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Eagle Ford Oil and Gas Corp. 8-K [eagle-8k_081811.htm]
 
Exhibit 10.3
 
EXECUTION
 
PURCHASE AGREEMENT
 

THIS PURCHASE AGREEMENT (this “Agreement”) is made and entered in on this the
11th day of August, 2011, by and among Eagle Ford Oil & Gas Corp., a Nevada
corporation (“Buyer” or “Eagle Ford”), and  Valor Interest Partners, L.L.C., a
Texas limited liability company (“Valor”), Safari Adventure Productions, Inc, a
Texas corporation (“SAP”) Derek Schmidt, an individual residing in Texas
(“Schmidt”) and Jeff Morgenroth, an individual residing in Texas, (“Morgenroth”
and Valor, SAP, Schmidt and Morgenroth being sometimes collectively as the
“Sellers” or individually as a “Seller”).  Sandstone Energy Partners I, L.L.C.,
a Texas limited liability company (the “Company”) executes this Agreement to
indicate its agreement to be bound by the obligations, representations and
warranties of the Agreement to the same extent as the Sellers.
 
 
BACKGROUND

A. Eagle Ford through the Purchase Agreement dated June 20, 2011 acquired 100%
membership interest in Sandstone Energy, L.L. C., therefore resulting in Eagle
Ford owning 50% membership interest the Company;

B. Sellers are the collective owners of the remaining 50% of the membership
interests in the Company, the Company being engaged in the oil and gas
exploration and production of the Vick No: 1 well, located in Lee County, Texas;

C. Buyer desires to acquire, and Sellers desire to sell, all of the remaining
50% membership interests in the Company, in exchange solely for voting stock of
Buyer.

ARTICLE I
DEFINITIONS

1.01           Defined Terms. As used in this Agreement, the following terms
shall have the meanings ascribed to them below:

(i) “Affiliate” of a person shall mean (i) a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first-mentioned person and (ii) an “associate,” as that
term is defined in Rule 12b-2 promulgated under the Exchange Act.

(ii) “Ancillary Documents” shall mean each agreement, instrument and document
(other than this Agreement) executed or to be executed by Sellers, Buyer or
their respective members or shareholders in connection with the consummation of
the transactions contemplated hereby.

(iii) “Applicable Law” shall mean any statute, law, rule or regulation or any
judgment, order, writ, injunction or decree of any Governmental Authority to
which a specified person or property is subject.
 
 
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(iv) “Acquisition Shares” shall have the meaning set forth in Section 2.02.

(v) “Assets” shall mean all of the assets, properties and rights of the Company,
whether such assets, properties and rights are tangible or intangible, of every
kind, nature and description wherever situated, including, without limitation,
all of the assets, properties and rights owned by the Company on the Closing
Date.

(vi) “Business” shall mean the oil and gas exploration and production business
of the Company, including all of the Oil and Gas Interests of the Company.

(vii)  “Closing” shall mean the consummation of the acquisition of the Company
Membership Interests of the Sellers for the Acquisition Shares (as such term is
defined in Section 2.03).

(viii) “Closing Date” shall mean the date on which the Closing occurs.

(ix) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(x) “Company” means Sandstone Energy Partners I, L.L.C., a Texas limited
liability company.

(xi) “Company Membership Interests of the Sellers” shall mean the remaining 50%
membership interest in the Company in which the Sellers collectively own, as
described in the Company Agreement of the Company, as amended to date.

(xii) “Contract” shall mean, when such term is capitalized herein, written or
oral agreements, commitments or arrangements of the Company.

(xiii) “Control” (including the terms “controlling,” “controlled by” and “under
common control with”) shall mean the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
person, whether through ownership of voting securities, by contract, or
otherwise.

 
(xiv) “Encumbrances” shall mean any material liens, charges, pledges, options,
mortgages, deeds of trust, security interests, claims, restrictions (whether on
voting, sale, transfer, disposition or otherwise), easements and other
encumbrances of every type and description, whether imposed by law, agreement,
understanding or otherwise.

(xv) “Environmental Law” shall mean any and all laws, statutes, ordinances,
rules, regulations, notices, orders or determinations of any tribal authority or
other Governmental Authority pertaining to health or the environment, including,
without limitation, the Clean Air Act, as amended: the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), as
amended; the Federal Water Pollution Control Act, as amended; the Occupational
Safety and Health Act of 1970, as amended; the Resource Conservation, and
Recovery Act of 1976 (“RCRA”), as amended; the Safe Drinking Water Act, as
amended; the Toxic Substances Control Act, as amended; the Hazardous & Solid
Waste Amendments Act of 1984, as amended; the Superfund Amendments and
Reauthorization Act of 1986, as amended; the Hazardous Materials Transportation
Act, as amended; any state laws pertaining to the handling of oil and gas
exploration or production wastes or the use, maintenance and closure of pits and
impoundments; and any other environmental conservation or protection laws. As
used in this Agreement with respect to Environmental Law, “hazardous substance”
and “release” (or “threatened release”) have the meanings specified in CERCLA,
and the terms “solid waste” and “disposal” (or “disposed”) have the meanings
specified in RCRA; provided, however, that (A) to the extent the laws of the
jurisdiction wherein any assets are located establish a meaning for “hazardous
substance,” “release,” “solid waste” or “disposal” that is broader than that
specified in either CERCLA or RCRA, such broader meaning shall apply and (B) the
terms “hazardous substance” and “solid waste” shall include all oil and gas
exploration and production wastes that may present an endangerment to public
health or welfare or the environment, even if such wastes are specifically
exempt from classification as hazardous substances or solid wastes pursuant to
CERCLA or RCRA or the state analogues to those statutes.
 
