Exhibit 10.2

 

CONSENT AND AGREEMENT

 

This CONSENT AND AGREEMENT (this “Consent and Agreement”) is made and entered
into as of July 22, 2005, by and among Marriott Hotel Services, Inc., a Delaware
corporation (“MHSI”), Synthetic American Fuel Enterprises Holdings, Inc., an
Oregon corporation (“Holdings” and together with MHSI, the “Marriott Entities”),
Synthetic American Fuel Enterprises I, LLC, a Delaware limited liability company
(the “Company”), Serratus LLC, a Delaware limited liability company (“Seller”)
and IL Synfuel LLC, a Delaware limited liability company (“Buyer”).

 

R E C I T A L S

 

WHEREAS, pursuant to the Agreement for Purchase and Sale of Membership Interest
in Synthetic American Fuel Enterprises I, LLC dated as of the date hereof (the
“2005 Purchase Agreement”) by and between Seller and Buyer, Seller has agreed to
sell, transfer and assign to Buyer, and Buyer has agreed to purchase from
Seller, for such consideration as is provided for under the 2005 Purchase
Agreement, all of Seller’s Membership Interest (as defined in the LLC Agreement
(as hereinafter defined)) in the Company;

 

WHEREAS, also pursuant to the 2005 Purchase Agreement, Seller and Buyer have
entered into that certain Assignment Agreement (Membership Interest) dated as of
the date hereof (“Assignment Agreement (Membership Interest)”), pursuant to
which Seller has transferred and assigned to Buyer all of Seller’s Membership
Interest in the Company;

 

WHEREAS, contemporaneous with the closing of the sale of Seller’s Membership
Interest in the Company (the “Closing”) under the 2005 Purchase Agreement, Buyer
will enter into a certain Adhesion Agreement (the “Adhesion Agreement”) in favor
of the Marriott Entities and the Company pursuant to which Buyer agrees to be
bound by the terms of and assume and perform all of Seller’s obligations from
and after the Closing under that certain Amended and Restated Limited Liability
Company Agreement of the Company dated as of January 28, 2003 as amended by that
certain Amendment Agreement dated as of June 20, 2003 (the “First Amendment
Agreement”), that certain Second Amendment Agreement dated as of October 6, 2004
(the “Second Amendment Agreement”) and that certain Third Amendment Agreement
dated as of April 28, 2005 (as amended, the “LLC Agreement”);

 

WHEREAS, also contemporaneous with the Closing, pursuant to that certain Omnibus
Assignment and Assumption Agreement dated as of the date hereof (the “Omnibus
Assignment”) by and between Seller and Buyer, Seller will assign to Buyer and
Buyer will assume from Seller from and after the Closing, subject to the
limitations set forth in the Omnibus Assignment, all of Seller’s rights, title
and interest in and liabilities and obligations under (i) that certain Syn I
Promissory Note dated January 28, 2003 (as assigned, the “Base Note”) by Seller
in favor of Holdings, (ii) that certain Agreement for Purchase of Membership
Interest in the Company dated as of January 28, 2003 by and among Seller and the
Marriott Entities, as amended by the First Amendment Agreement and the Second
Amendment Agreement (as amended and assigned, the “2003 Purchase Agreement”),
(iii) that certain Membership Interest Purchase Agreement dated as of January 3,
2003 by and among Seller and the Marriott Entities (as assigned, the “0.1%

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Membership Interest Purchase Agreement”), (iv) that certain Pledge and Security
Agreement (of MHSI) dated as of January 28, 2003, made by MHSI in favor of
Seller and the Company (as assigned, the “MHSI Pledge Agreement”), and (v) that
certain guaranty dated as of January 28, 2003, made by Marriott International,
Inc., a Delaware corporation, in favor of Seller (as assigned, the “Original
Marriott Parent Guaranty”), to the limited extent set forth in the Omnibus
Assignment;

 

WHEREAS, pursuant to Section 10.5 of the LLC Agreement, on May 26, 2005 Seller
delivered to the Marriott Entities a Transfer Notice in respect of Seller’s
Membership Interest in the Company, and by notice to Seller dated June 2, 2005,
the Marriott Entities declined to exercise their right of first refusal under
such Section 10.5 with respect to such Membership Interest; and

 

WHEREAS, it is a condition to the Closing under the 2005 Purchase Agreement that
the parties hereto execute and deliver this Consent and Agreement;

 

NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which the parties hereby acknowledge, the parties
hereto agree as follows:

 

ARTICLE I

 

CONSENT

 

Section 1.01. Consent to Transfer of Seller’s Membership Interest. Subject to
the terms of this Consent and Agreement, and upon satisfaction of the conditions
set forth in Section 3.05:

 

(a) Each of the Marriott Entities hereby consents to the transfer by Seller to
Buyer of Seller’s Membership Interest in the Company as contemplated by the 2005
Purchase Agreement and the Assignment Agreement (Membership Interest);

 

(b) MHSI, as Administrative Member of the Company, acknowledges that the
Assignment Agreement (Membership Interest), Adhesion Agreement and Omnibus
Assignment are satisfactory in form and substance to MHSI, and satisfy the
requirements of Sections 10.3(a) and 10.3(b) of the LLC Agreement; and

 

(c) Each of the Marriott Entities acknowledges and agrees that, upon the
effectiveness of the Assignment Agreement (Membership Interest) and satisfaction
of the conditions set forth in Section 3.05 below, Buyer will become a Member
(as defined in the LLC Agreement) of the Company as of the effective date of the
Assignment Agreement (Membership Interest) with respect to the Membership
Interest transferred by Seller to Buyer as contemplated by the 2005 Purchase
Agreement.

 

(d) Each of the Marriott Entities hereby acknowledges that any and all
references in the LLC Agreement to “Buyer” (as defined in the LLC Agreement)
shall, from and after the date on which the Closing occurs (the “Closing Date”),
be deemed references to Buyer

 

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unless and until a Reconveyance Date (as defined in Section 5.1(b) of the 2005
Purchase Agreement) (if any) occurs under and in accordance with Section 5.1 of
the 2005 Purchase Agreement and Section 2.04 hereof.

