ex103.htm


    SUBORDINATION AND
INTERCREDITOR AGREEMENT

     

    THIS SUBORDINATION AND INTERCREDITOR
AGREEMENT (this “Agreement”)
is entered into as of this August 19, 2008, by and among the noteholders under
the Subordinated Debt Documents (as defined herein) being limited to CASTLERIGG
PNG INVESTMENTS LLC. on the date hereof (individually, a “Subordinated
Creditor” and collectively, the “Subordinated
Creditors” and, if there is only one such Subordinated Creditor, the term
“Subordinated Creditors” and all variations  thereof; e.g. “each
Subordinated Creditor,” as and when used hereinbelow, shall mean and refer to
that one Subordinated Creditor); PNG VENTURES, INC., a Nevada corporation (the
“Company”);
and FOURTH THIRD LLC, a Delaware limited liability
company (“Fourth
Third”), as Agent for all Senior
Lenders party to the Senior Credit Agreements described below and as a Senior
Lender.

     

    R
E C I T A L S

     

    A.           The
Agent, Senior Lenders (as hereinafter defined) and the Company, as “Parent” and
a “Loan Party” thereunder, have entered into an Amended and Restated Credit
Agreement, dated as of June 26, 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 New Earth LNG, LLC, a
Delaware limited liability company and wholly-owned subsidiary of the Company
(“Borrower”).  All
obligations of Borrower arising under the Senior Credit Agreement are guaranteed
by the Company under a Guarantee and Collateral Agreement, dated as of June 26,
2008, executed by the Company (among others) in favor of the Agent (as the same
may be amended, supplemented or otherwise modified from time to time as
permitted hereunder, the “Senior
Guarantee and Collateral Agreement”).  All of the obligations
of the Company to Agent and Senior Lenders under the Senior Credit Agreement,
the Senior Guarantee and Collateral Agreement and the other Senior Debt
Documents (as hereinafter defined) are secured by the Collateral (as hereinafter
defined).

     

    B.           Pursuant
to a Securities Purchase Agreement, dated as of August 19, 2008 (as the same may
be amended, supplemented or otherwise modified from time to time as permitted
hereunder, the “Securities
Purchase Agreement”), effective on or about the date
hereof,  the Company has issued to the Subordinated Creditors its
Subordinated Convertible Notes, aggregating $3,188,235 in principal amount (as
the same may be renewed, extended, amended, supplemented or otherwise modified
from time to time as permitted hereunder, individually and collectively, the
“Subordinated
Notes”).

     

    C.           Fourth
Third and Subordinated Creditors have agreed to enter into this Agreement for
the purpose of setting forth the relative rights and priorities of the Agent,
Senior Lenders and Subordinated Creditors under the Senior Debt Documents and
the Subordinated Debt Documents (as hereinafter defined).

     

    NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto hereby agree as follows:

     

    
      	
              1.  

            	
              Definitions. The following terms
      shall have the following meanings in this
  Agreement:

            


    

     

    “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 (i) all real and personal property of the 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 or any Subordinated Debt.

     

    “Collection
Action “ shall mean (a) to initiate or join in any suit, action or
proceeding against the Company or any Collateral to enforce payment of or make
demand for all or any part of the Subordinated Debt, (b) to seek monetary
damages against the Company, or (c) to take from or for the account of the
Company, by set-off or in any other matter, all or any part of any moneys which
may now or hereafter be owing by the Company with respect to the Subordinated
Debt.

     

    “Company”
shall have the meaning given to such term in the preamble.

     

    “Distribution”
means, with respect to any indebtedness or obligation, (a) any payment or
distribution by the Company (including the 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 the Company.  The term “Distribution”
shall expressly not include, however, any Common Stock (as defined in the
Securities Purchase Agreement) (i) into which, pursuant to the Securities
Purchase Agreement, the indebtedness represented by the Subordinated Note may be
converted, and (ii) issued pursuant to the exercise of the Warrants (as defined
in the Securities Purchase Agreement).

