Document:

ex101.htm

    ASSET
PURCHASE AGREEMENT

     

    THIS
ASSET PURCHASE AGREEMENT
(this “Agreement”) is made as of the 5th day of November, 2009 (the “Effective
Date”) by and among KYTX Oil & Gas, LLC, (“KYTX”) a Kentucky limited
liability company (the “Seller”) and Adventure Energy, Inc., (“Adventure”) a
Florida for profit corporation (the “Buyer”).

     

    RECITALS

     

    A. KYTX,
LLC, a Kentucky limited liability company (“KYTX”) is the owner of (i) certain
leases located in the counties of Adair, Russell, and Green in Kentucky (ii)
certain wells on said leases (iii) and certain fixtures on wells, field
equipment, and field house supplies; and

     

    B.
Adventure Energy, Inc., a Florida corporation (“Adventure”) is in the business
of exploration and production for oil and natural gas and has operations in the
state of Kentucky.

     

    AGREEMENT

     

    NOW,
THEREFORE, for and in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:

     

    ARTICLE
I

     

    THE
PURCHASE AND SALE

     

    1.1 Agreement to Purchase and
Sell. The Sellers agree to sell and transfer to the Buyer, and the Buyer
agrees to purchase and accept from Sellers pursuant to the terms and conditions
set forth in this Agreement the following assets (the “Purchased Assets”) of
Sellers:

     

    A. The
Wells as further described in Exhibit A

     

    B. The
Leases as further described in Exhibit B;

     

    C. All of
the equipment and supplies owned by Sellers and located in or at the individual
wells, on the leases, and at the Field House, as further described as Exhibit
D

     (Collectively,
the “Personal Property”);

     

       D.
The mobile #25 pump jack and trailer;
and                                                                                                

    
 

       E.
the Buyers shall assume the Field House lease dated February 1, 2009 by and
between KYTX and the Garrison representatives and located in Adair County,
Kentucky;  

    

    The
assets and property described in paragraphs A through E (the "Assets") shall be
transferred by Sellers to the Buyer, and  Sellers have not knowingly
allowed any liens, claims or encumbrances.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Notwithstanding
the foregoing, the transfer of the Assets pursuant to this Agreement shall not
include the assumption of any liability, outside of any liabilities defined in
the leases, related to the Assets or any other liabilities of
Sellers

     

    1.2 Consideration. In
exchange for the sale and transfer by the Sellers of the Purchased Assets to the
Buyer, the Buyer agrees, subject to the terms of this Agreement, to pay to the
Sellers One Hundred and Twenty Thousand Dollars ($120,000) (the “Purchase
Price”). The Purchase Price shall be allocated as follows:

     

    
      	 
      	 	 	 
	
              Leaseholds,
      Production, Well Assignments/Transfers, On Field Equipment

            	 	$	50,000.00	 
	
              Leaseholds,
      Production, Well Assignments/Transfers, On Field Equipment

            	 	 	50,000.00	 
	
              Field
      Equipment and Field House Equipment

            	 	 	15,000.00	 
	
              #25
      Mobile Pump Jack

            	 	 	5,000.00	 
	 
      	 	 	 	 
	 
      	 	 	 	 
	
              TOTAL

            	 	$	120,000	 

    

     

    

    A. Upon
the execution of the Agreement and within 24 hours of closing, the sum of
Seventy Thousand Dollars ($70,000.00) will be paid by Buyer to Sellers in cash
or by wire transfer of funds immediately available to Seller. Said amount shall
be credited towards all equipment purchases and the first of two (2) $50,000
payments to be credited towards the leaseholds, production, and well
assignments/transfers.

     

    B. On or
before 90 days after the closing of this transaction, the Buyers shall pay to
the Sellers the final $50,000 in cash or by wire transfer of funds immediately
available to Seller.

     

    1.3 Adjustments, Assumptions and
Payments.

     

           A.
Seller shall receive an overriding royalty interest of three percent (3%) of the
gross proceeds from any currently producing wells or any successful rework
wells, and any new wells drilled on the real property covered by the
leases.

     

    B.
Sellers shall not be entitled to solicit future revenue generation from
production of oil and gas on the real properties covered by the
leases

     

    C. Buyer
shall be responsible for the payment and filing of all assignments, each form
#ED-13 well transfer, any county, state, or federal registration, this
agreement, and any other collateral documents with the appropriate governmental
agencies.

     

     

    
      
        
        

      

      
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    1.4 Closing Deliveries.
Closing shall be set for November 6, 2009. At the Closing:

     

    (a) KYTX
as applicable will deliver to Buyer:

     

    (i)
an  #ED-13 well transfer form for each well being transferred from
KYTX to Adventure;

     

    (ii) a
bill of sale conveying to Buyer the Personal Property free and clear of all
liens, claims and encumbrances;

     

    (iii) an
assignment of each lease noted in Exhibit B. Seller shall prepare all
assignments utilizing Exhibit C;

     

    (iv) such
other assignments, certificates of title, registrations, transfer tax
declarations or certificates and other instruments of transfer and conveyance as
may reasonably be requested by Buyer, each in form and substance satisfactory to
Buyer and its legal counsel and executed by KYTX, as the case may
be;

     

    (v) a
copy of all division orders for any wells whereby KYTX has commercially sold
oil;

     

    (vi) any
original maps of leases, e-logs, down-hole camera videos, or any additional
documentation pertaining to the individual wells, leases, or operations in
general; and

    

    (vii) a
list of all wells plugged prior to the closing

    

     

     (b)
Buyer will deliver to Seller:

     

    (i) the
Purchase Price by wire transfer to an account specified by the Seller in a
writing delivered to Buyer at least one business days before the Closing
Date.

     

     

     

     

    ARTICLE
II

     

    REPRESENTATIONS
AND WARRANTIES

     

    2.1 Representations by
Buyer. The Buyer hereby represents and warrants unto the Sellers that the
following statements are true, correct, and complete as of the date of this
Agreement and will be true, correct, and complete as of the Closing
Date:

     

    (a) Organization and
Power. The Buyer is duly organized, validly existing, and in good
standing under the laws of the State of Florida and has full right, power, and
authority to enter into this Agreement and to assume and perform all of its
obligations under this Agreement; and, the execution and delivery of this
Agreement and the performance by the Buyer of its obligations hereunder have
been duly authorized by all requisite action of the Buyer and require no further
action or approval of the Buyer’s members or of any other individuals or
entities is necessary in order to constitute this Agreement as a binding and
enforceable obligation of the Buyer. This Agreement constitutes the legal, valid
and binding obligation of the Buyer, enforceable against such entity in
accordance with its terms. Buyer is qualified to do business in Kentucky at the
time of this agreement.

     

    
      
        
        

      

      
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    (b) Noncontravention.
Neither the entry into nor the performance of, or compliance with, this
Agreement by the Buyer has resulted, or will result, in any violation of, or
default under, or result in the acceleration of, any obligation under the
Buyer’s organizational documents, mortgage, indenture, lien agreement, note,
contract, permit, judgment, decree, order, restrictive covenant, statute, rule,
or regulation applicable to the Buyer.

    

    (c) Litigation. There is
no action, suit, or proceeding, pending or known to be threatened, against or
affecting the Buyer in any court or before any arbitrator or before any federal,
state, municipal, or other governmental department, commission, board, bureau,
agency or instrumentality which (i) in any manner raises any question affecting
the validity or enforceability of this Agreement, or (ii) could materially and
adversely affect the ability of the Buyer to perform its obligations hereunder,
or under any document to be delivered pursuant hereto.

     

    (d) Consents. Except as
may otherwise be set forth in Schedule 2.1(d) hereof, each consent, approval,
authorization, order, license, certificate, permit, registration, designation,
or filing by or with any governmental agency or body necessary for the
execution, delivery, and performance of this Agreement or the transactions
contemplated hereby by the Buyer has been obtained or will be obtained on or
before the Closing Date.

     

    (e) Brokerage Commission.
The Buyer has not engaged the services of any real estate agent, broker, finder
or any other person or entity for any brokerage or finder’s fee, commission or
other amount with respect to the transactions described herein on account of any
action by the Buyer.

     

    2.2 Representations by
Sellers. Each Seller, jointly and severally, hereby represents and
warrants unto the Buyer that each and every one of the following statements is
true, correct and complete as of the date of this Agreement and will be true,
correct and complete as of the Closing Date:

     

    (a) Organization and
Power. KYTX is duly organized, validly existing, and in good standing
under the laws of the state of its organization. Seller has full right, power,
and authority to enter into this Agreement and to assume and perform all of its
obligations under this Agreement; and the execution and delivery of this
Agreement and the performance by the Seller of its obligations hereunder have
been duly authorized by all requisite action of Seller and require no further
action or approval of Seller’s members or managers or directors or shareholders,
as the case may be, or of any other individuals or entities in order to
constitute this Agreement as a binding and enforceable obligation of the Seller.
This Agreement constitutes the legal, valid and binding obligation of each
Seller, enforceable against such entity in accordance with its
terms.

    

    

    
      
        
        

      

      
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    (b) Noncontravention.
Neither the entry into nor the performance of, or compliance with, this
Agreement by KYTX has resulted, or will result, in any violation of, or default
under, or result in the acceleration of, any obligation under the their
organizational documents, or any regulations, mortgage, indenture, lien
agreement, note, contract, permit, judgment, decree, order, restrictive
covenant, statute, rule, or regulation applicable to it.

     

    (c) Litigation. There is
no action, suit, or proceeding, pending or known to be threatened, against or
affecting KYTX in any court or before any arbitrator or before any federal,
state, municipal, or other governmental department, commission, board, bureau,
agency or instrumentality which (A) in any manner raises any question affecting
the validity or enforceability of this Agreement, (B) could materially adversely
affect the business, financial position, or results of operations (C) could
affect the ability of the Seller to perform its obligations hereunder, or under
any document to be delivered pursuant hereto, or (D) could create a lien on the
Property..