 
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(xvi) “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

(xvii) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

(xviii)  [omitted]

(xix) “Good, Marketable and Defensible Title” shall mean title in and to the Oil
and Gas Interests that, except for any permitted Encumbrances, and that to
Sellers’ knowledge:

(a) Is free and clear of all defects, burdens and liens;

(b)  In the case of each Oil and Gas Interest, (A) is filed, recorded or
otherwise referenced of record in the records of the applicable county in a
manner which under applicable local law constitutes imputed notice of such Oil
and Gas Interest to third parties acquiring an interest in or an encumbrance
against such Oil and Gas Interest, or (1) in the case of federal leases, in the
records of the applicable office of the Bureau of Land Management, (2) in the
case of Indian leases and mineral development agreements, in the applicable
office of the Bureau of Indian Affairs or applicable tribal records, or (3) in
the case of state leases, in the records of the applicable state land office,
but only to the extent the records referenced in (1), (2) and (3) above
constitute imputed notice under applicable local law to third parties acquiring
an interest in or an encumbrance against such leases, or (B) is assignable to
the Company out of an interest of record (as provided in clause (A) above), but
only to the extent that all conditions required to earn an enforceable right to
such assignment have been satisfied and the record owner of such interest is
ready, willing and able to make such assignment;

(c) In the case of each Oil and Gas Interest set forth in the reserve reports of
Sellers that entitles Sellers to receive and retain, without reduction,
suspension or termination and after deduction of all applicable royalties,
overriding royalties, production payments or other burdens payable out of
production, not less than the percentage set forth in the reserve reports as the
Company’s “Net Revenue Interest” of all Hydrocarbons produced, saved and
marketed from such Oil and Gas Interest, through the productive life of such Oil
and Gas Interest, except for changes or adjustments in such “Net Revenue
Interest” after the date hereof and in compliance with Sellers’ covenants and
agreement under this Agreement that result from the establishment of new units,
changes in existing units (or the participating areas therein), the entry into
of new pooling or unitization agreements, or an election not to participate in
an operation under a joint operating agreement or a unit agreement; and

 
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(d) In the case of each Oil and Gas Interest set forth in the reserve report of
the Company that obligates the Company to bear not greater than the percentage
set forth in the reserve report as the Company’s.

(xx) “Governmental Authority” shall mean any court or tribunal in any
jurisdiction (domestic or foreign) or any public, governmental, or regulatory
body, agency, department, commission, board, bureau or other authority or
instrumentality (domestic or foreign, federal or state).

(xxi) “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.

(xxii) “Hydrocarbons” shall mean oil, condensate, gas, casinghead gas and other
liquid or gaseous Hydrocarbons.

(xxiii) “Hydrocarbon Agreement” shall mean any of the Hydrocarbon Sales
Agreements and Hydrocarbon Purchase Agreements.

(xxiv) “Hydrocarbon Purchase Agreement” shall mean any material sales agreement,
purchase contract, or marketing agreement that is currently in effect and under
which the Company is a buyer of Hydrocarbons for resale (other than purchase
agreements entered into in the ordinary course of business with a term of three
months or less, terminable without penalty on 30 days’ notice or less, which
provide for a price not greater than the market value price that would be paid
pursuant to an arm’s-length contract for the same term with an unaffiliated
third-party Sellers, and which do not obligate Sellers to take any specified
quantity of Hydrocarbons or to pay for any deficiencies in quantities of
Hydrocarbons not taken).

(xxv) “Hydrocarbon Sales Agreement” shall mean any material sales agreement,
purchase contract, or marketing agreement that is currently in effect and under
which the Company is a seller of Hydrocarbons (other than “spot” sales
agreements entered into in the ordinary course of business with a term of three
months or less, terminable without penalty on 30 days` notice or less, and which
provide for a price not less than the market value price that would be received
pursuant to an arm’s- length contract for the same term with an unaffiliated
third party purchaser).

(xxvi) “IRS” shall mean the Internal Revenue Service.

(xxvii) “Knowledge” as used with respect to a Person (including references to
such Person being aware of a particular matter) shall mean those facts that are
actually known by the chief executive officer, president, chief financial
officer, or any senior executive or other vice president of such Person without
any inquiry or investigation.
 
 
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(xxviii)  “Material Adverse Change” shall mean with respect to any Person, any
adverse change or adverse condition in or relating to the financial condition,
of such Person and its subsidiaries that is material to such Person and its
subsidiaries taken as a whole.

(xxix) “Material Contract” shall mean, as relates to the Company, (i) oil and
gas leases, (ii) operating agreements relating to such leases, and (iii)
Contracts relating to the Business and involving a total commitment by or to any
party thereto of at least $10,000 on an annual basis and which cannot be
terminated by the Company with notice of ninety (90) days or less without
penalty to the Company.

(xxx) “Oil and Gas Interests” shall mean: (i) direct and indirect interests in
and rights with respect to oil, gas, mineral and related properties and assets
of any kind and nature, direct or indirect, including, without limitation,
working, royalty and overriding royalty interests, mineral interests, leasehold
interests, production payments, operating rights, net profits interests, other
non-working interests and non-operating interests; (ii) interests in and rights
with respect to Hydrocarbons and other minerals or revenues therefrom and
contracts in connection therewith and claims and rights thereto (including oil
and gas leases, operating agreements, unitization and pooling agreements and
orders, division orders, transfer orders, mineral deeds, royalty deeds, oil and
gas sales, exchange and processing contracts and agreements and, in each case,
interests thereunder), surface interests, fee interests, reversionary interests,
reservations and concessions; (iii) easements, rights of way, licenses, permits,
leases, and other interests associated with, appurtenant to, or necessary for
the operation of any of the foregoing; and (iv) interests in equipment and
machinery (including well equipment and machinery), oil and gas production,
gathering, transmission, compression, treating, processing and storage
facilities (including tanks, tank batteries, pipelines and gathering systems),
pumps, water plants, electric plants, gasoline and gas processing plants,
refineries and other tangible personal property and fixtures associated with,
appurtenant to, or necessary for the operation of any of the foregoing.