     

    “Enforcement
Action” shall mean (a) to take from or for the account of the Company by
set-off or in any other manner, the whole or any part of any moneys which may
now or hereafter be owing by the Company with respect to the Subordinated Debt,
(b) to sue for payment of, or to initiate or participate with others in any
suit, action or proceeding against the Company 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 the Company 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 the 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 the 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 Creditors 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 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 Company 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 the Company 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)
$38,000,000, over (ii) the amount of any prepayments or repayments under the
Senior Credit Agreement (specifically excluding, however, any such prepayments
or repayments occurring solely as a result of a Permitted Refinancing) (the
“Senior
Debt Limit”).  The sum of (i) 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 resulting from the failure of the Borrower to pay, on a timely basis,
any principal, interest, fees or other obligations under the Senior Debt
Documents, including, without limitation, any default in payment of Senior Debt
after acceleration thereof.

     

    “Senior
Lenders” shall mean the holders
of the Senior Debt.

     

    “Subordinated
Debt” shall mean all of the obligations of the Company under the
Subordinated Debt Documents to the Subordinated Creditors or evidenced by or
incurred pursuant to the Subordinated Debt Documents.

     

    “Subordinated
Debt Documents”
shall mean (i) the Securities Purchase Agreement, the Subordinated Note, the
Warrants and all other documents, agreements and instruments now existing or
hereinafter entered into by the Company in connection therewith, and (ii) each
document, if any (“Subordinated
Collateral Documents”) which now or hereafter may be executed and
delivered by the Company that creates a lien, security interest or mortgage on
any property to secure all or any portion of the obligation, indebtedness or
liabilities of the Company under any of the documents referred to in clause (i)
of this definition.

     

    “UCC”
shall mean the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.

     

    
      	
              2.  

            	
              Subordination.

            


    

     

    2.1. Subordination
of Subordinated Debt to Senior Debt.  The 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 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 the Company:

     

    (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 Creditors 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, sue for,
collect and receive any and all such Distributions, at Company's
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 the 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, the
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 the 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 Creditors 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 the 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 the Company, a Subordinated Creditor may exercise rights and remedies
generally available to holders of unsecured claims against any of the Company
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 Company 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 the 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 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 Creditors 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 Creditors under the Subordinated
Debt Documents and (ii) 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, but subject to the provisions of
Section 2.3(c) through Section 2.3(e) below, the 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 2.2(b) is applicable.

     

    (c) Nothing
contained in this Agreement shall prevent the Company from making, or any
Subordinated Creditor from receiving, at any time or from time to time, any
payments of accrued interest on the Subordinated Notes and any penalty payments
provided for in Section 4(q) of the Securities Purchase Agreement (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
Notes and the Securities Purchase Agreement as in effect on the date hereof
(without giving effect to any provisions of the Subordinated Notes or the
Securities Purchase Agreement which would have the effect of increasing the
amount or frequency of payment thereof) except: (i) during
the pendency of any Proceeding or (ii) if prior to any such payment being made
the Subordinated Creditors and the Company have received written notice from
Agent that a Senior Default has occurred and is continuing, unless and until
Subordinated Creditors and the Company 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 the Company, or any similar transaction involving the sale
or exchange of equity securities, debt or convertible debt of the Company
occurring subsequent to the date hereof, provided that the
Senior Lenders receive from the Company, on behalf of the Borrower, 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, the Company may pay to Subordinated Creditors, and the
Subordinated Creditors shall be entitled to receive from the Company to the
extent of any remaining proceeds, the then outstanding amount of the
Subordinated Debt.

     

    (e) Nothing
contained herein shall prevent Subordinated Creditor at any time in accordance
with the terms of the Subordinated Notes and the Warrants from (i) exercising
any right to convert the Subordinated Notes into equity as provided in the
Subordinated Notes, any anti-dilution adjustment rights or rights to conversion
of the Subordinated Notes, rights to receive replacement securities for or to an
adjustment of the convertibility provisions and conversion ratios as set forth
in the Subordinated Notes (whether upon merger, sale of the company or
otherwise), or other rights to receive securities from time to time upon
conversion of the Subordinated Notes, so long as none of the foregoing involves
the payment of money by the Company; or (ii) exercising any outstanding Warrants
to acquire Common Stock.