     

    (d)
[Intentionally Omitted.]

     

    (e) Operation. The
personal property, wells, structures, and equipment of the Seller are sold in
“as is” condition and after the Closing shall be in substantially the same
manner as conducted prior to the Closing.

     

    (f)
[Intentionally Omitted.]

     

    (g)
[Intentionally Omitted.]

     

    (h)
[Intentionally Omitted.]

     

     

    (i) Leases. Exhibit B
attached hereto is a true, correct and complete schedule of all mineral rights
leases.

    

     

    (j) Personal Property.
The Personal Property consists of all supplies, equipment, fixtures, and all
personal property located in or at individual wells, on the leases, and at the
field house, all of which is owned by KYTX.  Each item of personal property
is sold "as is".

     

    

    (k) Environmental
Matters. To the best of Sellers’ knowledge: (A) KYTX is, and at all times
has been, in full compliance with, and has not been and is not in violation of
or liable under, any environmental law. There is no basis for and no pending or
threatened order, notice, or communication from (i) any governmental body or
private citizen acting in the public interest, or (ii) the current or prior
owner or operator of any facilities, of any actual or potential violation or
failure to comply with any environmental law, or any actual or threatened
obligation to undertake or bear the cost of any environmental, health, and
safety liabilities with respect to any of the leases or any other properties or
assets (whether real, personal, or mixed) in which KYTX has had an interest, or
with respect to any property or facility at or to which hazardous materials were
generated, manufactured, refined, transferred, imported, used, or processed by
KYTX or any other person for whose conduct they are or may be held responsible,
or from which hazardous materials have been transported, treated, stored,
handled, transferred, disposed, recycled, or received.

     

     

    
      
        
        

      

      
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           (B) There are no
pending or, to the knowledge of KYTX, threatened claims, encumbrances, or other
restrictions of any nature, resulting from any environmental, health and safety
liabilities or arising under or pursuant to any environment law, with respect to
or affecting the leases or any other properties and assets (whether real,
personal, or mixed) in which KYTX or the Sellers has or had an
interest.

     

           (C) There is no basis
for any other person for whose conduct they are or may be held responsible,
received, any citation, directive, inquiry, notice, order, summons, warning, or
other communication that relates to hazardous activity, hazardous materials, or
any alleged, actual, or potential violation or failure to comply with any
environmental law, or of any alleged, actual, or potential obligation to
undertake or bear the cost of any environmental, health, or safety liability
with respect to the leases or any other properties or assets (whether real,
personal, or mixed) in which KYTX had an interest, or with respect to any
property or facility to which hazardous materials generated, manufactured,
refined, transferred, imported, used, or processed by KYTX, or any other person
for whose conduct they are or may be held responsible, have been transported,
treated, stored, handled, transferred, disposed, recycled, or
received.

     

     

    (l) Assets. KYTX owns and
has good marketable title to the Assets and Property, in each case free and
clear and has not knowingly permitted any liens, claims and
encumbrances

    

    (m) Brokerage Commission.
The Seller has not engaged the services of, any real estate agent, broker,
finder or any other person or entity for any brokerage or finder’s fee,
commission or other amount with respect to the transactions described herein on
account of any action by the Seller. The Seller hereby agrees to indemnify and
hold the Buyer and its employees, directors, members, partners, affiliates and
agents harmless against any claims, liabilities, damages or expenses arising out
of a breach of the foregoing paragraph. This indemnification shall survive
Closing or any termination of this Agreement.

     

    

    

    
      
        
        

      

      
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    ARTICLE
III

     

    COVENANTS
OF SELLERS

    BEFORE
CLOSING

     

    3.1.
Access and
Investigation. Between the date of this Agreement and the Closing Date
and upon reasonable advance notice from Buyer, KYTX will (a) afford Buyer and
its representatives and prospective lenders and their representatives full and
free access to the personnel, properties (including subsurface testing),
contracts, books and records, and other documents and data of KYTX, (b) furnish
such persons with copies of all such contracts, books and records, and other
documents and data relating to the business as Buyer may reasonably request, and
(c) furnish such persons with such additional financial, operating and other
data and information relating to the business as Buyer may reasonably
request.

     

    3.2.
Operation of the
Business. Between the date of this Agreement and the Closing Date, KYTX
will (a) conduct the business only in the ordinary course of business, (b) use
its best efforts to preserve intact the current business organization, keep
available the services of its current employees and agents, and maintain
relations and goodwill with its suppliers, customers, landlords, lessors,
employees, agents and others having business relationships with KYTX as relates
to the pending agreement.,

     

    3.3 Negative Covenant.
Except as otherwise expressly permitted by this Agreement, between the date of
this Agreement and the Closing Date, KYTX will not (a) make any modifications to
any material contract or any governmental authorization or (b) remove any
Equipment, except for Equipment that becomes obsolete or unusable which may be
disposed of or replaced in the ordinary course of business, (c) attempt to
generate revenue from any production.

     

    3.4 Required Approvals.
As promptly as practicable after the date of this Agreement, Buyer will make all
filings that are required by law to make to consummate the contemplated
transactions. Between the date of this Agreement and the Closing Date, KYTX will
(a) cooperate with Buyer with respect to all filings that Buyer elects to make
or that Buyer is required by law to make in connection with the contemplated
transactions.

    

    3.5 Notification. Between
the date of this Agreement and the Closing Date, the Sellers will promptly
notify Buyer in writing if KYTX becomes aware of (a) any fact or condition that
causes or constitutes a breach of any of Sellers’ representations and warranties
as of the date of this Agreement, (b) the occurrence after the date of this
Agreement of any fact or condition that would cause or constitute a breach of
any such representation or warranty had that representation or warranty been
made as of the time of the occurrence or discovery of such fact or condition,
(c) any material development affecting the leases or Property and the operations
and results of operations related to the leases or Property; or (d) any material
development affecting the ability of such party to consummate the transactions
contemplated by this Agreement.

     

    
      
        
        

      

      
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    3.6 Covenant to Remedy
Breaches. Without limiting the obligations of Seller set forth in this
Agreement, Seller covenants to use all reasonable efforts within its control (i)
to prevent the breach of any representation or warranty of such Seller hereunder
and (ii) to satisfy all covenants of such Seller hereunder.

     

    3.7 Damage or Destruction of
Assets. In the event of destruction or material damage, at or before the
moment of Closing, of any of the assets, then either Buyer of Seller shall have
the right to terminate this Agreement.

    

    ARTICLE
IV

     

    COVENANTS
OF BUYER PRIOR TO CLOSING

     

    4.1 Required Approvals.
As promptly as practicable after the date of this Agreement, Buyer will make all
filings that it is required by law to make to consummate the contemplated
transactions. Between the date of this Agreement and the Closing Date, Buyer
will (a) cooperate with KYTX with respect to all filings that KYTX elect to make
or that it is required by law to make in connection with the contemplated
transactions.

     

    4.2 Best Efforts. Buyer
will use its best efforts to cause the conditions in Article VI to be satisfied;
provided, however, that Buyer will not be required to make any material change
to its business, dispose of any material asset, expend material funds incur any
material burden or take actions that would result in a material adverse change
in the benefits to Buyer of this Agreement and the contemplated
transactions.

     

    ARTICLE
V

     

    INSPECTION
PERIOD

     

    5.1 Inspection Period.
Buyer shall have a due diligence period (the “Inspection Period”) beginning on
the date this Agreement is executed by all parties and expiring at
closing.

     

    5.2 Inspection. (a) At
any reasonable time and from time to time during the Inspection Period, Buyer
shall have the right to fully inspect the leases and Field House and to satisfy
itself that the Properties, as of the date of such inspection, are in good
operating condition and repair. Sellers shall use their best efforts to assure
that Buyer has access to the Properties during normal business hours, and
Sellers shall provide all available information concerning the Properties may
reasonably request to assist Buyer in making such determinations.

     

    

    
      
        
        

      

      
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    ARTICLE
VI

     

    CONDITIONS
PRECEDENT TO BUYER’S OBLIGATION TO CLOSE

     

    Buyer’s
obligation to purchase the Purchased Assets and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction, on
or before the Closing Date, of each of the following conditions (any of which
may be waived by Buyer, in whole or in part):

     

    6.1 Accuracy of
Representations. (a) All the Sellers’ representations and warranties in
this Agreement (considered both collectively and individually) must have been
accurate as of the date of this Agreement, and must be accurate as of the
Closing Date as if then made.

     

    (b) In
addition, each of the Sellers’ covenants and each of the Seller’s
representations and warranties in this Agreement that contain an express
materiality qualification, must have been accurate in all respects as of the
date of this Agreement, and must be accurate in all respects as of the Closing
Date as if then made.

     

    6.2 Performance. (a) All
of the covenants and obligations that KYTX is required to perform or to comply
with under this Agreement on or before the Closing Date (considered both
collectively and individually) must have been duly performed and complied with
in all material respects.

    

     

    6.3 No Proceedings. Since
the date of this Agreement, there must not have been commenced or threatened
against Buyer, or against any related person of Buyer, any proceeding (a)
involving any challenge to, or seeking damages or other relief in connection
with, any of the contemplated transactions, or (b) that may have the effect of
preventing, delaying, making illegal or otherwise interfering with any of the
contemplated transactions.

     

    6.4 No Prohibition.
Neither the consummation nor the performance of any of the contemplated
transactions will, directly or indirectly (with or without notice or lapse of
time), contravene, or cause Buyer or any related person of Buyer to suffer any
Adverse Consequence under (a) any applicable law, order or governmental
authorization, or (b) any law or order that has been published, introduced or
otherwise proposed by or before any governmental body.