 

Section 1.02. Consent to Assignments Pursuant to Omnibus Assignment. Subject to
the terms of this Consent and Agreement, and upon satisfaction of the conditions
set forth in Section 3.05:

 

(a) Each of the Marriott Entities hereby consents to the assignment by Seller to
Buyer and the assumption by Buyer from Seller, pursuant to the Omnibus
Assignment and subject to the limitations set forth therein, of all of Seller’s
rights, title and interest in and liabilities and obligations, from and after
the Closing, under the following (the “Assigned Agreements”): the 2003 Purchase
Agreement; the 0.1% Membership Interest Purchase Agreement; with respect to
Holdings only, the Base Note; and with respect to MHSI only, the MHSI Pledge
Agreement.

 

(b) Each of the Marriott Entities hereby acknowledges that, from and after the
Closing Date, any and all references to “Buyer” (as defined in each of the 2003
Purchase Agreement, the 0.1% Membership Interest Purchase Agreement, and the
MHSI Pledge Agreement) in the 2003 Purchase Agreement, the 0.1% Membership
Interest Purchase Agreement, or the MHSI Pledge Agreement, as the case may be,
and any references to “Maker” (as defined in the Base Note) in the Base Note,
shall, in each such case, be deemed to be references to Buyer unless and until a
Reconveyance Date (as defined in Section 5.1(b) of the 2005 Purchase Agreement)
(if any) occurs under and in accordance with Section 5.1 of the 2005 Purchase
Agreement and Section 2.04 hereof.

 

(c) For the avoidance of doubt, the parties hereto acknowledge and agree that
(i) Buyer shall be responsible in full for all amounts due under the Base Note
and under Sections 2.4 and 2.5 of the 2003 Purchase Agreement on the Quarterly
Payment Date (as defined in the 2003 Purchase Agreement) immediately following
the Closing Date, and (ii) if a Reconveyance Date occurs, Seller shall be
responsible in full for all amounts due under the Base Note and under Sections
2.4 and 2.5 of the 2003 Purchase Agreement on the Quarterly Payment Date (as
defined in the 2003 Purchase Agreement) immediately following such Reconveyance
Date.

 

(d) The parties hereto acknowledge that the agreements set forth in
Section 1.02(c) represent the agreements of Buyer and Seller with the Marriott
Entities, and the agreements set forth in Section 1.02(c) shall not alter the
obligations of Buyer to Seller and Seller to Buyer with respect to the payment
and adjustment obligations set forth in Sections 2.4 and 2.5 of the 2005
Purchase Agreement.

 

Section 1.03. Consent to Termination of Serratus Pledge. Each of Holdings and
the Company consents to the termination of that certain Pledge and Security
Agreement (of Buyer) dated as of January 28, 2003 among Seller, Holdings and the
Company (the “Serratus Pledge Agreement”), subject to the satisfaction of the
conditions set forth in Section 3.05.

 

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Section 1.04. Consents Based on 2005 Purchase Agreement. Each of the consents
granted by the Marriott Entities and the Company pursuant to this Article I is
made and given on the basis of the 2005 Purchase Agreement in effect on the date
hereof, and not on the basis of any amendment to the 2005 Purchase Agreement
that may be made or entered into after the date hereof.

 

ARTICLE II

 

ACKNOWLEDGEMENT AND AGREEMENT

 

Section 2.01. Acknowledgement and Agreement (Transactions Contemplated by 2005
Purchase Agreement). Each of the Marriott Entities and the Company hereby
acknowledges as follows:

 

(a) Pursuant to the Adhesion Agreement, Buyer has undertaken to be bound by the
terms of and assume and perform Seller’s obligations under the LLC Agreement
from and after the Closing Date, all as more fully set forth in the Adhesion
Agreement;

 

(b) Pursuant to that certain [Buyer 1] Parent Guaranty (Marriott Entities,
Company) dated as of the date hereof (the “[Buyer 1] Parent Guaranty (Marriott
Entities, Company)”) by                      (“[Buyer 1] Parent”) in favor of
the Marriott Entities and the Company, [Buyer 1] Parent has guaranteed certain
of the payment obligations of Buyer under the 2003 Purchase Agreement and the
LLC Agreement from and after the date hereof, all as more fully set forth in the
[Buyer 1] Parent Guaranty (Marriott Entities, Company);

 

(c) Pursuant to those certain credit enhancements by                     
(“[Buyer 2] Parent”) in favor of the Company and Holdings, dated as of the date
hereof (collectively, the “[Buyer 2] Credit Enhancement (Holdings, Company)”),
[Buyer 2] Parent has guaranteed certain of the payment obligations of Buyer
under the 2003 Purchase Agreement and the LLC Agreement from and after the date
hereof, all as more fully set forth in the [Buyer 2] Credit Enhancement
(Holdings, Company);

 

(d) Buyer has executed and delivered a pledge agreement (the “Buyer Pledge
Agreement”) in favor of Holdings and the Company to secure Buyer’s obligations
under the 2003 Purchase Agreement, the Base Note and the LLC Agreement from and
after the date hereof, all as more fully set forth in the Buyer Pledge
Agreement; and

 

(e) Each of the Marriott Entities and the Company further acknowledges its
receipt of an executed copy of each of the agreements referenced in items
(b) through (e) above.