     

    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 Creditors 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, each Subordinated Creditor may file proofs of claim against the
Company in any Proceeding involving the Company.  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 Creditors 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 the Company or Agent to preserve or enforce its
rights with respect thereto, including (without limitation) notices to the
Company of the existence of a Subordinated Default.

     

    (e) Notwithstanding
anything in this Agreement to the contrary, if at any time hereafter, the
Company fails to pay, when due (other than because of a bona fide payment
dispute then being prosecuted in good faith by the Company), any payment in
respect of the Subordinated Notes otherwise then permitted to be paid pursuant
to said Section 2.3(c) or Section 2.3(d) above, Subordinated Creditors may take
Enforcement Action with respect to the Subordinated Debt to collect such
payment(s) then due, provided that the
Subordinated Creditors first shall have given Agent at least 90 days prior
written notice of such payment default and their intent to take Enforcement
Action pursuant hereto in respect thereof; and, provided, further, that, as to
any payments then permitted to be paid under Section 2.3(c) above, subsequent
thereto, either within such 90 day period or thereafter (including during the
pendency of any such Enforcement Action being taken by Subordinated Creditors),
the Company and the Subordinated Creditors do not receive from Agent the written
notice that a Senior Default has occurred and is continuing, in which case
Subordinated Creditors shall delay the commencement of, or desist in, any such
Enforcement Action in respect of such payments unless and until Subordinated
Creditors and the Company 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).

     

    2.5. Incorrect
Payments.  If any Distribution on account of the Subordinated
Debt is made by the Company 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 Creditors 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 (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 Creditors (subject to
any prior rights of third parties) and (C) such release by the Subordinated
Creditors 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.  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 Creditors to be applied in accordance with the Subordinated Debt
Documents 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 Creditors 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
the Subordinated Creditors in their sole discretion).

     

    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 Creditors, 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 August 19, 2008 among Castlerigg PNGr Investments
LLC., as collateral agent, PNG Ventures, Inc. (the “Company”),
and Fourth Third LLC (“Agent”),
to the indebtedness (including interest) owed by the Company, 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 26,
2008, among the Agent, the lenders named therein and the Company, among others
(the “Senior
Credit Agreement”), and the Loan Documents referred to therein as such
Senior 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 Creditors, without incurring liability to the Subordinated
Creditors and without impairing or releasing the obligations of the Subordinated
Creditors 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 Creditors (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 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 pursuant to which the Company provides collateral security for the
Subordinated Debt  or pursuant to which Borrower or any other “Loan
Party” (as defined in the Senior Credit Agreement; herein, a “Loan
Party”) provides a security interest in any Collateral 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 the Company or any Loan Party provides a security interest in or
mortgage on any property of the Company, in each case, in which the Agent does
not have a first priority perfected security interest. Prior to the Company, any
Loan Party 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
Company, the Loan Party affected and the Subordinated Creditors 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 the Company
or any Loan Party 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.

     

    
      	
              4.  

            	
              Waiver
      of Certain Rights by the Subordinated
  Creditors.

            


    

     

    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 the 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, 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 Creditors 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 Creditors 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.

     

    
      	
              5.  

            	
              Representations
      and Warranties.

            


    

     

    5.1. Representations
and Warranties of the Subordinated Creditors.  Each of the
Subordinated Creditors hereby represents and warrants to Agent and Senior
Lenders that as of the date hereof: (a) it is duly formed and validly existing
under the laws of the jurisdiction of its formation; (b) it has the power and
authority to enter into, execute, deliver and carry out the terms of this
Agreement, all of which have been duly authorized by all proper and necessary
action; (c) the execution of this Agreement by it will not violate or conflict
with its organizational documents, any material agreement binding upon it or any
law, regulation or order or require any consent or approval which has not been
obtained; (d) this Agreement is its legal, valid and binding obligation of
enforceable against it 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) it is the sole
owner, beneficially and of record, of the Subordinated Debt Documents and the
Subordinated Debt to which it is party.

     

    5.2. Representations
and Warranties of Agent.  Agent hereby
represents and warrants to the Subordinated Creditors 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 Creditors 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 Company and such Subordinated
Creditor, a payment by the Company 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
Creditors holding a majority of the principal amount of the Subordinated Notes
as in effect on the date hereof (the “Required
Subordinated Creditors”), 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 Business Day after delivery to such courier
properly addressed; or (d) if by United States mail, four Business Days after
deposit in the United States mail, postage prepaid and properly
addressed.