     

    6.5.
Material Adverse
Change. There shall have been no material adverse change (or changes
which in the aggregate are materially adverse) since the date hereof in the
leases or property taken as a whole, whether by reason of change in government
regulation or action or otherwise.

     

    6.6 Bankruptcy. KYTX
shall not have been the subject of a petition for reorganization or liquidation
under the Federal bankruptcy laws, or under state or foreign insolvency laws,
nor shall an assignment for the benefit of KYTX’s, or any of the Seller’s
creditors or any similar protective proceeding or act or event of bankruptcy
have occurred.

     

    
      
        
        

      

      
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    ARTICLE
VII

     

    CONDITIONS
PRECEDENT TO SELLER’S OBLIGATION TO CLOSE

     

    The
Seller’s obligation to sell the Purchased Assets and to take the other actions
required to be taken by them at the Closing is subject to the satisfaction, on
or before the Closing Date, of each of the following conditions (any of which
may be waived by the Seller Agent, in whole or in part):

     

    7.1 Accuracy of
Representations. All of Buyer’s representations and warranties in this
Agreement (considered both collectively and individually) must have been
accurate in all material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if then
made.

    

    7.2.
Buyer’s
Performance. All of the covenants and obligations that Buyer is required
to perform or to comply with under this Agreement on or before the Closing Date
(considered both collectively and individually) must have been performed and
complied with in all material respects.

     

     

    7.3.
No Prohibition.
There must not be in effect any law or order that (a) prohibits the consummation
of the contemplated transactions and (b) has been adopted or issued, or has
otherwise become effective, since the date of this Agreement.

     

    ARTICLE
VIII

     

    TERMINATION

     

    8.1 Termination Events.
Subject to Section 8.2, this Agreement may, by notice given before or at the
Closing, be terminated:

     

     

    (a) by
the Seller if Buyer has committed a material breach of any provision of this
Agreement and Sellers have not waived such breach; including without limitation
the failure to pay the second $50,000 installment or any portion thereof as
required by section 1.2B;

     

    (b) by
the Buyer if Seller has committed a material breach of any provision of this
Agreement and Buyers have not waived such breach

     

     

     

    ARTICLE
IX

     

    [INTENTIONALLY
OMITTED]

     

    

    
      
        
        

      

      
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    ARTICLE
X

     

    MISCELLANEOUS

     

    10.1
Notices. Any
notice provided for by this Agreement and any other notice, demand, or
communication required hereunder shall be in writing and either delivered in
person (including by confirmed facsimile transmission) or sent by hand delivered
against receipt or sent by recognized overnight delivery service or by certified
or registered mail, postage prepaid, with return receipt requested. All notices
shall be addressed as follows:

     

    
      	 
      	 
      	 
      
	
              If
      to Buyer:

            	 
      	
              Mr.
      Wayne Anderson

            
	 
      	 
      	
              Adventure
      Energy, Inc.

            
	 
      	 
      	
              33
      6th
      Street S., Suite 600

            
	 
      	 
      	
              St.
      Petersburg, FL 33701

               

            
	
              With
      a copy to:

            	 
      	
              Mr.
      Patrick O’Connor

            
	 
      	 
      	
              O’Connor
      & Associates

            
	 
      	 
      	
              1250
      S Belcher

            
	 
      	 
      	
              Largo,
      FL 33771

            
	 	 	 
	 	 	 
	If
      to Seller	 	Mr.
      Richard Derr
	 	 	KYTX,
      LLC
	 	 	6423
      KY 1232
	 	 	P.O.
      Box 569
	 	 	Gray,
      KY 40734
	 	 	 

    

          

    

     

    Any
address or name specified above may be changed by a notice given by the
addressee to the other party. Any notice, demand or other communication shall be
deemed given and effective as of the date of delivery in person or receipt set
forth on the return receipt. The inability to deliver because of changed address
of which no notice was given, or rejection or other refusal to accept any
notice, demand or other communication, shall be deemed to be receipt of the
notice, demand or other communication as of the date of such attempt to deliver
or rejection or refusal to accept.

     

    10.2
Entire Agreement;
Modifications and Waivers; Cumulative Remedies. This Agreement supersedes
any existing letter of intent between the parties hereto, constitutes the entire
agreement among the parties hereto and may not be modified or amended except by
instrument in writing signed by the parties hereto, and no provisions or
conditions may be waived other than by a writing signed by the party waiving
such provisions or conditions. No delay or omission in the exercise of any right
or remedy accruing to the Seller or the Buyer upon any breach under this
Agreement shall impair such right or remedy or be construed as a waiver of any
such breach theretofore or thereafter occurring. The waiver by the Seller or the
Buyer of any breach of any term, covenant, or condition herein stated shall not
be deemed to be a waiver of any other breach, or of a subsequent breach of the
same or any other term, covenant, or condition herein contained.

     

    
      
        
        

      

      
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    10.3
Successors and
Assigns. Except as set forth in this Article, this Agreement may not be
assigned by the Buyer or the Sellers without the prior approval of the other
party hereto.

     

    10.4
Article
Headings. Article headings and article and section numbers are inserted
herein only as a matter of convenience and in no way define, limit, or prescribe
the scope or intent of this Agreement or any part hereof and shall not be
considered in interpreting or construing this Agreement.

     

    10.5
Time of
Essence. With regard to all dates and time periods set forth or referred
to in this Agreement, time is of the essence.

     

    10.6
Governing Law.
This Agreement shall be construed and interpreted in accordance with the laws of
the State of Kentucky, without regard to conflicts of laws
principles.

     

    10.7
Counterparts.
This Agreement may be executed in any number of counterparts and by any party
hereto on a separate counterpart, each of which when so executed and delivered
shall be deemed an original and all of which taken together shall constitute but
one and the same instrument.

     

    10.8
Survival. All
covenants and agreements contained in the Agreement which contemplate
performance after the Closing Date (including, without limitation, those
covenants and agreements contained in Section 1.2 hereof) shall survive the
Closing.

     

    10.9
Further Acts.
In addition to the acts, instruments and agreements recited herein and
contemplated to be performed, executed and delivered by the Buyer and the
Sellers, each of the Buyer and each Seller shall perform, execute, and deliver
or cause to be performed, executed, and delivered at the Closing or after the
Closing, any and all further acts, instruments, and agreements and provide such
further assurances as the other party hereto may reasonably require to
consummate the transaction contemplated hereunder.

    

    10.10
Severability.
In case any one or more of the provisions contained in this Agreement shall for
any reason be held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other provision
hereof, and this Agreement shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein.

     

    10.11
Expenses.
Except as otherwise expressly provided in this Agreement, each party to this
Agreement will bear its respective expenses incurred in connection with the
preparation, execution and performance of this Agreement and the contemplated
transactions, including all fees and expenses of its
representatives.

     

    10.12
Confidentiality. The
Seller acknowledges that the matters relating to this Agreement, and the other
documents, terms, conditions and information related thereto (collectively, the
“Information”) are confidential in nature. Therefore, the Seller covenants and
agrees to keep the Information confidential and will not (except as required by
applicable law, regulation or legal process, and only after compliance with the
provisions of this Section 10.12), without the Buyer’s prior written consent,
disclose any Information in any manner whatsoever; provided, however, that the
Information may be revealed only to Sellers’ owners, Seller’s key employees,
legal counsel and financial advisors, each of whom shall be informed of the
confidential nature of the Information and shall agree to act in accordance with
the terms of this Section 10.12. In the event that a Seller or its key
employees, legal counsel or financial advisors (collectively, the “Information
Group”) are requested pursuant to, or required by, applicable law, regulation or
legal process to disclose any of the Information, the applicable member of the
Information Group will notify the Buyer promptly so that it may seek a
protective order or other appropriate remedy or, in its sole discretion, waive
compliance with the terms of this Section 10.12. In the event that no such
protective order or other remedy is obtained, or that the Buyer waives
compliance with the terms of this Section 10.12, the applicable member of the
Information Group may furnish only that portion of the Information which it is
advised by counsel is legally required and will exercise all reasonable efforts
to obtain reliable assurance that confidential treatment will be accorded the
Information.

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    The
parties hereto have executed and delivered this Agreement as of the date
indicated in the first sentence of this Agreement.

     

    
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	
              SELLERS:

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	
              KYTX,
      LLC

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              November
      6, 2009

            	 
      	 
      	 
      	
              By:

            	 
      	
              /s/ Richard
      Derr

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	
              Name:

            	 
      	
              Richard
      Derr

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	
              Its:

            	 
      	Treasurer	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	
              KYTX,
      LLC

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              November
      6, 2009

            	 
      	 
      	 
      	
              By:

            	 
      	
              /s/ Leslie
      Derr

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	
              Name:

            	 
      	
              Leslie
      Derr

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	
              Its:

            	 
      	
              Secretary

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	
              Adventure
      Energy, Inc.

            	 
      	 
      	 
      	
            	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	November
      6, 2009	 	 	 	

              By:

            	 	

              /s/
      Wayne
      Anderson

            	 	 	 	 	 	 	 	 	 	 
	 
      	 
      	 
      	 
      	 
      	 
      	
              Name:

            	 
      	
              Wayne
      Anderson

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	
              Its:

            	 
      	
              President

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

    

     

    

    

    

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    

    

    

    

    EXHIBIT
(A)

     

    

     

    
      	
              Wells
      To Be Transferred to Adventure Energy

            	 
      
	
              From
      KYTX OIL and GAS, LLC.