 

Section 2.02. Acknowledgement and Agreement Regarding [Seller Parent] Guarantee.
Effective as of the Closing Date, each of the Marriott Entities and the Company
acknowledges and agrees that:

 

(a) the Company shall have no rights under that certain Guarantee (the “Original
[Seller] Parent Guarantee”) of                  dated January 28, 2003 in favor
of MHSI,

 

4

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the Company and Synthetic American Fuel Enterprises II, LLC, a Delaware limited
liability company, unless and until the occurrence of a Reconveyance Date (if
any), except to the extent that such rights relate to Guaranteed Obligations (as
defined in the Original [Seller] Parent Guarantee, the “Original [Seller Parent]
Guaranteed Obligations”) relating to the 2003 Purchase Agreement or the LLC
Agreement that have accrued prior to the Closing Date; and

 

(b) none of the Marriott Entities shall have any rights under the Original
[Seller] Parent Guarantee with respect to the 2003 Purchase Agreement or the LLC
Agreement, unless and until the occurrence of a Reconveyance Date (if any),
except to the extent that such rights relate to Original [Seller Parent]
Guaranteed Obligations relating to the 2003 Purchase Agreement or the LLC
Agreement that accrued prior to the Closing Date.

 

Section 2.03. Acknowledgement and Agreement Regarding Indemnity Payments. (a)
Each of the Marriott Entities hereby acknowledges receipt of copies of the 2005
Purchase Agreement and the Omnibus Assignment, pursuant to which Seller has
expressly retained, and has not assigned to Buyer, Seller’s right to bring
certain claims for indemnification against the Marriott Entities for Buyer
Indemnified Costs (as defined in the 2003 Purchase Agreement), and pursuant to
which Seller and Buyer have agreed to certain allocations between themselves as
to certain Recoveries (as defined in Section 2.1(c) of the 2005 Purchase
Agreement); and each of the Marriott Entities acknowledges that Buyer shall have
no responsibility or obligation in respect of Seller’s exercise of any such
retained rights.

 

(b) Each Marriott Entity hereby agrees to use reasonable efforts to make any
payment of a Recovery in accordance with the allocations agreed by each of
Seller and Buyer pursuant to the provisions of Section 2.1 of the 2005 Purchase
Agreement and the Omnibus Assignment. For the avoidance of doubt, the parties
hereto acknowledge and agree that neither Marriott Entity shall incur any
liability whatsoever as a result of a failure to make payment of any Recovery in
accordance with such allocations, and that each Marriott Entity shall be
entitled to rely on any reasonable instruction of either Seller or Buyer as to
the proper allocation of any Recovery.

 

Section 2.04. Consents in Event of Reconveyance of Membership Interest.
(a) Subject to the rights of the Company and Holdings under Section 3 of the
Buyer Pledge Agreement, and the option of MHSI under Section 6.1(a) of the 2003
Purchase Agreement and Section 4.4(c) of the LLC Agreement, each of the Marriott
Entities hereby grants its consent to a transfer of the Membership Interest that
is transferred by Seller to Buyer pursuant to the 2005 Purchase Agreement back
from Buyer to Seller in the event that Seller exercises its reconveyance option
pursuant to Section 5.1 of the 2005 Purchase Agreement and causes Buyer to
reconvey and transfer the Membership Interest to Seller, subject to the
satisfaction of the conditions set forth below:

 

(i) Seller shall have executed and delivered to the Company on or before the
Reconveyance Date an agreement substantially in the form of the Adhesion
Agreement, together with a counterpart to the LLC Agreement, duly executed by
Seller, as required by Section 10.6 of the LLC Agreement, pursuant to which
Seller shall have assumed all of the liabilities and obligations of the “Buyer”
(as defined in the LLC Agreement) under the LLC Agreement;

 

5

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(ii) Seller shall have re-assumed all of the liabilities and obligations of the
“Buyer” (as defined in each of the 2003 Purchase Agreement, the 0.1% Membership
Interest Purchase Agreement, and the MHSI Pledge Agreement) under the 2003
Purchase Agreement, the 0.1% Membership Interest Purchase Agreement, and the
MHSI Pledge Agreement, as the case may be, and all of the liabilities and
obligations of the “Maker” (as defined in the Base Note) under the Base Note;
provided, that such re-assumption shall be deemed to have occurred automatically
upon the Reconveyance Date in accordance with Section 1.04(b) of the Omnibus
Assignment as in effect on the date hereof (so long as such Section 1.04(b) has
not been amended);

 

(iii) Seller shall have executed and delivered to Holdings a pledge agreement
substantially in the form of the Serratus Pledge Agreement, pursuant to which
Seller shall pledge the reconveyed Membership Interest in favor of Holdings and
the Company;

 

(iv) such reconveyance will not violate any securities laws or any other
applicable federal or state laws or the order of any court having jurisdiction
over the Company or any of its assets;

 

(v) such reconveyance will not result in a termination of the Company under
Section 708(b)(1)(B) of the Code, unless Seller has indemnified the other
Members (as defined in the LLC Agreement) against the adverse tax effects in a
manner acceptable to the other Members or has caused the IRS to reissue all
rulings issued with respect to the Facility (as defined in the LLC Agreement);

 

(vi) the transfer will not cause the Company to be classified for United States
federal tax purposes as an association taxable as a corporation; and

 

(vii) the Original [Seller] Parent Guarantee remains in full force and effect.

 

(b) Each of the Marriott Entities and the Company acknowledges that such
reconveyance and transfer shall be effective on the Reconveyance Date and, from
and after the Reconveyance Date, any and all references to “Buyer” (as defined
in each of the LLC Agreement, the 2003 Purchase Agreement, the 0.1% Membership
Interest Purchase Agreement, and the MHSI Pledge Agreement) in the LLC
Agreement, the 2003 Purchase Agreement, the 0.1% Membership Interest Purchase
Agreement, or the MHSI Pledge Agreement, as the case may be, and any references
to “Maker” (as defined in the Base Note) in the Base Note, shall, in each such
case, be deemed to be references to the Seller.

 

(c) Each of the Marriott Entities agrees that it shall execute and deliver to
Seller and Buyer, at Seller’s cost and expense, such other documents as may be
reasonably requested by them in order to effectuate such reconveyance.

