EXHIBIT
10.12
AGREEMENT AND
MUTUAL WAIVER AND RELEASE
This Agreement and
Mutual Waiver and Release (“Agreement”) is entered into
effective as of the 26 th day of September 2008 (the
“Effective Date”) by and between AE Biofuels,
Inc., a Nevada corporation (“AEB”) of the
first part and TIC – The Industrial Company, a Delaware
corporation (“TIC”) of the second part. TIC and AEB
are referred to individually as a “Party” and
collectively as the “Parties.”
Recitals
A.
Pursuant to the terms of
a Unit Purchase Agreement dated January 18, 2006 (the
“Purchase Agreement”), TIC acquired one million units
in American Ethanol, LLC (the “Original Shares”). AEB
is the successor in all respects to American Ethanol, LLC. As a
result of various corporate actions and stock splits, the Original
Shares have been converted into four million shares of the common
stock of AEB (the “Shares”). The Shares are represented
by AEB stock certificate number 227-9, dated December 18, 2007 (the
“Certificate”). AEB has agreed to purchase the Shares
from TIC and TIC has agreed to convey the Shares to AEB all as more
particularly provided in this Agreement.
B.
TIC and American
Ethanol, LLC (together with Delta-T Corporation) previously entered
into a Strategic Alliance Agreement dated as of January 18, 2006
(the “Alliance Agreement”). AEB is the successor to
American Ethanol, LLC with respect to all of its rights and
obligations under the Alliance Agreement. The Parties wish to
confirm that the Alliance Agreement and all obligations and
liabilities under it have terminated.
C.
TIC and AEB previously
entered into a Services Agreement dated as of March 1, 2006 (the
“Original Agreement”) and as subsequently amended by a
First Amendment executed on approximately November 1, 2006 (the
“First Amendment”). (The Original Agreement as amended
by the First Amendment is referred to as the “Services
Agreement”). The Parties wish to confirm that the Services
Agreement and all obligations and liabilities under it have
terminated.
D.
TIC performed various
services for the benefit of AEB under the Services Agreement and
received compensation from AEB for such services. TIC and AEB have
agreed to release each other from all liability and claims arising
from the Services Agreement and any services provided pursuant to
it. TIC currently holds $234,419.00 as a result of dealings with
AEB pursuant to the terms of the Services Agreement (the
“Remaining Funds”). The Remaining Funds will be applied
to the purchase price of the Shares.
NOW, THEREFORE, in
consideration of the mutual promises, covenants and conditions
stated in this Agreement, the Parties agree as follows:
1.0
Sale And Purchase Of
Shares.
1.1
Purchase. TIC agrees to
sell to AEB and AEB agrees to purchase from TIC all of the
Shares.
1.2
Purchase Price. The
consideration for the conveyance of the Shares shall be the amount
set forth in Section 1.3 (the “Purchase Price”),
payable as provided below, as well as the other agreements of the
Parties set out in this Agreement.
1.3
Conveyance of
Shares.
A. Within five business
days of the mutual execution and delivery of this Agreement, TIC
shall execute and deliver to Sean R. O’Halloran
(“O’Halloran”) as counsel for AEB (i) a fully
executed stock assignment in the form of Exhibit A attached to this
Agreement for 1,880,000 of the Shares (the “Initial
Shares”), and (ii) the Certificate. O’Halloran shall
within five business days of his receipt of such materials return
to TIC a new certificate for the remaining balance of the Shares in
the amount of 2,120,000 (the “Remaining Shares”) as
properly issued by AEB (the “Second Certificate”). The
Purchase Price for the Initial Shares shall be $0.125 per Share, or
a total of $234,419.00, which shall be paid by TIC’s
retention of the Remaining Funds.
B. AEB shall purchase
the Remaining Shares represented by the Second Certificate on or
before December 30, 2008. The Purchase Price for the Remaining
Shares shall be an amount equal to $265,581.00. To complete such
purchase, AEB shall give notice to TIC that it intends to complete
the purchase of the Remaining Shares and within 24 hours of such
notice, shall wire to TIC the Purchase Price for the Remaining
Shares. Within five business days of its receipt of the wired
Purchase Price funds for the Remaining Shares, TIC shall execute
and deliver to O’Halloran (i) a fully executed stock
assignment in the form of Exhibit A attached to this Agreement for
the Remaining Shares, and (ii) the Second Certificate.
C. If AEB does not pay
the Purchase Price for the Remaining Shares on or before December
30, 2008, AEB shall be in default and, in addition to all other
rights and remedies of TIC, default interest shall begin accruing
on the Purchase Price for the Remaining Shares as of January 1,
2008 at an annual rate of eighteen percent (18%) until the Purchase
Price for the Remaining Shares (including all accrued interest) is
paid in full. AEB acknowledges that remedies at law may be
inadequate to protect TIC against the failure of AEB to perform
under the terms of this Agreement and, without prejudice to any
other rights and remedies otherwise available, AEB agrees to the
granting of equitable relief, including injunctive relief and
specific performance, in favor of TIC for purpose of enforcing this
Agreement and without proof of actual damages.
2.0
General
Releases
2.1
Termination of Alliance
and Services Agreement. The Parties acknowledge and agree that both
the Alliance Agreement and the Services Agreement have been
terminated and no further liabilities, obligations or duties exist
thereunder on behalf of either Party.
2
2.2
AEB on its own behalf
and on behalf of its corporate parents, subsidiaries, affiliates,
successors, predecessors, assigns, agents, employees, principals,
owners, representatives, officers and directors, hereby waive and
release all rights, claims, demands, costs, expen
