Document:

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.           The
Company is engaged in the production and distribution of bio-diesel.

B.             Sellers
are the sole shareholders of the Company.

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

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

Agreement

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

1.                                       Sale and Purchase.  Subject to the terms and conditions herein
set forth, and in reliance upon the representations, warranties and covenants
contained herein, Buyer agrees to purchase the Interest

 

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

2.                                       Purchase Price.   The purchase
price for the Interest shall be the issuance and delivery of the Consideration
to Sellers (at their order), as those terms are defined above.

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

4.                                       Buyer’s First Right of Refusal.  Sellers and the Company grant Buyer a first
right of refusal to purchase any portion or all of the remaining 50% of the
equity ownership interest in the Company, on and for terms equal to any other
bona-fide offer received by Sellers or the Company for the purchase of said remaining
50% portion.  This First Right of Refusal
shall 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 average
sale price of the Buyer’s common stock is $2 or more per share, Buyer
shall have an irrevocable option at its sole discretion to purchase the
remaining 50% of the equity ownership interest in the Company in exchange for
Buyer’s issuance, to the then existing owners of the remaining 50% of the
equity of the Company (“Other Company Shareholders”), 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 times the 2005 NEAT, as defined herein.  This Option to Buy shall be considered part
and parcel to the Interest.

6.                                       Future Option to Sell. 
On that Second Purchase Date, if the five trading day trailing average
sale price of the Buyer’s common stock is less than $2 per share, the
Other Company Shareholders shall have an irrevocable option at their sole discretion
to sell the remaining 50% of the equity ownership interest in the Company in
exchange 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 times
the 2005 NEAT, as defined herein.  With
the prior written consent of the parties, this sale may be made under the same
terms but at a later date than the Second Purchase Date.  This Future Option to Sell shall be
considered part and parcel to the Consideration.

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

a.               Sellers
own all of the issued and outstanding equity ownership interests in the
Company.

b.              Sellers
are the sole legal and beneficial owners of the Interest, free and clear of any
and all liens, claims, and encumbrances, with full power to transfer the same
as contemplated herein.

c.               The
Proforma Financials of the Company, attached hereto as Exhibit “A”, represents
an accurate estimate of the Company’s current and proforma financial
condition.  Specifically, there are no
liens, debts or claims against any of the properties and assets of the Company
besides those listed in Exhibit “A”.

d.              Sellers
and/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 by
Sellers’ execution and delivery of this Agreement.

e.               The
Company is a lawful corporation, validly existing and in good standing under
the laws of the state of Mississippi.  To
the 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.                 Sellers
and/or the Company will not enter into any new contracts or agreements between
the date of this Agreement and the Closing, except in the ordinary course of
business.

8.                                       Representations, Warranties and Covenants of Buyer.  Buyer hereby represents and warrants to
Sellers that:

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

b.              The execution, delivery and performance of
this Agreement and the consummation of the transaction on the part of Buyer
contemplated hereunder have been duly authorized by all necessary corporate
action on the part of Buyer.  This
Agreement is (or will be when executed and delivered pursuant hereto) the
legal, valid and binding obligation of Buyer, enforceable in accordance with
its terms.

c.               Neither the execution and delivery of this
Agreement by Buyer, nor Buyer’s compliance with any of the terms and provisions
of this Agreement, nor the consummation of the transactions contemplated
hereby, will conflict with or result in a violation of, or constitute a material
default under its Bylaws or any other agreement, contract or commitment to
which it is a party; nor will the performance by Buyer of its obligations
hereunder violate any judgment, order, injunction, decree, regulation or ruling
of any court or governmental authority to which Buyer is subject.

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

10.                                 Loss and Liens. The risk of any loss, condemnation, or
destruction of all or any part of the Company’s property prior to closing is
upon the Sellers and/or the Company. 
Sellers and/or the Company shall not place, permit, or cause to be
placed any liens or encumbrances on the title to the Company’s property or the
Interest from the date hereof through closing.

11.                                 No Marketing.    No employee, agent or
representative of the Company or the Sellers may engage in marketing, nor
consider offers for selling, transferring, pledging or otherwise encumbering or
alienating the Interest prior to Closing.