 

6

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(d) Subject to Section 3.04 below, each of the Marriott Entities and the Company
further acknowledges that, notwithstanding the occurrence of the Reconveyance
Date (if any), Buyer shall remain solely liable for any Remaining Obligations
(as defined in Section 5.1(a)(iii) of the 2005 Purchase Agreement) owed to the
Marriott Entities or the Company and that Seller shall not, under any
circumstances, have any liability or obligation to the Marriott Entities or the
Company for any of such Remaining Obligations; provided, however, that Seller
shall be responsible in full for any amounts due under the Base Note and
Sections 2.4 and 2.5 of the 2003 Purchase Agreement on the Quarterly Payment
Date (as defined in the 2003 Purchase Agreement) immediately following the
Reconveyance Date.

 

(e) The parties hereto acknowledge that the agreements set forth in
Section 2.04(d) represent the agreements of Buyer and Seller with the Marriott
Entities, and the agreements set forth in Section 2.04(d) shall not alter the
obligations of Buyer to Seller and Seller to Buyer with respect to the payment
and adjustment obligations set forth in Sections 5.2 and 5.3 of the 2005
Purchase Agreement.

 

Section 2.05. Agreements Regarding Company Information. (a) MHSI, in its
capacity as Administrative Member (as defined in the 2003 Purchase Agreement) of
the Company, hereby agrees to deliver, and to cause any successor Administrative
Member (to the extent any such successor is an Affiliate of MHSI) to deliver, to
Seller from and after the Closing Date (as defined in the 2005 Purchase
Agreement) (i) a copy of each Operations Report (as defined in the 2003 Purchase
Agreement) delivered to Members of the Company pursuant to Section 2.5 of the
2003 Purchase Agreement in respect of any Quarter (as defined in the LLC
Agreement) in which the Company is in existence and (ii) a copy of each written
determination of the Accounting Firm (as defined in the 2003 Purchase Agreement)
with respect to any dispute arising under Section 2.5 of the 2003 Purchase
Agreement. Seller agrees that it shall deal with such Operations Reports and
such written determinations of the Accounting Firm in compliance with the
confidentiality provisions set forth in Section 12.13 of the LLC Agreement as if
Seller were still a member of the Company at the time Seller receives such
information.

 

(b) Each of MHSI, in its capacity as Administrative Member, Holdings and the
Company hereby acknowledges and grants its consent to the agreement of Buyer and
Seller, made pursuant to Section 5.1(a)(v) of the 2005 Purchase Agreement, that,
following the exercise by Seller of Seller’s reconveyance option, as more fully
described in Section 2.04 above, Seller shall provide Buyer with access to, or
copies of, any information received by Seller from the Administrative Member in
respect of the period of Buyer’s ownership of the Membership Interest; provided,
that Buyer shall comply with the confidentiality provisions set forth in
Section 12.13 of the LLC Agreement as if Buyer were still a member of the
Company at the time Buyer receives such information.

 

Section 2.06. Acknowledgments and Agreements Based on 2005 Purchase Agreement.
Each of the acknowledgments and agreements made by the Marriott Entities and the
Company pursuant to this Article I is made on the basis of the 2005 Purchase
Agreement in effect on the date hereof, and not on the basis of any amendment to
the 2005 Purchase Agreement that may be made or entered into after the date
hereof.

 

7

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ARTICLE III

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Section 3.01. Representations and Warranties of Seller. Seller hereby represents
and warrants to each of the Marriott Entities and the Company as of the date
hereof as follows (with the understanding that the Marriott Entities and the
Company are relying on such representations and warranties in entering into and
performing this Consent and Agreement):

 

(a) Organization; Good Standing; Etc. Seller is a limited liability company,
duly formed, validly existing and in good standing under the laws of the State
of Delaware and has all requisite limited liability company power and authority
to own, lease and operate its properties and to carry on its business as now
being conducted.

 

(b) Authority. Seller has all requisite power and authority as a limited
liability company to enter into this Consent and Agreement and the other
Transaction Documents (as defined in the 2005 Purchase Agreement) to which it is
a party, to perform its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby. The execution and delivery by
Seller of this Consent and Agreement and the other Transaction Documents to
which it is a party, the performance by it of its obligations hereunder and
thereunder and the consummation by it of the transactions contemplated hereby or
thereby have been duly authorized by all necessary limited liability company
action on the part of Seller. This Consent and Agreement has been duly executed
and delivered by Seller and, upon execution and delivery by it of the other
Transaction Documents to which it is a party, the other Transaction Documents
will be duly executed and delivered by Seller. This Consent and Agreement
(assuming due authorization, execution and delivery by the other parties hereto)
constitutes, and upon execution and delivery by Seller of the other Transaction
Documents to which it is a party (assuming due authorization, execution and
delivery by each other party thereto), each of the other Transaction Documents
will constitute, the valid and binding obligations of Seller, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting enforcement of
creditors’ rights and remedies generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).

 

(c) No Conflict; Required Filings and Consents. The execution and delivery by
Seller of this Consent and Agreement and the other Transaction Documents to
which it is a party do not, the performance by it of its obligations hereunder
and thereunder and the consummation by Seller of the transactions contemplated
hereby or thereby will not (i) violate, conflict with or result in any breach of
any provisions of its certificate of formation, limited liability company
agreement or other organizational documents, (ii) violate, conflict with or
result in a violation or breach of, or constitute a default (with or without due
notice or lapse of time or both) under, or permit the termination of, or result
in the acceleration of, or entitle any Person (as defined in the 2005 Purchase
Agreement) to accelerate any obligation, or result in the loss of any benefit,
or give any Person the right to require any collateral to be posted or any
security to be repurchased, or give rise to the creation of any Lien (as defined
in the 2005

 

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Purchase Agreement) upon any of its assets under, any of the terms, conditions
or provisions of any loan or credit agreement, note, bond, mortgage, indenture
or deed of trust or any license, lease, agreement or other instrument or
obligation to which Seller is a party or by which or to which it or any of its
assets may be bound or subject, or (iii) violate any applicable law; except in
the case of clauses (ii) and (iii) of this Section 3.01(c) for any such
violations, conflicts, breaches, defaults, rights of termination, cancellation
or acceleration, loss of benefits, repurchase rights, Liens or effects that
would not adversely affect the ability of Seller to consummate the transactions
contemplated by this Consent and Agreement and the other Transaction Documents
to which Seller is a party. No Consent (as defined in the 2005 Purchase
Agreement) is required by or with respect to Buyer in connection with the
execution and delivery by Buyer of this Consent and Agreement or any of the
other Transaction Documents to which Buyer is a party, the performance by Buyer
of its obligations hereunder and thereunder or the consummation by Buyer of the
transactions contemplated hereby or thereby, except for any such Consent that is
routine or ministerial in nature.