            	 
      
	 
      	 
      
	
              WELL
      NAME

            	
              PERMIT
      NUMBER

            
	 
      	 
      
	
              J.C.
      LASLEY NO. 1

            	
              104515

            
	
              J.C.
      LASLEY NO. 2

            	
              106128

            
	
              J.C.
      LASLEY NO. 3

            	
              105262

            
	
              J.C.
      LASLEY NO. 4

            	
              105219

            
	
              J.C.
      LASLEY NO. 5

            	
              106097

            
	
              RANDY
      HATCHER NO. 1

            	
              104634

            
	
              JASON
      CAMFIELD NO. 1

            	
              98728

            
	
              ERNEST
      HAMMOND ET.AL. NO. 1

            	
              105364

            
	
              ROBERT
      CALDWELL NO. 1

            	
              105616

            
	
              EUGENE
      ANTLE NO. 1

            	
              105787

            
	
              EUGENE
      ANTLE NO. 3

            	
              106006

            
	
              JAMES
      BRUMMETT NO. 1

            	
              105853

            
	
              JAMES
      BRUMMETT NO. 2

            	
              105833

            
	
              COLBY
      SMITH NO. 1

            	
              106098

            
	
              AMOS
      DEVELOPMENT NO. 2

            	
              104233

            

    

    

    

    

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    

    

    EXHIBIT
(B)

    

    
      	
              LEASE
      NAME

            	
              ACERAGE

            	
              RECORDING
      DATA

            	
              COUNTY

            	
              DATE

            
	 
      	 
      	 
      	 
      	 
      
	
              DAVID
      M. BOWLES

            	
              102
      ACRES

            	
              OIL
      & GAS BK 84 PG 370

            	
              ADAIR

            	
              14-Nov-08

            
	
              GREGORY
      A. NELSON

            	
              18.57
      ACRES

            	
              OIL
      & GAS BK 84 PG 382

            	
              ADAIR

            	
              29-Nov-08

            
	
              ZADA
      SNEED

            	
              152
      ACRES

            	
              OIL
      & GAS BK 84 PG 358

            	
              ADAIR

            	
              8-Nov-08

            
	
              C.K.
      WALKUP

            	
              31.47
      ACRES

            	
              OIL
      & GAS BK 84 PG 384

            	
              ADAIR

            	
              29-Nov-08

            
	
              ERNEST
      HAMMONDS

            	
              12
      ACRES

            	
              LEASE
      BK 43 PG 762

            	
              RUSSELL

            	
              8-Dec-08

            
	
              PORTER
      STOTTS JR.

            	
              71
      ACRES

            	
              OIL
      & GAS BK 84 PG 428

            	
              ADAIR

            	
              27-Jan-09

            
	
              JAMES
      BRUMMETT

            	
              19
      ACRES

            	
              OIL
      & GAS BK 84 PG 636

            	
              ADAIR

            	
              9-Jun-09

            
	
              J.C.
      & CRAIG LASLEY

            	
              40
      ACRES

            	
              OIL
      & GAS BK 84 PG 372

            	
              ADAIR

            	
              12-Nov-08

            
	
              EUGENE
      ANTLE

            	
              150
      ACRES

            	
              LEASE
      BK 43 PG 758

            	
              RUSSELL

            	
              7-Apr-09

            
	
              WILLIAM
      R. HILL

            	
              1.5
      ACRES

            	
              LEASE
      BK 43 PG 765

            	
              RUSSELL

            	
              17-Feb-09

            
	
              RANDY
      HATCHER

            	
              8.73
      ACRES

            	
              OIL
      & GAS BK 84 PG 230

            	
              ADAIR

            	
              21-Aug-08

            
	
              JASON
      CAMFIELD

            	
              63.27
      ACRES

            	
              OIL
      & GAS BK 84 PG 389

            	
              ADAIR

            	
              10-Dec-08

            
	
              ROBERT
      CALDWELL

            	
              51
      ACRES

            	
              OIL
      & GAS BK 84 PG 354

            	
              ADAIR

            	
              6-Nov-08

            
	
              J.C.
      & BONITA LASLEY

            	
              152
      ACRES

            	
              OIL
      & GAS BK 84 PG 228

            	
              ADAIR

            	
              27-Aug-08

            
	
              BONNIE
      D. LOY

            	
              75
      ACRES

            	
              OIL
      & GAS BK 84 PG 755

            	
              ADAIR

            	
              17-Aug-09

            
	
              STL
      ENERGY

            	
              780
      ACRES

            	
              OIL
      & GAS BK 84 PG 757

            	
              ADAIR/GREEN

            	
              8-Jul-09

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              NOTE:  THE
      STL ENERGY LEASE COVERS THE MELVIN BROWN, OLLEN JANES, AND COLBY SMITH
      LEASES

            

    

     
 

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
(C)

    

    THIS
ASSIGNMENT, made and entered into this ___ day of October 2009 by and between
KYTX Oil & Gas, LLC,
6423 KY 1232, P.O. Box 569, Gray, KY 40734 hereinafter referred to as Assignor,
and ADVENTURE ENERGY,
INC., 33 6th Street S., Suite 600, St. Petersburg, FL 33701, hereinafter
referred to as Assignee.

     

    WITNESSETH,
that for an in consideration of the sum of One Dollar ($1.00) and other good and
valuable consideration, all of which is hereby acknowledged, Assignor does by
these presents assign, convey, transfer, and set over unto Assignee, with
covenant of special warranty, all of its rights, title, and interest in the
mineral rights lease designated as__________________,as set forth in lease dated
_____________ and recorded in Oil & Gas Book ____ at page _____ in the
office of the County Clerk of Adair County, Kentucky (the “Lease”).

     

    Assignor
hereby RESERVES and EXCEPTS, from this Assignment an overriding royalty interest
of three percent (3%) of the gross proceeds from any currently producing wells
or  any successful rework wells, and any new wells drilled on the real
property covered by the Lease.

     

    IN
WITNESS WHEREOF, the Assignor has executed this assignment on the day and year
first above written.

     

    ___________________________________

     

    KYTX Oil
& Gas, LLC

     

    
      	
              STATE OF KENTUCKY

            	
              )

            	 
      
	 
      	
              )

            	
              :SS

            
	
              COUNTY
      OF __________________

            	
              )

            	 
      

    

    

     

    On the
_____ day of _________, 2009 before me personally appeared ________________, who
executed the foregoing instrument, and acknowledged that he executed the same as
his free act and deed for the purpose herein contained.

     

    WITNESS
my hand and seal this _____ day of _______, 2009.

     

    
      	 
      	 
      

    

    NOTARY
PUBLIC

     

    My
commission expires:  __________________________________

     

    THIS
INSTRUMENT PREPARED BY:

     

    Adventure
Energy, Inc.

    33 6th
Street, Suite 600

    St.
Petersburg, FL 33701

    

    By:
_________________________

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
 

    EXHIBIT
D

    

    KYTX
FIELD HOUSE INVENTORY

    

    
      	
              TOOLS

            	 
      	 
      	 
      	 
      	 
      	
              SIZE

            	 
      	
              QUANITY

            
	
               
      CHAIN BINDER

            	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              1

            
	
               
      WATER HOSE

            	 
      	 
      	 
      	 
      	
              100
      FT.

            	 
      	
              1

            
	
               
      GARDEN RAKE

            	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              1

            
	 
      FLOOR JACK	 	 	 	 	 3
      1/2 TON	 	 
	
               
      PLASTIC GAS CAN

            	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              4

            
	
               
      ELECTRIC PUMP

            	 
      	 
      	 
      	 
      	
              12
      VOLT

            	 
      	
              1

            
	
                STEEL
      FENCE POST DRIVER

            	 
      	 
      	 
      	
              N/A

            	 
      	
              1

            
	
                POST
      HOLE DIGGER

            	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              1

            
	
               
      SHOVEL

            	 
      	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              3

            
	
               
      LADDER

            	 
      	 
      	 
      	 
      	 
      	
              17
      FT.

            	 
      	
              2

            
	
               
      PRESSURE WASHER

            	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              1

            
	
               
      TOOL SET

            	 
      	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              1

            
	
               
      A-FRAME HOIST

            	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              1

            
	
               
      PIG MAT

            	 
      	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              100

            
	
               
      OIL PAN

            	 
      	 
      	 
      	 
      	 
      	
              2
      GAL.

            	 
      	
              1

            
	
               
      SURVEYING YARD STICK

            	 
      	 
      	 
      	
              25
      FT

            	 
      	
              1

            
	
               
      FENCE POST INSULATORD

            	 
      	 
      	 
      	
              N/A

            	 
      	
              1
      BAG

            
	
               
      ELECTRIC FANS

            	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              2

            
	
               
      AIR COMPRESSOR

            	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              1

            
	
               
      HAND SAW

            	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              1

            
	
               
      COPPER CUT

            	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              2
      CANS

            
	
               
      AIR HOSE

            	 
      	 
      	 
      	 
      	 
      	
              30
      FT

            	 
      	
              1

            
	
               
      STEEL LOG CHAIN

            	 
      	 
      	 
      	 
      	
              20
      FT

            	 
      	
              1

            
	
               
      LITHIUM GREASE

            	 
      	 
      	 
      	 
      	 
      	 
      	
              14
      TUBES

            
	
               
      SULFURIC ACID CLEANER

            	 
      	 
      	 
      	 
      	 
      	
              40
      GALS

            
	
               
      TREATMENT/ KNOCKOUT

            	 
      	 
      	 
      	 
      	 
      	
              3
      GALS

            
	
               
      ANTICEEZ

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              2
      BKTS

            
	 
      INSULATION WRAP	 	 	 	 	 	 2
      1/2' x 20'	 	 
	
               
      

            	 
      	 
      	 
      	 
      	
               

