Exhibit 10.3


INTERCREDITOR AGREEMENT


THIS INTERCREDITOR
AGREEMENT (the “Agreement”) is made July 13, 2007 by and among GEM SOLUTIONS, INC., a Delaware corporation (the “Company”),
FEQ GAS, LLC, a Delaware limited liability company (“FEQ”),
and TRIDENT GROWTH FUND, L.P.  (“Trident”).


R E C I T A L S:


A.    Pursuant to that certain Loan and Security
Agreement, dated the date hereof  (the “FEQ
Loan Agreement”) between FEQ and the Company, FEQ has extended a
$100,000  line of credit to the Company;


B.    The Company and Trident have entered into
that certain Loan Agreement dated April 1, 2005 (such agreement, and all other
loan agreements between the Company and Trident, each as amended to date, being
the (“Trident Loan Agreement”), pursuant to which Trident made available
to the Company loans in the maximum aggregate principal amount of
$1,600,000.  The Company’s obligations
under the Trident Loan Agreement are secured by a perfected security interest
in substantially all of the Company’s assets.


C.    FEQ and Trident wish to enter into this
Intercreditor Agreement to set forth and evidence the relative rights and
interests of FEQ and Trident in respect of the indebtedness evidenced by FEQ
Loan Agreement and Trident Loan Agreement;


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


ARTICLE I


DEFINITIONS


In
addition to the terms defined in the preamble and recitals of this Agreement,
the following terms shall have the respective meanings set forth below.


“Bankruptcy
Code” means the United States Bankruptcy Code (11 U.S.C. § 101 et
seq.), as amended, and any successor statute.


“Business
Days” means any day that is not Saturday or Sunday with the exception of
nationally recognized holidays.


“Debt”
of any person means, without duplication, (a) all obligations of such person
for borrowed money and all obligations of such person evidenced by bonds,
debentures, notes or other similar instruments on which interest charges are
customarily paid, (b) all obligations,



 1
 









contingent or
otherwise, relative to the face amount of all letters of credit, whether or not
drawn, and banker’s acceptances issued for the account of such person, (c) all
capitalized lease obligations of such person (to the extent required by
generally accepted accounting principles to be included on the balance sheet of
such person) and (d) all obligations of such person (contingent or otherwise)
to guarantee, purchase or otherwise acquire, or otherwise assure a creditor
against loss in respect of, another person.


“Event
of Default” shall mean the occurrence of any default or event of default
and the expiration of any application grace or notice periods under FEQ Loan
Agreement and the documents executed and delivered in connection therewith.


“FEQ
Debt” means all obligations to pay money pursuant to FEQ Loan Agreement or
evidenced by the Note referred to therein, not to exceed the principal amount
of $100,000 and the non-default rate of interest on such amount as provided in
the FEQ Loan Agreement and the other fees and costs described therein.


“Proceeding”
means (a) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Company, its properties or its creditors as such, (b) any proceeding for
any liquidation, dissolution or other winding-up of the Company, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy
proceedings, or (c) any assignment for the benefit of creditors or marshaling
of assets of the Company or the appointment of a trustee, receiver,
sequestrator or other custodian for the Company or any of its properties.


“Satisfied”
means with respect to the FEQ Debt that all of the FEQ Debt shall have been
paid in full in cash and all financing arrangements and accommodations between
the Company and FEQ shall have been terminated and FEQ shall have no obligation
to make any loans, financial accommodations or advance any funds which would
constitute FEQ Debt to the Company.


“Senior
Loan Documents” means FEQ Loan Agreement and all notes, guaranties,
security agreements, pledge agreements, mortgages, debentures, charges,
assignments of deposit, deed of trust, assignments of leases, collateral
assignments, UCC financing statements and other documents, instruments and
agreements executed and delivered from time to time pursuant to or in
connection with FEQ Loan Agreement or in connection with any FEQ Debt.


“Trident
Debt” means the principal not in excess of $1,600,000 and the non-default
rate of interest on such amount as provided in Trident Loan Agreement  in respect of the Debt of the Company
incurred under Trident Loan Agreement and all other amounts owing from time to time
by the Company, any affiliate or subsidiary of the Company and any guarantor of
the Trident Debt to Trident.



 2
 









ARTICLE
II


SUBORDINATION


Section 2.1     Payment
Subordination.  Upon the terms and
conditions set forth in this Agreement, (a) Trident hereby subordinates all
Trident Debt and all claims and demands arising therefrom to all of the FEQ
Debt; (b) Trident agrees that all of the FEQ Debt shall be Satisfied in full
(including without limitation all interest accruing on any FEQ Debt after
commencement of any Proceeding whether or not such interest is allowable in any
such Proceeding) before Trident shall be paid anything (of any kind or
character) on account of the principal of any Trident Debt or any other sums
payable in connection therewith except for current interest at the non-default
rate; and (c) until all of the FEQ Debt is Satisfied, the Company will make,
and Trident will not demand or accept, either directly or indirectly, payment
(of any kind or character) of all or any part of Trident Debt, except for
current interest at the non-default rate, without the prior written consent of
FEQ.