 

(d) Conditions to Transfer. The conditions to the transfer of its Membership
Interest set forth in Section 10.3 of the LLC Agreement have been fulfilled as
of the Closing Date.

 

Section 3.02. Representations and Warranties of Buyer. Buyer hereby represents
and warrants to each of the Marriott Entities and the Company as of the date
hereof as follows (with the understanding that the Marriott Entities and the
Company are relying on such representations and warranties in entering into and
performing this Consent and Agreement):

 

(a) Organization; Good Standing; Etc. Buyer is a limited liability company, duly
formed, validly existing and in good standing under the laws of the State of
Delaware and has all requisite limited liability company power and authority to
own, lease and operate its properties and to carry on its business as now being
conducted.

 

(b) Authority. Buyer has all requisite power and authority as a limited
liability company to enter into this Consent and Agreement and the other
Transaction Documents to which it is a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by Buyer of this Consent and Agreement
and the other Transaction Documents to which it is a party, the performance by
it of its obligations hereunder and thereunder and the consummation by it of the
transactions contemplated hereby or thereby have been duly authorized by all
necessary limited liability company action on the part of Buyer. This Consent
and Agreement has been duly executed and delivered by Buyer and, upon execution
and delivery by it of the other Transaction Documents to which it is a party,
the other Transaction Documents will be duly executed and delivered by Buyer.
This Consent and Agreement (assuming due authorization, execution and delivery
by the other parties hereto) constitutes, and upon execution and delivery by
Buyer of the other Transaction Documents to which it is a party (assuming due
authorization, execution and delivery by each other party thereto), each of the
other Transaction Documents will constitute, the valid and binding obligations
of Buyer, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting enforcement of creditors’ rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).

 

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(c) No Conflict; Required Filings and Consents. Except as disclosed on Schedule
3.3(c) to the 2005 Purchase Agreement, the execution and delivery by Buyer of
this Consent and Agreement and the other Transaction Documents to which it is a
party do not, the performance by it of its obligations hereunder and thereunder
and the consummation by Buyer of the transactions contemplated hereby or thereby
will not (i) violate, conflict with or result in any breach of any provisions of
its certificate of formation, limited liability company agreement or other
organizational documents, (ii) violate, conflict with or result in a violation
or breach of, or constitute a default (with or without due notice or lapse of
time or both) under, or permit the termination of, or result in the acceleration
of, or entitle any Person to accelerate any obligation, or result in the loss of
any benefit, or give any Person the right to require any collateral to be posted
(other than the security interest granted by Buyer to Holdings and the Company
pursuant to the Buyer Pledge Agreement) or any security to be repurchased, or
give rise to the creation of any Lien upon any of its assets under, any of the
terms, conditions or provisions of any loan or credit agreement, note, bond,
mortgage, indenture or deed of trust or any license, lease, agreement or other
instrument or obligation to which Buyer is a party or by which or to which it or
any of its assets may be bound or subject, or (iii) violate any applicable law;
except in the case of clauses (ii) and (iii) of this Section 3.02(c) for any
such violations, conflicts, breaches, defaults, rights of termination,
cancellation or acceleration, loss of benefits, repurchase rights, Liens or
effects that would not adversely affect the ability of Buyer to consummate the
transactions contemplated by this Consent and Agreement and the other
Transaction Documents to which Buyer is a party. No Consent is required by or
with respect to Buyer in connection with the execution and delivery by Buyer of
this Consent and Agreement or any of the other Transaction Documents to which
Buyer is a party, the performance by Buyer of its obligations hereunder and
thereunder or the consummation by Buyer of the transactions contemplated hereby
or thereby, except for any such Consent that is routine or ministerial in
nature.

 

(d) Absence of Litigation. There is no claim, action, suit, inquiry, judicial or
administrative proceeding, grievance or arbitration pending or, to the Knowledge
(as defined in the 2005 Purchase Agreement) of Buyer, threatened against Buyer
or any of its Affiliates (as defined in the 2005 Purchase Agreement) that seeks
to restrain, prohibit or otherwise enjoin this Consent and Agreement or any of
the other Transaction Documents to which Buyer is a party or the consummation of
the transactions contemplated hereby or thereby.

 

(e) Broker’s Fees. No agent, broker, investment banker or other Person engaged
by Buyer or any of its Affiliates will be entitled to any broker’s or finder’s
fee or any other commission or similar fee payable by any of the Marriott
Entities, the Company or any of their Affiliates in connection with any of the
transactions contemplated by this Consent and Agreement.

 

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Section 3.03. Representations and Warranties of Marriott Entities. Each of the
Marriott Entities hereby represents and warrants to the Buyer as of the date
hereof as follows (with the understanding that the Buyer is relying on such
representations and warranties in entering into and performing this Consent and
Agreement):

 

(a) Organization; Good Standing; Etc. It is a corporation, duly formed, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now being conducted.

 

(b) Authority. It has all requisite power and authority as a corporation to
enter into this Consent and Agreement and the other Transaction Documents to
which it is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. Its execution and
delivery of this Consent and Agreement and the other Transaction Documents to
which it is a party, the performance by it of its obligations hereunder and
thereunder and the consummation by it of the transactions contemplated hereby or
thereby have been duly authorized by all necessary corporate action on its part.
This Consent and Agreement has been duly executed and delivered by it and, upon
execution and delivery by it of the other Transaction Documents to which it is a
party, the other Transaction Documents will be duly executed and delivered by
it. This Consent and Agreement (assuming due authorization, execution and
delivery by the other parties hereto) constitutes, and upon execution and
delivery by it of the other Transaction Documents to which it is a party
(assuming due authorization, execution and delivery by each other party
thereto), each of the other Transaction Documents will constitute, its valid and
binding obligations, enforceable against it in accordance with the terms hereof
and thereof, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting enforcement of creditors’ rights and
remedies generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).