(xxxi) “Ordinary Course of Business” shall mean an action taken by a Person if:

(a) Such action is taken in the ordinary course of the normal day-to-day
operations of such Person and is consistent with past practices of such Person;

(b) Such action is not required to be authorized by the Board of Directors of
such Person and is not required to be specifically authorized by the
shareholders, if any, of such Person; and

(c) Such action is similar in nature and magnitude to actions customarily taken,
without any authorization by the Board of Directors, in the ordinary course of
the normal day-to-day operations of other Persons that are in the same line of
business as such Person.

 
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(xxxii)  “Person” shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, enterprise, limited liability
company, unincorporated organization or Governmental Authority.

(xxxiii)  “Proceedings” shall mean all proceedings, actions, claims, suits,
investigations and inquiries by or before any arbitrator or Governmental
Authority.

(xxxiv)  “Reasonable Best Efforts” shall mean a party’s best efforts in
accordance with reasonable commercial practice and without the incurrence of
unreasonable expense.

(xxxv)  “SEC” shall mean the United States Securities and Exchange Commission.

(xxxvi)  “Subsidiary” shall mean an entity in which fifty percent (50%) or more
of its outstanding equity securities or interests are owned by the Company.

(xxxvii) “Tax” shall mean any income taxes or similar assessments or any sales,
excise, occupation, use, ad valorem, property, production, severance,
transportation, employment, payroll, franchise or other tax imposed by any
United States federal, state or local (or any foreign or provincial) taxing
authority, including any interest, penalties or additions attributable thereto.

(xxxviii) “Tax Return” shall mean any return or report, including any related or
supporting information, with respect to Taxes.

(xxxix)  “Securities Act” shall mean the Securities Act of 1933, as amended.

(xl)  “Working Interest” of the costs and expenses relating to the maintenance,
development and operation of such Oil and Gas Interest (including the plugging
and abandonment and site restoration with respect to all existing and future
wells located thereon or attributable thereto), through plugging, abandonment
and salvage of all wells and related lease facilities located on such Oil and
Gas Interest or lands pooled, unitized or otherwise combined therewith, except
for changes or adjustments in such “Working Interest” after the date hereof and
in compliance with Sellers’ covenants and agreement under this Agreement that
result from the establishment of new units, changes in existing units (or the
participating areas therein), the entry into of new pooling or unitization
agreements, or an election by a third party not to participate in an operation
under a joint operating agreement or a unit agreement;

(c) In the case of each Oil and Gas Interest, reflects that all royalties,
rentals, Pugh clause payments, shut in gas payments and other payments due with
respect to such Oil and Gas Interest have been properly and timely paid, except
for payments held in suspense for title or other reasons which are customary in
the industry and which will not result in grounds for cancellation of the
Company’s rights in such Oil and Gas Interest; and

(c) Reflects that all consents to assignment, notices of assignment or
preferential purchase rights which are applicable to or must be complied with in
connection with the transaction contemplated by this Agreement, have been
obtained and complied with to the extent the failure to obtain or comply with
the same could render this transaction or any such prior sale, assignment or
transfer (or any right or interest affected thereby) void or voidable or could
result in the Company incurring any liability or loss of title.
 
 
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ARTICLE II
PURCHASE OF SELLERS’ MEMBERSHIP INTERESTS FOR STOCK
 
2.01 Purchase of Company Membership Interests of the Sellers. Subject to the
terms and conditions specified in this Agreement, Sellers hereby sell, convey,
transfer, assign and deliver to Buyer, and Buyer hereby purchases from Sellers
on the Closing Date, all of the Company Membership Interests of the Sellers, as
set forth on Schedule 2.01 in exchange for the shares of Buyer Common Stock
described in Section 2.02.

2.02 Acquisition Consideration. As consideration for the sale of the Company
Membership Interests of the Sellers to Buyer, Buyer shall immediately issue and
deliver to Sellers that number of shares (rounded upward to the nearest whole
share) of  Buyer’s voting common stock, par value $0.001 per share (the “Buyer
Common Stock”) as set forth in Schedule 2.02. The issuance and delivery of the
Acquisition Shares is intended to be exempt from the registration requirements
of the Securities Act pursuant to 4(2) thereof and Rule 506 of Regulation D
promulgated thereunder; and exempt from the registration or qualification
requirements of any applicable state securities laws. As a result, the
Acquisition Shares may not be offered, sold, or transferred by the holder
thereof until either a registration statement under the Securities Act or
applicable state securities laws shall have become effective with regard
thereto, or an exemption under the Securities Act and applicable state
securities laws is available with respect to any proposed offer, sale or
transfer.

2.03 Closing. The signing of this Agreement and the closing (“Closing”) shall
take place at the offices of Boyer Jacobs Short, Nine Greenway Plaza, #3100,
Houston, Texas immediately following the signing of this Agreement by all
parties (the “Closing Date”). The execution of this Agreement and all Closing
transactions shall be deemed to have occurred simultaneously.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

3.01 Representations and Warranties of Sellers. Each of the Sellers represents
and warrants to Buyer (severally and not jointly), except as set forth in the
Sellers Disclosure Schedule which is attached hereto (the “Sellers Disclosure
Schedule”) and which will set forth the exceptions to the representations and
warranties contained in this Section 3.01 and items requiring description by
this Section 3.01 under the captions referencing the subsections to which such
exceptions apply, that:

(a) Organization and Good Standing of the Company. The Company is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of  Texas and has the requisite corporate power to carry
on its business as it is now being conducted, and to own, operate or lease the
properties and assets it currently owns, operates or holds under lease. The
Company is duly qualified as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of its properties owned
or leased or the nature of its activities makes such qualification necessary.

