Document:

ex101.htm

    EMPLOYMENT
AGREEMENT

    

    THIS
EMPLOYMENT AGREEMENT, is made as of May 21, 2008 (the “Effective Date”), by
and between Kevin Markey (the “Employee”) and PNG
Ventures, Inc, a Nevada corporation (the “Company”). Both the
Employee and the Company may hereinafter be referred to individually as a “Party” and
collectively as the “Parties.”

    

    RECITALS

    

    WHEREAS,
the Company desires to employ Employee on the terms and conditions herein stated
and Employee accepts such terms of employment;

    

    AGREEMENT

    

    NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement,
and for good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed as follows:

    

    1.           Position.  During
the term of this Agreement, the Company will employ the Employee, and the
Employee will serve the Company in the capacity of Chief Executive
Officer.

    

    2.           Duties.  The
Employee will perform the duties of the Chief Executive Officer of the Company
as such position is described by the Bylaws of the Company, together with such
additional reasonably related duties assigned by the Board of Directors; provided, however, the
Employee shall not be empowered to take any of the following actions without
prior written approval by the Board of Directors:

    

    
      	
               
      

            	
              2.1

            	
              Hire
      and/or fire any Company officer, employee, agent or
      subcontractor;

            

    

    

    
      	
               
      

            	
              2.2

            	
              Enter
      into any agreement to encumber the Company in any form in excess of
      $100;

            

    

    

    
      	
               
      

            	
              2.3

            	
              Enter
      into any executory, merger or acquisition
  agreement;

            

    

    

    
      	
               
      

            	
              2.4

            	
              Sell,
      transfer or otherwise dispose of any of any Company
  assets;

            

    

    

    
      	
               
      

            	
              2.5

            	
              Issue
      any debt or equity interest in the Company, including, but not limited to,
      common stock, preferred stock, warrants, notes, debt instruments of any
      kind, convertible notes or any other debt or securities (or otherwise
      enter into agreements to issue any debt or
  securities);

            

    

    

    3.           Service.  Except
with respect to the matters specified below, Employee will devote sufficient
working time and efforts to adequately attend the business and affairs of the
Company.  However, Employee will not work full time and the Company
agrees that Employee may have other outside business activities.

    

    4.           Term of
Agreement.  The initial term of this Agreement shall be 10 days
and shall automatically renew every 10 days thereafter until terminated as
further described in Section 6 herein.

    

    5.           Compensation and
Expenses.

    

    5.1           Salary.   Employee
shall receive $50 per day as compensation for performing his duties
hereunder.

    

    5.5           Expenses.  Employee
shall be responsible for any and all costs and expenses incurred by Employee
while acting as an employee of the Company.

    

    6.           Termination. The
Employee shall serve at the will of the Board of Directors and may be terminated
by the Board of Directors for any reason whatsoever without notice (a “Termination”).
Employee shall be entitled to any unpaid salary accrued up to the point of
termination.

    

    7.           Miscellaneous.

    

    7.1           Severability.  If
any provision of this Agreement shall be found by any arbitrator or court of
competent jurisdiction to be invalid or unenforceable, then the Parties hereby
waive such provision to the extent that it is found to be invalid or
unenforceable and to the extent that to do so would not deprive one of the
Parties of the substantial benefit of its bargain.  Such provision
shall, to the extent allowable by law and the preceding sentence, be modified by
such arbitrator or court so that it becomes enforceable and, as modified, shall
be enforced as any other provision hereof, all the other provisions continuing
in full force and effect.

    7.2           No
Waiver.  The failure by either Party at any time to require
performance or compliance by the other of any of its obligations or agreements
shall in no way affect the right to require such performance or compliance at
any time thereafter.  The waiver by either Party of a breach of any
provision hereof shall not be taken or held to be a waiver of any preceding or
succeeding breach of such provision or as a waiver of the provision
itself.  No waiver of any kind shall be effective or binding, unless
it is in writing and is signed by the Party against whom such waiver is sought
to be enforced.

    

    7.3           No
Assignment.  This Agreement and all rights hereunder are
personal to the Employee and may not be transferred or assigned by the Employee
at any time.  The Company may assign its rights, together with its
obligations hereunder, to any parent, subsidiary, affiliate or successor, or in
connection with any sale, transfer or other disposition of all or substantially
all of its business and assets, provided, however, that any such assignee
assumes the Company's obligations hereunder.

    

    7.4           Withholding.  All
sums payable to the Employee hereunder shall be reduced by all federal, state,
local and other withholding and similar taxes and payments required by
applicable law.

    

    7.5           Entire
Agreement.  This Agreement constitutes the entire and only
agreement between the Parties relating to employment of the Employee with the
Company, and this Agreement supersedes and cancels any and all previous
contracts, arrangements or understandings with respect thereto.

