or replacements thereof, the following legend:
“This
instrument and the rights and obligations evidenced hereby and any security
interests or other liens securing such obligations are subordinate in the manner
and to the extent set forth in that certain Subordination and Intercreditor
Agreement (the “Subordination
Agreement”) dated as of June [__], 2008 among Black Forest International,
LLC, the “Companies” so identified therein, and Fourth Third LLC (“Agent”),
to the indebtedness (including interest) owed by the Companies, and the security
interests and liens securing such indebtedness, pursuant to and in connection
with that certain Amended and Restated Credit Agreement, dated as of June [__],
2008, among the Agent, the lenders named therein and the Company and the Loan
Documents referred to therein as such Credit Agreement and Loan Documents have
been and hereafter may be amended, supplemented or otherwise modified from time
to time and to indebtedness refinancing the indebtedness under that agreement as
contemplated by the Subordination Agreement; and each holder of this instrument,
by its acceptance hereof, irrevocably agrees to be bound by the provisions of
the Subordination Agreement.”
3. Modifications.
3.1. Modifications
to Senior Debt Documents. Senior Lenders may at
any time and from time to time without the consent of or notice to the
Subordinated Creditor, without incurring liability to the Subordinated Creditor
and without impairing or releasing the obligations of the Subordinated Creditor
under this Agreement, change the manner or place of payment or extend the time
of payment of or renew or alter any of the terms of the Senior Debt, or amend in
any manner any agreement, note, guaranty or other instrument evidencing or
securing or otherwise relating to the Senior Debt; provided that,
without the prior written consent of the Required Subordinated Creditor (as
hereinafter defined), the Senior Lenders shall not agree to any amendment,
modification or supplement to, or waiver or departure from, the Senior Debt
Documents the effect of which is to (a) increase the principal of the Senior
Debt to an amount in excess of the Senior Debt Limit, (b) increase the interest
rate with respect to the Senior Debt by more than 300 basis points, except in
connection with the imposition of a default rate of interest of up to 2.0% in
accordance with the terms of the Senior Debt Documents, (c) extend the
final maturity of the Senior Debt (as set forth in the Fourth Third Loan
Documents in effect on the date hereof), except that the final maturity of the
Senior Debt under each Senior Credit Agreement may be extended by up to two
years, or (d) directly prohibit or restrict the payment of principal of,
interest on, or other amounts payable with respect to, the Subordinated Debt, in
a manner that is more restrictive then the prohibitions and restrictions
currently contained in the Senior Credit Agreements.
3.2. Modifications
to Subordinated Debt Documents.
(a) Until
the Senior Debt has been paid in full in cash (or other consideration acceptable
to Agent in its sole discretion), and notwithstanding anything to the contrary
contained in the Subordinated Debt Documents, no Subordinated Creditor shall,
without the prior written consent of Agent, agree to any amendment, modification
or supplement to the Subordinated Debt Documents that would (i) impose or make
more burdensome any event of default or covenant under the Subordinated Debt
Documents, (ii) increase the principal amount of the Subordinated Debt, (iii)
increase the rate of interest on the Subordinated Debt by more than 300 basis
points except in connection with the imposition of a default rate of interest of
up to 2.0% or (iv) directly prohibit or restrict the payment of any amounts
payable with respect to the Senior Debt.
(b) No
Subordinated Creditor shall accept or enter into any agreement or
instrument subsequent to the date hereof pursuant to which any Company provides
collateral security for the Subordinated Debt other than a mortgage or deed of
trust subordinate to any then existing mortgage or deed of trust in favor of the
Agent on any real property and improvements of a Company, unless such agreement
or instrument has been approved by the Agent in writing, such approval not to be
unreasonably withheld. Any such agreement or instrument that is substantially
similar to the security documents providing collateral security for the Senior
Debt shall be approved by the Agent so long as such security document indicates
that it is subject to this Agreement in a manner and to an extent reasonably
satisfactory to the Agent. In no event shall any Subordinated Creditor accept or
enter into any agreement or instrument pursuant to which any Company provides a
security interest in or mortgage on any property of such Company in which the
Agent does not have a first priority perfected security interest. Prior to any
Company or any Subordinated Creditor entering into any agreement or instrument
that would create a lien, security interest or mortgage in any Collateral in
favor of a collateral agent securing any Subordinated Debt, the Companies and
the Subordinated Creditor shall cause such collateral agent to become a party to
this Agreement and agree for this Agreement to be amended to accommodate a
collateral agent, in each case, pursuant to agreements in form and substance
reasonably satisfactory to the Agent.
(c) In
no event shall any Subordinated Creditor enter into any agreement with any
Company that places any restriction on the modification of the Senior Debt
Documents or creates any default or event of default or right to accelerate, put
or cause any Subordinated Creditor to purchase, any Subordinated Debt, that is
more extensive or more restrictive than the provisions of Section
3.1.
