exhibit103.htm


    Exhibit
10.3

    ASSET PURCHASE AND SALE
AGREEMENT

    


    This Asset Purchase and Sale Agreement
(the “Agreement”) is made and entered into as of this 15th day of October, 2008,
by and between M-J Oil Company, Inc., an Ohio corporation (“Seller”), and ECCO
Energy Corp., a Nevada corporation (“Buyer”).

    


    BACKGROUND


    WHEREAS, Seller desires to sell to
Buyer, and Buyer desires to purchase from Seller, the Assets (as defined in
Section 1 hereof) in accordance with the terms and conditions set forth
herein.

    


    NOW THEREFORE, in consideration of the
premises and mutual covenants and conditions contained herein, the parties
hereto, intending to be legally bound hereby, agree as follows:

    


    1.           Sale and
Purchase of the Assets.  On the Closing Date (as defined in
Section 11 hereof), Seller shall sell, assign, convey and deliver to Buyer, and
Buyer shall purchase and acquire from Seller, as of the Effective Date (also as
defined in Section 11(a) hereof), all of Seller’s right, title and interest in
and to the following assets (Seller’s right, title and interest in the following
is collectively called the “Assets”):

    


    a. Pipeline.  That
certain pipeline more particularly described in Exhibit 1(a) attached hereto and
made a part hereof for all purposes (the “Pipeline”);

    


    b. Contracts.  All
right, title and interest of Seller in and to all presently existing and valid
rights of ways, easements, and other agreements and contracts which relate to
any of the Assets described above, or which relate to the operation, or
maintenance thereof or other agreements and contracts enumerated on Schedule
1(b) hereto;

    


    c.  Records.  All
books, files, records, maps, correspondence, studies, surveys, reports and other
data in the possession of Seller and relating to the Assets or copies thereof
(the “Records”).

    


    2.           Purchase
Price.  Subject to the Closing of that certain Asset Purchase
and Sale Agreement dated September 30, 2008 by and between Seller and Samurai
Corp., an affiliate of Buyer, the total purchase price for the Assets, shall be
One Million Dollars U.S. ($1,000,000.00) payable at the Closing by delivering to
Seller a Promissory Note substantially in the form of Exhibit 2 attached hereto
and made a part hereof.

    


    3.           Representations
and Warranties of Seller.  Seller represents and warrants to
Buyer as follows:

    


    a. Organization.  Seller
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Ohio and is qualified or registered as a foreign entity in
each jurisdiction where it is required to be so qualified and registered except
where the failure to so qualify would not have a material adverse effect on the
Seller’s ownership, operation or value of the Assets.

    


    b. Authority.   Seller
has full power and authority to enter into this Agreement and to perform
Seller’s obligations under this Agreement.  Neither the execution and
delivery of this Agreement nor the performance by Seller of its obligations
hereunder will (i) violate Seller’s Articles of Organization, (ii) violate or
constitute a default under any law, regulation, contract, agreement, consent
decree or judicial order by which Seller or any of its officers, members or
partners are bound or (iii) result in the creation of any Title Defect upon the
Assets.

    


    c. Enforceability.  This
Agreement has been duly executed and delivered by the Seller and constitutes the
legal, valid and binding obligation of Seller enforceable in accordance with its
terms, except as limited by bankruptcy or other laws applicable generally to
creditor’s rights and as limited by general equitable principles.  At
the Closing, all documents required hereunder to be executed and delivered by
Seller and shall constitute the legal, valid and binding obligations of Seller
enforceable in accordance with their respective terms, except as limited by
bankruptcy or other laws applicable generally to creditor’s rights and as
limited by general equitable principles.

    


    d. Contracts.  Schedule
1(b) contains a list of all material contracts affecting the Assets in Seller’s
possession or to which Seller is aware the Assets are subject.  Seller
has received no notice of its material default under any of such
contracts.  Such contracts are in full force and effect and have not
been modified or amended to any material extent subsequent to the date
hereof.

    


    e. Preferential
Purchase Rights/Consents.  To the best of Seller’s knowledge,
Schedule 3(e) sets forth all consents, approvals, waivers and authorizations
(collectively, “Consents”), and all preferential purchase rights required to be
obtained (“Pref Rights”), in connection with the sale of the Assets to
Buyer.

    


    f. Litigation
and Claims.  Except as described on Schedule 3(f), no claim,
demand, filing, cause of action, administrative proceeding, lawsuit or other
litigation is pending or, to Seller’s knowledge, threatened with respect to
Seller or the Assets that could now or hereafter materially adversely affect the
ownership, operation or value of the Assets.

