Exhibit 10.4 

 

PURCHASE & SALE AGREEMENT

 

This PURCHASE & SALE AGREEMENT (this “Agreement”) is entered into and effective
as of the 30th day of December, 2016 (the “Effective Date”), between Green Stone
Capital Partners Limited (“Seller”), a Cayman Islands company, and Foothills
Exploration Operating, Inc. (“Buyer”), a corporation organized under the laws of
the State of Nevada, with its principal office at 633 17th Street, Suite 1700-A,
Denver, Colorado 80202. In this Agreement, Buyer and Seller sometimes are
referred to individually as a “Party” or collectively as the “Parties”. 

RECITALS

WHEREAS, Seller owns 250 units of membership interest (the “Membership
Interests”) (representing twenty-five percent (25%) of the total equity
interest) in Tiger Energy Partners International, LLC (“TEPI”), a Nevada limited
liability company;

 

WHEREAS, Seller desires to sell, transfer and convey to Buyer and Buyer desires
to purchase the Membership Interests upon the terms and conditions herein set
forth (the “Transaction”);

 

WHEREAS, Buyer desires to pay for the Membership Interests, and Seller desires
to accept payment for the Membership Interests; and

 

WHEREAS, in connection with the Transaction, Seller and Buyer desire to make the
representations, warranties and covenants contained in this Agreement.

 

NOW, THEREFORE, in consideration of the premises, and of the representations,
warranties and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the
Parties hereto agree as follows:

SECTION TWO

CONSIDERATION.

As consideration for the Membership Interests, Buyer shall assume Seller’s pro
rata share of TEPI’s debt, including those liabilities and other accounts
payable identified on TEPI’s balance sheet as of the Closing Date.

SECTION THREE

CLOSING

The closing of the Transaction (the “Closing”) provided for in this Agreement
shall be at the offices of Husch Blackwell LLP, attorneys for Buyer, at 1700
Lincoln Street, Suite 4700, Denver, Colorado 80203, on December 30, 2016 at 9:00
A.M. (the “Closing Date”), or at such other place and time as agreed to by the
Parties. 

 

 

SECTION FOUR

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer that:

 

(a)Seller, at the Closing Date, shall have full and valid title to the
Membership Interests to be delivered by Seller, and there will be no existing
impediment to the sale and transfer of those Membership Interests to Buyer. On
delivery to Buyer of the Membership Interests to be delivered under this
Agreement, the Membership Interests shall be free and clear of all liens,
charges, and encumbrances, and shall be legally issued, fully paid, and
nonassessable. The Membership Interests delivered under this Agreement will
constitute all of the issued and outstanding Membership Interests owned by
Seller as of the Closing Date.

(b)Seller has the full right, power, legal capacity, and authority to enter into
this Agreement and to sell and to deliver to Buyer the Membership Interests to
be sold and delivered under this Agreement.

(c)Seller is duly organized and validly existing and in good standing under the
laws of is nation of incorporation and has all of the corporate powers necessary
to engage in the business in which it presently is engaged.

(d)Seller has title to all of its property and assets, except property and
assets disposed of since that date in the ordinary course of business. Except as
otherwise provided herein, Seller’s in the Membership Interests are subject to
no mortgage, pledge, lien, conditional sales agreement, lease, encumbrance, or
charge. Notwithstanding the foregoing, Seller expressly discloses to Buyer a
certain BIA Administrative Appeal and a Ute Indian Tribe Global Settlement
Agreement, which are attached hereto as Exhibit A and Exhibit B, respectively,
and incorporated by reference.

(e)Seller is not a defendant, or a plaintiff against whom a counterclaim or
cross-complaint has been asserted, in any litigation, pending or threatened,
neither has any material claim been made or asserted against Seller, nor are
there any proceedings involving Seller threatened by or pending before any
federal, state, or municipal government, or any department, board, body, or
agency thereof that could any material way affect Seller’s right, title or
interest in or to, of the value of, the Membership Interests; provided, however
that Seller expressly discloses the following actions where TEPI has been named
as a defendant: (1) that certain action brought by Peak Well Service and (2)
that certain action brought by SCI Welding. In addition, Seller expressly
discloses to Buyer that certain State of Utah Stipulated Order, a copy of which
is attached hereto as Exhibit C and incorporated by reference.

(f)Seller is not in violation of any provisions of its articles of organization
or bylaws or any provision of law, and Seller has not defaulted under any
agreement or other instrument to which said Seller is a party or by which Seller
is bound, other than those of an immaterial or insubstantial nature.

 

 

(g)Seller is not in default in payment of any of its obligations, except as
provided herein.

SECTION FIVE

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller that:

 

(a)Buyer is a corporation, duly organized and validly existing and in good
standing under the laws of Nevada.

(b)Buyer will have at the Closing Date funds sufficient to consummate the
Transaction contemplated by this Agreement.

(c)The execution and delivery of this Agreement by Buyer has been duly
authorized by proper corporate action, and on the Closing Date Buyer will have
all necessary corporate power and authority to consummate the Transaction
contemplated by this Agreement.

SECTION SIX

CONDITIONS PRECEDENT TO SELLER’S OBLIGATIONS

Seller’s obligation to perform and complete the Transaction provided for under
this Agreement shall be subject to Buyer performing, on or before the Closing
Date, all acts required of Buyer, and shall be further subject to the material
accuracy of the representations and warranties of Buyer contained in the
Agreement.

SECTION SEVEN

CONDITIONS PRECEDENT TO BUYER’S OBLIGATIONS

Buyer’s obligation to perform and complete the Transaction provided for in this
Agreement shall be subject to Seller performing, on or before the Closing Date,
all acts required of Seller, and shall be further subject to the material
accuracy and correctness of the representations and warranties of Seller
contained in this Agreement, and to the further condition that Seller shall
deliver to Buyer, on the Closing Date, a certificate of Seller to the effect
that the representations and warranties of Seller contained in this Agreement
are substantially true as of the Closing Date.

SECTION EIGHT

INDEMNITY WITH RESPECT TO TAXES

(d)Seller shall indemnify Buyer against any and all loss, liability, and
expense, including attorney’s fees, resulting from or arising out of taxes
levied, imposed, or assessed by any governmental authority, with respect to the
income and operations of company for all periods prior to the Closing Date.
Prior to the Closing Date, Seller shall be granted full power and authority to
take any and all action with respect to proceedings relating to the taxes,
including the right to settle, compromise, and dispose of the proceedings in the
name of the Target Companies. Seller shall be entitled to the benefit of any
refunds and credits for taxes for those periods.

 

 

(e)Buyer shall indemnify Seller, against any and all loss, liability, and
expense, including attorney’s fees, resulting from or arising out of taxes
levied, imposed, or assessed by any governmental authority, with respect to the
income of the Target Companies for all periods commencing after the Closing
Date.

SECTION NINE

EXPENSES OF SALE

Whether or not the Transaction is consummated, any cost or expense incurred in
connection with this Agreement and the Transaction shall be borne solely by the
Party incurring such cost or expense.  

SECTION TEN

NO BROKERAGE FEES

Buyer and Seller each represent that neither has employed any broker or entered
into any agreement for the payment of any fees, compensation, or expenses to any
person, firm, or corporation in connection with this Transaction. Each shall
indemnify the others against any such fees, compensation, or expenses that may
be incurred, particularly any claim for a finder’s fee.

SECTION ELEVEN

NOTICES

Any notice, request, instruction or other document to be given hereunder by any
Party to the others shall be in writing and delivered personally or sent by
registered or certified mail or by overnight courier, postage prepaid, or by
facsimile: 

 

To Seller:

 

Mr. Mark Schipperheijn

The Grand Pavilion commercial Center

Hibiscus Way, 802 West Bay Road

Grand Cayman

KY1-1203

Cayman Islands, B.W.I.

(Fax No.: +852 3106-3834) 

 

To Buyer:

 

Mr. B.P. Allaire

President

Foothills Exploration Operating, Inc.

633 17th Street, Suite 1700-A

Denver, CO 80202

(Fax No.: +1 720-449-7479)

 

 

 

or to such other Persons or addresses as may be designated in writing by the
party to receive such notice as provided above. Any notice, request, instruction
or other document given as provided above shall be deemed given to the receiving
party upon actual receipt, if delivered personally; three (3) Business Days
after deposit in the mail, if sent by registered or certified mail; upon
confirmation of successful transmission if sent by facsimile (provided that if
given by facsimile such notice, request, instruction or other document shall be
followed up within one (1) Business Day by dispatch pursuant to one of the other
methods described herein); or on the next Business Day after deposit with a
nationally recognized overnight courier, if sent by a nationally recognized
overnight courier.

SECTION TWELVE

BINDING EFFECT

This Agreement shall inure to the benefit of and be binding on Buyer and Seller
and their respective heirs, executors, administrators, successors, and assigns.
All representations and warranties shall survive the Closing of the Transaction
under this Agreement.

SECTION THIRTEEN

CONFIDENTIALITY

For the purposes of this Agreement “Confidential Information” means all
information relating to the disclosing Party (including without limitation, all
such information concerning or relating to the disclosing Party’s assets,
liabilities, businesses, customers, suppliers, product formulations,
manufacturing, sources of raw materials, information on employee compensation,
suppler agreements, or pricing of finished and raw materials) furnished by or on
behalf of the disclosing Party or its representatives, or learned or obtained in
any fashion by the other Party in connection with visits to the disclosing
Party’s facilities (which information learned or obtained in connection with
such visits shall be deemed disclosed by the disclosing Party), whether
furnished, learned or obtained before or after the date hereof, and whether
oral, written or electronic. Confidential Information shall include all
information of the types described above, regardless of the manner or form in
which it is furnished, learned or obtained, and includes, without limitation,
all data, reports, interpretations, forecasts and records containing or
otherwise reflecting any of such information, whether prepared by the disclosing
Party or others, and any summaries, analyses or other documents created by the
disclosing Party or others which refer to, relate to, discuss, constitute, or
embody all or any portion of any of such information. The term Confidential
Information shall not include, however, information that: (a) is or becomes
generally available to the public other than as a result (directly or
indirectly) of a disclosure or other action by the receiving Party; (b) was in
the receiving Party’s possession and obtained on a non-confidential basis prior
to the disclosure thereof by the disclosing Party; or (c) becomes available to
the receiving Party on a non-confidential basis from a Person other than the
disclosing Party who is not otherwise bound by any obligation of confidentiality
with respect thereto.

 

(A)Each Party agrees not to disclose, and to take reasonable actions to ensure
its employees do not disclose, the Confidential Information of the other Party
to any other Person; provided, however a Party may disclose Confidential
Information (i) to such Party’s representatives who have agreed not to disclose
the Confidential Information and then only to the extent such representatives
need to know such Confidential Information in connection with its evaluation of
the Transaction, (ii) to governmental authorities, but only to the extent such
disclosure to the governmental authority is required by any applicable legal
requirement, or (iii) to such other persons to the extent required pursuant to
any applicable legal requirement.

 

 

 

(B)Notwithstanding anything to the contrary in the foregoing, Buyer, or any of
Buyer’s affiliates, may disclose all or any part of this Agreement, including
the Exhibits hereto, as is required by, or is advisable in connection with any
filing with, any state or federal regulatory agency by Buyer or any of Buyer’s
affiliates.

 

(C)The Parties agree to use the same degree of care when protecting the
Confidential Information of the other Party that it uses with regard to its own
Confidential Information, but in no event may a Party use less than a reasonable
degree of care.

SECTION FOURTEEN

GOVERNING LAW; VENUE; ATTORNEY FEES

THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF COLORADO WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAW. Each
Party hereto hereby irrevocably submits to the jurisdiction of and venue in
state and federal courts in the City and County of Denver, in respect of the
interpretation and enforcement of the provisions of this Agreement and of the
documents referred to in this Agreement, and in respect of the Transaction, and
hereby waives, and agrees not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof or of any such document,
that it is not subject thereto or that such action, suit or proceeding may not
be brought or is not maintainable in the chosen court or that venue thereof may
not be appropriate, or that this Agreement or any such document may not be
enforced in or by the chosen court, and each party hereto hereby irrevocably
agrees that all claims with respect to such action, suit or proceeding shall be
heard and determined solely in the chosen court. The Parties hereby consent to
and grant the chosen court jurisdiction over the person of such Parties and, to
the extent permitted by law, over the subject matter of such dispute and agree
that mailing of process or other papers in connection with any such action or
proceeding or in such other manner as may be permitted by law shall be valid and
sufficient service thereof. In any action brought to enforce the terms of this
Agreement, the prevailing Party shall be entitled to recover its reasonably
incurred attorney fees and costs.

SECTION FIFTEEN

INDEMNIFICATION

Subject to the provisions contained in this Section Fifteen, from and after the
Closing Date, Seller shall indemnify, defend and hold Buyer, its affiliates and
their respective directors, officers, shareholders, partners, members,
employees, attorneys, accountants, agents, successors and permitted assigns,
each in their capacity as such (collectively, the “Buyer Indemnified Parties”),
harmless from and against, and pay to each relevant Buyer Indemnified Party the
amount of, any and all losses incurred by such Buyer Indemnified Party based
upon, attributable to or resulting from any breach of any of the representations
or warranties made by Seller in this Agreement and the breach of any covenant or
other agreement of Seller contained in this Agreement.