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4.
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Waiver
of Certain Rights by the Subordinated
Creditor.
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4.1. Marshaling.
Each Subordinated Creditor hereby waives any rights it may have under applicable
law to assert the doctrine of marshaling or to otherwise require Agent or Senior
Lenders to marshal any property of any Company or any other obligor on the
Senior Debt for the benefit of such Subordinated Creditor.
4.2. Rights
Relating to Agent’s Actions with respect to the Collateral. Each
Subordinated Creditor hereby waives, to the extent permitted by applicable law,
any rights which it may have as the holder of a Secured Claim to enjoin or
otherwise obtain a judicial or administrative order preventing Agent or Senior
Lenders from taking, or refraining from taking, any action with respect to all
or any part of the Collateral, except to the extent such action is expressly
excluded from the definition of Enforcement Action. Without
limitation of the foregoing, subject to Section 2.7(b), each Subordinated
Creditor hereby agrees (a) that it has no right to direct or object to the
manner in which Agent and Lenders apply the proceeds of the Collateral resulting
from the exercise by Agent and Senior Lenders of rights and remedies under the
Senior Debt Documents to the Senior Debt and (b) that Agent has not
assumed any obligation to act as the agent for the Subordinated Creditor with
respect to the Collateral. The Agent shall have
the exclusive right to enforce against and realize upon the Collateral until the
Senior Debt is paid in full in cash (or other consideration acceptable to Agent
in its sole discretion). In exercising rights and remedies with
respect to the Collateral, the Agent and Senior Lenders may enforce the
provisions of the Senior Debt Documents and exercise remedies thereunder, all in
such order and in such manner as it or they may determine in the exercise of its
or their sole business judgment. Such exercise and enforcement shall
include, without limitation, the rights to sell or otherwise dispose of
Collateral, to incur expenses in connection with such sale or disposition and to
exercise all the rights and remedies of a secured lender under the
UCC. In conducting any public or private sale under the UCC, Agent
shall give the Subordinated Creditor such notice of such sale as may be required
by the UCC; provided, however, that 10 days’ notice shall be deemed to be
commercially reasonable notice.
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5.
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Representations
and Warranties.
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5.1. Representations
and Warranties of the Subordinated Creditor. Subordinated
Creditor hereby represents and warrants to Agent and Senior Lenders that as of
the date hereof: (a) Subordinated Creditor is a company, duly formed and validly
existing under the laws of the [state]; (b) such Subordinated Creditor has the
power and authority to enter into, execute, deliver and carry out the terms of
this Agreement on behalf to itself and the Subordinated Creditor, all of which
have been duly authorized by all proper and necessary action; (c) the execution
of this Agreement by Subordinated Creditor will not violate or conflict with the
organizational documents of Subordinated Creditor, any material agreement
binding upon Subordinated Creditor or any law, regulation or order or require
any consent or approval which has not been obtained; (d) this Agreement is the
legal, valid and binding obligation of Subordinated Creditor, enforceable
against Subordinated Creditor and the Subordinated Creditor in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by equitable principles; and (e)
Subordinated Creditor, together with the other Subordinated Creditor, are the
sole owners, beneficially and of record, of the Subordinated Debt Documents and
the Subordinated Debt.
5.2. Representations
and Warranties of Agent. Agent hereby
represents and warrants to the Subordinated Creditor that as of the date hereof:
(a) Agent is a limited liability company duly formed and validly existing under
the laws of the State of Delaware; (b) Agent has the power and authority to
enter into, execute, deliver and carry out the terms of this Agreement on behalf
of itself and the Senior Lenders, all of which have been duly authorized by all
proper and necessary action; (c) the execution of this Agreement by Agent will
not violate or conflict with the organizational documents of Agent, any material
agreement binding upon Agent or any law, regulation or order or require any
consent or approval which has not been obtained; and (d) this Agreement is the
legal, valid and binding obligation of Agent, enforceable against Agent and the
Senior Lenders in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally or by
equitable principles.
6. Subrogation. Subject to the
payment in full in cash (or other consideration acceptable to Agent in its sole
discretion) of all Senior Debt, the Subordinated Creditor shall be subrogated to
the rights of Agent and Senior Lenders to receive Distributions with respect to
the Senior Debt until the Subordinated Debt is paid in full. Each Subordinated
Creditor agrees that in the event that all or any part of a payment made with
respect to the Senior Debt is recovered from the holders of the Senior Debt in a
Proceeding or otherwise, any Distribution (other than Reorganization
Subordinated Securities) received by such Subordinated Creditor with respect to
the Subordinated Debt at any time after the date that it receives notice that
such payment has been so recovered, whether pursuant to the right of subrogation
provided for in this Agreement or otherwise, shall be deemed to have been
received by such Subordinated Creditor in trust as property of the holders of
the Senior Debt and such Subordinated Creditor shall forthwith deliver the same
to the Agent for the benefit of the Senior Lenders for application to the Senior
Debt until the Senior Debt is paid in full. A Distribution made pursuant to this
Agreement to Agent or Senior Lenders which otherwise would have been made to any
Subordinated Creditor is not, as between the Companies and such Subordinated
Creditor, a payment by the Companies to or on account of the Senior
Debt.