 
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(b) Power. Each of the Sellers has the power and authority to enter into this
Agreement and perform this Agreement and the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by each of the
Sellers, and the consummation of the transactions contemplated hereby, will not
(i) violate or conflict with any provision of its Articles of Incorporation,
Articles of Limited Partnership or Certificate of Formation, and Bylaws,
Agreement of Limited Partnership or Company or Operating Agreements, as the case
may be, or any other organizational or governing documents of such Seller, (ii)
violate or conflict with any material agreement or instrument to which such
Seller or the Company is a party or by which such Seller or the Company or any
of the properties are bound; (iii) violate or conflict with any judgment, order,
ruling, or decree applicable to such Seller or the Company as a party in
interest, or (iv) violate or conflict with any law, rule or regulation
applicable to such Seller or the Company.

(c) Execution, Delivery; Valid and Binding Agreement. The execution, delivery
and performance of this Agreement by each of the Sellers and the Ancillary
Documents to which each of such Sellers is a party and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all requisite corporate action, and no other corporate Proceedings
are necessary to authorize the execution, delivery or performance of this
Agreement and the Ancillary Documents to which such Seller is a party. This
Agreement has been, and each of the Ancillary Agreements to be executed by each
of the Sellers at Closing will be, duly executed and delivered by Sellers and
constitute the valid and binding obligation of Sellers, enforceable in
accordance with their respective terms.

(d) Governmental Authorities; Consents. The Sellers are not required to submit
any notice, report or other filing with any Governmental Authority in connection
with its execution or delivery of this Agreement or the consummation of the
transactions contemplated hereby, and, except as set forth in the Sellers
Disclosure Schedule, no consent, approval or authorization of any Governmental
Authority or any other Person is required to be obtained by Sellers in
connection with its execution, delivery and performance of this Agreement or the
transactions contemplated hereby and except for such consents, approvals and
authorizations which, if not obtained, would not result in a Material Adverse
Change with respect to Sellers or the Company.
 
 
(e) Company Membership Interests of the Sellers. The Company Membership
Interests of the Sellers constitute 50% of all of the authorized and issued
membership interests of the Company. All of the Company Membership Interests of
the Sellers have been duly authorized and are validly issued. The Company
Membership Interests of the Sellers are owned by each of the Sellers as set
forth in Schedule 2.01 free and clear of all liens claims and encumbrances.

(f) Financial Statements. The un-audited financial statements (collectively, the
“Company Financial Statements”) have been delivered to Buyer and are attached as
Schedule 3.01 (f) to the Sellers’ Disclosure Schedule. The Company Financial
Statements (i) have been prepared by the Company’s management on a consistent
basis throughout the periods covered thereby; (ii) present fairly, in all
material respects, the financial condition of the Company as of the dates
thereof and the results of their operations for the periods then ended; and
(iii) are consistent with the books and records of the Company, which books and
records are true, correct and complete in all material respects. For purposes of
this Agreement, the “Balance Sheet” means the consolidated balance sheet of the
Company dated as of June 30, 2011, and the “Balance Sheet Date” means June 30,
2011. Since the Company Balance Sheet Date there has been no change in the
assets or liabilities, or in the business or condition, financial or otherwise,
or in the results of operations of the Company, which has had or is reasonably
likely to result in a Material Adverse Change.
.
 
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(g) No Undisclosed Material Liabilities. The Company does not have any debt,
liability or obligation of any kind, whether accrued, absolute, contingent,
inchoate, determined, determinable, or otherwise, except for (i) liabilities or
obligations which, individually or in the aggregate, would not result in a
Material Adverse Change; (ii) liabilities or obligations under this Agreement or
incurred in connection with the transactions contemplated hereby; (iii)
liabilities or obligations disclosed in the Balance Sheet or footnotes thereto;
and (iv) liabilities or obligations arising in the ordinary course of business
after the Balance Sheet Date and which do not result in a Material Adverse
Change.

(h) No Litigation. There is no suit, action, proceeding, or investigation
presently pending or, to the Knowledge of Sellers, threatened against or
affecting the Company or its  Assets that has had or could reasonably be
expected to result in a Material Adverse Change or prevent, hinder or materially
delay the ability of the Sellers to consummate the Acquisition, nor is there any
judgment, decree, injunction, rule or order of any Governmental Authority or
arbitrator outstanding against the Company or the Assets which has had, or
which, insofar as reasonably can be foreseen, in the future could have, any such
effect.

(i) Compliance with Laws and Permits. The Company is not in violation of, or in
default in any material respect under, and no event has occurred that (with
notice or the lapse of time or both) would constitute a violation of or default
under any applicable law, rule, regulation, ordinance, order, writ, decree or
judgment of any Governmental Authority. The Company has obtained and holds all
material permits, licenses, variances, exemptions, orders, franchises, approvals
and authorizations of all Governmental Authorities necessary for the lawful
conduct of its business and the lawful ownership, use and operation of the
Assets (the “Company Permits”), except for the Company Permits which the failure
to obtain or hold would not, individually or in the aggregate, result in a
Material Adverse Change. The Company is in compliance with the terms of the
Company Permits, except where the failure to comply would not, individually or
in the aggregate, result in a Material Adverse Change. All of the Company
Permits are in full force and effect and no action or claim is pending nor, to
the Knowledge of Sellers, is threatened to revoke or terminate any Company
Permit or declare any Company Permit invalid in any material respect. No
investigation or review by any Governmental Authority with respect to the
Company is pending or, to the knowledge of Sellers, threatened, other than those
the outcome of which would not, individually or in the aggregate, result in a
Material Adverse Change. All Company Permits that are material to the Company
are set forth in Section 3.01(i) of the Sellers Disclosure Schedule.
 
 
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(j) Title to Assets. The Company has Good, Marketable and Defensible Title to
all of its Oil and Gas Interests. All leases relating to the Oil and Gas
Interests are in full force and effect, and the Company has not received any
notice of default with respect to any of such leases.

(k) Environmental Matters. With respect to environmental matters, the Company
has not violated any material order or requirement of any Governmental Authority
or any Environmental Law, and to Sellers’ Knowledge the ownership and operation
of the Assets have been in material compliance with Environmental Laws.

(l)           Tax Matters. No member of the Seller Group has distributed stock
of another Person, or has had its stock distributed by another Person, in a
transaction that was purported or intended to be governed in whole or in part by
Code §355 or Code §361.

(m)           Brokerage. No third party shall be entitled to receive any
brokerage commissions, finder’s fees, fees for financial advisory services or
similar compensation in connection with the Acquisition based on any arrangement
or agreement made by or on behalf of Sellers or the Company.

(n)           Private Placement

(i) Each of the Sellers understands that investment in shares of Acquisition
Stock is a speculative investment involving a high degree of risk.  Each of the
Sellers is aware that there is no guarantee that it will realize any gain from
accepting the Acquisition Shares as acquisition consideration. Sellers are
acquiring the Acquisition Shares for its own account and not with a view to the
distribution thereof in violation of the Securities Act, and any applicable
securities laws of any state.

(ii)           Each of the Sellers is an “accredited investor” as defined in
Rule 501(a) of Regulation D promulgated under the Securities Act. Sellers are
financially able to bear the economic risk of its decision to accept the
Acquisition Shares as acquisition consideration, including the ability (but not
the intention) to hold the Acquisition Shares indefinitely or to afford a
complete loss of its investment in the Acquisition Shares.  Each of the Sellers
has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the shares.

(iii)           Each of the Sellers acknowledges that the certificates for the
securities comprising the Acquisition Shares that Sellers will receive will
contain legends substantially as follows:

THE SHARES THAT ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR EAGLE FORD OIL & GAS
CORP.  (THE “COMPANY”) RECEIVES AN OPINION OF COUNSEL FOR THE COMPANY THAT AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE. THE
SHARES THAT ARE REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF THE PURCHASE AGREEMENT, BETWEEN THE COMPANY, VALOR INTEREST
PARTNERS, LLC, SAFARI ADVENTURE PRODUCTIONS, INC., DEREK SCHMIDT, JEFF
MORGENROTH AND EAGLE FORD OIL & GAS CORP.
 
 
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3.02           Representations and Warranties of Buyer. Buyer hereby represents
and warrants to Sellers that, except as may be set forth to the contrary in
Buyer’s latest SEC Form 10-K, or elsewhere in this Agreement, that:

(a) Incorporation and Corporate Power.  Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of Nevada and has the corporate power and authority and all authorizations,
licenses, permits and certifications necessary to own and operate its properties
and to carry on its business as now conducted and presently proposed to be
conducted. The copies of the Articles of Incorporation and Bylaws of Buyer which
have been furnished to Sellers prior to the date hereof reflect all amendments
made thereto and are correct and complete as of the date hereof. Buyer is
qualified to do business as a foreign corporation in the states in which the
nature of its business or its ownership of property requires it to be so
qualified except for those jurisdictions in which the failure to be so qualified
would not, individually or in the aggregate, result in a Material Adverse Change
with respect to Buyer.

(b) Execution, Delivery; Valid and Binding Agreement. The execution, delivery
and performance of this Agreement by Buyer and the Ancillary Documents to which
Buyer is a party and the consummation of the transactions contemplated hereby
and thereby have been duly and validly authorized by all requisite corporate
action, and no other corporate proceedings are necessary to authorize the
execution, delivery or performance of this Agreement and the Ancillary Documents
to which Buyer are a party. This Agreement has been, and each of the Ancillary
Agreements to be executed by Buyer at Closing will be, duly executed and
delivered by Buyer and constitute the valid and binding obligation of Buyer,
enforceable in accordance with their respective terms.

(c) No Breach. The execution, delivery and performance of this Agreement
by  Buyer and the Ancillary Documents to which Buyer is a party and the
consummation  of the transactions contemplated hereby and thereby do not (i)
conflict with or result in a violation of any provision of the charter or bylaws
of  Buyer, (ii) constitute a default under, or give rise to any right of
termination, cancellation, or acceleration under any material bond, debenture,
note, mortgage, indenture, lease, contract, agreement, or other instrument or
obligation to which Buyer is a party or by which either of them or any of their
properties may be bound, (iii) result in the creation or imposition of any
Encumbrance upon the properties of Buyer, or (iv) violate any Applicable Law
binding upon Buyer except, in the case of clauses (ii), (iii), and (iv) above,
for any such conflicts, violations, defaults, terminations, cancellations,
accelerations or Encumbrances which would not, individually or in the aggregate,
result in a Material Adverse Change with respect to Buyer.

 
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(d) Governmental Authorities; Consents. Other than with respect to any
securities law reporting obligation, Buyer is not  required to submit any
notice, report or other filing with any Governmental Authority in connection
with its execution or delivery of this Agreement or the consummation of the
transactions contemplated hereby, and no consent, approval or authorization of
any Governmental Authority or any other Person is required to be obtained by
Buyer in connection with their respective execution, delivery and performance of
this Agreement or the transactions contemplated hereby and except for such
consents, approvals and authorizations which, if not obtained, would not result
in a Material Adverse Change with respect to Buyer.

(e) Financial Statements. The following audited and un-audited financial
statements (collectively, the “Buyer Financial Statements”) have been delivered
to Sellers:
 
(i) The audited consolidated balance sheets of Buyer as of December 31, 2008,
2009 and 2010, and the related audited statements of operations and changes in
stockholders’ equity for the fiscal year then ended; and

(ii) The un-audited consolidated balance sheet of Buyer and the related
un-audited statements of operations for the period ended June 30, 2011.

The Buyer Financial Statements (i) have been prepared in accordance with
generally accepted accounting principles (“GAAP”) on a basis consistent
throughout the periods covered thereby; (ii) present fairly, in all material
respects, the financial condition of  Buyer as of the dates thereof and the
results of their operations for the periods then ended; and (iii) are consistent
with the books and records of Buyer which books and records are true, correct
and complete in all material respects. For purposes of this Agreement, the
“Buyer Balance Sheet” means the consolidated balance sheet of Buyer dated as of
June 30, 2011, and the “Balance Sheet Date” means June 30, 2011. All liabilities
and obligations, whether absolute, accrued, contingent or otherwise, whether
direct or indirect, and whether due or to become due, which existed at the date
of the Buyer Financial Statements and are required, under GAAP, to be recorded
or disclosed in the balance sheets included in the Buyer Financial Statements or
disclosed in notes to the Buyer Financial Statements are so recorded or
disclosed.

