Purchase and Sale Agreement between Torchlight Energy, Inc. and Zenith Petroleum Corporation dated June 6, 2014

Acquisition of Oklahoma Assets.  At the Closing (as defined in Section E, hereof) Purchaser will acquire from Seller certain Working Interest positions in wells and net mineral acres free and clear of all liens and encumbrances, the details of which assets to be acquired are further outlined as Exhibit A (the “Oklahoma Assets”).

Consideration—Purchase Price.  At the Closing, as consideration for the purchase of the Oklahoma Assets, the Purchaser will cause to be issued to Seller 1,350,000 shares of common stock (the “Stock”) of Torchlight Energy Resources, Inc, the parent of the Purchaser.

Stock Consideration and Stock Valuation.  Torchlight Energy Resources, Inc. will issue the 1,350,000 shares for the acquisition of the Oklahoma Assets.  Seller acknowledges that the shares of Stock will not have been registered under the Securities Act of 1933, as amended (the “Act”), or any state securities acts, and accordingly, are restricted securities.

1.

Closing.  The closing of the transactions contemplated by this Agreement shall take place on or before June 6, 2014 (the “Closing Date”), at a place mutually agreeable to the Parties, or at such other time as agreed upon among the Parties (the “Closing”).

2.

Delivery of Documents at Closing.  At the Closing: (a) Seller shall deliver to Purchaser all instruments of assignment and bills of sale necessary to transfer to Purchaser good and marketable title to the Oklahoma Assets free and clear of all liens, charges or encumbrances against delivery by Purchaser to Seller of the Stock.

Responsibility for Recordation. Purchaser’s counsel shall record all the assignments in the appropriate real property records, and provide file-stamped copies of those documents to the Parties as soon as practicable after the Closing.

1.

i.

ii.

Seller warrants and represents to Purchaser that (a) it owns all of the Oklahoma Assets free and clear of any liens, claims, equities, charges, options, rights of first refusal, or encumbrances; (b)  it has not assigned any interest in the Oklahoma Assets to any third party, nor is any such assignment pending; (c)  it has the unrestricted right and power to transfer, convey and deliver full ownership of the Oklahoma Assets without the consent or agreement of any other person and without any designation, declaration or filing with any governmental authority; and (d) upon the transfer of the Oklahoma Assets to Purchaser as contemplated herein, Purchaser will receive good and valid title thereto, free and clear of any liens, claims, equities, charges, options, rights of first refusal, encumbrances or other restrictions.

iii.

iv.

Seller further warrants and represents to Purchaser that the lease included in the Oklahoma Assets is valid, in effect, and has not lapsed or reverted to the lessor(s).

v.

Seller warrants and represents that the execution, delivery, and performance of this Agreement by Seller does not (a) conflict with, violate, or constitute a breach of or a default under any other outstanding agreements or articles of organization or regulations of Seller; (b) result in the creation or imposition of any lien, claim, or encumbrance of any kind upon the Oklahoma Assets or (c) require any authorization, consent, approval, exemption, or other action by or filing with any third party or Governmental Authority (as defined below) under any provision of:  (i) any applicable Legal Requirement (as defined below), or (ii) any credit or loan agreement, promissory note, or any other agreement or instrument to which Seller is a party or by which the Oklahoma Assets may be bound or affected.  For purposes of this Agreement, "Governmental Authority" means any foreign governmental authority, the United States of America, any state of the United States, and any political subdivision of any of the foregoing, and any agency, department, commission, board, bureau, court, or similar entity, having jurisdiction over the parties hereto or their respective assets or properties.  For purposes of this Agreement, "Legal Requirement" means any law, statute, injunction, decree, order or judgment (or interpretation of any of the foregoing) of, and the terms of any license or permit issued by, any Governmental Authority.

vi.

Seller warrants and represents that no permit, consent, approval or authorization of, or designation, declaration or filing with, any Governmental Authority or any other person or entity is required on the part of Seller in connection with the execution and delivery by Seller of this Agreement or the consummation and performance of the transactions contemplated hereby.

vii.

Seller warrants and represents that there is no claim, suit, arbitration, investigation, action, litigation or other proceeding, whether judicial, administrative or otherwise, now pending or, to Seller’s knowledge, contemplated or threatened against Seller before any court, arbitration, administrative or regulatory body or any governmental agency which may result in any judgment, order, award, decree, liability or other determination which will or could reasonably be expected to have any material effect upon Seller or the transfer by Seller to Purchaser of the Oklahoma Assets, under this Agreement, and there is no basis known to Seller for any such action. No litigation is pending, or, to Seller’s knowledge, threatened against Seller, or their assets or properties which seeks to restrain or enjoin the execution and delivery of this Agreement or any of the documents referred to herein or the consummation of any of the transactions contemplated thereby or hereby. Seller is not subject to any judicial injunction or mandate or any quasi-judicial or administrative order or restriction directed to or against it or which would affect Seller or the Oklahoma Assets.

2.

(ii)

Purchaser hereby agrees to and shall indemnify, defend (with legal counsel reasonably acceptable to Seller), and hold Seller, its officers, directors, employees, affiliates, parent, agents, legal counsel, successors and assigns (collectively, the "Seller Group") harmless at all times after the date of this Agreement, from and against any and all actions, suits, claims, demands, debts, liabilities, obligations, losses, damages, costs, expenses, penalties or injury  (including reasonable attorneys’ fees and costs of any suit related thereto) suffered or incurred by any of the Seller Group arising from: (a) any misrepresentation by, or breach of any covenant or warranty of Purchaser contained in this Agreement, or any exhibit, certificate, or other instrument furnished or to be furnished by Purchaser hereunder; (b) any nonfulfillment of any agreement on the part of Purchaser under this Agreement; (c) any liability or obligation due to any third party by Purchaser relating to the Oklahoma Assets subsequent to the Closing Date; or (d) any suit, action, proceeding, claim or investigation against Seller Group which arises from or which is based upon or pertaining to Purchaser’s conduct or the operation or liabilities of the Oklahoma Assets subsequent to the Closing Date.

Notices.  Any notices or other communications required or permitted hereunder shall be sufficiently given if in writing and delivered in person or sent by registered or certified mail (return receipt requested) or nationally recognized overnight delivery service, postage pre-paid, addressed as follows, or to such other address has such party may notify to the other parties in writing:

 

Seller:

Controlling Law. The Parties agree that this Agreement shall be governed, construed, and applied in accordance with the laws of the State of Texas applicable to contracts between Texas residents that are to be wholly performed in Texas, without regard to choice of law or conflicts of law principles of Texas or any other jurisdiction.

Forum Selection Clause.  The Parties agree that all disputes arising under this Agreement shall be brought solely in the Judicial District Courts of Collin County, Texas.

Entire Agreement. This Agreement constitutes the entire, final agreement of the Parties on all matters that are the subject of this Agreement, and this Agreement fully supersedes and replaces any and all prior agreements or understandings, written or oral, between the Parties relating to the Lease.

Multiple Counterparts.  This Agreement may be executed in counterparts by the undersigned and all such counterparts so executed shall together be deemed to constitute one final agreement, as if one document had been signed by all parties hereto; and each such counterpart shall be deemed to be an original, binding the party subscribed thereto, and multiple signature pages (including faxes or other electronic delivery of signature pages) affixed to a single copy of this Agreement shall be deemed to be a fully executed original Agreement.  It shall be sufficient in making proof of this Agreement to produce or account for a facsimile or pdf copy of an executed counterpart of this Agreement.

/s/ Jack Johnston

/s/ John Brda

Jack Johnston

John Brda

 

President