7. Modification.
Any modification or waiver of any provision of this Agreement, or any consent to
any departure by any party from the terms hereof, shall not be effective in any
event unless the same is in writing and signed by Agent and the Subordinated
Creditor holding a majority of the principal amount of the Subordinated Debt,
and then such modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose given. Any notice to or demand on
any party hereto in any event not specifically required hereunder shall not
entitle the party receiving such notice or demand to any other or further notice
or demand in the same, similar or other circumstances unless specifically
required hereunder.
8. Further
Assurances. Each party to this Agreement promptly will execute and
deliver such further instruments and agreements and do such further acts and
things as may be reasonably requested in writing by any other party hereto that
may be necessary or desirable in order to effect fully the purposes of this
Agreement.
9. Notices.
Unless otherwise specifically provided herein, any notice delivered under this
Agreement shall be in writing addressed to the respective party as set forth
below and may be personally served, telecopied or sent by overnight courier
service or certified or registered United States mail and shall be deemed to
have been given (a) if delivered in person, when delivered; (b) if delivered by
telecopy, when transmitted and a confirmation is received if transmission and
confirmation occur on a Business Day before 4:00 p.m. (New York time) or, if
after 4:00 p.m. (New York time), on the next succeeding Business Day after such
transmission and confirmation have occurred; (c) if delivered by nationally
recognized overnight courier, one (1) Business Day after delivery to such
courier properly addressed; or (d) if by United States mail, four (4) Business
Days after deposit in the United States mail, postage prepaid and properly
addressed.
Notices
shall be addressed as follows:
as set
forth on its signature page hereto
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If
to Agent or Senior Lenders:
Fourth
Third Capital LLC
000
Xxxx Xxxxxx
Xxxxx
0000
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxx X. Xxxxxxxxx
Chief
Financial Officer
Telecopy: (000)
000-0000
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With
a copy to (which shall not constitute notice):
King
& Spalding LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxxx X. Xxxxxx
Telecopy:
(000) 000-0000
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or in any
case, to such other address as the party addressed shall have previously
designated by written notice to the serving party, given in accordance with this
Section 9.
10. Successors
and Assigns. This Agreement shall inure to the benefit of, and shall be
binding upon, the respective successors and assigns of Agent, Senior Lenders,
the Subordinated Creditor and the Companies. To the extent permitted under the
Senior Debt Documents, Senior Lenders may, from time to time, without notice to
any Subordinated Creditor, assign or transfer any or all of the Senior Debt or
any interest therein to any Person and, notwithstanding any such assignment or
transfer, or any subsequent assignment or transfer, the Senior Debt shall,
subject to the terms hereof, be and remain Senior Debt for purposes of this
Agreement, and every permitted assignee or transferee of any of the Senior Debt
or of any interest therein shall, to the extent of the interest of such
permitted assignee or transferee in the Senior Debt, be entitled to rely upon
and be the third party beneficiary of the subordination provided under this
Agreement and shall be entitled to enforce the terms and provisions hereof to
the same extent as if such assignee or transferee were initially a party
hereto.
11. Relative
Rights. This
Agreement shall define the relative rights of Agent, Senior Lenders and the
Subordinated Creditor. Nothing in this Agreement shall (a) impair, as among the
Companies, Agent and Senior Lenders and as between the Companies and the
Subordinated Creditor, the obligation of the Companies with respect to the
payment of the Senior Debt and the Subordinated Debt in accordance with their
respective terms or (b) affect the relative rights of Agent, Senior Lenders or
the Subordinated Creditor with respect to any other creditors of the
Companies. For purposes of clarification, the Companies shall have no
rights to assert any rights or benefits hereunder.
12. Conflict. In
the event of any conflict between any term, covenant or condition of this Agreement and any
term, covenant or condition of any of the Senior Debt Documents or the
Subordinated Debt Documents, the provisions of this Agreement shall control and
govern.
13. Headings. The
paragraph headings used in this Agreement are for convenience only and shall not
affect the interpretation of any of the provisions hereof.
14. Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
15. Severability. In the event that any
provision of this Agreement is deemed to be invalid, illegal or unenforceable by
reason of the operation of any law or by reason of the interpretation placed
thereon by any court or governmental authority, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby, and the affected provision shall be
modified to the minimum extent permitted by law so as most fully to achieve the
intention of this Agreement.
16. Continuation
of Subordination; Termination of Agreement. This Agreement
shall remain in full force and effect until the payment in full in cash (or
other consideration acceptable to Agent in its sole discretion) of the Senior
Debt after which this Agreement shall terminate without further action on the
part of the parties hereto.
17. Applicable
Law. This
Agreement shall be governed by and shall be construed and enforced in accordance
with the internal laws of the State of New York, without regard to conflicts of
law principles, other than section 5-1401 of the New York General Obligations
Law.
18. CONSENT
TO JURISDICTION. EACH SUBORDINATED
CREDITOR AND EACH COMPANY HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND
IRREVOCABLY AGREES THAT, SUBJECT TO AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS.
EACH SUBORDINATED CREDITOR AND EACH COMPANY EXPRESSLY SUBMITS AND CONSENTS TO
THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS. EACH SUBORDINATED CREDITOR AND EACH COMPANY HEREBY WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, ADDRESSED TO SUCH SUBORDINATED CREDITOR AND THE COMPANIES AT THEIR
RESPECTIVE ADDRESSES SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE
COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
19. WAIVER OF JURY
TRIAL. EACH SUBORDINATED CREDITOR, EACH COMPANY AND AGENT
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE SUBORDINATED DEBT
DOCUMENTS OR ANY OF THE SENIOR DEBT DOCUMENTS. EACH SUBORDINATED
CREDITOR, EACH COMPANY AND AGENT ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THE SENIOR DEBT DOCUMENTS AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH
SUBORDINATED CREDITOR, EACH COMPANY AND AGENT WARRANTS AND REPRESENTS THAT EACH
HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND
THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
20. Perfection
Agent. Agent and each
Subordinated Creditor agree that solely with respect to (i) any Collateral in
which a security interest may only be perfected by title, possession or
“control”, or (ii) any shares of the issued and outstanding stock of Earth
pledged by PNG as Collateral and held by the Agent, such party shall serve as
the contractual representative agent of the other party solely for purposes of
perfecting (to the extent not otherwise perfected) the liens in favor of the
Subordinated Creditor or liens in favor of Agent and Senior Lenders, as
applicable, subject in all events to the relative priorities established
pursuant to this Agreement and to the limitations set forth in this Agreement
with respect to such party’s liabilities, duties and obligations in respect of
the Collateral or otherwise. Without limiting the generality of the
foregoing, each party shall be deemed to be an agent of the other party solely
for purposes of perfection under the UCC
and shall not incur any liabilities, fiduciary duties or obligations whatsoever
to the other party due to the provisions of this Section 20. Promptly
following the payment in full of the Senior Debt in cash, cash equivalents or
other consideration acceptable to the Agent, the Agent shall, upon the request
of the Subordinated Creditor, (x) deliver the remainder of such Collateral, if
any, in its possession to the designee of the Subordinated Creditor, and (y)
deliver any certificates of title held by it in respect of the Collateral (such
as motor vehicle titles) and assign the Lien of the Agent on any such
certificates of title, without representation, warranty
or recourse and otherwise on terms reasonably acceptable to the Required
Subordinated Creditor, in each case except as may otherwise be required by
applicable law or court order.
(Signature page follows)
IN WITNESS WHEREOF, the
Subordinated Creditor, the Companies and Agent have caused this Agreement to be
executed as of the date first above written.
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SUBORDINATED
CREDITOR
BLACK
FOREST INTERNATIONAL, LLC
By:
_______________________________
Name:
Title:
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If
to the Subordinated Creditor:
____________________________
____________________________
____________________________
____________________________
Attention:____________________
Telecopy:____________________
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With
a copy to (which shall not constitute notice):
____________________________
____________________________
____________________________
____________________________
Attention:____________________
Telecopy:____________________
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COMPANIES:
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PNG
VENTURES, INC.
By:____________________________
Name:
Title:
NEW
EARTH LNG, LLC
By:____________________________
Name:
Title:
APPLIED
LNG TECHNOLOGIES USA, L.L.C.
By: New
Earth LNG, LLC, its sole member
By:____________________________
Name:
Title:
FLEET
STAR, INC.
By:____________________________
Name:
Title:
EARTH
LEASING, INC.
By:____________________________
Name:
Title:
ARIZONA
LNG, L.L.C.
By: New
Earth LNG, LLC, its sole member
By:____________________________
Name:
Title:
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AGENT:
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FOURTH
THIRD LLC, a Delaware limited liability company, as Agent and as a Senior
Lender
By:
Its:
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