Since the Buyer Balance Sheet Date there has been no change in the assets or
liabilities, or in the business or condition, financial or otherwise, or in the
results of operations of Buyer, which has had or is reasonably likely to result
in a Material Adverse Change.

(f) Absence of Undisclosed Liabilities. Except as may be disclosed in the
Buyer’s latest SEC Form 10-K and recently filed 8-K’s on June 21st, June 24th,
June 30th, July 20th and August 11th or as set forth elsewhere in this
Agreement, Buyer has no material liabilities (whether accrued, absolute,
contingent, un-liquidated or otherwise, whether due or to become due, and
regardless of when asserted) arising out of transactions or events heretofore
entered into, or any action or inaction, or any state of facts existing, with
respect to or based upon transactions or events heretofore occurring, except
liabilities which have arisen after June 30, 2011 in the Ordinary Course of
Business (none of which is a material uninsured liability for breach of
contract, breach of warranty, tort, infringement, claim or lawsuit) and other
liabilities which, in the aggregate, are not material to Buyer.
 
 
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(g) No Material Adverse Change. Since June 30, 2011, there has not been any
Material Adverse Change in, or any event or condition that might reasonably be
expected to result in any Material Adverse Change in, the assets, financial
condition, operating results, customer, employee or supplier relations, business
condition or prospects of Buyer.

(h) Tax Matters. Except as may be set forth in Buyer’s latest SEC Form 10-K or
elsewhere in this Agreement:

(i) Buyer and any affiliated, combined or unitary group of which Buyer is or was
a member for purposes of any Taxes (the “Buyer Group”) has timely filed, been
included in or sent all Tax Returns required to be filed or sent by or relating
to any of them prior to the Closing relating to any Taxes with respect to any
income, properties or operations of the Buyer Group prior to the Closing Date;

(ii) As of the time of filing, the Tax Returns of the Buyer Group:

A. Correctly reflected  in all material respects the facts regarding the income,
business, assets, operations, activities and status of the Buyer Group and any
other information required to be shown therein;

B. Constituted complete and accurate representations of the Tax liabilities for
the periods covered; and

C. Accurately set forth all items (to the extent required to be included or
reflected in the Tax Returns) relevant to future Tax liabilities, including the
Tax bases of properties and assets;

D. Buyer has timely paid all Taxes whether or not shown as due and payable on
the Tax Returns that have been filed by the Buyer Group;

E. Buyer has established a reserve (in accordance with generally accepted
accounting principles) on Buyer Financial Statements for any Taxes that relate
to  periods before the Closing ;

F. The charges, accruals and reserves for Taxes reflected on Buyer  Financial
Statements are adequate to cover the Tax liabilities accruing or payable by
Buyer in respect of periods prior to the date hereof;

G.  Buyer is not delinquent in the payment of any Taxes. It has requested a
filing extension for the 2010 Tax Return to be filed by September 15, 2011;

H. To Buyer’s Knowledge, no deficiency for any Taxes has been proposed, asserted
or assessed against Buyer (or any member of any affiliated or combined group of
which Buyer are or have been a member for which Buyer could be liable for
Taxes);
 
 
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I. Buyer has not been granted any extension of the limitation period applicable
to any Tax claims  nor has Buyer waived any such limitation period;

J. Buyer has not been a party to any tax sharing agreement with any corporation
which is not a member of the affiliated group of which Buyer is a member;

K. Buyer has not made any election under Section 1362(a) of the Code;

L. No Tax is required to be withheld pursuant to Section 1445 of the Code as a
result of the transactions contemplated in this Agreement;

M. Neither Buyer nor any Affiliate is a party to any agreement, contract, plan
or arrangement that has resulted or would result, separately or in the
aggregate, in the payment of any “excess parachute payments” within the meaning
of Section 280G of the Code and the consummation of the transactions
contemplated by this Agreement will not be a factor causing payments to be made
by Buyer that are not deductible (in whole or in part) under Section 280G of the
Code;

N. To Buyer’s Knowledge, no examinations of the Tax Returns of any member of the
Buyer Group are currently in progress or, to the Knowledge of Buyer, threatened
and no deficiencies have been asserted or assessed against any member of the
Buyer Group as a result of any audit by the Internal Revenue Service or any
other taxing authority and no such deficiency has been proposed or threatened;

O. There are no liens for Taxes (other than for current Taxes not yet due and
payable) upon the assets of any member of the Buyer Group;

P. No member of the Buyer Group will be required to include any item of income
in, or exclude any item of deduction from taxable income for any taxable period
(or portion thereof) ending after the Closing Date as a result of (A) a change
in method of accounting for a taxable period (or portion thereof) ending on or
prior to the Closing Date, (B) any “closing agreement,” as described in Code
§7121 (or any corresponding provision of state, local or foreign income Tax
law), (C) any intercompany transaction or any excess loss account (or any
corresponding or similar provision or administrative rule of federal, state,
local or foreign income Tax law), (D) any installment sale or open transaction
made on or prior to the Closing Date or (E) as a result of any prepaid amount
received on or prior to the Closing Date;

Q. No member of the Buyer Group has distributed stock of another Person, or has
had its stock distributed by another Person, in a transaction that was purported
or intended to be governed in whole or in part by Code §355 or Code §361; and

R. Buyer have withheld and timely paid all Taxes required to have been withheld
and paid in connection with any amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third party.
 
 
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(i) No Litigation. Except as may be set forth in  Buyer’s latest SEC Form 10-K
and the judgment described in Section 2.04 of the June 20, 2011 Purchase
Agreement filed as Exhibit 10.1 in Form 8-K dated June 24, 2011, there is no
suit, action, proceeding, or investigation presently pending or, to the
knowledge of Buyer, threatened against or affecting the Buyer that has had or
could reasonably be expected to result in a Material Adverse Change with respect
to Buyer or prevent, hinder or materially delay the ability of Buyer to
consummate the Acquisition, nor is there any judgment, decree, injunction, rule
or order of any Governmental Authority or arbitrator outstanding against the
Buyer which has had, or which, insofar as reasonably can be foreseen, in the
future could have, any such effect.

(j) Employees. (a) No executive employee of Buyer and, to the Knowledge of
Buyer, no group of employees of Buyer has any plans to terminate his, her or its
employment; (b) Buyer have complied in all material respects with all laws
relating to the employment of labor, including provisions thereof relating to
wages, hours, equal opportunity, collective bargaining and the payment of social
security and other taxes; (c) Buyer have no material labor relations problem
pending and its labor relations are satisfactory; (d) there are no workers’
compensation claims pending against Buyer nor is Buyer aware of any facts that
would give rise to such a claim; and (e) no employee of Buyer is subject to any
secrecy or non-competition agreement or any other agreement or restriction of
any kind that would impede in any way the ability of such employee to carry out
fully all activities of such employee in furtherance of the business of Buyer.

(k) Employee Benefit Plans. Buyer does not maintain any plans which would be
considered an “employee benefit plan” under ERISA.

(l) Compliance with Laws; Permits.

(i) Buyer and their respective officers, directors, agents and employees in
their capacity as such, have complied in all material respects with all
Applicable Laws, regulations and other requirements which materially affect the
business of Buyer and to which Buyer may be subject, and, except as may be set
forth elsewhere in this Agreement, no claims have been filed against Buyer
alleging a violation of any such laws, regulations or other requirements. To
Buyer’s Knowledge no such claims are pending or threatened.

(ii) Buyer has in full force and effect, all permits necessary to conduct its
businesses and own and operate its properties. A true, correct and complete list
of all the permits held by Buyer is attached to this Agreement. Buyer has
conducted its business in all material respects in compliance with all material
terms and conditions of such permits.

(m) SEC Filings. Buyer has delivered to Sellers copies of the following
documents previously filed by Buyer with the Securities and Exchange Commission
(the “Commission”): (i) Buyer’s annual report on Form 10-K for the fiscal year
ended December 31, 2010, and (ii) Buyer’s Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2011. Buyer has filed all reports, registration
statements and other documents required to be filed by it under the Exchange Act
since its inception (the “SEC Filings”) along with recent 8-K’s filed this year
on June 21st, June 24th, June 30th, July 20th and August 11th.
 
 
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Buyer has delivered to or made available for inspection by Sellers accurate and
complete copies of all the SEC Filings in the form filed by Buyer with the
Commission since its inception. The SEC Filings were prepared in accordance and
complied in all material respects with the applicable requirements of the
Securities Act or the Exchange Act, as applicable. None of such forms, reports
and statements, including, without limitation, any financial statements,
exhibits and schedules included therein and incorporated therein by reference,
at the time filed, declared effective or mailed, as the case may be, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. In addition, since June 20, 2011 the Company has been conducting a
private placement of up to 12,000,000 shares of Common Stock.  To date, Buyer
has issued or agreed to issue approximately 1,300,000 shares of Common Stock
from the private placement at cash prices ranging from $.33 to $.46 per share.

(n) Brokerage. No third party shall be entitled to receive any brokerage
commissions, finder’s fees, fees for financial advisory services or similar
compensation in connection with the transactions contemplated by this Agreement
based on any arrangement or agreement made by or on behalf of Buyer or any
affiliate thereof.

(o) Validity of Buyer Common. The shares of Buyer Common Stock to be issued to
Sellers pursuant to this Agreement have been duly authorized and, upon issuance,
delivery of the Company Membership Interests of the Sellers in payment
therefore, will be validly issued, fully paid and non-assessable.

(p) Accuracy of Information. All of the information and other data relating to
Buyer furnished to Sellers by or on behalf of Buyer in connection with the
Acquisition is accurate and complete in all material respects, and none of such
information contains any untrue statement of a material fact, or omits to state
a material fact necessary to make the statements contained therein, under the
circumstances in which they are made, not misleading.
 
 
3.03 Representations and Warranties on Closing. The representations and
warranties made in this Article III will be true and correct in all material
respects on and as of the Closing Date, except that any such representations and
warranties which expressly relate only to an earlier date shall be true and
correct on the Closing Date as of such earlier date.

 
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ARTICLE IV
ADDITIONAL CLOSING DELIVERIES

5.01 Buyer’s Additional Closing Deliveries. The Buyer has made the following
additional deliveries to Seller at the Closing:

(a)           Officers’ Certificate. Sellers have received a certificate
executed on behalf of Buyer by the President of the Buyer, dated the Closing
Date, representing and certifying, as to the identity and incumbency of its
officers and directors and as to resolutions of the Board of Directors of Buyer
authorizing the execution, delivery and performance by Buyer of this Agreement,
certified by the secretary or an assistant secretary of Buyer; and

(b)           Certificate of Secretary of State of Nevada. A certificate from
the Secretary of State of Nevada, dated not more than 10 days prior to the
Closing Date, as to the legal existence and good standing of Buyer under the
laws of such state.

5.02 Sellers’ Additional Closing Deliveries. The Sellers have made the following
additional deliveries to Buyer at the Closing:

(i.)           Officers’ Certificate. Buyer has received a certificate executed
on behalf of each of Valor and SAP, certifying resolutions of the partners or
members of Valor and SAP, authorizing the execution, delivery and performance by
each of this Agreement, certified by the secretary or an assistant secretary of
each.

 
 
ARTICLE VI
[OMIT]

 
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ARTICLE VII
MISCELLANEOUS

7.01 Entire Agreement. This Agreement, together with the Schedules, Exhibits,
Annexes, Ancillary Documents and other writings referred to herein or delivered
pursuant hereto, constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof. Each party to this Agreement acknowledges that no
representations, inducements, or agreements, oral or otherwise have been made by
any party, or anyone acting on behalf of any party, which are not embodied
herein or in the Schedules, Annexes and Exhibits hereto, and no other agreement,
statement or promise not contained in this Agreement or in the Schedules,
Annexes or Exhibits hereto shall be binding. The parties hereto have had the
opportunity to consult with their respective attorneys concerning the meaning
and the import of this Agreement and the Schedules, Annexes and Exhibits hereto
and each has read this Agreement and the Schedules and Exhibits hereto, as
signified by such party’s signature below, and are executing the same for the
purposes and consideration herein expressed.
 
 
7.02 Binding Effect; Assignment; No Third Party Benefit. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors, heirs, personal representatives and permitted assigns; provided,
however, that neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (by
operation of law or otherwise) without the prior written consent of the other
parties, except that upon written notice to Sellers (a) Buyer may assign to any
other direct wholly owned domestic corporate subsidiary of Buyer all of Buyer’s
rights, interests or obligations hereunder, provided as a condition of such
assignment to any subsidiary of Buyer, such subsidiary shall be required to make
the same representations to Sellers as Buyer had under Article III hereof.
Except as set forth in this Section 7.02, nothing in this Agreement, express or
implied, is intended to or shall confer upon any Person other than  Buyer,
Company and Sellers any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.

7.03 Severability. If any provision of this Agreement is held to be
unenforceable, this Agreement shall be considered divisible and such provision
shall be deemed inoperative to the extent it is deemed unenforceable, and in all
other respects this Agreement shall remain in full force and effect; provided,
however, that if any such provision may be made enforceable by limitation
thereof, then such provision shall be deemed to be so limited and shall be
enforceable to the maximum extent permitted by Applicable Law.

7.04 Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of Texas regardless of the
laws that might otherwise govern under principles of conflicts of laws
applicable thereto.

 
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7.05 Notices. All notices, requests, demands, claims and other communications
required or permitted to be given hereunder shall be in writing and shall be
given by (a) personal delivery (effective upon delivery); (b) recognized
overnight delivery service (effective on the next day after delivery to the
service); or (c) registered or certified mail, return receipt requested and
postage prepaid (effective on the third day after being so mailed), in each case
addressed to the intended Seller recipient as set forth in Schedule 2.01 with
exception to the Buyer below:

If to the Buyer:
Eagle Ford Oil & Gas Corp.
1110 NASA Parkway
Suite 311
Houston, Texas 77058
Attention: Paul Williams

 
With a copy to:
Boyer Jacobs Short
Nine Greenway Plaza
Suite 3100
Houston, Texas 77046
Attention: John R. Boyer, Jr.
 
Any party may change his or its address for receiving notices by giving written
notice of such change to the other parties in accordance with this Section 7.05.

7.06 Injunctive Relief. The parties hereto acknowledge and agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Agreement, and shall be entitled to enforce specifically the provisions of this
Agreement, in any court of the United States or any state thereof having
jurisdiction, in addition to any other remedy to which the parties may be
entitled under this Agreement or at law or in equity.

7.07 DTPA Waiver. To the extent applicable to the transaction contemplated
hereby, each of Buyer waives the provisions of the Texas Deceptive Trade
Practices Act, Chapter 17, Subchapter E, Sections 17.41 through 17.63,
inclusive, Texas Bus. & Com. Code. Notwithstanding the foregoing, the parties
hereto agree that such waiver shall not in any way modify, limit, reduce or
otherwise impact the obligations of the Sellers pursuant to Section 8.02 of this
Agreement.

7.08 Descriptive Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.

 
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7.09 Counterparts. This Agreement may be executed by the parties hereto in any
number of counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same agreement. Each counterpart may consist
of a number of copies hereof each signed by less than all, but together signed
by all, the parties hereto.

7.10 Descriptive Headings. The descriptive headings herein are inserted for
convenience of reference only, do not constitute a part of this Agreement and
shall not affect in any manner the meaning or interpretation of this Agreement.

7.11 Gender. Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires.

7.12 References. All references in this Agreement to Articles, Sections and
other subdivisions refer to the Articles, Sections and other subdivision of this
Agreement unless expressly provided otherwise. The words “this Agreement”,
“herein”, “hereof”, “hereby”, “hereunder” and words of similar import refer to
this Agreement as a whole and not to any particular subdivision unless expressly
so limited. Whenever the words “include”, “includes” and “including” are used in
this Agreement, such words shall be deemed to be followed by the words “without
limitation”. Each reference herein to a Schedule or Exhibit refers to the item
identified separately in writing by the parties hereto as the described Schedule
or Exhibit to this Agreement. All Schedules, Annexes and Exhibits are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein.

7.13 United States Dollars. Unless expressly indicated otherwise, all dollar
amounts in this Agreement and the Schedules and Exhibits hereto are expressed in
United States dollars.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
 
 
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SIGNATURES
 
To evidence the binding effect of the foregoing terms and condition, the parties
have caused their respective duly authorized representative to execute and
deliver this Agreement on the date first above written.
 

     Sellers:                 Valor Interest Partners, L.L.C.            
 
  By: 
/s/
       
R. Sandy Cunningham Jr., President
                          Safari Adventure Productions, Inc.            
 
  By:
/s/
       
Brook Minx, President
                     
 
  DEREK SCHMIDT                         Derek Schmidt, Individually            
              JEFF MORGENROTH                       Jeff Morgenroth,
Individually                      
 
  Company:                 SANDSTONE ENERGY PARTNERS I, L.L.C.                  
        By:
/s/
       
Ralph “Sandy” Cunningham Jr.
        President                           Buyer:                 EAGLE FORD
OIL & GAS CORP.                 By:           Paul Williams         Chief
Executive Officer  

 
 
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