Section 2.2     Lien
Subordination.  Trident hereby agrees
that, regardless of the time, manner or order of attachment or perfection or
lack of perfection and regardless of any priority otherwise available to
Trident, if any, Trident’s lien and security interest, if any, in any and all
of the collateral for Trident Debt is and shall be fully subject and
subordinate (i) to FEQ’s claims to and lien and security interest in such
collateral and any and all other property of the Company, (ii) to all FEQ’s
rights therein, and (iii) to FEQ’s rights to be repaid in full prior to the
repayment of Trident Debt.  FEQ shall
have the right, at all times and from time to time, to apply all or any part of
the collateral and the other property of the Company, and the proceeds thereof
and all collections and remittances thereof, and all other collections and
payments from or on behalf of the Company to the repayment of FEQ Debt, and Trident
shall not have the right to proceed against all or any portion of the
collateral or other property of the Company for Trident Debt until FEQ Debt has
been Satisfied. No claim of or under Trident Debt shall have any claim to or
against any assets of the Company on a parity with or prior to the claim of FEQ
Debt


Section 2.3     Payment
Blockage. No payment or distribution shall be made on account of any
Trident Debt, except for current interest at the non-default rate, or in
respect of any redemption, retirement, purchase or other acquisition by the
Company of any Trident Debt, at any time during which FEQ shall have notified
Trident that any FEQ Debt shall have been declared due and payable prior to or
upon  its stated final maturity or
otherwise and remains unpaid.


Section 2.4     Subordination
in Event of Insolvency, Etc.  In the
event of any Proceeding, (a) FEQ Debt shall first be Satisfied before any
payment or distribution, whether in cash, securities or other property shall be
made in respect of Trident, and (b) any payment or distribution of assets which
would otherwise (but for this Agreement) be payable or deliverable in respect
of Trident Debt shall be paid or delivered directly to FEQ for application
towards any payment of FEQ Debt until all FEQ Debt shall have been Satisfied.


Section 2.5     Turnover of
Improper Payments.  If any payment or
distribution, whether in cash, securities or other property, shall be received
by Trident in contravention of any of the terms hereof, such payment or
distribution shall be received and held in trust for the benefit of FEQ, and 



 3
 









shall be
promptly paid over and delivered to, FEQ for application towards the payment of
FEQ Debt to the extent necessary to cause all FEQ Debt to be Satisfied.


Section 2.6     Subrogation.  At such time as all FEQ Debt has been
Satisfied, Trident shall be subrogated to any rights of FEQ in and to the FEQ
Debt and any security for the FEQ Debt, only to the extent paid by or on behalf
of Trident, and to receive any further payments or distributions of assets of
the Company applicable to FEQ Debt until all Trident Debt shall be paid in
full.  For purposes of such subrogation,
no payments or distributions to FEQ of any cash, property or securities to
which Trident would be entitled except for the provisions of this Agreement
shall, as among the Company and its creditors other than FEQ on the one hand
and Trident on the other hand, be deemed to have been made as a payment by it
to or on account of FEQ Debt.


Section 2.7     Reinstatement.  The provisions of this Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any payment in respect of FEQ Debt is rescinded or must otherwise be
returned by FEQ in the event of a Proceeding, all as though such payment had
not been made.


Section 2.8     Company’s
Obligations Absolute.  Nothing
contained herein shall impair, as between the Company and Trident, the
obligation of the Company to pay to Trident all amounts payable in respect of
Trident Debt as and when the same shall become due and payable in accordance
with the terms thereof, or prevent Trident from exercising all rights, powers
and remedies otherwise permitted by applicable law or upon an event of default
with respect to Trident Debt.


Section 2.9     Certain
Payments and Distributions.  Nothing
contained herein shall prohibit the payment or distribution on account of
Trident Debt that is made in the form of equity securities of the Company, or
in the form of debt securities or other evidences of indebtedness that are
subordinated in right of payment at least to the extent and in the manner
provided in this Agreement.


Section 2.10   Notice of
Acceleration.  Subject to Section
2.14, Trident shall provide FEQ with five (5) Business Days prior written
notice of Trident’s intention to call a default under the Trident Debt or
accelerate the Trident Debt.  FEQ shall
provide Trident with five (5) business days prior written notice of FEQ’s
intention to call a default under the FEQ Debt or accelerate the FEQ Debt.


