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SUBSCRIPTION AGREEMENT

TO:          PNG Ventures, Inc.
2038 Corte Del Nogal, Suite 110
Carlsbad, California  92011
Attention: Mark Baum, Esq.

Ladies and Gentlemen:

The undersigned (the “Subscriber”) hereby tenders Subscriber’s subscription to
PNG Ventures, Inc., a Delaware corporation (the “Company”), on the terms and
conditions hereinafter set forth:

1.           DEFINITIONS

1.1           “Effective Date” shall mean June __, 2008.

1.2           “Subscriber Shares” are the number of shares of Common Stock to be
issued to Subscriber pursuant to this Subscription Agreement.

1.3           “Exchange Agreement” shall mean that certain Share Exchange
Agreement among Earth Biofuels, Earth LNG, Inc., New Earth LNG, Inc. and its
subsidiaries and the Company dated as of the Effective Date.

1.4           “Credit Agreement” shall mean that certain Amended and Restated
Credit Agreement dated as of the Effective Date between New Earth LNG,
Subscriber and the other parties listed therein, whereby New Earth LNG, as a
subsidiary of the Company, will be primary borrower.

1.5           “Master Rights Agreement” shall mean that certain Master Rights
Agreement between the Company and Subscriber regarding certain registration and
other rights related to the Subscriber Shares.

1.6           “Earth Biofuels” shall mean Earth Biofuels, Inc.

1.7           “New Earth LNG” shall mean New Earth LNG, Inc., a Delaware
Corporation.

1.8           “Common Stock” shall mean the common stock of the Company, $.001
par value per share.

1.9           “Securities Act” shall mean the Securities Act of 1933, as
amended.
 
1.10           “Subscription Agreement” shall mean this Subscription Agreement.

 
 

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1.11           “Affiliate” shall mean and any individual, corporation,
partnership, association, or business that directly or indirectly through
intermediaries, controls, is controlled by or is under common control with
Subscriber.

1.12           “Commission” shall mean the Securities and Exchange Commission.

1.13           “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended

2.
SUBSCRIBER SHARES

2.1           Subscription.  Subscriber hereby irrevocably subscribes for
1,100,000 shares of Common Stock (the “Subscriber Shares”), to be issued to
Subscriber upon closing of the transaction contemplated by the Exchange
Agreement and as partial consideration for the Credit Agreement and the proceeds
thereunder.

2.2           Closing.  The issuance of the Subscriber Shares shall occur
contemporaneously with the execution and delivery of the Credit Agreement, the
closing relating to the Exchange Agreement and Master Rights Agreement at a
closing (the “Closing”) to be held at a time and place agreed upon by the
parties.  At the Closing, Subscriber and the Company shall each deliver an
executed copy of this Subscription Agreement and the Company will deliver to
Subscriber a stock certificate for the Subscriber Shares.

2.3           Transfer.  Subscriber acknowledges and agrees that Subscriber will
not sell, transfer, or otherwise dispose of the Subscriber Shares unless (i) to
an Affiliate, subject to compliance with federal and state securities laws, (ii)
the Company agrees to such transfer, subject to compliance with federal and
state securities laws, or (iii) the Common Stock is registered under the
Securities Act as provided under the Master Rights Agreement or otherwise, or
unless such sale, transfer, or other disposition would be in compliance with all
applicable federal and state laws and regulations and Subscriber provides the
Company with a legal opinion reasonably acceptable in form and substance stating
that such sale, transfer or other disposition may be made without registration
under the Act or under any applicable state laws and regulations.

3.
REPRESENTATIONS AND WARRANTIES OF COMPANY

The Company represents and warrants to Subscriber as follows:

3.1           Organization.  The Company is a corporation duly organized and
validly existing under the laws of the State of Nevada, with full corporate
power and authority to conduct its business as it is now being conducted, to own
or use the properties and assets that it purports to own or use.

3.2           Capitalization.  The authorized capital stock of the Company
consists of Fifty Million (50,000,000) shares of common stock, $.001 par value
per share, of which _______ shares are issued and outstanding, and 1,900,000
shares of Common Stock are issued in

 
 

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electronic form to the Company’s transfer agent as escrow agent, for issuance
upon conversion of the Note (as defined in the Exchange Agreement), no shares
are held in the treasury of the Company.  The Subscriber Shares will represent
approximately 8.66% of the fully diluted shares of Common Stock immediately
following the Closing.  The Subscriber Shares have been duly authorized for
issuance and, when issued in accordance with the terms of this Subscription
Agreement, will be validly issued, fully paid and nonassessable.  Subscriber
will acquire good and valid title to the Subscriber Shares, free of all claims,
liens, options, preemptive rights, charges, encumbrances, and restrictions of
any kind whatsoever, except for restriction on their transferability under the
Securities Act.  All of the issued and outstanding shares of capital stock of
the Company are validly issued, fully paid and nonassessable and are not subject
to, nor were they issued in violation of, any preemptive rights.  There are no
outstanding options, warrants or other rights, agreements or commitments of any
kind obligating the Company to issue any additional shares of its capital stock,
except as set forth in Section 3.3 of the Exchange Agreement.

