Document:

EXHIBIT
10.24

UNCONDITIONAL
GUARANTY OF PAYMENT AND PERFORMANCE

WHEREAS, pursuant to the Convertible Secured Promissory
Note — Bridge Loan (the “Note”), Warrant to Purchase Shares of Common Stock and
Registration Rights Agreement being entered into concurrently herewith between
Earth Biofuels, Inc. (“Borrower”) and Greenwich Power, L.L.C. (“Lender”) (such Note,
Warrant and Agreement are hereinafter collectively referred to as the “Agreements”),
the undersigned (“Guarantor”) will receive substantial economic benefits, and
Guarantor has requested that Lender enter into the Agreements with Borrower;
and Lender is willing to enter into the Agreements but only upon the condition,
among others, that Guarantor shall have executed and delivered this Guaranty to
Lender.

NOW, THEREFORE, in consideration of the foregoing
recitals and of the mutual covenants contained in this Guaranty and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties agree as follows:

1. To induce Lender to advance
funds to Borrower upon the terms and conditions set forth in the Note, and in
consideration thereof, Guarantor hereby unconditionally and irrevocably
guaranties to Lender, and to its successors, endorsees, transferees, and
assignees, Borrower’s prompt and complete payment when due, whether at the
stated maturity, by acceleration or otherwise, of Borrower’s obligations under
the Note, and Borrower’s prompt and complete performance of all of its other
covenants, obligations and agreements contained in the Note and the other Agreements.

2. This is intended to be and
shall be construed as a continuing guaranty and shall remain in full force and
effect and shall be binding in accordance with and to the extent of its terms
upon Guarantor and its successors and assigns, and shall inure to the benefit
of Lender and its successors, endorsees, transferees and assigns.

3. If all or any parts of the obligations
of Borrower to Lender are not paid when due, Guarantor hereby guarantees that
it will pay the same to Lender, upon demand, without setoff or counterclaim and
without reduction by reason of any taxes, levies, imposts, charges and
withholdings, restrictions or conditions of any nature that are now or may
hereafter be imposed, levied or assessed by any country, political subdivision
or taxing authority, all of which will be for the account of and paid by
Guarantor, and Lender need not first proceed to preserve, utilize or exhaust
any other rights or remedy against Borrower or other guarantor or any security
that Lender may have to obtain payment. The payment shall be made in cash, bank
check or immediately available funds at Lender’s office at 537 Steamboat Road,
Greenwich, Connecticut 06830-7153 or at such other place as Lender may
designate in writing.

4. Guarantor hereby waives notice
of the acceptance of this Guaranty and of the transactions as above specified
and the state of Borrower’s account at any time, and expressly agrees to any
extensions, renewals, accelerations or modifications of any of the terms of the
Agreements or any of them, and waives diligence, presentment, demand, protest
or notice, whether of non-payment, dishonor, protest or otherwise, of any
document or documents and notice of any extension, renewal, modification or
default and assents to the release, substitution 

 

or variation of any
collateral that may at any time be held as security for the Note, all without
relieving Guarantor of any liability under this Guaranty. The obligations of
Guarantor under this Guaranty shall be an unconditional obligation to make
prompt payment and performance to Lender irrespective of the genuineness,
validity, regularity or enforceability of any indebtedness or evidence of
indebtedness of Borrower to Lender or of other circumstances that might otherwise
under the laws of any jurisdiction constitute a legal or equitable discharge of
a surety or a guarantor or a bar (in the nature of a moratorium or otherwise)
to the enforcement of Lender’s rights either (i) against Borrower on all or any
part of its obligations under the Agreements or (ii) under this Guaranty.

5. Notwithstanding any payment or
payments made by Guarantor under this Guaranty or any setoff or application of
funds of Guarantor by Lender, Guarantor shall not be entitled to be subrogated
to any of the rights of Lender against Borrower or any collateral security or
guarantee or right of offset held by Lender for the payment or performance of
the obligations of Borrower, nor shall Guarantor seek any reimbursement from
Borrower in respect of payments made by Guarantor under this Guaranty, until
all amounts then owing and any other performance then due to Lender by Borrower
for or on account of the obligations of Borrower to Lender are irrevocably paid
and satisfied in full.