    


    g. Finder’s
Fees.  Seller has not incurred any liability, contingent or
otherwise, for brokers’ or finders’ fees in respect to this transaction for
which Buyer shall have any responsibility whatsoever.

    


    h. Compliance
with Laws.  Seller has no actual knowledge, and has not
received any notice from any federal, state or municipal authority that the
Assets or Seller’s use thereof in its business, are not in material compliance
with all laws, rules, regulations and permits relating to the Assets except for
such non-compliance and violations which, individually or in the aggregate,
would not have a material adverse effect on the ownership, operation or value of
the Assets.  Seller will promptly notify Buyer upon receipt of any
such notice.

    


    i. Title.  Seller
owns the Assets free and clear of all liens and encumbrances (except as
disclosed in the Schedules hereto) arising by, through or under Seller. The
Transfer Documents contemplated in Section 6(d) shall be conveyed by Seller to
Buyer with covenants of limited warranty against claims and demands of all
persons lawfully claiming the same by, through, or under Seller, but not
otherwise related to the title to the Pipeline, subject to the limitations of
such warranty set forth in Section 13, but such Transfer Documents shall be made
without any warranty of title, either express or implied, with respect to any
personal property and equipment, and with respect to such personal property and
equipment the Transfer Documents shall be made on an “as is” “where is” basis
with all faults.

    


    j. Environmental
Issues.  To the best of its knowledge, Seller has complied in
all material respects with all Environmental Laws (as defined below) and with
the terms of all permits, licenses, orders, decrees and agreements
thereunder.  Seller is not aware of, and has not received notice from
any person or entity asserting or alleging (i) any non-compliance with the
Environmental Laws by Seller relating to the operation and ownership of the
Assets; (ii) any liability in connection with the release, spill, discharge,
storage, disposal or presence of any pollutants, contaminations, chemicals,
industrial, toxic or hazardous substances or wastes, petroleum, petroleum
products or wastes and natural gas by-products, liquids or wastes (collectively,
“Hazardous Materials”), including but not limited to liability under the federal
Comprehensive Environmental Response, Compensation and Liability Act or similar
state “Superfund” laws, relating in any way to the Assets; or (iii) the release,
discharge or presence of any Hazardous Materials at, on, under or from any of
the Assets requiring cleanup or other remedial action pursuant to the
Environmental Laws.  For purposes of this agreement, Environmental
Laws shall include the Comprehensive Environmental Response, Compensation and
Liability Act of 2980, as amended (42 U.S.C. & 6091 et. seq.).  The
Resource Conservation and Recovery Act of 1976 (42 U.S.C. & 6901 et. seq.), The Clean
Water Act (33 U.S.C. & 466 et. seq.), The Safe
Drinking Water Act (14 U.S.C. & 1401-1450), The Hazardous Materials
Transportation Act (49 U.S.C. & 1401-7401 et. seq.) as amended, The
Clean Air Act amendments of 1990, and any other applicable federal, state or
local law.  Notwithstanding the foregoing, the parties acknowledge
that oil and gas assets of the nature of the Assets routinely contain some
quantities of oil, brine or other materials and that the presence of such
materials in such locations and quantities as are routinely found on or near
Appalachian Basin oil and gas properties is not a violation of any warranty or
other provision of this Agreement.

    


    k. Financial
Data.  To Seller’s
knowledge, all financial data provided by Seller to Buyer relating to the Assets
is true and accurate in all material respects.

    


    l. No AFE
Items.  Seller has incurred no expenses, and has made no
commitments to make expenditures, in connection with (and no other obligations
or liabilities have been incurred which would adversely affect) the ownership or
operation of the Assets since September 1, 2008, other than routine expenses
incurred in the normal operation of the same.  Seller has not
abandoned or removed any material items of equipment, except those replaced by
items of equal suitability and value since September 1, 2008.

    


    


    m.
Permits.  To the extent Seller is the operator of an Asset, to
the best of its knowledge Seller has all material governmental licenses and
permits necessary or appropriate to own and operate the Asset as presently being
owned and operated, and such licenses, permits and filings are in full force and
effect (and are transferable by Seller), and Seller has not received written
notice of any material violations in respect of any such licenses or
permits.  To the extent that Seller is not the operator of an Asset,
to the best of Seller’s knowledge, the operator of the Asset has all material
governmental licenses and permits necessary or appropriate to own and operate
the Asset as presently being owned and operated, and such licenses, permits and
filings are in full force and effect, and Seller has not received written notice
of any material violations in respect of any such licenses or
permits.

    


    n. No
Material Adverse Change. Since the date of this Agreement, to the best of
Seller’s knowledge there shall have been no material adverse changes in the
conditions of any of the Assets except normal depreciation of equipment through
ordinary wear and tear and other events or conditions approved in writing by
Buyer on the Closing Date.