3.3           Articles of Incorporation.  A true and complete copy of each of
the Company’s Articles of Incorporation and Bylaws, as in effect on the
Effective Date, have been provided to Subscriber.

3.4           No Conflict.  Neither the execution and delivery of this
Subscription Agreement, nor the Master Rights Agreement, nor the transactions
contemplated hereby and thereby, do or will (i) violate any provision of the
Articles of Incorporation or Bylaws of the Company, (ii) violate, contravene or
conflict in any material respect with any resolution adopted by the board of
directors or the shareholders of the Company, (iii) to the knowledge of the
Company, violate any law or order applicable to the Company or any of its
assets, properties or businesses, (iv) result in a breach of, constitute a
default (or an event which, with or without the giving of notice or lapse of
time or both, would become a default) under, require any consent under, or give
to others any right of termination, amendment, acceleration, suspension,
revocation or cancellation of, any material contract or agreement to which the
Company is a party or is bound, or (v) result in the creation of any lien or
encumbrance on any of the Subscriber Shares.

3.5           Authority.  This Subscription Agreement constitutes the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms except as enforceability may be limited by applicable
laws relating to bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors’ rights generally and except as
such enforceability is subject to general principles of equity.  The Company has
the right, power, authority and capacity to execute and deliver this
Subscription Agreement and perform its obligations hereunder.

3.6           Litigation.  The Company is not a party to any material pending
litigation or, to its knowledge, any governmental proceedings are threatened
against the Company, other than as relates to the Settlement Agreement (as
defined in the Exchange Agreement), and related Amended Court Order (as defined
in the Exchange Agreement) already provided to and reviewed by Subscriber.

3.7           Periodic Reports.  The Company is current in the filing of all
quarterly or annual

 
 

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financial or reports with the Commission, and has been a reporting company under
the Exchange Act.  All such reports and statements filed by the Company with the
Commission did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstance under which they were made, not
misleading.

4.
REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER

In order to induce the Company to accept this Subscription Agreement, Subscriber
hereby represents and warrants as follows:

4.1           Access to Information.

(a)           Documents and Records.  Subscriber acknowledges that all requested
documents, records, and books pertaining to the Company have been made available
for inspection by Subscriber or its representatives including, without
limitation, the Settlement Agreement and related Amended Court Order, and the
Exchange Agreement.  Subscriber has had a reasonable opportunity to ask
questions of and receive answers from the officers of the Company concerning the
terms and conditions of the offering of the Subscriber Shares, and to obtain
additional information, to the extent possessed or obtainable without
unreasonable effort or expense by the officers of the Company.  All such
questions have been answered to the satisfaction of Subscriber.

(b)           Experience.  Subscriber has such knowledge and experience in
financial and business matters as to enable Subscriber to (i) evaluate the
merits and risks associated with the purchase of the Subscriber Shares, and (ii)
make an informed decision with respect thereto.  Subscriber is financially
capable of bearing the risk of loss of any and all consideration paid for the
Subscriber Shares, and acknowledges that an investment in the Subscriber Shares
involves a high degree of risk, including a possible total loss of
investment.  Subscriber is acquiring the Subscriber Shares for its own account,
not as a nominee or agent, and not with a view to, or for sale in connection
with, any distribution thereof. Subscriber understands that the Subscriber
Shares has not been registered under the Securities Act, or any state securities
laws, by reason of specific exemptions from the registration provisions of the
Securities Act and such laws that may depend upon, among other things, the bona
fide nature of Subscribers’ investment intent as expressed herein.

(c)           Accredited Investor.  Subscriber is an “accredited investor”
within the meaning of Regulation D promulgated by the Commission under the
Securities Act.  Subscriber acknowledges that the Company will rely upon the
representations and warranties made by Subscriber in this Subscription Agreement
in order to establish an exemption from the registration requirements of the
Securities Act and applicable state securities laws and that Company shall place
the legend described in Section 4.2 (the “Legend”) on the certificate
representing the Subscriber Shares to reflect that the Subscriber Shares have
not been registered under the Securities Act and applicable state laws.

