ex101.htm


     

    


    


    
      	
              Dennis
      G. McLaughlin, III

              Chief
      Executive Officer

              Earth
      Biofuels, Inc.

              Earth
      LNG, Inc.

              3001
      Knox Street, Suite 303

              Dallas,
      Texas 75205

            


    

    


    Re:           Acquisition of Earth LNG,
Inc.

    


    Dear Mr.
McLaughlin:

    


    This
binding letter of intent (the “Letter of Intent”)
sets forth the understanding of the mutual intentions of the below parties
regarding the proposed transaction between on the one hand, PNG Ventures, Inc.,
a Nevada corporation, (“PNGX”) and, on the
other hand, both Earth Biofuels, Inc., a Delaware corporation (“EBOF”) and Earth LNG,
Inc., a Texas corporation and wholly owned subsidiary of EBOF (“Earth LNG” and,
together with EBOF, the “EBOF Parties”) (PNGX,
EBOF and Earth LNG may be referred to hereinafter individually as a “Party” and
collectively as the “Parties”).

    


    Each
Party understands and acknowledges that this is a binding
Letter of Intent and therefore creates a legally binding contract, which will be
subject to the Definitive Agreements (as defined below). All Parties agree to
make all best and expeditious efforts to complete the Definitive Agreement on or
before June 30, 2008 (the “Closing
Date”).

    


    1.             Transaction
Architecture.  Earth LNG currently owns and will own at
closing, through one or more subsidiary entities, (i) 100% of the “LNG”
production facility located in Topock, Arizona, (ii) certain lease, rental,
delivery, purchase, contract and related rights, and (iii) all fixtures,
buildings, machinery and other assets of Earth LNG and its subsidiaries
(collectively, the “LNG Assets”) as are
currently in place. PNGX will acquire from EBOF, 100% of the issued and
outstanding shares of Earth LNG (which shall at closing, include and thereby
transfer, all of the LNG Assets) such that Earth LNG and all of its subsidiaries
will be wholly owned by PNGX (the “Transaction”).  Pursuant
to the Transaction, and presuming satisfaction of all closing conditions and
satisfactory Definitive Agreements, PNGX will acquire 100% of Earth LNG (which,
for the avoidance of doubt, shall include all of the LNG Assets held by it or
its subsidiaries) in exchange for a controlling interest of PNGX common
stock.  Additionally, shares of PNGX may be used to discharge certain
secured and unsecured indebtedness, so that total indebtedness of Earth LNG and
its subsidiaries include no more than $32,500,000, some or all of which may be
secured only by a lien on the actual assets an not by any pledge of securities
of PNGX or of the subsidiaries.  PNGX shall acquire Earth LNG without
having to issue debt or assume any indebtedness (provided that indebtedness of
the subsidiaries secured by land in the Topock Arizona property only is
acceptable).  The Transaction may be structured as a securities
purchase agreement, asset purchase or similar transaction. No assurance can be
made that the Transaction will not be taxable.

    


    2.             Definitive
Agreements.    After receipt of this fully executed
Letter of Intent, the Parties will commence preparation of definitive agreements
which will effect the Transaction and arrangements contemplated herein (the
“Definitive
Agreements”). The Definitive Agreements will contain the provisions
outlined above, in addition to the usual and customary representations and
warranties, covenants assuring marketable title to Earth LNG and of the LNG
Assets by Earth LNG and its subsidiaries, conditions, and indemnifications for
transaction of this kind, including, without limitations: environmental, tax and
securities filings, and corporate filings, and the accuracies of all of the
same.

    


    3.             Due
Diligence.      For a period not to exceed
ten (10) days subsequent to the execution of this Letter of Intent, the Parties
shall comply with reasonable requests to review relevant information concerning
themselves and business entities they are affiliated with, insofar as such
requests are reasonably related to the completion of the Transaction and the
execution of the going-forward plan of operating the post-Transaction business.
Upon the execution of this Letter of Intent by all Parties, the Parties shall
immediately mutually exchange the following:

    


    
      	
              -  

            	
              All
      Financial Statements

            


    

    
      	
              -  

            	
              History
      of financings and related documents

            


    

    
      	
              -  

            	
              Certificate
      of Incorporation (with any amendments
thereto)

            


    

    
      	
              -  

            	
              All
      board minutes

            


    

    
      	
              -  

            	
              Bylaws
      (with any amendments thereto)

            


    

    
      	
              -  

            	
              Current
      shareholder list

            


    

    
      	
              -  

            	
              Title
      report relating to the Topock Arizona LNG facility and its buildings and
      structures and UCC report relating to fixtures, as well as a schedule of
      assets, leases (including, without limitation equipment, vehicle and heavy
      machinery leases) and rental/lease obligations, as well as a current list
      of orders, all as of a recent date, all of which shall be kept
      confidential.