    


    4.           Representations
and Warranties of Buyer.  Buyer represents and warrants to
Seller as follows:

    


    a. Organization.  Buyer
is a Nevada corporation duly organized, validly existing and in good standing
under the laws of the state of Nevada and is qualified or registered as a
foreign entity in the State of Ohio and duly bonded as a well owner in that
state.

    


    b. Authority
and Ability.  Buyer has full power and authority and has taken
all requisite action, corporate or otherwise, to authorize Buyer to carry on
Buyer’s business as presently conducted, to enter into this Agreement, to
purchase the Assets on the terms described in this Agreement and to perform its
obligations under this Agreement.  Neither the execution and delivery
of this Agreement nor the performance by Buyer of its obligations hereunder will
(i) violate Buyer’s Articles of Incorporation or Bylaws or (ii) violate or
constitute a default under any law, regulation, contract, agreement, consent
decree or judicial order by which Buyer or any of its directors, officers or
shareholders are bound. Buyer has the financial ability and available credit to
be able to perform all of its obligations under this Agreement.

    


    c. Enforceability.  This
Agreement has been duly executed and delivered on behalf of Buyer and
constitutes the legal, valid and binding obligation of Buyer enforceable in
accordance with its terms except as limited by bankruptcy or other laws
applicable generally to creditor’s rights and as limited by general equitable
principles.  At the Closing, all documents required hereunder to be
executed and delivered by Buyer shall be duly authorized, executed and delivered
and shall constitute legal, valid and binding obligations of Buyer enforceable
in accordance with their respective terms, except as limited by bankruptcy or
other laws applicable generally to creditor’s rights and as limited by general
equitable principles.  Buyer is currently solvent.

    


    d. Status of
Buyer.  Buyer represents that by reason of its knowledge and
experience in the evaluation, acquisition, and operation of oil and gas
properties, Buyer has performed, or will perform before Closing, a due diligence
review of the Assets and will have evaluated the merits and risks of purchasing
the Assets from Seller and has formed an opinion as to the value and purchase of
the Assets based solely on Buyer’s knowledge and experience and not on any
representations or warranties by Seller except as otherwise provided in this
Agreement  Buyer is acquiring the Assets for its own account and
without a view to the distribution thereof within the meaning of the Securities
Act of 1933, as amended.

    


    e. Finder’s
Fees.  Buyer has not incurred any liability, contingent or
otherwise, for brokers’ or finders’ fees in respect to this transaction for
which Seller shall have any responsibility whatsoever.


     

        5.     Covenants
of Seller.


    a. Conduct
of Business Pending Closing.  Seller covenants that from the
date hereof to the Closing Date, Seller will:

    


    i. Ordinary
Course of Business, etc.  Not (A) act in any manner with
respect to the Assets other than in the normal, usual and customary manner,
consistent with prior practice; (B) dispose of, encumber or relinquish any of
the Assets (other than in the ordinary course of business or as a result of the
expiration of Leases or other agreements or contracts that Seller has no right
or option to renew); (C) waive, compromise or settle any material right or claim
with respect to any of the Assets; (D) commit to or make capital expenditures
with respect to the Assets in an amount which exceeds $10,000 without Buyer's
consent, except when required by an emergency when there shall have been
insufficient time to obtain advance consent.

    


    ii. Permits,
etc.  Cooperate with Buyer in the notification of all
applicable governmental regulatory authorities of the transactions contemplated
hereby and cooperate with Buyer in obtaining the issuance by each such authority
of such permits, licenses and authorizations as may be necessary for Buyer to
own and operate the Assets following the consummation of the transactions
contemplated by this Agreement.

    


    iii. Consents.  Use
commercially reasonable efforts, consistent with industry practices in
transactions of this type, to identify, with respect to all material Assets, (i)
that Consents be obtained which would be applicable to the transactions
contemplated hereby and (ii) the names and addresses of parties holding such
rights; in attempting to identify such and Consents, and the names and addresses
of such parties holding the same, Seller shall in no event be obligated to go
beyond its own records. Seller will request from the parties so identified (and
in accordance with the documents creating such Consents), execution of Consents
and/or waivers so identified.

    


    b. Access.  Seller,
shall afford to Buyer and its authorized representatives reasonable access, at
Buyer’s sole risk and expense, from the date hereof until the Closing Date
during normal business hours, to (i) the Assets operated by Seller, provided,
however, that Buyer shall indemnify and hold harmless Seller from and against
any and all Damages (as defined in Section 14 hereof) arising from Buyer’s
inspection of the Assets, and (ii) Seller’s Records.