 
 

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(d)           Transfer.  Subject to Section 2.3, Subscriber will not transfer
any shares of Common Stock without registration under the Securities Act and
applicable state securities laws unless the transfer is exempt from registration
under the Securities Act and such laws and is made in compliance with the
Legend.

(e)           Authorization.  All action on the part of Subscriber necessary for
the authorization, execution, delivery and performance of all obligations of
Subscriber under this Subscription Agreement have been taken prior to
Closing.  This Subscription Agreement, when executed and delivered by such
Subscriber, will constitute the valid and binding obligation of such Subscriber,
except as enforceability may be limited in accordance with bankruptcy,
insolvency or other laws affecting the enforcement of creditors’ rights
generally, and except that the availability of the remedy of specific
performance or other equitable relief is subject to the discretion of the court
before which any proceeding thereof may be brought.

4.2           Legend.  Subscriber understands that there will be placed on the
certificates for the Subscriber Shares, when issued and delivered, the Legend,
stating in substance as follows:

 
“THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION
STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR THE
ISSUER RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO
COUNSEL FOR THE ISSUER THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
SUCH ACT IS AVAILABLE.”

5.
GOVERNING LAW

ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS
SUBSCRIPTION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
DOMESTIC LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR
ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF DELAWARE.

6.           ENTIRE AGREEMENT

This Subscription Agreement, the Master Rights Agreement and all other
agreements contemplated by this Subscription Agreement supersede all prior
discussions and agreements between the parties with respect to the subject
matter hereof and thereof and contain the sole and entire agreement between the
parties hereto with respect to the subject matter hereof and thereof.

 
 

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6.           NOTICES

All notices, demands or other communications to be given or delivered under or
by reason of the provisions of this Subscription Agreement shall be in writing
and shall be deemed to have been given when delivered personally, mailed by
certified or registered mail, return receipt requested and postage prepaid, or
sent via a nationally recognized overnight courier, or sent via facsimile to the
recipient accompanied by a certified or registered mailing.  Such notices,
demands and other communications shall be sent to the Company and Subscriber at
the addresses set forth below and to the other parties hereto at such address or
to the attention of such other person as is specified in the Company's books and
records:
 
If to the Company:
 
PNG Ventures, Inc.
2038 Corte Del Nogal, Suite 110
Carlsbad, California  92011
Attention: Mark Baum, Esq.
Tel. (760) 804-8844 x205
Facsimile: (760) 804-8845

with a copy to:

Hodgson Russ, LLP
1540 Broadway, 24th Floor
New York, NY 10036
Attention: Ron Levy, Esq.
Tel. (212) 751-4300
Fax. (212) 751-0928
Email: rlevy@hodgsonruss.com

If to Subscriber:

______________________
______________________
______________________
Attention Tom Quimby
Tel. (___) __-___________
Facsimile: (___)___-_____
Email: tom@medleycapital.com

King & Spalding, LLP
1185 Avenue of the Americas
New York, NY 10036
Attention: Gerald Woods, Esq.

 
 

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Tel. (212) 556-2232
Facsimile: (212) 556-2222
Email: GWoods@kslaw.com

or such other address or to the attention of such other Person as the recipient
party shall have specified by prior written notice to the sending party.

7.           WAIVER

Waiver by either party of any term or provision of this Subscription Agreement
shall be in writing and shall not constitute a continuing waiver thereof nor of
any further or additional rights such party may hold under this Subscription
Agreement.

8.
SEVERABILITY

If any provision of this Subscription Agreement shall be held to be invalid,
illegal or unenforceable, the validity, legality or enforceability of the
remaining provisions shall not in any way be affected or impaired.

9.
CUMULATIVE RIGHTS

Unless expressly stated to the contrary elsewhere in this Subscription
Agreement, all rights, powers and privileges conferred hereunder upon the
parties hereto shall be cumulative and not restrictive of those given by law.

10.
HEADINGS

The descriptive headings of this Subscription Agreement are inserted for
convenience only and do not constitute a part of this Subscription Agreement.

11.           COUNTERPARTS

This Subscription Agreement may be executed simultaneously in two or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same agreement.  Facsimile or scanned and emailed counterparts signatures to
this Subscription Agreement shall be acceptable and binding.

 
 

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IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement as
of the Effective Date.

Subscriber:

FOURTH THIRD LLC

By: /s/ Seth R.
Taube                                                                                       

Name:   Seth R. Taube                                                        

Title:     Authorized
Signatory                                                                           

ACCEPTED AND AGREED TO:

Company:

PNG VENTURES, INC.

By: /s/ Kevin
Markey                                                                                             

Name:   Kevin
Markey                                                                    

Title:    Chief Executive
Officer                                                                           

 
 

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