 

(c) No Conflict; Required Filings and Consents. Its execution and delivery of
this Consent and Agreement and the other Transaction Documents to which it is a
party do not, its performance of its obligations hereunder and thereunder and
its consummation of the transactions contemplated hereby or thereby will not
(i) violate, conflict with or result in any breach of any provisions of its
certificate of incorporation, bylaws or other organizational documents,
(ii) violate, conflict with or result in a violation or breach of, or constitute
a default (with or without due notice or lapse of time or both) under, or permit
the termination of, or result in the acceleration of, or entitle any Person to
accelerate any obligation, or result in the loss of any benefit, or give any
Person the right to require any collateral to be posted or any security to be
repurchased, or give rise to the creation of any Lien upon any of its assets
under, any of the terms, conditions or provisions of any loan or credit
agreement, note, bond, mortgage, indenture or deed of trust or any license,
lease, agreement or other instrument or obligation to which it is a party or by
which or to which it or any of its assets may be bound or subject, or
(iii) violate any applicable law; except in the case of clauses (ii) and
(iii) of this Section 3.03(c) for any such violations, conflicts, breaches,
defaults, rights of termination, cancellation or acceleration, loss of benefits,
repurchase rights, Liens or effects that would not adversely affect its ability
to consummate the transactions contemplated by this Consent and Agreement and
the other Transaction Documents to which it is a party. No Consent is required
by or with respect to it in

 

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connection with its execution and delivery of this Consent and Agreement or any
of the other Transaction Documents to which it is a party, its performance of
its obligations hereunder and thereunder or the consummation by it of the
transactions contemplated hereby or thereby, except for any such Consent that is
routine or ministerial in nature.

 

(d) Membership Interest. Based solely upon the books and records of the Company,
MHSI and Holdings own a 50.0% Membership Interest (as defined in the LLC
Agreement) and 1.1% Membership Interest, respectively, in the Company.

 

Section 3.04. Subrogation of Seller Payments. (a) The parties agree that the
right of Seller to receive payments from Buyer under Section 2.5 and 2.6 of the
2005 Purchase Agreement (the “Seller Payments”) will be subrogated and
subordinate to the rights of the Marriott Entities and the Company to receive
payments under the 2003 Purchase Agreement and the LLC Agreement (the “Marriott
Payments”). To the extent Seller receives any Seller Payments (including, but
not limited to, under the [Buyer 1] Parent Guaranty (Seller) and [Buyer 2]
Credit Enhancement (Seller) (each as defined in the 2005 Purchase Agreement)) at
a time when any Marriott Payments that are due and owing for the same period
have not been paid, Seller agrees to pay such Seller Payments (up to the amount
of the unpaid Marriott Payments) to the Marriott Entities and/or the Company, as
applicable, promptly following receipt of written notice thereof by the Company
or a Marriott Entity.

 

(b) If, at any time, Seller is required to make any payment to the Company
and/or any Marriott Entity in accordance with Section 3.04(a), Seller shall give
notice thereof to Buyer, and the amount of any Seller Payment that was in turn
paid by Seller to such Marriott Entity or the Company, as the case may be, shall
(as between Seller and Buyer, [Buyer 1] Parent or [Buyer 2] Parent, as the case
may be) be reinstated and such original obligation shall continue as though such
payment to Seller had not been made.

 

Section 3.05. Closing Deliverables. The effectiveness of this Consent and
Agreement is subject to the occurrence of the Closing and the delivery by Seller
and Buyer, as applicable, to the Company and the Marriott Entities of each of
the following:

 

(a) copies of (i) the certificate of formation of Buyer and a certificate dated
not more than eight days prior to the Closing Date stating that Buyer is validly
existing and in good standing on such date, certified by the Secretary of State
of the State of Delaware, (ii) the limited liability company agreement of Buyer,
certified as of the Closing Date by a manager of Buyer, (iii) resolutions of
Buyer, and any other documents evidencing all actions taken by Buyer, to
authorize the execution and delivery of this Consent and Agreement and any other
Transaction Document requiring execution by Buyer, such resolutions to be
certified as of the Closing Date by a manager of Buyer, and (iv) a certificate
of incumbency from a manager of Buyer as to the managers or authorized
representatives of Buyer who sign this Consent and Agreement and any other
Transaction Documents requiring execution by Buyer on behalf of Buyer;

 

(b) copies of (i) the certificate of incorporation of [Buyer 1] Parent and a
certificate dated not more than eight days prior to the Closing Date stating
that [Buyer 1] Parent is validly existing and in good standing on such date,
certified by the Secretary of State of the

 

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State of Delaware, (ii) the by-laws of [Buyer 1] Parent, certified as of the
Closing Date by the secretary or an assistant secretary of [Buyer 1] Parent,
(iii) resolutions of [Buyer 1] Parent, and any other documents evidencing all
actions taken by [Buyer 1] Parent, to authorize the execution and delivery of
the [Buyer 1] Parent Guaranty (Marriott Entities, Company) and any other
Transaction Document requiring execution by [Buyer 1] Parent, such resolutions
to be certified as of the Closing Date by the secretary or assistant secretary
of [Buyer 1] Parent, and (iv) a certificate of incumbency from the secretary or
assistant secretary of [Buyer 1] Parent as to the officers of [Buyer 1] Parent
who sign the [Buyer 1] Parent Guaranty (Marriott Entities, Company) and any
other Transaction Document requiring execution by [Buyer 1] Parent on behalf of
[Buyer 1] Parent;

 

