CASTLERIGG MASTER INVESTMENTS LTD.
c/o Sandell Asset Management Corp.
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
November 8, 2007
Earth BioFuels, Inc.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx XxXxxxxxxx
Re: Note and Warrants Blockers
Dear Xx. XxXxxxxxxx:
Reference is hereby made to that certain Securities Purchase
Agreement, dated as of July 24, 2006, by and among Earth BioFuels, Inc. (the
"COMPANY"), Castlerigg Master Investments Ltd. ("CASTLERIGG") and certain other
buyers (the "SECURITIES PURCHASE AGREEMENT"), whereby the Company issued to
Castlerigg (i) that certain Senior Convertible Note with a principal amount of
$11,500,000 (the "CASTLERIGG NOTE"), (ii) that certain Series A Warrant
initially exercisable into 1,982,759 shares of common stock, $0.001 par value
(the "COMMON STOCK") of the Company (the "CASTLERIGG SERIES A WARRANT") and
(iii) that certain Series B Warrant, which upon certain circumstances may become
exercisable into 1,982,759 shares of Common Stock (the "CASTLERIGG SERIES B
WARRANT"). Capitalized terms not defined herein shall have the meaning as set
forth in the Securities Purchase Agreement.
Pursuant to the provisions of (a) Section 3(d) of the Castlerigg
Note and any Notes acquired by Castlerigg after the date hereof, (b) Section
1(f)(i) of the Castlerigg Series A Warrant and any Series A Warrants acquired by
Castlerigg after the date hereof, and (c) Section 1(f)(i) of the Castlerigg
Series B Warrant and any Warrants acquired by Castlerigg after the date hereof,
Castlerigg hereby notifies you of its election to decrease the blocker
percentage specified in each such section from 4.99% (which Castlerigg and the
Company hereby acknowledge as the initial "MAXIMUM PERCENTAGE" thereunder) to
1.249%, such that from and after the date hereof the Maximum Percentage shall
equal 1.249%. We further hereby waive any right to increase the Maximum
Percentage set forth in the Castlerigg Note, the Castlerigg Series A Warrant,
the Castlerigg Series B Warrant and any other Notes or Warrants acquired by
Castlerigg after the date hereof above 1.249% at any time.
With respect to the Castlerigg Note, the Castlerigg Series A Warrant
and the Castlerigg Series B Warrant, we understand that this change will become
effective immediately upon your receipt of this letter.
With respect to any Notes and/or Warrants acquired by Castlerigg
after the date hereof, we understand that this change will become effective
immediately upon Castlerigg's acquisition of such other Notes and/or Warrants.
Very truly yours,
CASTLERIGG MASTER INVESTMENTS LTD.
BY: XXXXXXX ASSET MANAGEMENT CORP.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Managing Director
Acknowledged and agreed this
___ day of November, 2007 by:
EARTH BIOFUELS, INC.
By: -------------------------------
Name:
Title:
cc: Xxxxxxx X. Xxxxx, Esq.