    


    6.           Conditions
Precedent to the Obligations of Seller.  The obligations of
Seller to be performed at the Closing are subject to the fulfillment (or waiver
by Seller in its sole discretion), before or at the Closing, of each of the
following conditions:

    


    a. Representations
and Warranties.  The representations and warranties by Buyer
set forth in this Agreement shall be true and correct in all material respects
at and as of the Closing as though made at and as of the Closing and Buyer shall
have delivered a certificate to such effect to Seller; and Buyer shall have
performed and complied with in all material respects all covenants and
agreements required to be performed and satisfied by it at or prior to
Closing.

    


    b. No
Litigation.  There shall be no suits, actions or other
proceedings pending or threatened to enjoin the consummation of the transactions
contemplated by this Agreement or seeking substantial damages against Seller or
Buyer in connection therewith.

    


    c. Purchase
Price.  Buyer shall have delivered the executed Promissory Note
representing the Purchase Price to Seller, which promissory note shall have been
executed within the State of Ohio.

    


    d. Conveyance
Documents.  Buyer shall have executed and delivered to Seller
(i) instruments of assignment and deeds in forms mutually acceptable to Buyer
and Seller effectuating the transfer of the Assets as contemplated herein (the
“Transfer Documents”), (ii) Deeds of Trust, Mortgages, Security Agreements and
any and all UCC forms evidencing all security interests and superior title in
and to the Assets retained by Seller to secure payment of the Promissory Note
and (iii) all appropriate state or local forms required to be executed to effect
the administrative change of operator of such Assets from Seller to Buyer to the
extent that Seller shall no longer have regulatory responsibility for the
Assets.

    


    e. Simultaneous
Transaction.  A closing shall have occurred, or will occur
simultaneously on a transaction involving the sale of oil and gas wells from
Seller to an affiliate of Buyer.

    


    7.           Conditions
Precedent to the Obligations of Buyer.  The obligations of
Buyer to be performed at the Closing are subject to the fulfillment (or waiver
by Buyer in its sole discretion), before or at the Closing, of each of the
following conditions:

    


    a. Representations
and Warranties.  The representations and warranties by Seller
set forth in this Agreement shall be true and correct in all material respects
at and as of the Closing as though made at and as of the Closing and Seller
shall have delivered a certificate to such effect to Buyer; and Seller shall
have performed and complied with in all material respects all covenants and
agreements required to be performed and satisfied by it at or prior to
Closing.

    


    b. No
Litigation.  There shall be no suits, actions or other
proceedings pending or threatened to enjoin the consummation of the transactions
contemplated by this Agreement or seeking substantial damages against Seller or
Buyer in connection therewith.

    


    c. Conveyance
Documents.  Seller shall have executed and delivered to Buyer
(i) the Transfer Documents, (ii)  and all appropriate state or local
forms required to be executed to effect the administrative change of operator of
such Assets from Seller to Buyer.

    


    d. Title.  Buyer
shall be satisfied in its sole discretion as to the state of title to the
Assets; if Buyer is not so satisfied on or before October 17, 2008, it shall
have the right to terminate this Agreement.

    


    8.           Title
Matters.

    


    a. Title
Adjustment.  Buyer shall notify Seller in writing of any
claimed Title Defects promptly upon Buyer’s discovery thereof and in no event
later than October 15 (“Title Defects Notice”).  The Title Defects
Notice shall set forth in reasonable detail the nature of such claimed Title
Defect  Any Title Defect that is not identified in the Title Defects
Notice shall thereafter be forever waived and expressly assumed by Buyer and
shall be deemed to have become a Permitted Encumbrance; provided, however, that
nothing contained herein shall be deemed to limit Buyer’s right to
indemnification under Section 14(b) hereof or under Seller’s limited warranty of
title.

    


    b. Definitions.  The
following terms shall have the following meanings for purposes of this
Agreement:

    


    i. “Title
Defect” shall mean any lien, mortgage, pledge (other than liens,
mortgages and pledges to be released at Closing), claim, charge, option or other
defect which would both violate Seller’s limited warranty covenants and
materially affect or interfere with the operation, use, ownership or value of
such Pipeline other than Permitted Encumbrances.

    


    ii. “Permitted
Encumbrances” shall mean:

    


    A. Materialman’s,
mechanic’s, repairman’s, employee’s, contractor’s, operator’s, tax, and other
similar liens or charges arising in the ordinary course of business for
obligations that are not delinquent or that will be paid and discharged in the
ordinary course of business or if delinquent, that are being contested in good
faith by appropriate action of which Buyer is notified in writing before
Closing;

    


    B. All
Consents;

    


    C. All
rights to consent by, required notices to, filings with, or other actions by
governmental entities in connection with the sale or conveyance of pipelines or
interests therein if they are routinely obtained subsequent to the sale or
conveyance;

    


    D. Easements,
rights-of-way, servitudes, permits, surface leases and other rights in respect
of surface operations that do not materially interfere with the oil and gas
operations to be conducted with respect to the Assets;

    


    E. All
operating agreements, unit agreements, unit operating agreements, pooling
agreements and pooling designations affecting the Assets;

    


    F. Conventional
rights of reassignment prior to release or surrender requiring notice to the
holders of the rights;

    


    G. All
rights reserved to or vested in any governmental, statutory or public authority
to control or regulate any of the Assets in any manner, and all applicable laws,
rules and orders of governmental authority;

    


    H. The terms
and conditions of the easements or rights of way affecting the Assets, and of
all other agreements affecting the Assets; and

    


    I. Any Title
Defects Buyer may have expressly waived in writing or which are deemed to have
become Permitted Encumbrances under Section 8(a).

    


    Nothing
contained in this Section 8(b)(ii) shall be deemed to limit Buyer’s right to
indemnification under Section 14(b) hereof or Seller’s limited warranty of
title.

    


    iii. “Defect
Value” shall mean the amount which is determined in accordance with
Section 8(b)iv below with respect to each Title Defect which is accepted by
Seller or determined to be a Title Defect pursuant to Section
8(b)iv.

    


    iv. Determination
of Title Defects and Defect Values.  Within three (3) business
days after Seller’s receipt of the Title Defects Notice, Seller shall notify
Buyer whether Seller agrees with Buyer’s claimed Title Defects and/or the
proposed Defect Values therefor (“Seller’s Response”).  In the event
such claimed Title Defect is not cured prior to the Release Date and if Seller
does not agree with any claimed Title Defect and/or the proposed Defect Value
therefor, then the parties shall attempt to agree on such matters.  If
the parties cannot reach agreement concerning either the existence of a Title
Defect or a Defect Value prior to Release Date, then either party may terminate
this Agreement.

    


         vii. Remedies
for Title Defect.  Seller shall have the right, but not the
obligation, to cure any Title Defect accepted by Seller or determined to be a
Title Defect pursuant to Section 8(b)iv above.

     

    


    9.           Third
Party Consents.    The
Purchase Price shall not be adjusted for the absence of Consents.

    


    10.          Suspense
Funds Held by Seller.  Suspense funds, if any, related to the
Assets shall be accounted for on the Final Settlement Statement as provided in
Section 12(b) below.

    


    11.          Closing.  

    


    a. The
purchase and sale of the Assets pursuant to this Agreement shall be consummated
(“Closing”) in Columbus, Ohio, at the offices of Vorys, Sater, Seymour and
Pease, LLP on or before October 17, 2008, or such other place and time as Seller
and Buyer may mutually agree (the “Closing Date”).   Seller will
continue to operate the Assets until the Closing and/or the Release Date as
defined in that certain Asset Purchase and Sale Agreement dated September 30,
2008 by and between Seller and Samurai Corp., an affiliate of
Buyer.  The Effective Date for the sale of the pipeline will be
October 1, 2008.

    


    b. Adjustments
to be Made.  In accordance with this Section 11(b), after
Closing, and in preparing the Final Settlement Statement, Buyer and Seller,
shall take such steps as are necessary or appropriate so that Seller shall pay
all expenses which are incurred in the operation of the Assets before October 1,
2008, and Buyer shall pay all expenses which are incurred in the operation of
the Assets after October 1, 2008, including reasonable and customary operating
expenses charged by Ohio operators for similar or like assets.
All  2008 property Taxes on the Assets shall be prorated between buyer
and Seller as of the date of Closing.

    


    12.           Closing
Statement and Post-Closing Adjustments.

    


    a. Final
Settlement Statement.  After the Closing, Seller shall prepare,
in accordance with this Agreement, a statement (the “Final Settlement
Statement”), a copy of which shall be delivered by Seller to Buyer no later than
forty-five (45) days after the Closing, setting forth each adjustment to the
Purchase Price necessary in accordance herewith and showing the calculation of
such adjustments. Buyer shall have thirty (30) days after receipt of the Final
Settlement Statement to review such statement and to provide written notice to
Seller of Buyer’s objection to any item on the statement.  Buyer’s
notice shall clearly identify the item(s) objected to and the reasons and
support for the objection(s).  If Buyer does not provide written
objection(s) within the 30-day period, the Final Settlement Statement shall be
deemed correct and shall not be subject to further adjustment.  If
Buyer provides written objection(s) within the 30-day period, the Final
Settlement Statement shall be deemed correct as to the items with respect to
which no objections were made.  Buyer and Seller shall meet to
negotiate and resolve the objections within fifteen (15) days of Buyer’s receipt
of Seller’s objections.  If Buyer and Seller agree on all objections
the adjusted Final Settlement Statement shall be deemed correct and shall not be
subject to further adjustment.  Any items not agreed to at the end of
the 15-day period may, at either party’s request, be resolved by arbitration in
accordance with Section 12(c) below.

    


    b. Arbitration.  If
Seller and Buyer cannot agree upon the Final Settlement Statement, the parties
shall chose a mutually agreeable accounting firm to act as an arbitrator and
decide all points of disagreement with respect to the Final Settlement Statement
by not later than twenty (20) days following the parties retention of such
consultant for such purpose.  The decision of such accounting firm on
all such points shall be binding upon the parties.  The costs and
expenses of such accounting firm shall be borne 50% by Seller and 50% by
Buyer.

    


    c. Payment
of Final Purchase Price.  Any amounts owing from Seller to
Buyer or Buyer to Seller as determined by the Final Settlement Statement shall
be paid within five (5) days of the date the Final Settlement Statement is
agreed upon or the final decision of the accounting firm, as the case may
be.

    


    13.           Limitation
of Warranties.  Except as otherwise set forth in Section 3
hereof and as contained in the conveyance documents, the Assets are being sold
by Seller to Buyer without recourse, covenant, or warranty of any kind, express,
implied, or statutory.  WITHOUT LIMITATION OF THE GENERALITY OF THE
IMMEDIATELY PRECEDING SENTENCE, SELLER CONVEYS SUCH PROPERTY AS-IS, WHERE-IS AND
WITH ALL FAULTS AND EXPRESSLY DISCLAIMS AND NEGATES (a) ANY IMPLIED OR EXPRESS
WARRANTY OF MERCHANTABILITY, (b) ANY IMPLED OR EXPRESS WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE AND (c) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO
MODELS OR SAMPLES OF MATERIALS.  SELLER ALSO EXPRESSLY DISCLAIMS AND
NEGATES ANY IMPLIED OR EXPRESS WARRANTY AT COMMON LAW, BY STATUTE OR OTHERWISE
RELATING TO THE ACCURACY OF ANY OF THE INFORMATION FURNISHED WITH RESPECT TO THE
EXISTENCE OR EXTENT OF RESERVES OR THE VALUE OF THE ASSETS BASED THEREON OR THE
CONDITION OR STATE OF REPAIR OF ANY OF THE ASSETS; THIS DISCLAIMER AND DENIAL OF
WARRANTY ALSO EXTENDS TO THE EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY AS TO
THE PRICES BUYER AND SELLER ARE OR WILL BE ENTITLED TO RECEIVE FROM PRODUCTION
OF OIL, GAS OR OTHER SUBSTANCES FROM THE ASSETS, IT BEING UNDERSTOOD THAT ALL
RESERVE, PRICE, AND VALUE ESTIMATES UPON WHICH BUYER HAS RELIED OR IS RELYING
HAVE BEEN DERIVED BY THE INDIVIDUAL EVALUATION OF BUYER.

    


    14.           Indemnification.  Except
as expressly limited elsewhere in this Agreement:

    


    a. Buyer’s
Indemnification.  Buyer agrees to indemnify and hold harmless
Seller, its officers, directors, employees, partners, members and managers and
any entity which controls, is controlled by or is under common control with
Seller and each of their respective successors and assigns (the “Seller
Indemnified Parties”) from and against any and all liability, loss, cost and
expense (including, without limitation, court costs and reasonable attorneys’
fees) (collectively, “Damages”) incurred by any Seller Indemnified Party and
arising directly or indirectly out of or resulting from:

    


    i. any
liability attributable to the ownership or operation of Assets which is incurred
with respect to any period of time after the Effective Date;

    


    ii. any
liability resulting from the condition of the Assets arising at any time after
the Closing Date under any Environmental Law;

    


    iii. any
breach by Buyer of any of its representations, warranties, covenants or
agreements hereunder; and/or

    


    b. Seller’s
Indemnification.  Seller agrees to indemnify and hold harmless
Buyer, its officers, directors, employees, shareholders and any entity which
controls, is controlled by or is under common control with Buyer and each of
their respective successors and assigns (the “Buyer Indemnified Parties”) from
and against any and all Damages incurred by any Buyer Indemnified Party and
arising directly or indirectly out of or resulting from

    


    i. any
liability attributable to the ownership and operation of the Assets which is
incurred with respect to any period of time before the Effective
Date;

    


    ii. any
breach by Seller of any of its representations, warranties, covenants or
agreements hereunder; and/or

    


    iii. any
Damages incurred by Buyer arising directly or indirectly out of or resulting
from Seller’s failure to obtain a required Consent, but only if Buyer provides
written notice of such Damages to Seller prior to the expiration of one year
subsequent to the Closing Date.

    


    c. Limits on
Indemnification.  No party hereto shall be liable for
consequential or incidental damages incurred by the other
party.  Further, Seller’s and Buyer’s indemnification obligations
shall expire on the first anniversary of the Closing.

    


    15.           Risk of
Loss.  An adjustment to the Purchase Price shall be made if,
after the date hereof and prior to the Closing, any part of the Assets shall be
destroyed or harmed by fire or any other casualty or cause or shall be taken by
condemnation or the exercise of eminent domain, but Seller shall be entitled to
any applicable insurance proceeds or condemnation awards. In the event of any
such loss, casualty or taking by eminent domain, the value of such Assets shall
be considered in the calculation of Defect Value as provided in Section
(8)(b)(iii).

    


    16.           Termination
and Remedies.

    


    a. Termination.  If
the Closing has not occurred on or prior to the Closing Date on account of any
failure of Buyer to perform its obligations hereunder and Seller has fully
complied and performed pursuant to the provisions of this Agreement, Seller may
terminate this Agreement.

    b. Sole
Remedy of Buyer Prior to Closing.  If, any time prior to
Closing, it is determined that any of the representations and warranties made
herein by Seller are materially incorrect or if Seller fails to fully and timely
comply with any of Seller’s obligations as set forth herein or as required by
applicable law, Buyer’s sole and exclusive remedy against Seller shall be to
terminate this Agreement.

    


    17.           Further
Assurances.  After the Closing, Seller and Buyer shall execute,
acknowledge and deliver or cause to be executed, acknowledged and delivered such
instruments and take such other action as may be necessary or advisable to carry
out their obligations under this Agreement and under any exhibit, document,
certificate or other instrument delivered pursuant hereto.

    


    18.           Access to
Records by Seller.  No later than  thirty (30) days
after Closing, Seller shall deliver to Buyer the originals of all Records
including accounting Records relating to the Assets at Buyer’s expense and with
minimal disruption of Seller’s ongoing business.  For a period of
three (3) years after the date of Closing, Buyer will retain the Records
delivered to it pursuant hereto and will make such Records available to Seller
upon reasonable notice at Buyer’s headquarters at reasonable times and during
office hours.  Buyer shall notify Seller in writing within thirty (30)
days of the sale to a third party of all or any part of the Assets which
involves the transfer of any of the Records of the name and address of the
buyer(s) in any such sale.  Buyer shall require as part of any such
sales transaction that such third party assume the obligations imposed on Buyer
in this Section.

    


    19.           Notices.  All
notices required or permitted under this Agreement shall be in writing and shall
be delivered personally or by certified mail, postage prepaid and return receipt
requested or by telecopier as follows:

    


    Buyer:                           
Samuel M. Skipper, President

    ECCO Energy Corp.

    3315 Marquart, Suite 206

    Houston,
TX  77027

    


    With
copies
to:             Claudio
R. Roman

    Attorney at Law

    3315 Marquart St. Suite
205

    Houston, TX 77027-6027

    


    


    Seller:                             
M-J Oil Company, Inc.

    3382 Baird Avenue

    Paris, OH 44669

    Phone: 330-868-2083

    Fax: 330-868-2084

    


    With
copies
to:             John
K. Keller, Esq.

    Vorys, Sater, Seymour and Pease,
LLP

    52 E. Gay Street

    Columbus, OH 43215

    Phone: 614-464-6389

    Fax:614-719-4794

    


    or to
such other place within the United States of America as either party may
designate as to itself by written notice to the other.  All notices
given by personal delivery or mail shall be effective on the date of actual
receipt at the appropriate address.  Notices given by telecopier shall
be effective upon actual receipt if received during recipient’s normal business
hours or at the beginning of the next business day after receipt if received
after the recipient’s normal business hours.  All notices by
telecopier shall be confirmed in writing on the day of transmission by either
mailing by postage prepaid certified mail with return receipt requested, or by
personal delivery.