     

    Notices
shall be addressed as follows:

     

    
      	
              If
      to the Subordinated Creditors:

               

              Castlerigg
      PNG Investments LLC, as Agent

              c/o
      Sandell Asset Management Corp.

              40
      West 57th
      Street

              New
      York, New York 10019

              Telephone:
      (212) 603-5700

              Telecopy:   (212)
      603-5710

              Attention:
      Cem Hacioglu (chacioglu@sandellmgmt.com)

               Matthew
      Piskin (mpiskin@sandellmgmt.com)

               

            
	
              With
      a copy to (which shall not constitute notice):

               

              Fox
      Rothschild LLP

              100
      Park Avenue, Suite 1500

              New
      York, New York 10017

              Telecopy:   (212)
      299-2150

              Attention:  Stephen
      M. Cohen

               

            
	
              If
      to the Company:

            
	
              3100
      Knox Street, Suite 403

              Dallas,
      Texas 75205

              Telecopy:
      (214) 520-0507

              Attention:
      Kevin Markey, CEO

            
	
              With
      a copy to (which shall not constitute notice):

            
	
              Hodgson
      Russ LLP

              1540
      Broadway, 24th
      Floor

              New
      York, New York 10036

              Telecopy:
      (212) 751-0928

              Attention:
      Ron Levy, Esq.

            
	
              If
      to Agent or Senior Lenders:

              Fourth
      Third Capital LLC

              375
      Park Avenue

              Suite
      3304

              New
      York, New York 10152

              Attention:
      Brian J. Cavanaugh

              Chief
      Financial Officer

              Telecopy:  (212)
      759-0091

            
	
              With
      a copy to (which shall not constitute notice):

              King
      & Spalding LLP

              1185
      Avenue of the Americas

              New
      York, New York 10036

              Attention:
      Robert S. Finley

              Telecopy:
      (212) 556-2222

            


    

    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 Creditors and the Company. 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 Creditors. Nothing in this Agreement shall (a) impair, as among the
Company, Agent and Senior Lenders and as between the Company and the
Subordinated Creditors, the obligation of the Company 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 Creditors with respect to any other creditors of the
Company.  For purposes of clarification, the Company 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 THE 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 THE 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 COMPANY 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, THE 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, THE 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, THE 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 any Collateral in which
a security interest may only be perfected by title, possession or “control”,
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 Creditors 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 Creditors,
(x) deliver the remainder of such Collateral, if any, in its possession to the
designee of the Subordinated Creditors, 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 Creditors,
in each case except as may otherwise be required by applicable law or court
order

     

    21. Entire
Agreement.    This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes and replaces, in its
entirety, any agreement or  understanding, whether written or oral,
heretofore made between or among the parties relative to the subject matter
thereof.

     

    


     

    (Signature page follows)

     

    


     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    IN WITNESS WHEREOF, the
Subordinated Creditors, the Company and Agent have caused this Agreement to be
executed as of the date first above written.

     

    


     

    
      	
              SUBORDINATED
      CREDITORS

              CASTLERIGG
      PNG INVESTMENTS LLC,

              By:
      Castlerigg Master Investments Ltd., its sole member

               

              By:  Sandell
      Asset Management Corp., its

                      investment
      manager

               

              By:
      /s/
      Patrick T. Burke

                    Name:
      Patrick T. Burke

                    Title:
      Senior Managing Director

            


    

    
 

    
 

    
      	
              “COMPANY”:

              PNG
      VENTURES, INC.

               

                    
                By:       
      /s/
      Kevin
      Markey                                                                       

                Name: 
      Kevin
      Markey                                                                          

                Title:     President

              

            


    

    


     

     

    
      	
              AGENT:

            
	
              FOURTH
      THIRD LLC, a Delaware limited liability company, as Agent and as a Senior
      Lender

               

               

                    
                      
                  By:       
      /s/ Seth
      B.
      Taube                                                                     

                  Name:  Seth
      B.
      Taube                                                                          

                  Title: