**EXHIBIT 10.70**

 

**PURCHASE AND SALE AGREEMENT**

 
| **Date:**                 |   | February 25, 2005                                                          |
|---------------------------|--------|----------------------------------------------------------------------------|
| ** **                |   |                                                                       |
| **Sellers:**              |   | R. BRUCE BLACKWELL                                                         |
|                      |   | PO Box 16806, Jackson, MS 39236                                            |
|                      |   |                                                                       |
|                      |   | TOMMY JOHNSON                                                              |
|                      |   | PO Box 16806, Jackson, MS 39236                                            |
|                      |   |                                                                       |
|                      |   | ROBERT GLENN                                                               |
|                      |   | PO Box 16806, Jackson, MS 39236                                            |
|                      |   |                                                                       |
|                      |   | WILLIAM WEBSTER                                                            |
|                      |   | PO Box 16806, Jackson, MS 39236                                            |
|                      |   |                                                                       |
| **Buyer:**                |   | APOLLO RESOURCES INTERNATIONAL, INC.                                       |
|                      |   | 3001 Knox St., Suite 403, Dallas, TX 75205                                 |
|                      |   | Contact: Dennis G. McLaughlin, III, CEO                                    |
|                      |   |                                                                       |
| **Company:**              |   | EARTH BIOFUELS, INC.                                                       |
|                      |   | PO Box 16806, Jackson, MS 39236                                            |
|                      |   | Contact: R. Bruce Blackwell, CEO                                           |
|                      |   |                                                                       |
| **Interest:**             |   | The “Interest” shall be inclusive of all of the  following:      |
|                      |   | 1)                                                                         | 50% of the equity ownership of Company; |
|                      |   | 2)                                                                         | Buyer’s First Right of Refusal, as defined herein;  and |
|                      |   | 3)                                                                         | Buyer’s Option to Buy, as defined herein |
|                      |   |                                                                       |   |
| **Consideration:**        |   | The “Consideration” shall be inclusive of all of the  following: |
|                      |   | 1)                                                                         | 1,700,000 shares of the restricted common stock of  Buyer; and |
|                      |   | 2)                                                                         | Future Option to Sell, as defined herein. |
|                      |   |                                                                       |   |
| **2005 NEAT:**            |   | The Company’s actual Net Earnings After Taxes for  calendar year 2005 |
| ** **                |   |                                                                       |
| **Second Purchase Date:** |   | February 1, 2006                                                           |

 

**Recitals**

A.           TheCompany is engaged in the production and distribution of bio-diesel.

B.             Sellersare the sole shareholders of the Company.

C.             Buyerwishes to pay Sellers the Consideration for the purchase of the Interest, andupon the terms and subject to the conditions set forth in this Agreement.

D.            Sellerswish to sell Buyer the Interest in exchange for the Consideration, and upon theterms and subject to the conditions set forth in this Agreement.

**Agreement**

NOW, THEREFORE, inconsideration of the foregoing premises and the representations, warranties,and covenants hereinafter set forth, and for other good and valuableconsideration, including the Consideration as herein defined, the receipt andsufficiency of which are hereby acknowledged, the parties agree as follows:

1.                                       **Sale and Purchase**.  Subject to the terms and conditions hereinset forth, and in reliance upon the representations, warranties and covenantscontained herein, Buyer agrees to purchase the Interest

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from Sellers, and Sellers agree to sell the Interest to Buyer.

2.                                       **Purchase Price**.   The purchaseprice for the Interest shall be the issuance and delivery of the Considerationto Sellers (at their order), as those terms are defined above.

3.                                       **Closing**.  Closing of thetransaction contemplated herein (the “Closing”)shall take place on Friday, February 25, 2005, at a time and place to bemutually decided by the parties.  (Thedate on which the Closing is held shall be referred to in this Agreement as the“Closing Date.”)  At the Closing, Seller shall deliver to Buyerthe Interest, and Buyer shall deliver the Consideration.

4.                                       **Buyer’s First Right of Refusal**.  Sellers and the Company grant Buyer a firstright of refusal to purchase any portion or all of the remaining 50% of theequity ownership interest in the Company, on and for terms equal to any otherbona-fide offer received by Sellers or the Company for the purchase of said remaining50% portion.  This First Right of Refusalshall be considered part and parcel to the Interest.

5.                                       **Buyer’s Option to Buy**. On the Second Purchase Date, if the five trading day trailing averagesale price of the Buyer’s common stock is $2 or more per share, Buyershall have an irrevocable option at its sole discretion to purchase theremaining 50% of the equity ownership interest in the Company in exchange forBuyer’s issuance, to the then existing owners of the remaining 50% of theequity of the Company (“Other Company Shareholders”), of its restricted commonshares to be valued at $2.00 per share, with said remaining 50% to be thenvalued at 50% of five times the 2005 NEAT, as defined herein.  This Option to Buy shall be considered partand parcel to the Interest.