    

    7.6           Amendment.  This
Agreement may be amended, modified, superseded, cancelled, renewed or extended
only by an agreement in writing executed by both Parties hereto.

    

    7.7           Notices.  All
notices, requests, demands or other communications required or permitted
hereunder shall be in writing and shall be delivered personally, or sent by
telecopier machine or by a nationally recognized overnight courier service, and
shall be deemed given when so delivered personally, or by telecopier machine or
overnight courier service.

     

    7.8           Binding
Nature.  This Agreement shall be binding upon, and inure to the
benefit of, the successors and personal representatives of the respective
Parties hereto.

    

    7.9           Headings.  The
headings contained in this Agreement are for reference purposes only and shall
in no way affect the meaning or interpretation of this Agreement.  In
this Agreement, the singular includes the plural, the plural included the
singular, the masculine gender includes both male and female referents, and the
word “or” is used in the inclusive sense.

    

    7.10           Counterparts and Fax
Signatures.  This Agreement may be executed by Fax and in two
or more counterparts, each of which shall be deemed to be an original but all of
which, taken together, constitute one and the same agreement.

    

    7.11           Governing
Law.  The subject matter of this Agreement shall be governed by
and construed in accordance with the laws of the State of California (without
reference to its choice of law principles), and to the exclusion of the law of
any other forum, without regard to the jurisdiction in which any action or
special proceeding may be instituted.  EACH PARTY HERETO AGREES TO
SUBMIT TO THE PERSONAL JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL COURTS
LOCATED IN NORTH COUNTY OF SAN DIEGO, CALIFORNIA FOR RESOLUTION OF ALL DISPUTES
ARISING OUT OF, IN CONNECTION WITH, OR BY REASON OF THE INTERPRETATION,
CONSTRUCTION, AND ENFORCEMENT OF THIS AGREEMENT, AND HEREBY WAIVES THE CLAIM OR
DEFENSE THEREIN THAT SUCH COURTS CONSTITUTE AN INCONVENIENT FORUM.  AS
A MATERIAL INDUCEMENT FOR THIS AGREEMENT, EACH PARTY SPECIFICALLY WAIVES THE
RIGHT TO TRIAL BY JURY OF ANY ISSUES SO TRIABLE.   If it becomes
necessary for any Party to institute legal action to enforce the terms and
conditions of this Agreement, the prevailing Party shall be awarded reasonable
attorneys fees, expenses and costs.

    

    7.12           Arbitration.  Any
dispute or other disagreement arising from or out of this Agreement shall be
submitted to arbitration under the commercial rules of the American Arbitration
Association and the decision of the arbiter(s) shall be enforceable in any court
having jurisdiction thereof.  Arbitration shall occur only in San
Diego County, CA.  The interpretation and the enforcement of this
Agreement shall be governed by California Law as applied to residents of the
State of California relating to contracts executed in and to be performed solely
within the State of California.

    

    7.13           Attorneys'
Fees.  In the event of any claim, demand or suit arising out of
or with respect to this Agreement, the prevailing Party shall be entitled to
reasonable costs and attorneys' fees, including any such costs and fees upon
appeal.

    

    7.14           Joint Drafting and Exclusive
Agreement.  This Agreement is the only
Agreement executed by and between the Parties related to the performance of the
Services described herein.  There are no additional oral agreements or
other understandings related to the performance of the Services described
herein.  This Agreement shall be deemed to have been drafted jointly
by the Parties hereto, and no inference or interpretation against any one Party
shall be made solely by virtue of such Party allegedly having been the
draftsperson of this Agreement.  The Parties have each conducted
sufficient and appropriate due diligence with respect to the facts and
circumstances surrounding and related to this Agreement.  The Parties
expressly disclaim all reliance upon, and prospectively waive any fraud,
misrepresentation, negligence or other claim based on information supplied by
the other Party, in any way relating to the subject matter of this
Agreement.

    

    7.15           Acknowledgments and
Assent.  The Parties acknowledge that they have been given at
least ten (10) days to consider this Agreement and that they were advised to
consult with an independent attorney prior to signing this Agreement and that
they have in fact consulted with counsel of their own choosing prior to
executing this Agreement.  The Parties may revoke this Agreement for a
period of three (3) calendar days after signing this Agreement, and the
Agreement shall not be effective or enforceable until the expiration of this
three (3) day revocation period.  The Parties agree that they have
read this Agreement and understand the content herein, and freely and
voluntarily assent to all of the terms herein.

    

    

    

    ***SIGNATURE
PAGE FOLLOWS***

    

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
 

    

    SIGNATURE
PAGE

    

    IN
WITNESS WHEREOF, this Agreement is executed and dated as of the date first set
forth above.

    

    

    
      	
              COMPANY

               

              PNG
      Ventures, Inc.

               

               

            	
              EMPLOYEE

               

              Kevin
      Markeyex101.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

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