            


    

    


    4.             Transaction Document
Expenses.  The EBOF Parties shall individually and collectively
be solely responsible for all fees and expenses of the Parties agents, advisors,
attorneys and accountants with respect to the negotiation of this Letter of
Intent, the negotiation and drafting of the Definitive Agreements and, if
Definitive Agreements are executed, the closing of the Transaction.

    


    5.             Termination Fee/No
Shop.      Until August 30, 2008, neither
EBOF, Earth LNG nor any of their subsidiaries or principals may enter into any
transaction or agreement to enter into a transaction for the sale of Earth LNG,
its subsidiaries or any of the LNG Assets or otherwise encumber or enter into an
agreement that would encumber any of the foregoing or enter into any agreement
outside of the ordinary course of business or that would otherwise hinder PNGX’s
rights or intentions under this agreement.  Similarly, PNGX may not
solicit or enter into agreements with other businesses for the acquisition of
such business, and neither party may enter into any transaction that would
frustrate the intent of the Parties herein. In the event the Transaction is
terminated by the EBOF Parties or the Transaction does not close by the Closing
Date regardless of reason (other than clear bad faith of PNGX) (a “Termination”), the
EBOF Parties shall jointly and severally pay to PNGX, a termination fee of
$100,000 (the “Termination Fee”) in
addition to the Deposit (as defined below). The Termination Fee shall compensate
PNGX for all fees, expenses and losses of opportunity associated with the
Transaction and the Termination thereof. On the earlier date of (i) 60 days from
the execution of this Letter of Intent and (ii) the date PNGX (a) closes any
equity or debt financing or (b) sells any asset, EBOF shall deliver to PNGX, or
its creditor/assignee, a $50,000 non-refundable deposit payment (the “Deposit”) via
electronic wire transfer or overnight delivery of a cashiers check to PNGX’s
address first listed above. The Deposit may be used by PNGX for any purpose,
including repayment of professional fees or consulting fees, and as part of the
consideration for entering into settlement and indemnification agreement with
its principals.  The Deposit shall be delivered to PNGX from EBOF’s
interest in the proceeds from the sale of Biofuels Company of America, LLC, an
Illinois limited liability company, and shall be delivered pursuant to the
Irrevocable Funds Instruction Letter attached hereto as Exhibit
A.

    


    6.             EBOF Series A Preferred
Redemption.   EBOF currently has issued and outstanding
shares of its Series A Preferred Stock. As part of the Transaction terms and in
consideration of PNGX entering into the Letter of Intent, PNGX shall, at
closing, assume all of EBOF’s obligations to pay the total Redemption Price (as
defined in the Certificate of Designation relating to the Series A Preferred
Stock) currently owed by EBOF to holders of the Series A Preferred
Stock.  After such assumption, EBOF shall no longer be required to
make such payment but such payment shall be the sole obligation of PNGX and its
subsidiaries.

    


    7.             Public
Announcement.    Within five (5) days following the
following the date of this Letter of Intent, the Parties shall (i) individually
release a Form 8-K with the U.S. Securities and Exchange Commission regarding
the Transaction (collectively the “Form 8-K’s” copies of
which has been attached hereto as Exhibit B
and
Exhibit C) and (ii) jointly release a press release regarding the
Transaction (the “Joint Press Release”
a copy of which has been attached hereto as Exhibit
D).  With the exception of the Form 8-K’s and Joint Press
Release, the Parties agree not to issue any further press releases or make any
further public announcement regarding the Transaction without prior written
mutual consent of all Parties, except where a public announcement is otherwise
required by law.