12.                                 Notices.  In order to be effective
all notices, consents, approvals and disapprovals (“Notice”) required by this Agreement must be in writing, signed by
an officer or lawful agent of the party giving such Notice, and either (i)
personally delivered; (ii) placed in the mail, properly addressed, with postage
prepaid thereon; or (iii) deposited for delivery by a recognized, private
overnight courier for next business morning delivery, properly addressed, and
with the full waybill prepaid.  Notice
shall be deemed received and effective on the earlier of the date actually
received, or, if applicable, three (3) business days after being sent as
specified in clause (ii) of this paragraph. 
Notices must be addressed to the parties hereto at the addresses first
stated above.

13.                                 Entire Agreement; Amendments.  Each
of the parties represents that no promise or agreement which is not expressed
in this Agreement,

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has been made to such party in executing this
Agreement, and neither of the parties is relying upon any statement or
representation not contained in this Agreement. 
This Agreement, including the Exhibit hereto, constitutes the entire
understanding 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 the
parties.

14.                                 Binding Effect; Permissibility of Assignment.  This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, and all future
shareholders of the Company.

15.                                 Governing Law and Jurisdiction.  This
Agreement shall be governed by and construed in accordance with the laws of the
state of Texas, without reference to its conflict of laws rules.  Jurisdiction and venue shall reside
exclusively in the courts of Dallas County, Texas.

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

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

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

19.                                 Reasonable Cooperation.  Each
party hereto agrees to execute and deliver such instruments and take such other
action as the other party may reasonably request in order to carry out the
intent of this Agreement.

20.                                 Multiple Counterparts.  This Agreement may be executed in multiple
counterparts 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 a
decree of specific performance.  Any
equitable remedy shall not be exclusive and shall be in addition to any other
remedy available.

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

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

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IN WITNESS
WHEREOF, the parties hereto have caused their duly authorized representatives
to execute this Agreement on and effective as of the Date first set forth
herein.

	
  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

  	
   

  	
   

  	
   

  

 

 5EXHIBIT 10.71

PROMISSORY NOTE

	
  $850,000.00

  	
  March 2, 2006

  

FOR VALUE RECEIVED, the
undersigned, Earth Biofuels, Inc., a Delaware corporation (“Maker”), hereby promises to pay to
the order of Southern Biofuels, LLC, a Mississippi limited liability company (“Payee”), the principal sum of Eight
Hundred Fifty Thousand and No/100 Dollars ($850,000.00), together with interest
thereon as provided for below.

The
principal of this Promissory Note (this “Note”)
shall be due and payable March 13, 2006.

The
unpaid principal balance of this Note shall bear interest from the date of
February 21, 2006 until paid in full at the rate of 7.25% per annum.

Principal
and all accrued interest are payable at P.O. Box 54461, Jackson, Mississippi
39288, or at such other address as the Payee of this Note may from time to time
designate in writing.

The
Payee shall not, by any act (except by a written instrument executed and
delivered in accordance with this paragraph), delay, indulgence, omission or
otherwise be deemed to have waived any right, remedy or other power hereunder
or to have acquiesced in any default hereunder. 
No waiver, amendment, supplement or other modification of any of the
terms or provisions of this Note shall be effective unless set forth in a
writing executed and delivered by the party sought to be charged.

Maker
waives presentment, diligence, protest, demand, notice of demand, notice of
acceptance or reliance, notice of non-payment, notice of dishonor, notice of
protest and all other notices to parties in connection with the delivery,
acceptance, performance, default or enforcement of this Note, any endorsement
or guaranty of this Note, or any collateral.

The undersigned
agrees to pay upon demand all of Payee’s costs and expenses, including Payee’s
attorneys’ fees and Payee’s legal expenses, incurred in connection with the
collection of this Note. If there is a lawsuit, Guarantor agrees upon Payee’s
request to submit to the jurisdiction of the courts of Rankin County, State of
Mississippi.

THIS
NOTE SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF MISSISSIPPI, WITHOUT REGARD TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.

 

IN
WITNESS WHEREOF, Maker has executed and delivered this Note as of the date set
forth above.

	
   

  	
  EARTH BIOFUELS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DENNIS G. MCLAUGHLIN, III

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Dennis G. McLaughlin, III

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer, Director

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