            	
              1

            

    

    

    

    

    

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

    

    

    

    

    

    
      	
              KTYX
      FIELD HOUSE EQUIPMENT

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              WELL
      EQUIPMENT INVENTORY

            	 
      	 
      	 
      	 
      	 
      	
              SIZE

            	 
      	
              QUANITY

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              RODS

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              STEEL
      SUCKER RODS

            	 
      	 
      	 
      	 
      	
              25
      FT

            	 
      	
              162

            
	
              STEEL
      PONY ROD SUB

            	 
      	 
      	 
      	
              10
      FT

            	 
      	
              5

            
	
              STEEL
      PONY ROD SUB

            	 
      	 
      	 
      	
              5
      FT

            	 
      	
              2

            
	
              STEEL
      PONY ROD SUB

            	 
      	 
      	 
      	
              1
      FT

            	 
      	
              1

            
	
              STEEL
      PONY ROD SUB

            	 
      	 
      	 
      	
              4
      FT

            	 
      	
              1

            
	
              STEEL
      PONY ROD SUB

            	 
      	 
      	 
      	
              8
      FT

            	 
      	
              6

            
	
              ANCHOR
      RODS

            	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              5

            
	
              STEEL
      POLISH ROD

            	 
      	 
      	 
      	 
      	
              8
      FT

            	 
      	
              3

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
               STEEL
      UPSET TUBING

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              STEEL
      TUBING

            	 
      	 
      	 
      	 
      	
              2
      IN

            	 
      	
              179
      JOINTS

            
	
              TUBING
      SUB (2  INCH )

            	 
      	 
      	 
      	
              2
      FT

            	 
      	
              3

            
	
              TUBING
      SUB (2  INCH )

            	 
      	 
      	 
      	
              6
      FT

            	 
      	
              2

            
	
              TUBING
      SUB (2  INCH )

            	 
      	 
      	 
      	
              8
      FT

            	 
      	
              1

            
	
              TUBING
      SUB (2  INCH )

            	 
      	 
      	 
      	
              4
      FT

            	 
      	
              2

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              NIPPLES

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              STEEL
      NIPPLE

            	 
      	 
      	 
      	 
      	
              2"
      x 10"

            	 
      	
              45

            
	
              STEEL
      NIPPLE

            	 
      	 
      	 
      	 
      	
              1"
      x 10"

            	 
      	
              1

            
	
              STEEL
      NIPPLE

            	 
      	 
      	 
      	 
      	
              1"
      x 1"

            	 
      	
              2

            
	
              STEEL
      NIPPLE

            	 
      	 
      	 
      	 
      	
              2"
      x 4"

            	 
      	
              14

            
	
              STEEL
      NIPPLE

            	 
      	 
      	 
      	 
      	
              1"
      x 4"

            	 
      	
              5

            
	
              STEEL
      NIPPLE

            	 
      	 
      	 
      	 
      	
              2"
      x 1"

            	 
      	
              11

            
	
              PLASTIC
      SHORT NIPPLE

            	 
      	 
      	 
      	
              2
      IN

            	 
      	
              4

            
	
              PLASTIC
      NIPPLE

            	 
      	 
      	 
      	 
      	
              2"
      x 6"

            	 
      	
              3

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
               

              P.V.C

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              PIPE

            	 
      	 
      	 
      	 
      	 
      	
              2
      IN

            	 
      	
              45
      FT

            
	
              PIPE
      FITTINGS

            	 
      	 
      	 
      	 
      	
              2
      IN

            	 
      	
              12

            
	
              ELBOWS

            	 
      	 
      	 
      	 
      	 
      	
              2
      IN

            	 
      	
              10

            
	
              COUPLERS

            	 
      	 
      	 
      	 
      	
              2
      IN

            	 
      	
              6

            

    

     

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    
 

    
      	
              TANK
      PARTS

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              PLASTIC
      LOAD OUT

            	 
      	 
      	 
      	 
      	
              2
      IN

            	 
      	
              7

            
	
              PLASTIC
      TEES

            	 
      	 
      	 
      	 
      	
              2
      IN

            	 
      	
              3

            
	
              UNION
      VALVES

            	 
      	 
      	 
      	 
      	
              2
      IN

            	 
      	
              6

            
	
              PLASTIC
      ELBOWS

            	 
      	 
      	 
      	 
      	
              2
      IN

            	 
      	
              6

            
	
              PLASTIC
      COUPLINGS

            	 
      	 
      	 
      	 
      	
              2IN

            	 
      	
              13

            
	
              STEEL
      LOAD OUT

            	 
      	 
      	 
      	 
      	
              3
      IN

            	 
      	
              3

            
	
              STEEL
      LADDER

            	 
      	 
      	 
      	 
      	
              100
      TANK

            	 
      	
              1

            
	
              STEEL
      PLATFORM & RAIL

            	 
      	 
      	 
      	
              100
      TANK

            	 
      	
              2

            
	
              GAS
      LINE FITTINGS

            	 
      	 
      	 
      	 
      	 
      	 
      	
              5

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              PLUGS
      AND VALVES

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              STEEL
      PLUG

            	 
      	 
      	 
      	 
      	
              3
      IN

            	 
      	
              1

            
	
              STEEL
      PLUG

            	 
      	 
      	 
      	 
      	
              2
      IN

            	 
      	
              3

            
	
              SHUT
      OFF VALVE (BRASS)

            	 
      	 
      	 
      	
              3
      IN

            	 
      	
              2

            
	
              SHUT
      OFF VALVE (BRASS)

            	 
      	 
      	 
      	
              2
      IN

            	 
      	
              1

            
	
              SHUT
      OFF VALVE (BRASS)

            	 
      	 
      	 
      	
              1
      1/2"

            	 
      	
              1

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              CHANGE
      OVERS

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              3/4"
      CHANGE OVER

            	 
      	 
      	 
      	 
      	
              2
      IN

            	 
      	
              3

            
	
              3/4"
      x 3/4" CHANGE OVER

            	 
      	 
      	 
      	
              3
      IN

            	 
      	
              2

            
	
              3/4"
      x 5/8" CHANGE OVER

            	 
      	 
      	 
      	
              3
      IN

            	 
      	
              4

            
	
              3/4"
      x 3/4" CHANGE OVER

            	 
      	 
      	 
      	
              N/A

            	 
      	
              10

            
	
              3/4"
      x 3/4" CHANGE OVER

            	 
      	 
      	 
      	
              6
      IN

            	 
      	
              5

            
	
              1
      1/2  x 1 1/2 CHANGE OVER

            	 
      	 
      	 
      	
              N/A

            	 
      	
              7

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              ELECTRICAL

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              DIRECT
      BURIAL  WIRE

            	 
      	 
      	 
      	
              N/A

            	 
      	
              100
      FT

            
	
              ELECTRIC
      FENCE WIRE

            	 
      	 
      	 
      	
              N/A

            	 
      	
              200
      FT

            
	
              PVC
      CONDUIT

            	 
      	 
      	 
      	 
      	
              2
      IN

            	 
      	
              8
      FT

            
	
              PVC
      CONDUIT

            	 
      	 
      	 
      	 
      	
              1
      1/2 IN

            	 
      	
              10
      FT

            
	
              PVC
      CONDUIT

            	 
      	 
      	 
      	 
      	
              2
      1/2 IN

            	 
      	
              6FT

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              STEEL
      CASING

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              CASING

            	 
      	 
      	 
      	 
      	 
      	
              7
      IN

            	 
      	
              13
      JOINTS

            
	
              CASING

            	 
      	 
      	 
      	 
      	 
      	
              4
      IN

            	 
      	
              1
      30' JOINT

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              PUMPING
      TEES, WELL HEADS ANDUNIONS

            	 
      	 
      	 
      	 
      
	
              WELL
      HEAD  STEEL

            	 
      	 
      	 
      	 
      	
              7
      IN

            	 
      	
              1

            
	
              STEEL
      PUMPING TEE W/ CUPPS

            	 
      	 
      	 
      	
              N/A

            	 
      	
              3

            
	
              HAMMER
      UNION

            	 
      	 
      	 
      	 
      	
              2
      IN

            	 
      	
              17

            
	
              HAMMER
      UNION

            	 
      	 
      	 
      	 
      	
              1
      IN

            	 
      	
              12

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              MISL

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              CATTLE
      GATES

            	 
      	 
      	 
      	 
      	
              12
      FT

            	 
      	
              17

            
	
              STEEL
      FENCE POSTS

            	 
      	 
      	 
      	 
      	
              6
      FT

            	 
      	
              6

            
	
              FILE
      CABINETS

            	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              2

            
	
              STRAW

            	 
      	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              1
      BAIL

            
	
              STEEL
      ELBOWS

            	 
      	 
      	 
      	 
      	
              2
      IN

            	 
      	
              2

            
	
              PRESURE
      GUAGE

            	 
      	 
      	 
      	 
      	
              600
      PSI

            	 
      	
              2

            
	
              PRESURE
      GUAGE

            	 
      	 
      	 
      	 
      	
              2000
      PSI

            	 
      	
              2

            
	
              STEEL
      ADAPTER

            	 
      	 
      	 
      	 
      	
              1
      IN

            	 
      	
              7

            
	
              GUTTER
      LINE

            	 
      	 
      	 
      	 
      	
              4
      IN

            	 
      	
              100
      FT

            
	
              TARP

            	 
      	 
      	 
      	 
      	 
      	
              6'
      x 8'

            	 
      	
              1

            
	
              U-BOLTS

            	 
      	 
      	 
      	 
      	 
      	
              N/A

            	 
      	
              2

            
	
              RUBBER
      PULLY BELTS

            	 
      	 
      	 
      	 
      	 
      	
              3

            

    

    

    

    

    

    19ex1015.htm

    Exhibit 10.4

     

    SECURITIES
PURCHASE AGREEMENT

     

     

             THIS
STOCK PURCHASE AGREEMENT (this “Agreement”) is made
as of November 10, 2009, by and among E 2 INVESTMENTS, LLC (“E 2”), a Florida
Limited Liability Company, the (“Buyer”) and HARLIS
TRUST, a REVOCABLE TRUST, the (“Seller”).

     

    WHEREAS,
Seller owns Four Million Four Hundred and Seventy Thousand (4,470,000) shares
(the “Shares”)
of common stock, par value $0.001 per share (“Common
Stock”)  of  Wilon Resources, Inc. (“Company”) as of
the date of this Agreement; and

     

    WHEREAS,
upon the terms and subject to the conditions set forth herein, Buyer desires to
acquire the Shares from Seller, and Seller desires to sell the Shares to
Buyer.

     

    NOW,
THEREFORE, in consideration of the premises, representations and warranties and
mutual covenants contained herein and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

     

             
1.     
Purchase and Sale of Common
Stock and Warrants.

     

             
1.1    Sale of Common Stock.
Subject to the terms and conditions of this Agreement, Buyer agrees to purchase
and the Seller agrees to sell to Buyer all 4,470,000 shares of the Company’s
Common Stock for the purchase price of $500,000.00 at the closing as set forth
below. The shares of Common Stock to be sold pursuant to this Agreement are
collectively referred to herein as the “Shares.”

     

              1.2    Closing. The purchase
and sale of the Shares shall take place at the office of the Company at 5:00
p.m. EST, on or before November 13, 2009 or at such other time and place as the
Seller and Buyer agree upon in writing (which time and place are designated as
the “Closing”).

     

    1.3     Purchase and Sale of
Shares. At the Closing, upon the terms and subject to the conditions set
forth in this Agreement, Seller shall sell, assign, transfer and convey the
Shares to Buyer, and Buyer shall purchase and acquire the Shares from Seller,
free and clear of all Liens other than restrictions on transfer arising under
applicable securities Laws. The payment for said shares by Buyer to the Seller
along with other consideration shall be tendered as follows:

     

    1.3.1
Three Thousand Five Hundred Dollars ($3,500.00) has been received by the Seller
prior to the execution of this agreement; and

     

    1.3.2 A
payment in the amount of One Hundred Thousand Dollars ($100,000.00) shall be
sent via wire transfer of immediately available funds to the account or accounts
of the Seller specified by the Seller at the date of the Closing;
and

     

    1.3.3 A
payment in the amount of One Hundred Thousand Dollars ($100,000.00) shall be
sent via wire transfer of immediately available funds to the account or accounts
of the Seller specified by the Seller on or before 90 days after the Closing;
and

     

    1.3.4 The
Seller and Buyer shall enter into a promissory note for $296,500.00 with the
first payment in the amount of $146,500 to be made at the one (1) year
anniversary of the closing, and the balance of $150,000 to be made at the two
(2) year anniversary of the closing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    2.
Conditions to Closing

     

    2.1 The obligation of the Buyer to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction of the following conditions as of the Closing Date:

     

    (a) Seller shall have delivered or
caused to be delivered to Buyer the certificates representing the Shares owned
by Seller, duly endorsed for transfer including a Medallion Guarantee on a Stock
Power provided by the Buyer, and the Shares shall be free and clear of all Liens
other than restrictions on transfer arising under applicable securities Laws;
and

     

    (b) Seller shall have delivered or
caused to be delivered to the Buyer each of the
following:  

     

    (i) Affidavit from Seller stating that
the Company is not indebted to P & J Resources, Inc, Richard Williams, Pam
Williams, or any entity they may control, and there are no claims by any of the
related parties against the Company.

     

    (ii) resignations effective as of the
Closing from the officers and directors of the Company and appointment of 2
directors designated by the Buyers. Each action to be approved by the Board of
the Company with an executed resolution for each.

     

    (iii) certified copies of the
resolutions duly adopted by Seller’s Board of Directors (or its equivalent
governing body) authorizing the execution, delivery and performance of this
Agreement and the other agreements contemplated hereby to which Seller is a
party, and the consummation of all transactions contemplated hereby and
thereby;

     

    (iv) executed agreement between the
Buyer and the Dallas Group, or any entity which they may now be known
as

     

    (v) certified list of all wells
operated by B.T.U. Pipeline, Inc. within the state of West Virginia

     

    (vi) certified list of all current and
long term liabilities, current and pending litigation, claims, encumbrances
against the Company

     

    (vii) transfer of title for the
approximate 175 acres of land in Wayne County, West Virginia as referenced in
the Deed dated October 6, 2006 by and between Gregory A. Botkins and Sherry,
parties of the first part, and Harry Thompson, as Trustee of Harlis Trust Under
Trust Agreement Dated June 1, 2001, party of the second part into the name of
Wilon Resources, Inc.

     

    (iix)
certified list of all leases held by Wilon Resources, Wilon Gathering, Harry
Thompson, and Harlis Trust in the state of West Virginia. An assignment of all
leases held by Wilon Gathering, Harry Thompson, and Harlis Trust to Wilon
Resources.

     

    (ix)
executed Assignment of Debt by Harry Thompson to the Buyer

     

    (x)
executed three (3) year non-compete agreement with respect to the business of
the Company in the state of West Virginia

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    (xi) at
closing, the Buyer shall take possession of all files, folders, computers,
software, maps, and any office supplies used in the everyday course of business
for Wilon and located in the Chattanooga office.

     

    (xii) at
closing, the West Virginia tap shall be delivered to a location to be designated
by the Buyers.

     

    (xiii)
prepared assignment by the Seller and/or AXG, Inc. for a 5% overriding royalty
on the KY pipeline. The royalty is understood to be calculated by total mcf
passing through the pipeline on a daily basis times a transmission cost per mcf.
Example: Seller of gas receives $5.00/mcf with a transmission charge of 10%.
Therefore, transmission charge to seller is $.50/mcf. 5% of the $.50 calculates
to $.025/mcf to Purchasers. The Trust and/or AXG shall provide the Purchasers a
monthly report with payment.

     

    (xiv)
provide at closing, all agreements between Wilon, BTU and any purchasing company
for the Company’s natural gas, including but not limited to Columbia Gas
Transmission, Appalachian Natural Gas Marketing, LLC, Columbia Natural
Resources, and the Tennessee Gas Pipeline Company.

     

    (xv)
provide at closing, a letter to Olde Monmouth Stock Transfer notifying them of
the resignation of all officers and directors and the name(s) of the new interim
Board who will have sole authority for the issuance of any new certificates or
any and all transfer agent services.

     

    (xvi)
provide at closing, a letter to the Tennessee Department of State amending the
Company’s Articles (if necessary) for a change in Directors.

     

    (xvii)
provide at closing, a change of principal and authorized signature, for all
Wilon Resources, Inc. and B.T.U. Pipeline, Inc banking accounts

     

    2.2 The
obligation of the Seller to consummate the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions as of the
Closing Date:

     

    (a)  Buyer shall have
delivered or caused to be delivered to the Seller each of the
following:

     

    (i) at closing, SLMI Options, LLC, a
wholly owned subsidiary of Adventure Energy, Inc., shall forbear on the
foreclosure of the Chattanooga office building and West Virginia
land.

     

    (ii) SLMI Options, LLC shall release
its lien/mortgage with respect to the real property located at 3875 Hixson Pike,
Chattanooga, TN after the 60 day “Information” period is satisfied. The Trust
shall occupy said premise rent free until the end of this 60 day
period.

     

    (iii) the Seller and Mr. Thompson
shall be released from any “personal” guarantees with respect to the debt
obligations to SLMI Options, LLC upon completion of the 60 day “Information”
period.

     

    (iv) the Buyers may elect to retain
the office computers and replace these with two (2) new desktop computers of
comparable value, or copy all files on the computers and allow the Seller to
retain the computers.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.3
Special Stipulations Inherit to this Agreement:

     

    (a) Any ownership in the Kentucky
natural gas pipeline held by the Company shall be released to AXG, Inc. (“AXG”)
at closing. The Trust and/or AXG shall also retain any ownership in real
property, pipelines, leases, wells, and taps located in Kentucky. The Trust
and/or AXG shall also be responsible for and assume any liabilities associated
with any pipelines, leases, and wells located in Kentucky whereby outside
investors have purchased or entered into agreements assigning them working
interests, royalties, and/or overriding royalties. The Buyers are under the
assumption that there are outside investors in some or all of the wells that
Wilon operated in the state of Kentucky either under the name of Wilon
Resources, Wilon Gathering, or the operator of these wells, P & J Resources.
The Buyers are also aware that there are outside investors in the Kentucky
pipeline. The Buyers will not assume any liabilities pertaining to any real
property, agreements, working interest owners, royalties, overriding royalties,
or assignments located within the state of Kentucky. The Trust and/or AXG will
be responsible for the liabilities associated with the Kentucky pipeline, wells,
leases, real property, commercial or individual contracts, and will relieve the
Company and the Buyer of any liability associated with these items. After
transfer, the Trust and/or AXG shall assign the Purchasers a 5% overriding
royalty in the KY pipeline.

     

    (b) Harry Thompson, the Trustee of the
Trust, shall agree to a 60 day Information Period whereby he will agree to be
available to answer questions pertaining to the operation of the Company for at
least four (4) hours per day Monday through Friday. Mr. Thompson shall be
available at the current corporate office form 9-3 EDT for the first two (2)
weeks post closing, Monday through Friday. After the initial two (2) week
period, Mr. Thompson shall agree to be readily available via phone, e-mail, and
fax. During this period, Mr. Thompson’s duties shall include but not be limited
to assisting the Buyers in settling any legal claims, creditor issues, leasehold
and/or well issues, and state issues with any of the wells.

     

    (c)  The Buyers will agree
not to seek indemnification against you with respect to those items specifically
described in said certified list defined in section 2.1.b.6.  As to
any item not disclosed in the certified list, the Buyers will have the right of
set off with regard to the payment of the Purchase Price.

     

    (d)  Wilon shall not assume
any liabilities of Wilon Gathering, Richard Williams, AXG, Inc., or any entities
controlled by Mr. Thompson or any family members and Wilon Gathering shall not
assume any liabilities of Wilon. The field gathering system located in West
Virginia shall remain the property of Wilon. Wilon shall not assume any
liabilities associated with the amine plant in West Virginia. The pipe currently
laying or installed in Wayne County, West Virginia on the leaseholds and right
of ways of the Company shall remain the property of the Company.

     

    3.     
Representations and Warranties
of the Seller.

     

             
Except as set forth in the Disclosure Schedule delivered to Buyer specifically
identifying the relevant subparagraphs hereof, which disclosures shall be deemed
to be representations and warranties made hereunder, the Company hereby
represents and warrants to Investor as follows:

     

             
3.1    Organization, Good Standing and Qualification. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Tennessee and has all requisite corporate power
and authority to carry on its business as currently conducted. The Company and
each of its Subsidiaries is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure to so qualify would have a
material adverse effect on its business or properties. True and accurate copies
of the Company’s Articles of Incorporation and Bylaws, each as amended and in
effect at the Closing, have been delivered to the special counsel to the
Investor.

     

             
3.2    Capitalization. On the date of this Agreement, the
authorized capital stock of the Company consists of an aggregate of 50,000,000
shares of common stock, $0.001 par value (“Common Stock”), of which 22,396,503
shares are issued and outstanding, and 5,000,000 shares of preferred stock,
$.001 par value (“Preferred Stock”) of which zero are issued and outstanding.
Other than the shares described in the Disclosure Schedule, there are no
outstanding rights, options, warrants, preemptive rights, convertible
securities, rights of first refusal or similar rights for the purchase or
acquisition from the Company of any securities of the Company. All outstanding
securities of the Company and each of its Subsidiaries have been issued in
compliance with applicable state and federal securities laws.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

             
3.3    Subsidiaries. The Company’s only wholly owned subsidiary
is B.T.U. Pipeline, Inc., which is validly existing and in good standing under
the laws of the State of Tennessee.

     

             
3.4    Authorization. All corporate and individual actions on the
part of the Seller and the Company, its officers, and directors necessary for
the authorization, execution and delivery of this Agreement, and the performance
of all obligations of the Seller and the Company hereunder and thereunder, and
the authorization, sale, and delivery of the Shares being sold hereunder has
been taken or will be taken prior to the Closing, and this Agreement,
constitutes valid and legally binding obligations of the Seller and the Company,
enforceable in accordance with their respective terms, subject to: (i) judicial
principles limiting the availability of specific performance, injunctive relief,
and other equitable remedies; (ii) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect generally relating
to or affecting creditors’ rights; and (iii) limitations on the enforceability
of the indemnification provisions herein.

     

             
3.5    Valid Issuance of Common Stock and Warrants. The Shares
that are being purchased by the Buyer hereunder, when delivered in accordance
with the terms of this Agreement for the consideration expressed herein, will be
duly and validly issued, fully paid, and nonassessable, and will be free of
restrictions on transfer directly or indirectly created by the Company other
than restrictions on transfer under applicable state and federal securities
laws.

     

             
3.6    Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the purchase of the Shares or the
consummation of any other transaction contemplated hereby, except for the
following: (i) the filing of such notices as may be required under the
Securities Act of 1933, as amended (the “Securities Act”); and (ii) the
compliance with any other applicable state securities laws, which compliance
will have occurred within the appropriate time periods therefore.

     

             
3.7    Litigation. The material litigation of the Company and
each of its Subsidiaries is set forth in the documents which have been provided
to the Buyer. There is no action, suit, proceeding or investigation pending or,
to the best of the Seller’s or Company’s knowledge, currently threatened before
any court, administrative agency or other governmental body against the Seller
or the Company which questions the validity of this Agreement, or the right of
the Seller to enter into this Agreement, or to consummate the transactions
contemplated hereby, or which would be reasonably likely to result, either
individually or in the aggregate, in any material adverse change in the
condition (financial or otherwise), business, property, assets or liabilities of
the Company. The Company is not a party or subject to, and none of its assets is
bound by, the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality which would be reasonably
likely to have a material adverse effect on the Company.

     

             
3.8    Employees. To the best knowledge of the Seller, no officer
or key employee of the Company or any or its Subsidiaries is in violation of any
current or prior employee contract or proprietary information agreement. No
employees of the Company are represented by any labor union or covered by any
collective bargaining agreement. There is no pending or, to the best of the
Company’s knowledge, threatened labor dispute involving the Company or any of
its Subsidiaries and any group of its employees.

     

             
3.9    Patents and Trademarks. The Company has sufficient title
to and ownership of all trade secrets, and, to its knowledge, copyrights,
information, proprietary rights and processes, patents, trademarks, service
marks and trade names necessary for its business as now conducted and as
proposed to be conducted without any material conflict with or infringement of
the rights of others, except for what has been disclosed to the Buyer in
writing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

             
3.10   Compliance with Other Instruments. The Company is not in
violation or default of any provision of its Articles of Incorporation or
Bylaws, each as amended and in effect on and as of the Closing. The Company has
complied with and is not in violation or default of any material provision of
any instrument, mortgage, deed of trust (exclusive of the deed of trust held by
SLMI Options, LLC), loan (exclusive of the three commercial loans between the
Seller, the Company and SLMI Options, LLC)  , contract, commitment,
judgment, decree, order or obligation to which it is a party or by which it or
any of its properties or assets are bound which would materially adversely
affect the condition (financial or otherwise), business, property, assets or
liabilities of the Company or, to the best of its knowledge, of any provision of
any federal, state or local statute, rule or governmental regulation which would
materially adversely affect the condition (financial or otherwise), business,
property, assets or liabilities of the Company.

     

             
3.11   Permits. The Company has all franchises, permits, licenses, and
any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could reasonably be expected to materially
and adversely affect the business, properties, prospects, or financial condition
of the Company, and the Company believes it can obtain, without undue burden or
expense, any similar authority for the conduct of its business as planned to be
conducted. The Company is not in default in any material respect under any of
such franchises, permits, licenses, or other similar authority. Each of the
foregoing representations and warranties apply to each of the
Subsidiaries.

     

             
3.12   Compliance with Laws. To the best of its knowledge, the Company
is not in violation of any applicable statute, law or regulation that applies to
the Company relating to the environment, occupational health and safety, fair
trade and business practices, competition, sale of securities, the
Sarbanes-Oxley Act of 2002 or any other statute, law or regulation, and to the
best of its knowledge, no material additional expenditures are or will be
required in order to comply with any such existing statute, law or regulation.
The Company has not received any written, or to its knowledge, oral
communications alleging that the Company has violated any such statute, law or
regulation. Each of the foregoing representations and warranties apply to each
of the Subsidiaries.

     

             
3.13   Disclosure. No representation, warranty or statement by the
Company in this Agreement, or in any written statement or certificate furnished
to the Buyer pursuant to this Agreement, contains any untrue statement of a
material fact or, when taken together, omits to state a material fact necessary
to make the statements made herein or therein, in light of the circumstances
under which they were made, not misleading.

     

             
3.14   Title to Property and Assets. Except as set forth in the
disclosure schedule, the Company has good and marketable title to all of its
properties and assets free and clear of all mortgages, liens and encumbrances,
except liens for current taxes and assessments not yet due, uniform commercial
codes, liens and deeds of trust held by SLMI Options, LLC,  and
possible minor liens and encumbrances which do not, in any case, in the
aggregate, materially detract from the value of the property subject thereto or
materially impair the operations of the Company. With respect to the property
and assets it leases, the Company is in compliance with such leases and, to the
best of its knowledge, holds a valid leasehold interest free of all liens,
claims or encumbrances. The Company’s properties and assets are in good
condition and repair in all material respects. Each of the foregoing
representations and warranties apply to each of the Subsidiaries.

     

             
3.15   Except as reflected or reserved against in the latest
consolidated balance sheet of the Company included in the disclosure schedule,
of which a draft has been provided to the Buyer, (the “latest balance sheet”),
the Company and its subsidiaries have no liabilities of any nature (whether
arising out of contract, tort, statute or otherwise and whether direct or
indirect, accrued, matured or unmatured, asserted or unasserted, absolute,
contingent or otherwise) which would be required to be reflected on a balance
sheet prepared in accordance with generally accepted accounting principles (all
of such liabilities being collectively referred to as “Liabilities”), except for
liabilities incurred in the ordinary course of business since the date of the
latest balance sheet which would not, individually or in the aggregate, have a
material adverse effect on the Company.    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

             
3.16   Agreements; Action.

     

                  
(a)      There are no agreements, understandings or
proposed transactions between the Company and any of its officers, directors,
affiliates, or any affiliate thereof, in addition to employment
agreements.

     

                  
(b)      There are no agreements, understandings,
instruments, contracts, proposed transactions, judgments, orders, writs or
decrees to which the Company is a party or by which it is bound that may involve
(i) obligations (contingent or otherwise) of, or payments by the Company in
excess of, $100,000, or (ii) provisions restricting or adversely affecting the
conduct of the Company’s business or operations.