(c) copies of (i) the certificate of incorporation of [Buyer 2] Parent and a
certificate dated not more than eight days prior to the Closing Date stating
that [Buyer 2] Parent is validly existing and in good standing on such date,
certified by the Secretary of State of the State of Delaware, (ii) the by-laws
of [Buyer 2] Parent, certified as of the Closing Date by the secretary or an
assistant secretary of [Buyer 2] Parent, (iii) any documents evidencing all
actions taken by [Buyer 2] Parent to authorize the execution and delivery of the
[Buyer 2] Credit Enhancement (Holdings, Company) and any other Transaction
Document requiring execution by [Buyer 2] Parent, and (iv) a certificate of
incumbency from the secretary or assistant secretary of [Buyer 2] Parent as to
the officers of [Buyer 2] Parent who sign the [Buyer 2] Credit Enhancement
(Holdings, Company) and any other Transaction Document requiring execution by
[Buyer 2] Parent on behalf of [Buyer 2] Parent;

 

(d) a legal opinion of counsel to [Buyer 1] Parent, in form and substance
reasonably satisfactory to MHSI, to the effect that (i) [Buyer 1] Parent has
been duly incorporated and is validly existing and in good standing under the
laws of the jurisdiction in which it was formed, (ii) [Buyer 1] Parent has all
corporate power and authority to enter into and perform the transactions to be
performed by it that are contemplated by the Opinion Documents (as defined in
the 2005 Purchase Agreement) to which it is a party, (iii) each of such Opinion
Documents has been authorized by all necessary corporate action and has been
duly executed and delivered by it, (iv) the execution and delivery of such
Opinion Documents do not violate its constitutive documents, and (v) no filing
with, notice to or consent, approval, authorization or order of any government
agency or body or official or, to the best of such counsel’s knowledge, any
court, is required by federal or applicable state law to be obtained in
connection with the execution, delivery and performance by [Buyer 1] Parent of
such Opinion Documents;

 

(e) a legal opinion of outside counsel to [Buyer 1] Parent, in form and
substance reasonably satisfactory to MHSI, to the effect that each of the
Opinion Documents to which [Buyer 1] Parent is a party constitutes the valid and
binding obligation of [Buyer 1] Parent enforceable against it in accordance with
its terms, except as may be limited or otherwise affected by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other laws
affecting the rights of creditors generally and (ii) principles of equity,
whether considered at law or in equity;

 

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(f) a legal opinion of counsel to [Buyer 2] Parent, in form and substance
reasonably satisfactory to MHSI, to the effect that (i) [Buyer 2] Parent has
been duly incorporated and is validly existing and in good standing under the
laws of the jurisdiction in which it was formed, (ii) [Buyer 2] Parent has all
corporate power and authority to enter into and perform the transactions to be
performed by it that are contemplated by the Opinion Documents to which it is a
party, (iii) each of such Opinion Documents has been authorized by all necessary
corporate action and has been duly executed and delivered by it, (iv) the
execution and delivery of such Opinion Documents do not and will not violate its
constitutive documents, and (v) no filing with, notice to or consent, approval,
authorization or order of any government agency or body or official or, to the
best of such counsel’s knowledge, any court, is required by federal or
applicable state law to be obtained in connection with the execution, delivery
and performance by [Buyer 2] Parent of such Opinion Documents;

 

(g) a legal opinion of outside counsel to [Buyer 2] Parent, in form and
substance reasonably satisfactory to MHSI, to the effect that each of the
Opinion Documents to which [Buyer 2] Parent is a party constitutes the valid and
binding obligation of [Buyer 2] Parent enforceable against it in accordance with
its terms, except as may be limited or otherwise affected by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other laws
affecting the rights of creditors generally and (ii) principles of equity,
whether considered at law or in equity;

 

(h) a legal opinion of Sidley Austin Brown & Wood LLP, special counsel to Buyer,
in form and substance reasonably satisfactory to MHSI, to the effect that
(i) Buyer has been duly formed and is validly existing and in good standing
under the laws of the jurisdiction in which it was formed, (ii) Buyer has all
limited liability company power and authority to enter into and perform the
transactions to be performed by it that are contemplated by the Opinion
Documents to which it is a party, (iii) each of the Opinion Documents to which
Buyer is a party has been authorized by all necessary limited liability company
action and has been duly executed and delivered by it, (iv) the execution and
delivery of such Opinion Documents do not and will not violate its constitutive
documents, (v) each of such Opinion Documents constitutes the valid and binding
obligation of Buyer enforceable against it in accordance with its terms, except
as may be limited or otherwise affected by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws affecting the
rights of creditors generally and (ii) principles of equity, whether considered
at law or in equity, and (vi) no filing with, notice to or consent, approval,
authorization or order of any government agency or body or official or, to the
best of such counsel’s knowledge, any court, is required by federal or
applicable state law to be obtained in connection with the execution, delivery
and performance by Buyer of such Opinion Documents;

 

(i) a legal opinion of internal counsel to Seller, in form and substance
reasonably satisfactory to MHSI, to the effect that (i) Seller has been duly
formed and is validly existing and in good standing under the laws of the State
of Delaware, (ii) Seller has all limited liability company power and authority
to enter into and perform the transactions contemplated by the Opinion Documents
to which it is a party, (iii) each of the Opinion Documents to which Seller is a
party has been authorized by all necessary limited liability company action and
has been duly executed and delivered by Seller, and (iv) the execution and
delivery of the Opinion Documents to which Seller is a party do not and will not
violate Seller’s constitutive documents;

 

14

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(j) a legal opinion of Chadbourne & Parke LLP, New York counsel to Seller, in
form and substance reasonably satisfactory to MHSI, to the effect that (i) each
of the Opinion Documents to which Seller is a party constitutes the valid and
binding obligation of Seller enforceable against it in accordance with its
terms, except as may be limited or otherwise affected by (1) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other laws
affecting the rights of creditors generally and (2) principles of equity,
whether considered at law or in equity and (ii) no filing with, notice to or
consent, approval, authorization or order of any government agency or body or
official or, to the best of such counsel’s knowledge, any court, is required by
federal or applicable state law to be obtained in connection with the execution,
delivery and performance by Seller of the Opinion Documents to which it is a
party;