 

 

 

Subject to the provisions contained in this Section Fifteen, from and after the
Closing Date, Buyer shall indemnify, defend and hold Seller, its affiliates and
its respective directors, officers, shareholders, partners, members, employees,
attorneys, accountants, agents, successors and permitted assigns, each in their
capacity as such (collectively, the “Seller Indemnified Parties”), harmless from
and against, and pay to Seller Indemnified Party the amount of, any and all
losses incurred by Seller Indemnified Party based upon, attributable to or
resulting from any breach of the representations or warranties made by Purchaser
in this Agreement and the breach of any covenant or other agreement of Purchaser
contained in this Agreement. Notwithstanding the foregoing, neither Party will
be liable with respect to any claim involving the gross negligence, willful
misconduct, or bad faith of any other Party.

SECTION SIXTEEN

LEGAL ADVICE; INTERPRETATION

All Parties acknowledge and agree that they have obtained their own independent
legal advice prior to the execution of this Agreement. In interpreting this
Agreement, the Parties agree that the provisions of this Agreement shall be
construed in an evenhanded manner and shall not be construed against either
Party on this basis of which Party drafted this Agreement or section hereof.
Each Party acknowledges it has had an opportunity to consult with an attorney in
connection with the drafting and negotiation of this Agreement.

SECTION SEVENTEEN

ASSIGNMENT

Except in the case of an assignment between the parent and a subsidiary of the
assigning Party, this Agreement is not assignable by operation of law or
otherwise without the prior written consent of the other Party hereto. Any
purported assignment of this Agreement not in accordance with the terms of this
Section Seventeen will be void ab initio.

SECTION EIGHTEEN

ENTIRE AGREEMENT

This Agreement (including the Exhibits hereto) constitutes the entire agreement
among the Parties, and supersedes all other prior agreements, understandings,
representations and warranties both written and oral among the Parties, with
respect to the subject matter hereof.

SECTION NINETEEN

AMENDMENT; WAIVER

Subject to applicable law, this Agreement may be amended, modified or
supplemented only by means of a written instrument duly executed by each of the
Parties hereto. The failure of any Party to seek redress for any violation, or
to insist upon the strict performance, of any provision of this Agreement shall
not prevent any Party from seeking redress for any subsequent act, or failure to
act, or to insist upon the strict performance of this Agreement. No single or
partial exercise by a Party of any right or remedy hereunder shall preclude
other or further exercise thereof or the exercise of any other right or remedy.

 

 

SECTION TWENTY

SPECIFIC PERFORMANCE

The Parties agree that irreparable damage would occur if any provision contained
in this Agreement were not performed in accordance with its terms. Each Party
waives any requirement that the Party seeking specific performance post any bond
in connection therewith.

SECTION TWENTY-ONE

NO THIRD-PARTY BENEFICIARIES

Except as otherwise expressly provided herein, this Agreement is not intended
to, and does not, confer any rights or remedies hereunder upon any person other
than the Parties who are signatories hereto.

SECTION TWENTY-TWO

SEVERABILITY

If any one or more of the provisions of this Agreement shall be invalid,
illegal, or unenforceable in any respect, the validity, legality, and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired, and the offending provision or provisions shall be
reformed, and the remaining provisions interpreted, so as to give effect, to the
maximum extent permissible, to the agreement of the Parties as set out herein.

SECTION TWENTY-THREE

FURTHER ASSURANCES

The Parties shall, from time to time and upon reasonable request, execute,
acknowledge, and deliver, or cause to be executed, acknowledged, and delivered,
such instruments, and take such other action, as may be necessary or advisable
to carry out their respective obligations under this Agreement, and the
obligations of Buyer, or Buyer’s affiliates, in connection therewith, including
legal, accounting and regulatory requirements.

SECTION TWENTY-FOUR

COUNTERPARTS

This Agreement may be executed in any number of counterparts, including by
electronic means, each of which when executed and delivered shall be an
original, but all such counterparts shall constitute one and the same
instrument.

 

 

 

[Signature Page Follows]

 

 

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the date first written above by their respective officers or agents
thereunto duly authorized.

 

 

For and on behalf of

GREEN STONE CAPTIAL PARTNERS LIMITED,

a Cayman Islands company

 

By: __________________________________

 

Name: _______________________________

 

Title: ________________________________

 

 

 

For and on behalf of

FOOTHILLS EXPLORATION OPERATING, INC.,

a Nevada Corporation

 

By: __________________________________

 

Name: _______________________________

 

Title: ________________________________

 

 

 

 

 

 

EXHIBIT A

 

 

BIA ADMINISTRATIVE APPEAL

 

 

 

[INSERT]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT B

 

UTE INDIAN TRIBE GLOBAL SETTLEMENT AGREEMENT

 

 

 

[INSERT]

 

 

 

 

 

 

 

EXHIBIT C

 

State of Utah Stipulated Order

 

 

[INSERT]