6.                                       **Future Option to Sell**. On that Second Purchase Date, if the five trading day trailing averagesale price of the Buyer’s common stock is less than $2 per share, theOther Company Shareholders shall have an irrevocable option at their sole discretionto sell the remaining 50% of the equity ownership interest in the Company inexchange for Buyer’s issuance of its restricted common shares to be valued at$2.00 per share, with said remaining 50% to be then valued at 50% of five timesthe 2005 NEAT, as defined herein.  Withthe prior written consent of the parties, this sale may be made under the sameterms but at a later date than the Second Purchase Date.  This Future Option to Sell shall beconsidered part and parcel to the Consideration.

7.                                       **Representations and Warranties of Sellers**.  Sellershereby represent and warrant to Buyer that:

a.               Sellersown all of the issued and outstanding equity ownership interests in theCompany.

b.              Sellersare the sole legal and beneficial owners of the Interest, free and clear of anyand all liens, claims, and encumbrances, with full power to transfer the sameas contemplated herein.

c.               TheProforma Financials of the Company, attached hereto as Exhibit “A”, representsan accurate estimate of the Company’s current and proforma financialcondition.  Specifically, there are noliens, debts or claims against any of the properties and assets of the Companybesides those listed in Exhibit “A”.

d.              Sellersand/or the Company are not party to or bound by any contract, promissory note,agreement, commitment, or obligation, creating or securing indebtedness,obligations, or liabilities, a breach or default of which would be triggered bySellers’ execution and delivery of this Agreement.

e.               TheCompany is a lawful corporation, validly existing and in good standing underthe laws of the state of Mississippi.  Tothe best of Sellers’ knowledge, there are no pending actions or proceedings (i)to limit or impair the Sellers’ or the Company’s power to engage in business or(ii) to dissolve the Company.

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f.                 Sellersand/or the Company will not enter into any new contracts or agreements betweenthe date of this Agreement and the Closing, except in the ordinary course ofbusiness.

8.                                       **Representations, Warranties and Covenants of Buyer**.  Buyer hereby represents and warrants toSellers that:

## a.               Buyer is a corporation duly organized,validly existing and in good standing under the laws of the state of Utah andthe United States, and has all requisite power and authority to enter into,perform and carry out all of its duties and obligations in the transactioncontemplated by this Agreement.

## b.              The execution, delivery and performance ofthis Agreement and the consummation of the transaction on the part of Buyercontemplated hereunder have been duly authorized by all necessary corporateaction on the part of Buyer.  ThisAgreement is (or will be when executed and delivered pursuant hereto) thelegal, valid and binding obligation of Buyer, enforceable in accordance withits terms.

## c.               Neither the execution and delivery of thisAgreement by Buyer, nor Buyer’s compliance with any of the terms and provisionsof this Agreement, nor the consummation of the transactions contemplatedhereby, will conflict with or result in a violation of, or constitute a materialdefault under its Bylaws or any other agreement, contract or commitment towhich it is a party; nor will the performance by Buyer of its obligationshereunder violate any judgment, order, injunction, decree, regulation or rulingof any court or governmental authority to which Buyer is subject.

9.                                       **Attorney Fees**. ** **If any legal action or otherproceeding is brought for the enforcement of this Agreement or any otheragreement, document, contract, instrument or other writing entered into inconnection herewith, because of an alleged dispute, breach, default, ormisrepresentation, in connection with any of the provisions of this Agreementor such other writing, the successful or prevailing party shall be entitled torecover its reasonable attorney fees, and other costs and expenses, incurred insuch action or proceeding, in addition to any other relief to which it or theymay be entitled.

10.                                 **Loss and Liens.** The risk of any loss, condemnation, ordestruction of all or any part of the Company’s property prior to closing isupon the Sellers and/or the Company. Sellers and/or the Company shall not place, permit, or cause to beplaced any liens or encumbrances on the title to the Company’s property or theInterest from the date hereof through closing.

11.                                 **No Marketing.****  **No employee, agent orrepresentative of the Company or the Sellers may engage in marketing, norconsider offers for selling, transferring, pledging or otherwise encumbering oralienating the Interest prior to Closing.

12.                                 **Notices**.  In order to be effectiveall notices, consents, approvals and disapprovals (“Notice”) required by this Agreement must be in writing, signed byan officer or lawful agent of the party giving such Notice, and either (i)personally delivered; (ii) placed in the mail, properly addressed, with postageprepaid thereon; or (iii) deposited for delivery by a recognized, privateovernight courier for next business morning delivery, properly addressed, andwith the full waybill prepaid.  Noticeshall be deemed received and effective on the earlier of the date actuallyreceived, or, if applicable, three (3) business days after being sent asspecified in clause (ii) of this paragraph. Notices must be addressed to the parties hereto at the addresses firststated above.