    


    20.           Arbitration.  If
at any time any dispute shall arise between Buyer and Seller under this
Agreement or under any of the terms and provisions hereof (other than any
dispute to be decided by an accounting firm pursuant to Section 12(c) hereof)
which cannot be agreed upon by the parties hereto, then such dispute shall be
referred to a board of arbitrators (the “Board”).  Such Board shall be
composed of a representative of Buyer and a representative of Seller, to be
selected by them, respectively, and a third arbitrator who shall be chosen by
the two (2) arbitrators herein provided for.  In case the two (2)
arbitrators are unable to agree within ten (10) days upon a third arbitrator,
then the American Arbitration Association shall designate a disinterested person
to act as such arbitrator; and, in case either of the parties should, for a
period of ten (10) days after receipt of the notice below referred to, fail to
select and make known in writing to the other party the arbitrator selected by
it, the said American Arbitration Association shall designate two (2)
disinterested persons, who together with the person selected by the party
desiring the arbitration, shall constitute the Board.  Either party
may at any time serve upon the other a notice setting forth the point or points
upon which the decision of said Board is desired and the other party may, within
ten (10) days thereafter, serve a counter-notice specifying any additional
points or differences arbitrable hereunder upon which such other party may
desire a decision.  The Board shall give ten (10) days written notice
of the time and place of hearing to the respective parties, and shall determine
questions submitted to it for arbitration, and make its decision and award in
writing.  The decision and award of a majority of the arbitrators
shall be final, conclusive and obligatory upon the parties to this Agreement,
their successors and assigns, and without appeal, and each party hereto agrees
to abide by and comply with every such decision and award.  Those
costs of any such arbitration shall in the first instance be paid by the party
requesting the same, but if such party substantially prevails therein it shall
be reimbursed therefor by the other party, and this question of costs shall in
each case be determined by the Board when it renders its decision on the
question or questions submitted to it.

    


    21.           Governing
Law and Venue.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio. Venue for the
resolution of all disputes and arbitration proceedings provided for herein shall
take place in Columbus, Ohio.

    


    22.           Assignment.  This
Agreement shall be binding upon and shall inure to the benefit of the Parties
hereto and their respective permitted successors and
assigns.  Notwithstanding the preceding sentence, Buyer shall not
assign this Agreement or its rights or obligations hereunder without Seller’s
written consent which consent shall not be unreasonably withheld or
delayed.

    


    23.           Entire
Agreement; Amendments; Waivers.  This Agreement constitutes the
entire Agreement between the parties hereto with respect to the subject matter
hereof, superseding all prior negotiations, discussions, agreements and
understandings, whether oral or written, relating to such subject
matter.  This Agreement may not be amended and no rights hereunder may
be waived except by a written document signed by the party to be charged with
such amendment or waiver.  No waiver of any of the provisions of the
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.

    


    24.           Severability.  If
a court of competent jurisdiction determines that any clause or provision of
this Agreement is void, illegal, or unenforceable, the other clauses and
provisions of the Agreement shall remain in full force and effect and the
clauses and provisions which are determined to be void, illegal, or
unenforceable shall be limited so that they shall remain in effect to the extent
permissible by law.

    


    25.           Press
Releases.  Seller and Buyer shall consult with each other prior
to the issuance of any press releases or other public announcements concerning
this transaction.

    


    26.           Headings.  The
headings of the Sections of this Agreement are for guidance and convenience of
reference only and shall not limit or otherwise affect any of the terms or
provisions of this Agreement.

    


    27.           Counterparts.  This
Agreement may be executed by Buyer and Seller in any number of counterparts,
each of which shall be deemed an original instrument, but all of which together
shall constitute but one and the same instrument.  This Agreement will
be binding upon the parties who do sign whether or not all parties sign the
Agreement.

    


    28.           Expenses,
Fees and Taxes.  Each of the parties hereto shall pay its own
fees and expenses incident to the negotiation and preparation of this Agreement
and consummation of the transactions contemplated hereby, including broker fees.
Buyer shall be responsible for the cost of all fees for the recording of
transfer documents.  All other costs shall be borne by the party
incurring them.  Notwithstanding anything to the contrary herein, it
is acknowledged and agreed by and between Seller and Buyer that the Purchase
Price excludes any sales taxes or other taxes in connection with the sale of
property pursuant to this Agreement and that all such taxes shall be borne by
the party incurring them.

    


    29.           Business
Days.  The term “business day” when referred to herein shall
mean any day (other than a day which is a Saturday, Sunday or legal holiday) in
the State of Ohio.

    


    30.           Survival
of Representations and Warranties.  All representations and
warranties made herein by Seller and Buyer shall be continuing and shall be true
and correct on and as of Closing with the same force and effect as if made at
that time (and shall inure to the benefit of the respective successors and
assigns of Seller and Buyer), and all of such representations and warranties
shall survive for a period of one year from the Closing Date.

    


    IN
WITNESS WHEREOF, the parties hereto have caused their duly elected officers to
execute this Agreement on the date first above written.

    


    ECCO
Energy Corp.

    


    /s/Samuel
Skipper

    By:
Samuel M. Skipper, its:  President

    


    M-J Oil
Company, Inc.

    


    /s/Mark
Wimsatt

    By: Mark
Wimsatt, its:  President