     

                  
(c)      Since March 1, 2009 the Company has not (i)
declared or paid any dividends or authorized or made any distribution upon or
with respect to any class or series of its capital stock, (ii) incurred any
indebtedness for money borrowed or any other liabilities individually in excess
of $100,000 or, in the case of indebtedness and/or liabilities individually less
than $100,000, in excess of $250,000 in the aggregate, (iii) made any loans or
advances to any person, other than ordinary advances for travel expenses, or
(iv) sold, exchanged or otherwise disposed of any of its assets or rights, other
than the sale of its inventory in the ordinary course of business.

     

                  
(d)      For the purposes of subsections (b) and (c)
above, all indebtedness, liabilities, agreements, understandings, instruments,
contracts and proposed transactions involving the same person or entity
(including persons or entities the Company has reason to believe are affiliated
therewith) shall be aggregated for the purpose of meeting the individual minimum
dollar amounts of such subsections.

     

                  
(e)      The Company is not a party to and is not bound
by any contract, agreement or instrument, or subject to any restriction under
its Articles of Incorporation or its Bylaws that adversely affects its business
as now conducted or as proposed to be conducted, its properties or its financial
condition.

     

                  
(f)      The Company and each of its Subsidiaries have
no outstanding loans to its officers or directors.

     

             
3.17   Tax Returns and Audits. The Company has accurately prepared all
United States income tax returns and all state and municipal tax returns
required to be filed by it, if any, has paid all taxes, assessments, fees and
charges when and as due under such returns and has made adequate provision for
the payment of all other taxes, assessments, fees and charges shown on such
returns or on assessments received by the Company, where, if not paid or filed
or prepared correctly, would not have a material adverse effect on the Company.
To the best of the Company’s knowledge, no deficiency assessment or proposed
adjustment of the Company’s United States income tax or state or municipal taxes
is pending except that which has been disclosed in the disclosure schedule. Each
of the foregoing representations and warranties apply to each of the
Subsidiaries.

     

             
3.18   Shareholder Agreements. There are no agreements between the
Company and any of the Company’s shareholders, or to the best knowledge of the
Company, among any of the Company’s shareholders, which in any way affect any
shareholder’s ability or right freely to alienate or vote such shares (except
restrictions designed to provide compliance with securities laws).

     

             
3.19   Brokers or Finders. The Seller has not agreed to incur,
directly or indirectly, any liability for brokerage or finders’ fees, agents’
commissions or other similar charges in connection with this Agreement or any of
the transactions contemplated hereby.  

            

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.0    Representations and Warranties of the
Buyer.

     

             
Buyer hereby represents and warrants that:

     

             
4.1    Experience. Buyer is experienced in evaluating companies
such as the Company, is able to fend for itself in transactions such as the one
contemplated by this Agreement, has such knowledge and experience in financial
and business matters that such Buyer is capable of evaluating the merits and
risks of Buyer’s perspective purchase of shares, and has the ability to bear the
economic risks of the investment.

     

             
4.2    Investment. Buyer is acquiring the Shares for investment
for such Buyer’s own account and not with the view to, or for resale in
connection with, any distribution thereof. Such Buyer understands that the
Shares have not been registered under the Securities Act by reason of a specific
exemption from the registration provisions of the Securities Act which depends
upon, among other things, the bona fide nature of the investment intent as
expressed herein. Such Buyer further represents that it does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to any third person with respect to any of the
Shares.

     

             
4.3    Transfer. Buyer covenants that, in the absence of an
effective registration statement covering the Shares, Buyer will sell, transfer,
or otherwise dispose of the Shares only in a manner consistent with Buyer’s
representations and covenants set forth in this Section 3. In connection
therewith, Buyer acknowledges that the Company will make a notation on its stock
books regarding the restrictions on transfers set forth in this Section 3 and
will transfer securities on the books of the Company only to the extent not
inconsistent therewith.

     

             
4.4    Access to Data. Buyer has received and reviewed
information about the Company and has had an opportunity to discuss the
Company’s business, management and financial affairs with the Seller and to
review the Company’s facilities.

     

             
4.5    Authorization. This Agreement when executed and delivered
by Buyer will constitute a valid and legally binding obligation of the Buyer,
enforceable in accordance with its terms, subject to: (i) judicial principles
respecting election of remedies or limiting the availability of specific
performance, injunctive relief, and other equitable remedies; (ii) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect generally relating to or affecting creditors’ rights; and (iii)
limitations on the enforceability of the indemnification provisions
herein.

     

             
4.6    Accredited Investor. Buyer acknowledges that it is an
“accredited investor” as defined in Rule 506 of Regulation D as promulgated by
the Securities and Exchange Commission under the Securities Act and shall submit
to the Company such further assurances of such status as may be reasonably
requested by the Company. For state securities law purposes, the principal
address of the Buyer is that set forth below.

     

     5.0    Conditions of Buyer’s Obligations at
Closing.

     

             
The obligations of Buyer under Section 1 of this Agreement are subject to the
fulfillment on or before Closing of each of the following conditions, the waiver
of which shall not be effective against Buyer without its consent in writing
thereto:

     

             
5.1    Representations and Warranties. The representations and
warranties of the Seller contained in Section 2 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of Closing.

     

             
5.2    Performance. The Seller shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before each
Closing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     6.     
Miscellaneous.

     

             
6.1    Governing Law. This Agreement shall be governed in all
respects by the laws of the State of Florida, without regard to any provisions
thereof relating to conflicts of laws among different
jurisdictions.

     

             
6.2    Survival. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by Investor and the
closing of the transactions contemplated hereby for a period of 60 days
whereupon they shall cease and be of no further force and effect. All statements
as to factual matters contained in any certificate or exhibit delivered by or on
behalf of the Company pursuant hereto shall be deemed to be the representations
and warranties of the Company hereunder as of such date of such certificate or
exhibit.

     

             
6.3    Successors and Assigns. Except as otherwise provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto, including subsequent holders of the Registrable
Securities.

     

             
6.4    Entire Agreement; Amendment. This Agreement documents
referred to herein constitutes the final, complete, and exclusive statement of
the terms of the agreement between the parties pertaining to the subject matter
of this Agreement and supersedes all prior and contemporaneous understandings or
agreements of the parties. This Agreement may not be contradicted by evidence of
any prior or contemporaneous statements or agreements. No party has been induced
to enter into this Agreement by, nor is any party relying on, any
representation, understanding, agreement, commitment or warranty outside those
expressly set forth in this Agreement. Neither this Agreement nor any term
hereof may be amended, waived, discharged or terminated other than by a written
instrument signed by the party against whom enforcement of any such amendment,
waiver, discharge or termination is sought.

     

             
6.5    Notices, Etc. Any notices required or permitted to be
given hereunder shall be given in writing and shall be delivered (a) in person,
(b) by certified mail, postage prepaid, return receipt requested, (c) by
facsimile, or (d) by a commercial overnight courier that guarantees next day
delivery and provides a receipt, and such notices shall be addressed as
follows:

     

    
      	
              if
      to the Buyer, to:

            	
              E 2
      INVESTMENTS, LLC

            
	 
      	
              33
      6th
      Street South

            
	 
      	
              Suite
      600

            
	 
      	
              St.
      Petersburg, FL 33701

            
	 
      	
              Fax:
      815-846-0755

            

    

     

    
      	
              if
      to the Seller, to:

            	
              HARLIS
      TRUST

            
	 
      	
              HARRY
      THOMPSON, TRUSTEE

            
	 
      	
              3875
      Hixson Pike    

            
	 
      	
              Chattanooga,
      TN 37415    

            
	 
      	
              Fax:
      423-876-8549

            

    

     

    or to
such other address as either party may from time to time specify in writing to
the other party. Any notice shall be effective only upon delivery, which for any
notice given by facsimile shall mean notice which has been received by the party
to whom it is sent as evidenced by confirmation slip.

     

             
6.6    Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any holder of any Shares upon any breach or
default of the Company under this Agreement shall impair any such right, power
or remedy of such holder, nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing or as provided in this
Agreement. All remedies, either under this Agreement or by law or otherwise
afforded to any holder, shall be cumulative and not alternative.
 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

             
6.7    Expenses. Except as otherwise set forth herein, Seller and
Buyer shall bear their own expenses incurred on its behalf with respect to this
Agreement and the transactions contemplated hereby.

     

             
6.8    Finder’s Fee. The Seller and the Buyer shall each
indemnify and hold the other harmless from any liability for any commission or
compensation in the nature of a finder’s fee (including the costs, expenses and
legal fees of defending against such liability) for which the Seller or the
Buyer, or any of their respective partners, employees, or representatives, as
the case may be, is responsible.

     

             
6.10   Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.

     

             
6.11   Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any
party.

     

             
6.12   Facsimile Signatures. This Agreement may be executed by fax.
Any signature page delivered by a fax machine or facsimile copy machine shall be
binding to the same extent as an original signature page, with regard to any
agreement subject to the terms hereof or any amendment thereto. Any party who
delivers such a signature page agrees to later deliver an original counterpart
to any party which requires it.

     

             
6.13   Representation on Authority of Signatories. Each person signing
this Agreement represents and warrants that he or she is duly authorized and has
legal capacity to execute and deliver this
Agreement.        

     

             
IN WITNESS WHEREOF, the parties have duly and validly executed this Agreement as
of the date first above written.

     

    E 2
INVESTMENTS, LLC

     

    
      	
              By:

            	
              /s/
      Wayne Anderson  

            	 
      
	 
      	
              Wayne
      Anderson

            	 
      
	 
      	
              President

            	 
      

    

     

    HARLIS
TRUST

     

    
      	
              By:

            	/s/
      Harry Thompson  	 
      
	 
      	
              Harry
      Thompson

            	 
      
	 
      	
              Trustee

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