Section 2.11   Limitation on Consent
to Payment.  In the event that FEQ
consents in writing to the making of a payment on account of Trident Debt,
which payment or grant would otherwise be prohibited pursuant to this
Agreement, such consent shall be deemed to be a consent to the payment
specifically referred to in such written consent and shall not be construed as
a waiver generally as to all future payments. 
A consent by FEQ to any request shall not be deemed to be a consent to
future similar requests.


Section 2.12   Enforcement of
Subordination.  The right of FEQ to
enforce the subordination provisions and any other provisions hereof shall not
in any way be prejudiced or impaired by any act or failure to act on the part
of FEQ, the Company or any Trident or by any noncompliance by the Company or
any Trident with the terms, provisions and covenants of this Agreement.



 4
 









Section 2.13   FEQ Rights.  Without notice to Trident and without
affecting or releasing any obligation or agreement of Trident under this
Agreement or the subordination provided in this Agreement, FEQ may at any time
or times do any of the following with respect to any of the FEQ Debt: (a)
amend, modify, alter or waive any of the terms of the Senior Loan Documents in
any manner, (b) waive any of the terms of the Senior Loan Documents and charge
a normal and customary fee in connection therewith, (c) renew or extend the
time for payment of all or any part thereof, (d) decrease fees or interest
rates payable thereon, (e) increase the maximum principal amount available to
be borrowed thereunder up to an aggregate outstanding amount permitted pursuant
to the definition of “FEQ Debt” set forth in this Agreement (being the
principal sum of $100,000), (f) decrease the maximum principal amount available
to be borrowed thereunder, (g) accept collateral security or guaranties
therefor and sell, exchange, fail to perfect, release or otherwise deal with
all or any part of any such collateral or guaranties, (h) release any party
primarily or secondarily obligated thereon, (i) grant indulgences and take or
refrain from taking any action with regard to the collection or enforcement
thereof, and (j) take any action which might otherwise constitute a defense to
or a discharge of any Loan Party.


Section 2.14   Standstill.  Notwithstanding anything herein to the
contrary, Trident agrees that it will not institute any legal proceedings
against the Company or exercise any rights or remedies against the Company
without the consent of FEQ unless the Company fails to pay current interest at
the non-default rate or FEQ is taking any such actions (in which case any sums
collected by Trident shall be subject to the terms of this Agreement).  Nothing herein shall prohibit Trident from
filing proofs of claim or otherwise taking actions in a Proceeding to collect the
Trident Debt and enforce its rights under the Trident Loan Agreement, subject,
however to the terms of this Agreement.


ARTICLE III


MISCELLANEOUS


Section 3.1     Successors and
Assigns; Third Parties.  All
covenants and agreements in this Agreement contained by or on behalf of the
parties hereto shall bind and inure to the benefit of their respective
successors and assigns.  The
subordination provisions in Article II of this Agreement are for the benefit of
the holders from time to time of FEQ Debt and, subject to the provisions and
conditions set forth herein, any such holder that is not a party to this
Agreement shall be entitled to the benefits of this Agreement, provided that
such holder agrees to be bound by all of the provisions of this Agreement that are
binding upon each party to this Agreement as of the date hereof.  Each of FEQ and Trident agrees that it will
not assign or transfer the Trident Debt or FEQ Debt, as applicable, unless it
obtains and delivers to the other party, the written agreement of such assignee
or transferee to be bound by the terms of this Agreement.


Section 3.2     GOVERNING LAW;
SUBMISSION TO JURISDICTION.  THIS
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
DELAWARE AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF SAID STATE.  ALL ACTIONS
DIRECTLY 



 5
 









OR INDIRECTLY
ARISING OUT OF THIS AGREEMENT SHALL BE BROUGHT IN AND RESOLVED BY THE COURTS OF
THE COMMONWEALTH OF PENNSYLVANIA.


Section 3.3     Notices.  Any and all notices permitted or required to
be made under this Agreement shall be in writing, signed by the party giving
such notice, and shall be delivered personally, faxed (provided that such
notice is mailed to the other party promptly thereafter), or sent by certified
mail or nationally recognized overnight courier service (such as Federal
Express) to the other party at the address set forth below, or at such other
address as may be supplied in writing and of which receipt has been
acknowledged in writing.  The date of
personal delivery, the date of successful fax transmission, the third day after
the date of mailing, or the business day after the date of delivery to such
courier service, as the case may be, shall be the date of such notice.  For purposes of this Agreement, notices made
pursuant hereto shall be deemed to be made at the following addresses:


	
  

  	
  If to FEQ:

  	
   

  	
  111 Presidential Blvd.

  
	
   

  	
  Suite 158

  
	
   

  	
  Bala Cynwyd, PA 19004

  
	
   

  	
   

  
	
  :

  	
  If to Trident:

  	
  c/o Scott Cook

  
	
   

  	
   

  	
  270 N. Denton Tap Road

  
	
   

  	
   

  	
  Suite 100

  
	
   

  	
   

  	
  Coppell, TX 75019

  



 


Section 3.4     Amendments.  No amendment or modification hereof shall be
effective except in writing executed by FEQ and Trident, no amendment or
modification of Trident Loan Agreement or any documents collateral thereto
shall be effective except with the written consent of FEQ, and no amendment or
modification of the FEQ Loan Agreement or any documents collateral hereto shall
be effective except with the written consent of Trident.