     

    8.             Jurisdiction.  Florida
state courts, using Florida law.

    


    We trust
that these terms accurately reflect our understanding. If there are any
questions or comments regarding the same, please feel to contact me at your
convenience. Otherwise kindly execute this Letter of Intent acknowledging your
agreement to the terms outlined above and fax it to 760-804-8845.

    


    Best
regards,

    


    PNG
VENTURES, INC.

    


    


    _____________________

    By: Kevin
Markey

    Its:
Interim Chief Executive Officer

    


    


    Agreed
and accepted by:

    


    
      	
              EARTH
      BIOFUELS, INC.

               

               

              _____________________________

              By:
      Dennis G. McLaughlin, III

              Its:
      Chief Executive Officer

            	
              EARTH
      LNG, INC.

               

               

              _____________________________

              By:
      Dennis G. McLaughlin, III

              Its:
      Chief Executive Officer

            


    

    


    


    


    


    



    
      
         


      

      
         


        
          

        

      

      
         


      

    

    

 

    
      


      
        	
                Dennis
      G. McLaughlin, III

                Chief
      Executive Officer

                Earth
      Biofuels, Inc.

                Earth
      LNG, Inc.

                3001
      Knox Street, Suite 303

                Dallas,
      Texas 75205

              


      

      


      


      Re:           First Amended and Restated
Binding Letter of Intent.

      


      


      On or
about May 15, 2008 (i) PNG Ventures, Inc., a Nevada corporation, (“PNGX”) on one hand,
and, (ii) both Earth Biofuels, Inc., a Delaware corporation (“EBOF”) and Earth LNG,
Inc., a Texas corporation and wholly owned subsidiary of EBOF (“Earth LNG” and,
together with EBOF, the “EBOF Parties”) on the
other hand, entered into a binding letter of intent (the “Original LOI”).
(PNGX, EBOF and Earth LNG may be referred to hereinafter individually as a
“Party” and
collectively as the “Parties”).

      


      The
Parties hereby enter into this First Amended and Restated Binding Letter of
Intent (the “Amended
LOI”) whereby the Parties agree to ratify, assume and incorporate by
reference every term, condition, restriction, recital, preamble, paragraph,
section, subsection, article and executory page set forth in the Original LOI,
with the exception of the restatement of Sections 3 and 6 of the Original LOI
which shall be amended, completely restated and incorporated herein as
follows:

      


      3.           Due
Diligence.  The time during which the due diligence described
in the Original LOI may take place shall be extended ten (10) calendar days from
May 22, 2008.

      


      6.           Assumption of Financial
Obligations.  The EBOF Parties are currently indebted to: (i)
Black Forest International, LLC (“BFI”) pursuant to
shares of EBOF’s Series A Preferred Stock currently issued to BFI; (ii) Fourth
Third Capital, LLC (“Fourth Third”)
pursuant to the Credit Agreement dated February 28, 2007; and (iii) Greenfield
Commercial Credit, LLC (“Greenfield”) pursuant
to the Intercreditor Agreement dated as of March 1, 2007 and subsequently
amended on July 31, 2007. (“Greenfield”) (BFI,
Fourth Third and Greenfield may be referred to collectively as the “EBOF
Obligees”).  PNGX shall assume all financial obligations owed
by the EBOF Parties to the EBOF Obligees.

      


      Each
Party understands and acknowledges that this is a binding
agreement and therefore creates a legally binding contract, which will be
subject to the Definitive Agreements (as defined in the Original
LOI).

      


      We trust
that these terms accurately reflect our understanding. If there are any
questions or comments regarding the same, please feel to contact me at your
convenience. Otherwise kindly execute this Letter of Intent acknowledging your
agreement to the terms outlined above and fax it to 760-804-8845.

      


      Best
regards,

      


      PNG
VENTURES, INC.

      


      


      _____________________

      By: Kevin
Markey

      Its:
Interim Chief Executive Officer

      


      


      Agreed
and accepted by:

      


      
        	
                EARTH
      BIOFUELS, INC.

                 

                 

                _____________________________

                By:
      Dennis G. McLaughlin, III

                Its:
      Chief Executive Officer

              	
                EARTH
      LNG, INC.

                 

                 

                _____________________________

                By:
      Dennis G. McLaughlin, III

                Its:
      Chief Executive Officer