6. Any indebtedness of Borrower
now or hereafter owed to or held by Guarantor is hereby subordinated to the
indebtedness of Borrower to Lender; and such indebtedness of Borrower to Guarantor
if Lender so requests shall be collected, enforced and received by Guarantor as
trustee for Lender and be paid over to Lender on account of the indebtedness of
Borrower to Lender but without reducing or affecting in any manner the
liability of Guarantor under the other provisions of this Guaranty.

7. No failure to exercise and no
delay in exercising, on the part of Lender, any right, power or privilege under
this Guaranty shall operate as a waiver of right, power or privilege, nor shall
any single or partial exercise of any right, power or privilege preclude any
other or further exercise of the right, power or privilege, or the exercise of
any other power or right.  The rights and
remedies provided in this Guaranty are cumulative and not exclusive of any
rights or remedies provided by law.

8. Any notice or demand required
or permitted to be made or given hereunder shall be deemed sufficiently made
and given if given by personal service or by the mailing of such notice or
demand by certified or registered mail, return receipt requested, or by
overnight courier service providing for proof of delivery, addressed to the
parties at their respective last known addresses and, if to Guarantor, with a
copy to Roger A. Crabb, Esq., Scheef & Stone, L.L.P., 5956 Sherry Lane —
Suite 1400, Dallas, Texas 75225-8031; or if to Lender, with a copy to Hilary B.
Miller, Esq., 112 Parsonage Road, Greenwich, Connecticut 06830-3942. Either
party may change its address by like notice to the other party.

9. Guarantor hereby represents,
warrants, and covenants to Lender that: (a) except as disclosed to Lender in
writing prior in the execution of this Guaranty, no action, suit, investigation
or proceeding is pending or known to be threatened against or affecting
Guarantor that, if adversely determined, would have a material adverse effect
upon its financial condition;

 

(b) Guarantor is not in
default under any indenture relating to borrowed money, any agreement to which it
is a party or by which it is bound, any other indenture, or any order,
regulation, ruling or requirement of a court or public body or authority by
which it is bound, which default would have a material adverse effect on the
financial position of Guarantor; and (c) no license, consent or approval of, or
filing with, any governmental body or other regulatory authority is required
for the making and performance of, or any instrument or transaction contemplated
by, this Guaranty.

10. No provision of this Guaranty
shall be waived, amended or supplemented except by a written instrument
executed by Lender.

11. The obligations of Guarantor
under this Guaranty shall continue in full force and effect and shall remain in
operation until all of the obligations of Borrower under the Agreements shall
have been paid in full or otherwise fully satisfied, and continue to be effective
or be reinstated, as the case may be, if at any time payment or other
satisfaction of any of such obligations is rescinded or must otherwise be
restored or returned upon the bankruptcy, insolvency, or reorganization of Borrower,
or otherwise, as though such payment had not been made or other satisfaction
occurred. No invalidity, irregularity or unenforceability by reason of applicable
bankruptcy laws or any other similar law, or any law or order of any government
or government agency purporting to reduce, amend or otherwise affect, the obligations
of Borrower shall impair, affect, be a defense to or claim against the
obligations of Guarantor under this Guaranty.

12. In addition to its guaranty
of Borrower’s payment of the obligations of Borrower under the Note and
Borrower’s performance of all covenants, obligations and agreements contained
in the Agreements, Guarantor shall pay all actual costs and expenses (including
reasonable attorneys’ fees) paid or incurred by Lender in connection with the
enforcement of this Guaranty.

13. Guarantor hereby agrees to
execute any and all further documents, agreements, and instruments, and take
all further actions, that Lender shall reasonably request to effectuate or
further preserve, evidence, perfect the rights purported to be created in favor
of Lender under this Guaranty. Guarantor hereby assumes responsibility for
keeping itself informed of the financial condition of Borrower, and any and all
endorsers and/or other guarantors of any instrument or document evidencing all
or any part of the obligations of Borrower, and of all other circumstances
bearing upon the risk of nonpayment of the Note, or any part of the obligations
of Borrower, that diligent inquiry would reveal, and Guarantor hereby agrees
that Lender shall have no duty to advise Guarantor of information known to
Lender regarding such condition or any such circumstances. If Lender, in its
sole discretion, undertakes at any time or from time to time to provide any
such information to Guarantor, Lender shall be under no obligation (i) to
undertake any investigation not a part of its regular business routine, (ii) to
disclose any information that pursuant to accepted or reasonable commercial
finance practices, Lender wishes to maintain confidential, or (iii) to make any
other or future disclosures of such information or any other information to
Guarantor.

 

14. Guarantor hereby grants to
Lender a security interest in the Guaranty Collateral to secure the full and
prompt payment and performance of all of Guarantor’s obligations under this
Guaranty. Guarantor represents and warrants to Lender that it is the sole owner
of the Guaranty Collateral, free and clear of all liens, claims and encumbrances.
For purposes of this Guaranty, “Guaranty Collateral” means certificates for
10,000,000 shares of common stock, $0.001 par value, of Borrower, registered in
the name of Guarantor, which certificates are being delivered to Lender’s
counsel, duly endorsed for transfer in blank with signatures guaranteed, to be
held in escrow by such counsel pending the full performance of the aforesaid
obligations of Guarantor. Guarantor shall from time to time execute and deliver
to Lender, at the request of Lender, all documents that Lender may reasonably
request, in form satisfactory to Lender, to perfect and continue perfected
Lender’s security interest in the Guaranty Collateral and in order to fully
consummate all of the transactions contemplated hereunder. In the event of a
default hereunder, Lender shall have all rights and remedies of a secured party
provided by the Uniform Commercial Code in effect in the State of Delaware.

15.This Guaranty shall be
construed and enforced in accordance with the substantive laws of the State of
Delaware without regard to conflict of law principles. Each party hereby
consents and submits to the exclusive personal and subject matter jurisdiction
of the state and federal courts located in New York County, New York for
purposes of any action or proceeding related to this Guaranty. Trial by jury in
any action arising, proceeding or counterclaim arising hereunder or with
respect hereto is hereby waived.

IN WITNESS WHEREOF, intending to be legally bound, and
intending that this Guaranty shall constitute as instrument executed under
seal, the Guarantor has caused this Guaranty to be executed as of May 4, 2006.

	
  

  	
   

  	
  APOLLO INTERNATIONAL RESOURCES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ DENNIS G. MCLAUGHLIN, III

  	
   

  
	
   

  	
   

  	
   

  	
  Dennis G.
  McLaughlin, III

  
	
   

  	
   

  	
   

  	
  Its PresidentEXHIBIT
10.25

	
  Re:

  	
   

  	
  LETTER OF INTENT

  	
   

  	
  May 13, 2006

  

 

	
  Ben Cowart

  
	
  Jason Gehrig

  
	
  2323 Clearlake City Blvd., #180-184

  
	
  Houston, TX 77062

  

 

Gentlemen :

Please accept this
Letter of Intent (“LOI”) as the basis upon which Earth Biofuels, Inc. (the “Company”),
is prepared to enter into substantive negotiations with you to achieve the
purposes and goals as described herein.

EXCEPT FOR
PROVISIONS IN THIS DOCUMENT RELATED TO THE $500,000 DEPOSIT AND ANY EXPENDITURES
RELATED THERETO, NOTHING CONTAINED IN THIS LOI SHALL ACT TO CREATE ANY LEGAL
OBLIGATION WHATSOEVER OF ANY NATURE, EITHER IN LAW OR IN EQUITY, AMONG THE
PARTIES HERETO OR OTHERWISE BINDING UPON EITHER OF SUCH PARTIES EITHER TO THE
OTHER PARTY OR TO ANY THIRD PARTY. NO OBLIGATIONS OF ANY NATURE SHALL BE
CREATED UNLESS AND UNTIL DEFINITIVE DOCUMENTS HAVE BEEN FULLY EXECUTED AND
PROPERLY DELIVERED ACCORDING TO THE TERMS THEREIN.

1.                                      The
Parties

The Parties to
this proposed transaction shall consist of the Company, which may also be
referred to as the “Acquiror” and Vertex Energy, LP [verify – Vertex Energy is
not the general partner of Vertex Processing, according to Texas state public
records.  The GP is VTX, Inc.], which may
also be referred to as the “Seller”.  The
subject “Target” Company is Vertex Processing, LP.

2.                                      The
Transaction

Seller owns 100%
of the equity interests in a company (named Vertex Processing, LP) which owns a
chemical processing facility (the “Plant”) which resides on approximately 11
acres leased by Seller adjacent to the Houston Ship Channel in Houston, TX.  The parties envision the , Acquiror purchasing
a 51% equity interest in Vertex Processing from the current owner, Vertex
Energy, LP.  The intent of both parties
is to create a structure that would allow Acquiror to consolidate the
operations, in accordance with GAAP, with it’s financial statements.

3.                                      The
Consideration

In return, and
Subject to terms and conditions that will be more fully described in definitive
documents, the Acquiror shall pay to the Seller consideration as follows:

·                      $500,000
cash deposit paid to Seller upon execution of this LOI. Seller is entitled to
utilize such deposit for the sole purpose of converting Seller’s Plant to the
manufacture of Biodiesel fuel, during the period prior to the execution of the
Parties’ anticipated definitive agreements. 
Such expenditures incurred are non-refundable in the event of
non-execution of the definitive agreements. 
Any remaining funds not utilized are refundable in the event definitive
agreements are not executed within 60 days of the execution of this LOI.   .

·                      $2,000,000 paid
to Seller  at closing.

·                      1,500,000
shares of restricted “144”“ shares of common stock in the Company (OTCBB: EBOF)
at the Closing.

 

·                      Acquiror will
agree to become an obligor of the $947,500 existing senior bank indebtedness
currently owed by Vertex Processing, L.P., with Acquiror’s financial exposure
to be limited to the extent of Acquiror’s percentage ownership interest in
Target.

·                      Seller and Acquiror
agree to each pay $850,000.00 cash at closing, to pay off the existing $1.5
million bank line of credit in the name of Vertex Energy, L.P, and to which the
Target also has access for working capital purposes.  The parties agree that within 120 days after
execution of the definitive agreements, the  Target will establish its own banking
relationship and credit facilities in its own name to replace the existing one.
  EBOF shall guarantee the prospective line of
credit with third party lenders.

4.                                      Non-Transferability

Consistent with
the restricted status of the shares of stock to be delivered to Seller, Seller
shall not be allowed to sell, barter, encumber or otherwise hypothecate the Company
common stock at any time subsequent to the execution of the definitive
agreements except in accordance with Rule 144, provided, however, that any such
disposition is subject to the absolute right of Acquiror to exercise its first
right of refusal to re-acquire its Stock.

5.                                      The
Other Terms

Additionally,
Acquiror agrees to fund the necessary improvements to the facility to quickly
achieve a minimum biodiesel production rate of 10 million gallons per
year.  This funding is not to exceed $650,000.

In the event
capital requirements are in excess of $650,000 the equity owners of the Target
will bear such costs on a pro-rata basis.

180 days from the
date of the Closing, Seller, at its sole discretion, has the option to require
Acquiror to “buy back” the above mentioned 1,500,000 shares of restricted “144”
common stock of the Company at a purchase price of $2,000,000.

The parties shall
work together in good faith to conclude any and all other issues and matters
that will be memorialized in definitive documents, including but not limited
to, the resulting financing, ownership and management structure of the Company.

6.                                      No
Binding Agreement

EXCEPT FOR
PROVISIONS IN THIS DOCUMENT RELATED TO THE $500,000 DEPOSIT AND ANY EXPENDITURES
RELATED THERETO, NOTHING CONTAINED IN THIS LOI SHALL ACT TO CREATE ANY LEGAL
OBLIGATION WHATSOEVER OF ANY NATURE, EITHER IN LAW OR IN EQUITY, AMONG THE
PARTIES HERETO OR OTHERWISE BINDING UPON EITHER OF SUCH PARTIES EITHER TO THE
OTHER PARTY OR TO ANY THIRD PARTY. NO OBLIGATIONS OF ANY NATURE SHALL BE
CREATED UNLESS AND UNTIL DEFINITIVE DOCUMENTS HAVE BEEN FULLY EXECUTED AND
PROPERLY DELIVERED ACCORDING TO THE TERMS THEREIN.

The terms as described
herein shall remain available to you for a period that expires at 5:00 PM,
Dallas time, on or before May    13       ,
2006.

If the above terms
accurately reflect your understanding of our conversations and mutual intent,
please so indicate by your execution in the space provided below. The Company
shall then cause definitive documents to be prepared for your review and
consideration.

 2
 

 

We look forward to
working with you.

Very truly yours,

	
  /s/ DARREN L. MILES

  	
   

  
	
  Darren L. Miles

  
	
  Chief Financial Officer

  
	
  Earth Biofuels, Inc.

  
	
   

  
	
  UNDERSTOOD AND AGREED THIS     13    DAY
  OF MAY, 2006.

  
	
   

  
	
   

  
	
  /s/ Ben Cowart

  	
   

  
	
  VTX, Inc., General Partner of Vertex Energy, LP, by:

  
	
  Ben Cowart, President of VTX, Inc.

  
			

 

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