13.                                 **Entire Agreement; Amendments**.  Eachof the parties represents that no promise or agreement which is not expressedin this Agreement,

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has been made to such party in executing thisAgreement, and neither of the parties is relying upon any statement orrepresentation not contained in this Agreement. This Agreement, including the Exhibit hereto, constitutes the entireunderstanding between the parties hereto relative to the subject matter hereof,superseding any and all prior agreements, arrangements, and understandings,written or oral, between the parties. This Agreement may be amended only by a written instrument signed by theparties.

14.                                 **Binding Effect; Permissibility of Assignment**.**  **This Agreement and all of theprovisions hereof shall be binding upon and inure to the benefit of the partieshereto and their respective successors and permitted assigns, and all futureshareholders of the Company.

15.                                 **Governing Law and Jurisdiction**.  ThisAgreement shall be governed by and construed in accordance with the laws of thestate of Texas, without reference to its conflict of laws rules.  Jurisdiction and venue shall resideexclusively in the courts of Dallas County, Texas.

16.                                 **No Brokers**.  Each partyrepresents and warrants that it has dealt with no broker or finder in connectionwith the transaction contemplated by this Agreement, and that no broker orother person is entitled to any commission or finder’s fee in connection withthis transaction.  Each party agrees toindemnify, defend and hold harmless the other party against any commission orfinder’s fee alleged to be payable because of any act, omission or statement ofthe indemnifying party.

17.                                 **Severability**.**  **If any provision of this Agreement is held to beinvalid or unenforceable by any court of competent jurisdiction, it is theintent of all of the parties that all other provisions of this Agreement beconstrued to remain fully valid, enforceable and binding on the parties.

18.                                 **Covenant of Good Faith and Fair Dealing**.  Withregard to their respective obligations and commitments under this Agreement,each of Buyer. Sellers and the Company covenants that it shall act in goodfaith and deal fairly with the other party.

19.                                 **Reasonable Cooperation**.  Eachparty hereto agrees to execute and deliver such instruments and take such otheraction as the other party may reasonably request in order to carry out theintent of this Agreement.

20.                                 **Multiple Counterparts**.  This Agreement may be executed in multiplecounterparts and by facsimile, at the option of the parties.

21.                                 **Equitable Remedies**.  In the event of any breach of this Agreement,the provisions of this Agreement may be enforceable in a court of equity by adecree of specific performance.  Anyequitable remedy shall not be exclusive and shall be in addition to any otherremedy available.

22.                                 **Power to Bind**.  A responsible officer of the Company and theBuyer has read and understands the contents of this Agreement and is empoweredand duly authorized on behalf of the Company and the Buyer to execute it.

23.                                 **Plurality  **Whenthe context requires, singular nouns and pronouns include the plural.

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IN WITNESSWHEREOF, the parties hereto have caused their duly authorized representativesto execute this Agreement on and effective as of the Date first set forthherein.
| **SELLERS:**                         | ** ** |                |   |
|--------------------------------------|------------|---------------------|--------|
| ** **                           | ** ** |                |   |
| ** **                           | ** ** |                |   |
| /s/ R. BRUCE BLACKWELL               |       | /s/ TOMMY JOHNSON   |   |
| R. BRUCE BLACKWELL                   |       | TOMMY JOHNSON       |   |
|                                 |       |                |   |
|                                 |       |                |   |
| /s/ ROBERT GLENN                     |       | /s/ WILLIAM WEBSTER |   |
| ROBERT GLENN                         |       | WILLIAM WEBSTER     |   |
|                                 |       |                |   |
|                                 |       |                |   |
| **BUYER:**                           | ** ** |                |   |
| ** **                           | ** ** |                |   |
| APOLLO RESOURCES INTERNATIONAL, INC. |       |                |
|                                 |       |                |   |
|                                 |       |                |   |
| /s/ DENNIS G. MCLAUGHLIN, III        |       |                |   |
| Dennis G. McLaughlin, III, CEO       |       |                |   |
|                                 |       |                |   |
|                                 |       |                |   |
| **COMPANY:**                         | ** ** |                |   |
| ** **                           | ** ** |                |   |
| EARTH BIOFUELS, INC.                 |       |                |   |
|                                 |       |                |   |
|                                 |       |                |   |
| /s/ R. BRUCE BLACKWELL               |       |                |   |
| R. Bruce Blackwell, CEO              |       |                |   |

 

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