Section 3.5     Continued
Effectiveness of this Agreement.  This
Agreement shall remain in full force and effect notwithstanding any Proceeding
commenced by or against any party hereto. 
The FEQ Debt shall continue to be treated as FEQ Debt and the provisions
of this Agreement shall continue to govern the relative rights and priorities
of the holders of FEQ Debt and Trident Debt even if all or part of the liens in
favor of FEQ against assets of the Company are subordinated, set aside, avoided
or disallowed in connection with any Proceeding (or if all or part of the FEQ
Debt is subordinated, set aside, avoided or disallowed in connection with any
Proceeding as a result of the fraudulent conveyance or fraudulent transfer
provisions under the Bankruptcy Code or under any state fraudulent conveyance
or fraudulent transfer statute or if any interest accruing on the FEQ Debt
following the commencement of such Proceeding is otherwise disallowed) and this
Agreement shall be reinstated if at any time any payment of any of the FEQ Debt
is rescinded or must otherwise be returned by any holder of FEQ Debt or any
representative of such holder.



 6
 









Section 3.6     Defines Rights
of Lenders.  The provisions of this
Agreement are solely for the purpose of defining the relative rights of Trident
and FEQ and shall not be deemed to create any rights or priorities in favor of
any other person or entity, including, without limitation, the Company.


Section 3.7     Delay or
Omission Not Waiver.  Neither the
failure nor any delay on the part of FEQ to exercise any right, remedy, power
or privilege hereunder shall operate as a waiver thereof or impair any such
right, remedy, power or privilege.  No
single, partial or full exercise of any rights, remedies, powers and privileges
by FEQ shall preclude further or other exercise thereof.  No course of dealing between FEQ and the
Company or Trident shall operate as or be deemed to constitute a waiver of FEQ’s
rights hereunder or affect the duties or obligations of the Company or Trident.


Section 3.8     Termination.  This Agreement shall terminate upon the
earlier to occur of: (a) the FEQ Debt is Satisfied, or (b) a written
termination is executed by all parties hereto.


Section 3.9     Severability.  If any provision herein shall for any reason
be held invalid or unenforceable, no other provision shall be affected thereby,
and this Agreement shall be construed as if the invalid or unenforceable
provision had never been a part of it, and the affected provision shall be
modified to the minimum extent permitted by law so as to achieve most fully the
intention of this Agreement.


Section 3.10   Counterparts;
Facsimile Signatures.  This Agreement
may be executed in any number of counterparts, all of which taken together
shall constitute one and the same instrument, and any of the parties hereto may
execute this Agreement by signing any such counterpart.  Any signature on this Agreement delivered by
facsimile transmission shall be deemed to be an original signature to this
Agreement.


Section 3.11   Headings.  The paragraph headings used in this Agreement
are for convenience only and shall not affect the interception of any of the
provisions hereof.


Section 3.12   Trident
Expenses.  FEQ shall reimburse
Trident for its reasonable out of pocket attorneys fees incurred in connection
with the review and negotiation of this Agreement.


[CONTINUED ON NEXT PAGE]



 7
 









Section 3.13   Entire Agreement.  This agreement embodies the entire agreement
of the parties hereto with respect to the subject matter hereof, and there are
no courses of dealing, usages of trade, or other representations, promises,
terms or conditions referring to such subject matter, and no inducements or
representations leading to the execution hereof other than as mentioned herein.


IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.


 


	
  GEM SOLUTIONS, INC

  
	
   

  
	
   

  
	
  By:

  	
  /s/ John E.
  Baker

  	
   

  
	
   

  	
  Name: John E. Baker

  
	
   

  	
  Title: C.E.O.

  
	
   

  
	
   

  
	
  FEQ GAS, LLC

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Ernest A.
  Bartlett III

  	
   

  
	
   

  	
  Name: Ernest A. Bartlett III

  
	
   

  	
  Title: President

  
	
   

  
	
   

  
	
  TRIDENT GROWTH FUND, L.P.:

  
	
   

  
	
  By:

  	
   Trident
  Management, LLC, its General Partner

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Scotty Cook

  	
   

  
	
   

  	
  Name: Scotty Cook

  
	
   

  	
  Title: Authorized Member

  



 



 8