 

(k) an certificate of a duly authorized manager of Buyer certifying that each of
the representations and warranties set forth in Section 3.02 of this Consent and
Agreement is true and correct in all material respects as of the Closing Date;

 

(l) a certificate of a duly authorized manager of Seller certifying that each of
the representations and warranties set forth in Section 3.01 of this Consent and
Agreement is true and correct in all material respects as of the Closing Date;

 

(m) the [Buyer 1] Parent Guaranty (Marriott Entities, Company), duly executed by
[Buyer 1] Parent;

 

(n) the [Buyer 2] Credit Enhancement (Holdings, Company), duly executed by
[Buyer 2] Parent;

 

(o) copies of the 2005 Purchase Agreement, the Assignment Agreement (Membership
Interest), and the Omnibus Assignment and Assumption Agreement, duly executed by
Buyer and Seller, certified by a duly authorized officer of Seller;

 

(p) the Adhesion Agreement, duly executed by Buyer;

 

(q) the Buyer Pledge Agreement duly executed by Buyer;

 

(r) a counterpart to the LLC Agreement, duly executed by Buyer, as required by
Section 10.6 of the LLC Agreement;

 

(s) such Uniform Commercial Code financing statements and amendments to or
terminations of financing statements as may be reasonably requested by the
Company or the Marriott Entities in connection with the Transaction Documents;
and

 

(t) certified copies of any consents set forth on Schedule 3.3(c) to the 2005
Purchase Agreement.

 

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Section 3.06. Satisfaction of Conditions. Upon the request of Buyer or Seller,
following the delivery of the items described in Sections 3.05(a)-(t) above to
MHSI, MHSI agrees to certify in writing that MHSI has received such items and
that, therefore, the Consent and Agreement is effective subject to the
occurrence of the Closing under the 2005 Purchase Agreement.

 

Section 3.07. Effect of Amendments to 2005 Purchase Agreement and Related
Agreements. Any amendment, modification or waiver to any of the 2005 Purchase
Agreement, the Omnibus Assignment or the Assignment Agreement (Membership
Interest) following the date hereof shall not affect or alter any of Buyer’s or
Seller’s respective obligations or liabilities to any of the Marriott Entities
or the Company under the 2003 Purchase Agreement or the LLC Agreement, as in
effect on the date hereof, or under this Consent and Agreement, unless the
Marriott Entities shall have granted their consent in writing, acting
reasonably, to such amendment, modification or waiver.

 

ARTICLE IV

 

MISCELLANEOUS

 

Section 4.01. Effective Date. This Consent and Agreement shall have no force and
effect unless and until the Closing Date has occurred and the last of the
conditions set forth in Section 3.05 has been satisfied, at which time this
Consent and Agreement shall automatically and without further action become
effective (the “Effective Date”).

 

Section 4.02. Covenant of Further Assurances. The parties agree to execute such
other documents and perform such other acts as may be necessary or such other
reasonable acts as may be desirable to carry out the purposes of this Consent
and Agreement.

 

Section 4.03. Governing Law. THIS CONSENT AND AGREEMENT, INCLUDING THE
INTERPRETATION, CONSTRUCTION, VALIDITY AND ENFORCEABILITY HEREOF, WILL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED
AND PERFORMED THEREIN. THE PARTIES HEREBY IRREVOCABLY SUBMIT TO THE
NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN NEW YORK COUNTY, NEW
YORK, WITH RESPECT TO ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS CONSENT AND AGREEMENT. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING RELATING TO A DISPUTE
HEREUNDER AND FOR ANY COUNTERCLAIM WITH RESPECT THERETO.

 

Section 4.04. Successors and Assigns. This Consent and Agreement shall be
binding upon each of the parties hereto and their respective successors and
permitted assigns and shall inure to the benefit of each of the parties hereto
and their respective successors and permitted assigns.

 

Section 4.05. No Third Party Beneficiaries. Nothing in this Consent and
Agreement, express or implied, is intended or shall be construed to confer upon,
or give to, any person other

 

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than the Marriott Entities, Seller and Buyer and their respective successors and
permitted assigns, any remedy or claim under or by reason of this instrument or
any agreements, terms, covenants or conditions hereof.

 

Section 4.06. Counterparts. This Consent and Agreement may be executed in one or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same agreement. A facsimile transmission of
this Consent and Agreement bearing a signature on behalf of a party will be
deemed an original signature.

 

Section 4.07. Headings. The headings used in this Consent and Agreement are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Consent and Agreement.

 

Section 4.08. Amendments. This Consent and Agreement may not be modified or
amended except by the written agreement of each of the parties hereto.

 

[The remainder of this page was left blank intentionally.]

 

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IN WITNESS WHEREOF, the parties, acting through their duly authorized
representatives, have caused this Consent and Agreement to be executed in their
respective names as of the day and year first written above.

 

MARRIOTT HOTEL SERVICES, INC. By  

/s/ Kathleen K. Oberg

--------------------------------------------------------------------------------

Name:   Kathleen K. Oberg Title:   Vice President SYNTHETIC AMERICAN FUEL
ENTERPRISES HOLDINGS, INC. By  

/s/ Kathleen K. Oberg

--------------------------------------------------------------------------------

Name:   Kathleen K. Oberg Title:   President SYNTHETIC AMERICAN FUEL ENTERPRISES
I, LLC By:   Marriott Hotel Services, Inc., its Administrative Member By  

/s/ Kathleen K. Oberg

--------------------------------------------------------------------------------

Name:   Kathleen K. Oberg Title:   Vice President SERRATUS LLC By  

/s/

--------------------------------------------------------------------------------

Name:     Title:     IL SYNFUEL LLC By  

/s/

--------------------------------------------------------------------------------

Name:     Title: