AGREEMENT AND PLAN OF MERGER

Exhibit 99.1

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER is made as of the 26th day of May, 2004, by and

AMONG:

             HURON VENTURES, INC., a corporation formed pursuant to the laws 
             of the State of Delaware and having an office for business located at 
             suite 2000, 0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx XX Xxxxxx X0X 0X0 
             ("Huron") 
AND:   
             XXXXXXXXX ACQUISITION CORP. , a body corporate formed 
             pursuant to the laws of the State of Oklahoma and a wholly owned 
             subsidiary of Huron 
             (the "Acquirer") 
AND:   
             XXXXXXXXX FIELD UNIT INC. , a body corporate formed pursuant to 
             the laws of the State of Texas 
             ("Xxxxxxxxx") 
AND:   
             THE SHAREHOLDERS OF XXXXXXXXX, all of whom are set forth 
             on the signature pages of this Agreement 
             (the "Xxxxxxxxx Shareholders") 
AND:   
             XXXX ENERGY CORPORATION, a body corporate formed pursuant 
             to the laws of the State of Texas and having an office for business located 
             at 000 Xxxx 0xx Xxxxxx, Xxxxx 0000, Xxxx Xxxxx, XX 00000
             ("Xxxx") 
AND:   
             BIG SKY MANAGEMENT LTD. , a body corporate formed pursuant to 
             the laws of the Province of British Columbia and having its registered 
             office located at Suite 704 – 1478 West Hastings Street Vancouver, BC 
             Canada V6G 3J6 
             ("Big Sky") 

WHEREAS:

A. The Xxxxxxxxx Shareholders own 10,000,000 Xxxxxxxxx Shares, being 100% of the presently issued and outstanding Xxxxxxxxx Shares;

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B. The sole assets of Xxxxxxxxx are a 100% working interest and a 55% net revenue interest in the oil, gas and mineral leasehold estates and personal property related thereto located in Lincoln County, Oklahoma covering 2,178 acres, more or less, and known more particularly as the "Xxxxxxxxx Property";

C. Huron is a reporting company whose common stock is quoted on the NASD "Bulletin Board";

D. The respective Boards of Directors of Huron, Xxxxxxxxx and the Acquirer deem it advisable and in the best interests of Huron, Xxxxxxxxx and the Acquirer that Xxxxxxxxx merge with and into the Acquirer (the "Merger") pursuant to this Agreement and the Certificate of Merger, and the applicable provisions of the laws of the States of Texas and Oklahoma;

E. It is intended that the Merger shall qualify for United States federal income tax purposes as a reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended; and

X. Xxxx and Big Sky are being made party to this agreement for the purpose of making the specific representations, warranties and covenants contained herein.

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

ARTICLE 1
DEFINITIONS AND INTERPRETATION

Definitions

1.1     
In this Agreement the following terms will have the following meanings:
 
  (a)     
"Acquisition Shares" means the 5,165,000 Huron Common Shares to be issued to the Xxxxxxxxx Shareholders at Closing pursuant to the terms of the Merger;
 
  (b)     
"Affiliate" means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another Person, and a Person shall be deemed to control another Person if the controlling Person is the beneficial owner (as defined in Rule 13d-3 under the Securities Act of 1934, as amended) of ten percent (10%) or more of any class of voting securities (or other voting interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of securities, through serving as an officer or director, by contract or otherwise.
 
  (c)     
"Agreement " means this agreement and plan of merger among Huron, the Acquirer, Xxxxxxxxx, and the Xxxxxxxxx Shareholders;
 
  (d)     
"Xxxx Energy Management Agreement" means the management agreement in the form attached hereto as Schedule "Q" to be entered into at Closing between Xxxx and Huron pursuant to which Huron will agree to manage the business and affairs of Xxxx following the Closing on the terms specified therein and which will also provide that (i) Huron will be transferred, at the Closing, all of Xxxx'x right, title and interest in and to the name "Xxxx" and any variations thereof, together with all goodwill associated therewith, for the sum of $1.00, (ii) Huron will grant back to Xxxx a non-exclusive right
 

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to use the name "Xxxx Energy Corporation" in connection with its business, provided that Xxxx takes all such measures which a prudent business operator would take to avoid confusion in the marketplace caused by Huron's use of the name "Xxxx", and (iii) in the event that Huron ceases to manage the business and affairs of Xxxx for any reason whatsoever, or if Xxxx ceases to conduct any business other than that of a passive holding company, or if Huron, acting reasonably, concludes that an undue amount of confusion is resulting from the use of the name "Xxxx" by Xxxx, Xxxx rights to use the name "Xxxx" may be immediately terminated by Huron and Xxxx will, at its own cost and expense, change its name to a name other than "Xxxx", remove the "Xxxx" name from all of its materials and cease using the "Xxxx" name;
   
  (e)     
"Cash Purchase Price" means the sum of $150,000 to be paid by Huron as directed by the Xxxxxxxxx Shareholders on the Closing Date;
 
  (f)     
"Certificate of Merger" means the certificate of merger to be executed by Xxxxxxxxx and the Acquirer at the Closing and filed with the Secretaries of State for the States of Texas and Oklahoma to effect the Merger;
 
  (g)     
"Closing " means the completion, on the Closing Date, of the transactions contemplated hereby in accordance with Article 10 hereof;
 
  (h)     
"Closing Date" means the day on which all conditions precedent to the completion of the transaction as contemplated hereby have been satisfied or waived;
 
  (i)     
"Closing Time" means 1:00 o'clock p.m., Central Daylight Time, on the Closing Date;
 
  (j)     
"Xxxxxxxxx Accounts Payable and Liabilities" means all accounts payable and liabilities of Xxxxxxxxx, due and owing or otherwise constituting a binding obligation of the Xxxxxxxxx (other than a Xxxxxxxxx Material Contract) as of March 31, 2004, as set forth in Schedule "A" hereto;
 
  (k)     
"Xxxxxxxxx Accounts Receivable " means all accounts receivable and other debts owing to Xxxxxxxxx as of March 31, 2004, as set forth in Schedule "B" hereto;
 
  (l)     
"Xxxxxxxxx Assets" means all the property and assets of the Xxxxxxxxx Business of every kind and description wheresoever situated including, without limitation, Xxxxxxxxx Equipment, Xxxxxxxxx Leasehold Interests, Xxxxxxxxx Material Contracts, Xxxxxxxxx Xxxxx, Xxxxxxxxx Accounts Receivable, Xxxxxxxxx Cash, Xxxxxxxxx Intangible Assets and Davenport Goodwill, and all credit cards, charge cards and banking cards issued to Xxxxxxxxx;
 
  (m)     
"Xxxxxxxxx Audited Financial Statements" means the financial statements of Xxxxxxxxx for the two year periods ended March 31, 2004 and 2003, together with the unqualified auditors report thereon, prepared in accordance with Item 310 of Regulation SB, and which are to be delivered by Xxxxxxxxx to Huron pursuant to the terms hereof;
 
  (n)     
"Xxxxxxxxx Bank Accounts" means all of the bank accounts, lock boxes and safety deposit boxes of Xxxxxxxxx or relating to the Xxxxxxxxx Business, as set forth in Schedule "C" hereto;
 
  (o)     
"Xxxxxxxxx Business" means all aspects of the business conducted by Xxxxxxxxx;
 
  (p)     
"Xxxxxxxxx Cash " means all cash on hand or on deposit to the credit of Xxxxxxxxx on the Closing Date;
 

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  (q)     
"Xxxxxxxxx Debt to Related Parties" means the debts owed by Xxxxxxxxx and its subsidiaries to the Xxxxxxxxx Shareholders or to any family member thereof, or to any Affiliate of Xxxxxxxxx or the Xxxxxxxxx Shareholders as of March 31, 2004, as set forth in Schedule "D" hereto;
 
  (r)     
"Xxxxxxxxx Draft Financial Statements " means the draft financial statements of Xxxxxxxxx for the years ended March 31, 2004 and 2003 attached hereto as Schedule "E";
 
  (s)     
"Xxxxxxxxx Equipment" means all machinery, equipment, furniture, and furnishings used in the Xxxxxxxxx Business, including, without limitation, the items more particularly described in Schedule "F" hereto;
 
  (t)     
"Davenport Goodwill" means the goodwill of the Davenport Business together with the exclusive right of Huron to represent itself as carrying on the Xxxxxxxxx Business in succession of Davenport subject to the terms hereof, and the right to use any words indicating that the Xxxxxxxxx Business is so carried on, including the right to use the name "Xxxx" or "Xxxxxxxxx" or any variation thereof as part of the name of or in connection with the Xxxxxxxxx Business or any part thereof carried on or to be carried on by Xxxxxxxxx, the right to all corporate, operating and trade names associated with the Xxxxxxxxx Business, or any variations of such names as part of or in connection with the Xxxxxxxxx Business, all telephone listings and telephone advertising contracts, all lists of customers, books and records and other information relating to the Xxxxxxxxx Business, all necessary licenses and authorizations and any other rights used in connection with the Xxxxxxxxx Business;
 
  (u)     
"Davenport Insurance Policies" means the public liability insurance and insurance against loss or damage to Davenport Assets and the Xxxxxxxxx Business as described in the Statement of Xxxxxxxxx Insurance to be delivered by Xxxxxxxxx to Huron, as set forth in Schedule "G" hereto;
 
  (v)     
"Xxxxxxxxx Intangible Assets " means all of the intangible assets of Davenport, including, without limitation, Davenport Goodwill, all trademarks, logos, copyrights, designs, and other intellectual and industrial property of Xxxxxxxxx;
 
  (w)     
"Xxxxxxxxx Leasehold Interests" means the leasehold interests reflecting the Xxxxxxxxx Property as more particularly set forth in Schedule "H" attached hereto;
 
  (x)     
"Xxxxxxxxx Material Contracts" means the burden and benefit of and the right, title and interest of Xxxxxxxxx in, to and under all trade and non-trade contracts, engagements or commitments, whether written or oral, to which Davenport is entitled in connection with the Xxxxxxxxx Business whereunder Davenport is obligated to pay or entitled to receive the sum of $10,000 or more including, without limitation, any pension plans, profit sharing plans, bonus plans, loan agreements, security agreements, indemnities and guarantees, any agreements with employees, lessees, licensees, managers, accountants, suppliers, agents, distributors, officers, directors, attorneys or others which cannot be terminated without liability on not more than one month's notice, and those contracts listed in the Statement of Xxxxxxxxx Material Contracts, as set forth in Schedule "I" hereto;
 
  (y)     
"Xxxxxxxxx Royalty Interests " means all of the royalty interests in and under the Xxxxxxxxx Leasehold Interests as set forth in Schedule "J" attached hereto;
 
  (z)     
"Xxxxxxxxx Shares" means all of the issued and outstanding shares of Xxxxxxxxx'x common stock;
 

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  (aa)     
"Xxxxxxxxx Xxxxx" means the xxxxx in which Xxxxxxxxx has an interest by virtue of its ownership of the Xxxxxxxxx Leasehold Interests as set forth in Schedule "K" attached hereto;
 
  (bb)     
"Effective Time" means the date of the filing of the Certificate of Merger, which certificate shall provide that the Merger shall become effective upon such filing;
 
  (cc)     
"Employment Agreements" means the employment agreements to be entered into by and between Huron and each of Xxxxxxx, Xxxxxxx Xxxxxxxx and Xxx Xxxxxxxx prior to Closing in the forms attached hereto as Schedule "R";
 
  (dd)     
"Environmental Law" means any and all laws, statutes, ordinances, rules, regulations, orders or determinations of any tribal authority or other governmental authority pertaining to health or the environment, including, without limitation, the Clean Air Act, as amended; the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended; the Federal Water Pollution Control Act, as amended; the Occupational Safety and Health Act of 1970, as amended; the Resource Conservation, and Recovery Act of 1976 ("RCRA"), as amended; the Safe Drinking Water Act, as amended; the Toxic Substances Control Act, as amended; the Hazardous & Solid Waste Amendments Act of 1984, as amended; the Superfund Amendments and Reauthorization Act of 1986, as amended; the Hazardous Materials Transportation Act, as amended; any state laws pertaining to the handling of oil and gas exploration or production wastes or the use, maintenance and closure of pits and impoundments; and other environmental conservation or protection laws. For purposes of this Agreement, the terms "hazardous substance" and "release" (or "threatened release") have the meanings specified in CERCLA, and the terms "solid waste" and "disposal" (or "disposed") have the meanings specified in RCRA; provided, however, that (i) to the extent the laws of the jurisdiction wherein the Xxxxxxxxx Assets are located establish a meaning for "hazardous substance," "release," "solid waste" or "disposal" that is broader than that specified in either CERCLA or RCRA, such broader meaning shall apply and (ii) the terms "hazardous substance" and "solid waste" shall include all oil and gas exploration and production wastes that may present an endangerment to public health or welfare or the environment, even if such wastes are specifically exempt from classification as hazardous substances or solid wastes pursuant to CERCLA or RCRA or the state analogues to those statutes. For purposes of this Agreement, the term "governmental authority" includes the United States, the state, county, city, tribal and political subdivisions in which the Xxxxxxxxx Assets are located or which exercises jurisdiction over any of the Xxxxxxxxx Assets, and any agency, department, commission, board, bureau or instrumentality, or any of them, that exercises jurisdiction over any of the Xxxxxxxxx Assets;
 
  (ee)     
"Escrow Agent" means Xxxxxxx X. Xxxxx of Dallas Texas;
 
  (ff)     
"Financing " means the financing of Huron in the minimum amount of $2,000,000 pursuant to the Subscription;
 
  (gg)     
"Huron Accounts Payable and Liabilities" means all accounts payable and liabilities of Huron, on a consolidated basis, due and owing or otherwise constituting a binding obligation of Huron and its subsidiaries (other than a Huron Material Contract) as of March 31, 2004, as set forth in Schedule "L" hereto;
 
  (hh)     
"Huron Assets" means all the property and assets of the Huron Business of every kind and description wheresoever situated including, without limitation, Huron Material Contracts, Huron Cash, Huron Intangible Assets and Huron Goodwill, and all credit cards, charge cards and banking cards issued to Huron;
 

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  (ii)     
"Huron Bank Accounts" means all of the bank accounts, lock boxes and safety deposit boxes of Huron and its subsidiaries or relating to the Huron Business, as set forth in Schedule "M" hereto;
 
  (jj)     
"Huron Business" means all aspects of any business conducted by Huron;
 
  (kk)     
"Huron Cash" means all cash on hand or on deposit to the credit of Huron on the Closing Date;
 
  (ll)     
"Huron Common Shares" means the shares of common stock, $0.0001 par value, in the capital of Huron;
 
  (mm)     
"Huron Debt to Related Parties" means the debts owed by Huron to any Affiliate of Huron as described in Schedule "N" hereto;
 
  (nn)     
"Huron Financial Statements " means collectively, the audited consolidated financial statements of Huron for the two year periods ended June 30, 2003 and 2002, together with the unqualified auditors' report thereon, and the unaudited, reviewed consolidated financial statements of Huron for the nine month periods ended March 31, 2004 and 2003, all prepared in accordance with Item 310 of Regulation SB, true copies of which are attached as Schedule "O" hereto; and
 
  (oo)     
"Huron Goodwill" means the goodwill of the Huron Business including the right to all corporate, operating and trade names associated with the Huron Business, or any variations of such names as part of or in connection with the Huron Business, all books and records and other information relating to the Huron Business, all necessary licenses and authorizations and any other rights used in connection with the Huron Business;
 
  (pp)     
"Huron Intangible Assets" means all of the intangible assets of Huron and its subsidiaries, including, without limitation, Huron Goodwill, all trademarks, logos, copyrights, designs, and other intellectual and industrial property of Huron and its subsidiaries;
 
  (qq)     
"Huron Material Contracts" means the burden and benefit of and the right, title and interest of Huron and its subsidiaries in, to and under all trade and non-trade contracts, engagements or commitments, whether written or oral, to which Huron or its subsidiaries are entitled whereunder Huron or its subsidiaries are obligated to pay or entitled to receive the sum of $10,000 or more including, without limitation, any pension plans, profit sharing plans, bonus plans, loan agreements, security agreements, indemnities and guarantees, any agreements with employees, lessees, licensees, managers, accountants, suppliers, agents, distributors, officers, directors, attorneys or others which cannot be terminated without liability on not more than one month's notice, and those contracts listed in Schedule "P" hereto;
 
  (rr)     
"Investment " means the $1,500,000 to be invested by Huron pursuant to the Investment Escrow Agreement;
 
  (ss)     
"Investment Escrow Agreement " means the escrow agreement to be entered into between Xxxx, Huron, and the Escrow Agent concurrent with the execution of this Agreement in the form attached hereto as Schedule "S";
 
  (tt)     
"Xxxxxxx" mean Xxxxxx Xxxxxxx Xxxxxxx, one of the Xxxxxxxxx Shareholders and the principal shareholder of Xxxx;
 

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  (uu)     
"Management Stock Pool Agreement " means the agreement to be entered into between Huron and the Xxxxxxxxx Shareholders prior to Closing in the form attached hereto as Schedule "T";
 
  (vv)     
"Management Stock Pool Escrow Agreement " means the escrow agreement to be entered into between Huron, the Xxxxxxxxx Shareholders and the Escrow Agent prior to Closing in the form attached hereto as Schedule "U";
 
  (ww)     
"Merger" means the merger, at the Effective Time, of Xxxxxxxxx and the Acquirer pursuant to this Agreement and Plan of Merger;
 
  (xx)     
"Merger Consideration" means the Acquisition Shares and the Cash Purchase Price;
 
  (yy)     
"Operating Agreement " means the three month operating agreement, on the AAPL Model Form, with customary exhibits, to be entered into at Closing between the Operator and the Acquirer in the form attached hereto as Schedule "V";
 
  (zz)     
"Operator" means Xxxx Operating Company LLC;
 
  (aaa)     
"Person" means any natural person, partnership, joint venture, limited partnership, corporation, limited liability company, trust, estate, association or other entity.
 
  (bbb)     
"Place of Closing " means the offices of Xxxxx Xxxxx & Xxxxxxx, or such other place as Huron and the Xxxxxxxxx Shareholders may mutually agree upon;
 
  (ccc)     
"Preferred Shares" means the Series B Convertible Preferred Shares to be issued pursuant to the Financing;
 
  (ddd)     
"Return to Treasury and Debt Forgiveness Agreement " means the return to treasury and debt forgiveness agreement to be entered into prior to Closing between Huron and Big Sky in the form attached hereto as Schedule "W";
 
  (eee)     
"State Corporation Law" means the Texas Business Corporations Act and the Oklahoma Business Corporations Act;
 
  (fff)     
"Subscription" means the form of Subscription for the Preferred Shares attached hereto as Schedule "X";
 
  (ggg)     
"Surviving Company " means the Acquirer.

Any other terms defined within the text of this Agreement will have the meanings so ascribed to them.

Captions and Section Numbers

1.2 The headings and section references in this Agreement are for convenience of reference only and do not form a part of this Agreement and are not intended to interpret, define or limit the scope, extent or intent of this Agreement or any provision thereof.

Section References and Schedules

1.3 Any reference to a particular "Article", "section", "paragraph", "clause" or other subdivision is to the particular Article, section, clause or other subdivision of this Agreement and any reference to a Schedule by letter will mean the appropriate Schedule attached to this Agreement and by such reference the appropriate Schedule is incorporated into and made part of this Agreement. The Schedules to this

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Agreement are as follows:

Information concerningDavenport 
 
                   Schedule "A"     Xxxxxxxxx Accounts Payable and Liabilities 
                   Schedule "B"     Xxxxxxxxx Accounts Receivable 
                   Schedule "C"     Xxxxxxxxx Bank Accounts 
                   Schedule "D"     Xxxxxxxxx Debts to Related Parties 
                   Schedule "E"     Xxxxxxxxx Draft Financial Statements 
                   Schedule "F"     Xxxxxxxxx Equipment 
                   Schedule "G"     Xxxxxxxxx Insurance Policies 
                   Schedule "H"     Xxxxxxxxx Leasehold Interests 
                   Schedule "I"     Xxxxxxxxx Material Contracts 
                   Schedule "J"     Xxxxxxxxx Royalty Interests 
                   Schedule "K"     Xxxxxxxxx Xxxxx 
 
Information concerningHuron 
 
                   Schedule "L"     Huron Accounts Payable and Liabilities 
                   Schedule "M"     Huron Bank Accounts 
                   Schedule "N"     Huron Debts to Related Parties 
                   Schedule "O"     Huron Financial Statements 
                   Schedule "P"     Huron Material Contracts 
 
Agreements   
 
                   Schedule "Q"     Xxxx Energy Management Agreement 
                   Schedule "R"     Employment Agreements 
                   Schedule "S"     Investment Escrow Agreement 
                   Schedule "T"     Management Group Stock Pool Agreement 
                   Schedule "U"     Management Group Stock Pool Escrow Agreement 
                   Schedule "V"     Operating Agreement 
                   Schedule "W"     Return to Treasury and Debt Forgiveness Agreement 
                   Schedule "X"     Subscription 
 
Other Items   
 
                   Schedule "Y"     Legal Opinions 

Severability of Clauses

1.4 If any part of this Agreement is declared or held to be invalid for any reason, such invalidity will not affect the validity of the remainder which will continue in full force and effect and be construed as if this Agreement had been executed without the invalid portion, and it is hereby declared the intention of the parties that this Agreement would have been executed without reference to any portion which may, for any reason, be hereafter declared or held to be invalid.

ARTICLE 2
THE MERGER

The Merger

2.1 At Closing, Xxxxxxxxx shall be merged with and into the Acquirer pursuant to this Agreement and Plan of Merger and the separate corporate existence of Xxxxxxxxx shall cease and the Acquirer, as it

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exists from and after the Closing, shall be the Surviving Company.

Effect of the Merger

2.2 The Merger shall have the effect provided therefor by the State Corporation Law. Without limiting the generality of the foregoing, and subject thereto, at Closing (i) all the rights, privileges, immunities, powers and franchises, of a public as well as of a private nature, and all property, real, personal and mixed, and all debts due on whatever account, including without limitation subscriptions to shares, and all other choses in action, and all and every other interest of or belonging to or due to Xxxxxxxxx or the Acquirer, as a group, subject to the terms hereof, shall be taken and deemed to be transferred to, and vested in, the Surviving Company without further act or deed; and all property, rights and privileges, immunities, powers and franchises and all and every other interest shall be thereafter the property of the Surviving Company, as they were of Xxxxxxxxx and the Acquirer, as a group, and (ii) all debts, liabilities, duties and obligations of Xxxxxxxxx and the Acquirer, as a group, subject to the terms hereof, shall become the debts, liabilities and duties of the Surviving Company and the Surviving Company shall thenceforth be responsible and liable for all debts, liabilities, duties and obligations of Xxxxxxxxx and the Acquirer, as a group, and neither the rights of creditors nor any liens upon the property of Xxxxxxxxx or the Acquirer, as a group, shall be impaired by the Merger, and may be enforced against the Surviving Company.

Certificate of Incorporation; Bylaws; Directors and Officers

2.3 The Certificate of Incorporation of the Surviving Company from and after the Closing shall be the Certificate of Incorporation of the Acquirer until thereafter amended in accordance with the provisions therein and as provided by the applicable provisions of the State Corporation Law. The Bylaws of the Surviving Company from and after the Closing shall be the Bylaws of the Acquirer as in effect immediately prior to the Closing, continuing until thereafter amended in accordance with their terms, the Certificate of Incorporation of the Surviving Company and as provided by the State Corporation Law. The Directors of Xxxxxxxxx at the Effective Time shall become the Directors of the Surviving Company after the Closing.

Consideration

2.4 In consideration of the acquisition of the Xxxxxxxxx Shares from the Xxxxxxxxx Shareholders by Huron and the Acquirer, Huron and the Acquirer agree to pay the Merger Consideration to the Xxxxxxxxx Shareholders on the Closing Date.

Conversion of Securities

2.5 At the Effective Time, by virtue of the Merger and without any action on the part of the Acquirer, Xxxxxxxxx or the Xxxxxxxxx Shareholders, the shares of capital stock of each of Xxxxxxxxx and the Acquirer shall be converted as follows:

  (a)
Capital Stock of the Acquirer. Each issued and outstanding share of the Acquirer's capital stock shall continue to be issued and outstanding and shall be converted into one share of validly issued, fully paid, and non-assessable common stock of the Surviving Company. Each stock certificate of the Acquirer evidencing ownership of any such shares shall continue to evidence ownership of such shares of capital stock of the Surviving Company.
 
  (b)
Conversion of Xxxxxxxxx Shares. Each Xxxxxxxxx Share that is issued and outstanding at the Effective Time shall automatically be cancelled and extinguished and converted, without any action on the part of the holder thereof, into the right to receive at the time and in the amounts described in this Agreement an amount of Acquisition Shares equal to the number of Acquisition Shares divided by the number of Xxxxxxxxx Shares
 

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outstanding immediately prior to Closing. All such Xxxxxxxxx Shares, when so converted, shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of a certificate representing any such shares shall cease to have any rights with respect thereto, except the right to receive the Acquisition Shares paid in consideration therefor upon the surrender of such certificate in accordance with this Agreement.

Adherence with Applicable Securities Laws

2.6 The Xxxxxxxxx Shareholders agree that they are acquiring the Acquisition Shares for investment purposes and will not offer, sell or otherwise transfer, pledge or hypothecate any of the Acquisition Shares issued to them (other than pursuant to an effective Registration Statement under the Securities Act of 1933, as amended) directly or indirectly unless:

  (a)     
the sale is to Huron;
 
  (b)     
the sale is made pursuant to the exemption from registration under the Securities Act of 1933, as amended, provided by Rule 144 thereunder; or
 
  (c)     
the Acquisition Shares are sold in a transaction that does not require registration under the Securities Act of 1933, as amended, or any applicable United States state laws and regulations governing the offer and sale of securities, and the seller has furnished to Huron an opinion of counsel to that effect or such other written opinion as may be reasonably required by Huron.

The Xxxxxxxxx Shareholders acknowledge that the certificates representing the Acquisition Shares shall bear the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR OTHER APPLICABLE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE AND ARE SUBJECT TO RESTRICTIONS ON TRANSFER PURSUANT TO CERTAIN AGREEMENTS BETWEEN THE REGISTERED HOLDER AND THE ISSUER. THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THESE AGREEMENTS AND IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS.

NO SALE, OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION STATEMENT UNDER THE ACT IN RESPECT OF SUCH SHARES IS THEN IN EFFECT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT IS THEN IN FACT APPLICABLE TO THE SHARES.

ARTICLE 3
INTENTIONALLY DELETED

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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF BIG SKY

Representations and Warranties

4.1 Big Sky hereby represents and warrants in all material respects to Xxxxxxxxx and the Xxxxxxxxx Shareholders, with the intent that Xxxxxxxxx and the Xxxxxxxxx Shareholders will rely thereon in entering into this Agreement and in approving and completing the transactions contemplated hereby, that:

Huron - Corporate Status and Capacity

  (a)     
Incorporation. Huron is a corporation duly incorporated and validly subsisting under the laws of the State of Delaware, and is in good standing with the office of the Secretary of State for the State of Delaware;
 
  (b)     
Carrying on Business. Huron conducts the business described in its filings with the Securities and Exchange Commission and does not conduct any other business. Huron is duly authorized to carry on such business in Xxxxxxxxx, XX, Xxxxxx. The nature of the Huron Business does not require Huron to register or otherwise be qualified to carry on business in any other jurisdictions;
 
  (c)     
Corporate Capacity . Huron has the corporate power, capacity and authority to own the Huron Assets and to enter into and complete this Agreement;
 
  (d)     
Reporting Status; Listing. Huron is required to file current reports with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, the Huron Common Shares are quoted on the NASD "Bulletin Board", and all reports required to be filed by Huron with the Securities and Exchange Commission or NASD have been timely filed;

Acquirer - Corporate Status and Capacity

  (e)     
Incorporation. The Acquirer is a corporation duly incorporated and validly subsisting under the laws of the State of Oklahoma, and is in good standing with the office of the Secretary of State for the State of Oklahoma;
 
  (f)     
Carrying on Business. Other than corporate formation and organization, the Acquirer has not carried on business activities to date;
 
  (g)     
Corporate Capacity . The Acquirer has the corporate power, capacity and authority to enter into and complete this Agreement;

Huron - Capitalization

  (h)     
Authorized Capital. The authorized capital of Huron consists of 50,000,000 Huron Common Shares, $0.0001 par value per share, and 5,000,000 shares of preferred stock, $0.0001 par value per share, of which 16,982,204 Huron Common Shares, and no shares of preferred stock are presently issued and outstanding;
 
  (i)     
No Option, Warrant or Other Right. No person, firm or corporation has any agreement, option, warrant, preemptive right or any other right capable of becoming an agreement, option, warrant or right for the acquisition of Huron Common Shares or for the purchase, subscription or issuance of any of the unissued shares in the capital of Huron, other than options to acquire up to 1,392 Huron Common Shares at a price of $300 per share which expire in 2009;
 

- 12 -

Acquirer Capitalization

  (j)     
Authorized Capital. The authorized capital of the Acquirer consists of 10,000,000 shares of common stock, $0.001 par value, all of which are presently issued and outstanding;
 
  (k)     
No Option, Warrant or Other Right. No person, firm or corporation has any agreement, option, warrant, preemptive right or any other right capable of becoming an agreement, option, warrant or right for the acquisition of any common or preferred shares in the Acquirer or for the purchase, subscription or issuance of any of the unissued shares in the capital of Acquirer;

Huron - Records and Financial Statements

  (l)     
Charter Documents. The charter documents of Huron and the Acquirer have not been altered since the incorporation of each, respectively, except as filed in the record books of Huron or the Acquirer, as the case may be;
 
  (m)     
Corporate Minute Books . The corporate minute books of Huron and the Acquirer are complete and each of the minutes contained therein accurately reflect the actions that were taken at a duly called and held meeting or by consent without a meeting. All actions by Huron and the Acquirer which required director or shareholder approval are reflected on the corporate minute books of Huron and the Acquirer. Huron and the Acquirer are not in violation or breach of, or in default with respect to, any term of their respective Certificates of Incorporation (or other charter documents) or bylaws.
 
  (a)     
Huron Financial Statements. The Huron Financial Statements present fairly, in all material respects, the assets and liabilities (whether accrued, absolute, contingent or otherwise) of Huron as of the respective dates thereof, and the sales and earnings of the Huron Business during the periods covered thereby, in all material respects, and have been prepared in substantial accordance with generally accepted accounting principles consistently applied and the requirements of Item 310 of Regulation SB as promulgated by the Securities and Exchange Commission;
 
  (n)     
Huron Accounts Payable and Liabilities. There are no material liabilities, contingent or otherwise, of Huron or its subsidiaries which are not disclosed in Schedule "L" hereto (Huron Accounts Payable and Liabilities) or reflected in the Huron Financial Statements except those incurred in the ordinary course of business or in connection with the transactions contemplated hereby since the date of the said schedule and the Huron Financial Statements, and neither Huron nor the Acquirer have guaranteed or agreed to guarantee any debt, liability or other obligation of any person, firm or corporation. Without limiting the generality of the foregoing, all accounts payable and liabilities of Huron as of March 31, 2004, are described in Schedule "L" hereto (Huron Accounts Payable and Liabilities);
 
  (o)     
Huron Bank Accounts. All of the Huron Bank Accounts, their location, numbers and the authorized signatories thereto are, as set forth in Schedule "M" hereto (Huron Bank Accounts);
 
  (p)     
No Debt to Related Parties . Except as disclosed in Schedule "N" hereto (Huron Debts to Related Parties), neither Huron nor the Acquirer is, and on Closing will not be, indebted to any Affiliate of Huron except (i) for expenses incurred in furtherance of the transactions contemplated herby, and (ii) for accounts payable on account of bona fide business transactions incurred in normal course of the Huron Business, none of which are more than 60 days in arrears;
 

- 13 -

  (q)     
No Related Party Debt to Huron. No Affiliate of Huron is now indebted to or under any financial obligation to Huron or any subsidiary on any account whatsoever, except for advances on account of travel and other expenses not exceeding $1,000 in total;
 
  (r)     
No Dividends. No dividends or other distributions on any shares in the capital of Huron have been made, declared or authorized since the date of Huron Financial Statements;
 
  (s)     
No Payments. Other than for reimbursements of expenses, no payments of any kind have been made or authorized since the date of the Huron Financial Statements to or on behalf of officers, directors, shareholders or employees of Huron or the Acquirer or under any management agreements with Huron or the Acquirer, except payments made in the ordinary course of business and at the regular rates of salary or other remuneration payable to them;
 
  (t)     
No Pension Plans. There are no pension, profit sharing, group insurance or similar plans or other deferred compensation plans affecting Huron;
 
  (u)     
No Adverse Events. Since the date of the Huron Financial Statements
 
    (i)     
there has not been any material adverse change in the consolidated financial position or condition of Huron, the Acquirer, its liabilities or the Huron Assets or any damage, loss or other change in circumstances materially affecting Huron, the Huron Business or the Huron Assets or Huron' right to carry on the Huron Business, other than (i) the conversion of 600 shares of Series A Convertible Preferred Stock and (ii) changes in the ordinary course of business,
 
    (ii)     
there has not been any damage, destruction, loss or other event (whether or not covered by insurance) materially and adversely affecting Huron, its subsidiaries, the Huron Business or the Huron Assets,
 
    (iii)     
there has not been any material increase in the compensation payable or to become payable by Huron to any of Huron' officers, employees or agents or any bonus, payment or arrangement made to or with any of them,
 
    (iv)     
the Huron Business has been and continues to be carried on in the ordinary course,
 
    (v)     
Huron has not waived or surrendered any right of material value,
 
    (vi)     
neither Huron nor the Acquirer have discharged or satisfied or paid any lien or encumbrance or obligation or liability other than current liabilities in the ordinary course of business, and
 
    (vii)  no capital expenditures in excess of $10,000 individually or $30,000 in total have been authorized or made. 

Huron - Income Tax Matters

  (v)     
Tax Returns. All tax returns and reports of Huron required by law to be filed have been filed and are true, complete and correct, and any taxes payable in accordance with any return filed by Huron or in accordance with any notice of assessment or reassessment issued by any taxing authority have been so paid;
 

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  (w)     
Current Taxes. Adequate provisions have been made for taxes payable for the current period for which tax returns are not yet required to be filed and there are no agreements, waivers, or other arrangements providing for an extension of time with respect to the filing of any tax return by, or payment of, any tax, governmental charge or deficiency by Huron. Huron is not aware of any contingent tax liabilities or any grounds which would prompt a reassessment including aggressive treatment of income and expenses in filing earlier tax returns;

Huron - Applicable Laws and Legal Matters

  (x)     
Licenses. Huron holds all licenses and permits as may be requisite for carrying on the Huron Business in the manner in which it has heretofore been carried on, which licenses and permits have been maintained and continue to be in good standing except where the failure to obtain or maintain such licenses or permits would not have a material adverse effect on the Huron Business;
 
  (y)     
Applicable Laws. Neither Huron nor its subsidiaries have been charged with or received notice of breach of any laws, ordinances, statutes, regulations, bylaws, orders or decrees to which they are subject or which apply to them the violation of which would have a material adverse effect on the Huron Business, and to Big Sky's knowledge, neither Huron nor its subsidiaries are in breach of any laws, ordinances, statutes, regulations, bylaws, orders or decrees the contravention of which would result in a material adverse impact on the Huron Business;
 
  (z)     
Pending or Threatened Litigation. To Big Sky's knowledge, there is no material litigation or administrative or governmental proceeding pending or threatened against or relating to Huron, it's the Acquirer, the Huron Business, or any of the Huron Assets nor does Big Sky have any knowledge of any deliberate act or omission of Huron that would form any material basis for any such action or proceeding;
 
  (aa)     
No Bankruptcy. Neither Huron nor the Acquirer have made any voluntary assignment or proposal under applicable laws relating to insolvency and bankruptcy and no bankruptcy petition has been filed or presented against Huron or the Acquirer and no order has been made or a resolution passed for the winding-up, dissolution or liquidation of Huron or the Acquirer;
 
  (bb)     
Labor Matters. Neither Huron nor the Acquirer are party to any collective agreement relating to the Huron Business with any labor union or other association of employees and no part of the Huron Business has been certified as a unit appropriate for collective bargaining or, to the knowledge of Huron, has made any attempt in that regard;
 
  (cc)     
Finder's Fees. Neither Huron nor the Acquirer are party to any agreement which provides for the payment of finder's fees, brokerage fees, commissions or other fees or amounts which are or may become payable to any third party in connection with the execution and delivery of this Agreement and the transactions contemplated herein;

Execution and Performance of Agreement

  (dd)     
Authorization and Enforceability . The execution and delivery of this Agreement, and the completion of the transactions contemplated hereby, have been duly and validly authorized by all necessary corporate action on the part of Huron and the Acquirer;
 
  (ee)     
No Violation or Breach. The execution and performance of this Agreement will not:
 
    (i) violate the charter documents of Huron or the Acquirer or result in any breach of,
 

- 15 -

     
or default under, any loan agreement, mortgage, deed of trust, or any other agreement to which Huron or its subsidiaries are party,
     
    (ii)     
give any person any right to terminate or cancel any agreement including, without limitation, the Huron Material Contracts, or any right or rights enjoyed by Huron or the Acquirer,
 
    (iii)     
result in any alteration of Huron' or the Acquirer's obligations under any agreement to which Huron or the Acquirer are party including, without limitation, the Huron Material Contracts,
 
    (iv)     
result in the creation or imposition of any lien, encumbrance or restriction of any nature whatsoever in favor of a third party upon or against the Huron Assets,
 
    (v)     
result in the imposition of any tax liability to Huron or the Acquirer relating to the Huron Assets, or
 
    (vi)     
violate any court order or decree to which either Huron or the Acquirer are subject;

The Huron Assets - Ownership and Condition

  (ff)     
Business Assets. The Huron Assets comprise all of the property and assets of the Huron Business, and no other person, firm or corporation owns any assets used by Huron or its subsidiaries in operating the Huron Business, whether under a lease, rental agreement or other arrangement, other than as disclosed in Schedule "P" (Huron Material Contracts) hereto;
 
  (gg)     
Title. Huron is the legal and beneficial owner of the Huron Assets, free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances or other claims whatsoever, save and except as disclosed in Schedule "P" (Huron Material Contracts) hereto;
 
  (hh)     
No Option. No person, firm or corporation has any agreement or option or a right capable of becoming an agreement for the purchase of any of the Huron Assets;
 
  (ii)     
Huron Material Contracts. The Huron Material Contracts listed in Schedule "P" (Huron Material Contracts) constitute all of the material contracts of Huron and its subsidiaries;
 
  (jj)     
No Default . There has not been any default in any material obligation of Huron or any other party to be performed under any of the Huron Material Contracts, each of which is in good standing and in full force and effect and unamended (except as disclosed in Schedule "J" hereto), and Big Sky is not aware of any default in the obligations of any other party to any of the Huron Material Contracts;
 
  (kk)     
No Compensation on Termination. There are no agreements, commitments or understandings relating to severance pay or separation allowances on termination of employment of any employee of Huron or its subsidiaries. Neither Huron nor its subsidiaries are obligated to pay benefits or share profits with any employee after termination of employment except as required by law;

Huron Assets - Huron Goodwill and Other Assets

  (ll)     
Huron Goodwill. Huron does not carry on the Huron Business under any other business or trade names. Big Sky does not have any knowledge of any infringement by Huron or its subsidiaries of any patent, trademarks, copyright or trade secret;
 

- 16 -

The Huron Business

  (mm)     
Maintenance of Business. Since the date of the Huron Financial Statements, Huron has not entered into any material agreement or commitment except in the ordinary course or except as disclosed therein;
 
  (nn)     
Subsidiaries. Except for the Acquirer, Huron does not own any subsidiaries and does not otherwise own, directly or indirectly, any shares or interest in any other corporation, partnership, joint venture or firm; and

Huron - Acquisition Shares

  (oo)     
Acquisition Shares. The Acquisition Shares when delivered to the holders of Xxxxxxxxx Shares pursuant to the Merger shall be validly issued and outstanding as fully paid and non-assessable shares and the Acquisition Shares shall be transferable upon the books of Huron, in all cases subject to (i) the terms of the Management Group Stock Pool Agreement and (ii) the provisions and restrictions of all applicable securities laws.

Non-Merger and Survival

4.2 The representations and warranties of Big Sky contained herein will be true at and as of Closing in all material respects as though such representations and warranties were made as of such time. Notwithstanding the completion of the transactions contemplated hereby, the waiver of any condition contained herein (unless such waiver expressly releases a party from any such representation or warranty) or any investigation made by Xxxxxxxxx, the representations and warranties of Big Sky shall survive the Closing.

Indemnity

4.3 Big Sky agrees to indemnify and save harmless Xxxxxxxxx from and against any and all claims, demands, actions, suits, proceedings, assessments, judgments, damages, costs, losses and expenses, including attorneys' fees incurred in contesting any such claims and any payment made in good faith in settlement of any claim (subject to the right of Big Sky to defend any such claim), resulting from the breach by it of any representation or warranty made under this Agreement or from any misrepresentation in or omission from any certificate or other instrument furnished or to be furnished by Bi Sky to Xxxxxxxxx hereunder.

ARTICLE 5 COVENANTS OF HURON

Covenants

5.1      Huron and Big Sky covenant and agree with Xxxxxxxxx that they will:
 
  (a)     
Conduct of Business. Until the Closing, conduct the Huron Business diligently and in the ordinary course consistent with the manner in which the Huron Business generally has been operated up to the date of execution of this Agreement;
 
  (b)     
Preservation of Business. Until the Closing, use their best efforts to preserve the Huron Business and the Huron Assets and, without limitation, preserve for Xxxxxxxxx Huron's relationships with any third party having business relations with it;
 

- 17 -

  (c)     
Access. Until the Closing, give Xxxxxxxxx and its representatives full access to all of the properties, books, contracts, commitments and records of Huron, and furnish to Xxxxxxxxx and its representatives all such information as they may reasonably request;
 
  (d)     
Procure Consents. Until the Closing, take all reasonable steps required to obtain, prior to Closing, any and all third party consents required to permit the Merger and to preserve and maintain the Huron Assets notwithstanding the change in control of Huron arising from the Merger; and
 
  (e)     
Best Efforts. Big Sky shall use their commercially reasonable best efforts to cause all of its representations and warranties herein to remain true and correct in all respect until the Closing and to satisfy the conditions precedent set forth in section 8.3 hereof.

Authorization

5.2 Huron hereby agrees to authorize and direct any and all federal, state, municipal, foreign and international governments and regulatory authorities having jurisdiction respecting Huron and its subsidiaries to release any and all information in their possession respecting Huron to Xxxxxxxxx. Huron shall promptly execute and deliver to Xxxxxxxxx any and all consents to the release of information and specific authorizations which Xxxxxxxxx reasonably requires to gain access to any and all such information.

Survival

5.3 The covenants set forth in this Article shall survive the Closing for the benefit of Xxxxxxxxx and the Xxxxxxxxx Shareholders.

ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF
XXXX AND XXXXXXX

Representations and Warranties

6. Xxxx and Xxxxxxx hereby jointly and severally represent and warrant in all material respects to Huron, with the intent that Huron will rely thereon in entering into this Agreement and in approving and completing the transactions contemplated hereby, that:

Xxxxxxxxx - Corporate Status and Capacity

  (b)     
Incorporation. Xxxxxxxxx is a corporation duly incorporated and validly subsisting under the laws of the State of Texas, and is in good standing with the office of the Secretary of State for the State of Texas;
 
  (c)     
Carrying on Business . Davenport carries on business primarily in the States of Oklahoma and Texas and does not carry on any material business activity in any other jurisdiction. The nature of the Xxxxxxxxx Business does not require the Davenport to register or otherwise be qualified to carry on business in any other jurisdiction;
 
  (d)     
Corporate Capacity . Xxxxxxxxx has the corporate power, capacity and authority to own the Xxxxxxxxx Assets and to enter into and complete this Agreement;

Xxxxxxxxx - Capitalization

  (e) Authorized Capital. The authorized capital of Xxxxxxxxx consists of 10,000,000 shares of Common Stock, $0.001 par value per share;

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  (f)     
Ownership of Xxxxxxxxx Shares. The issued and outstanding share capital of Xxxxxxxxx will on Closing consist of 10,000,000 shares of Common Stock, $0.001 par value per share (being the Xxxxxxxxx Shares), which shares on Closing shall be validly issued and outstanding as fully paid and non-assessable shares. The Xxxxxxxxx Shareholders will be at Closing the registered and beneficial owners of all of the Xxxxxxxxx Shares. The Xxxxxxxxx Shares will on Closing be free and clear of any and all liens, charges, pledges, encumbrances, restrictions on transfer and adverse claims whatsoever;
 
  (g)     
No Option, Warrant or Other Right. No person, firm or corporation has any agreement, option, warrant, preemptive right or any other right capable of becoming an agreement, option, warrant or right for the acquisition of Xxxxxxxxx Shares held by the Xxxxxxxxx Shareholders or for the purchase, subscription or issuance of any of the unissued shares in the capital of Xxxxxxxxx;
 
  (h)     
No Restrictions. There are no restrictions on the transfer, sale or other disposition of Xxxxxxxxx Shares contained in the charter documents of Xxxxxxxxx or under any agreement;

Accuracy of Information

  (i)     
Accuracy of Information . All of the information, reports and other data furnished to Huron by or on behalf of Xxxx, Xxxxxxxxx or the Xxxxxxxxx Shareholders in connection with the transactions contemplated herein is accurate and complete in all material respects, and none of such information contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, under the circumstances in which they are made, not misleading. Xxxx and Xxxxxxx have no knowledge of any matter that materially and adversely affects (or may materially and adversely affect) the operations, prospects or condition of any of the Xxxxxxxxx Assets that has not been set forth in this Agreement, the Schedules to this Agreement, or the documents listed in such Schedules. Xxxx, Xxxxxxxxx or the Xxxxxxxxx Shareholders own and/or have the right to disclose to Huron all information furnished or made available to Huron in connection with the transactions described herein, and the disclosure by Xxxx, Xxxxxxxxx and the Xxxxxxxxx Shareholders to Huron of such information is not in violation of any duty owed by Xxxx, Xxxxxxxxx or the Xxxxxxxxx Shareholders to any person to whom such information relates or any obligation of Xxxx, Xxxxxxxxx or the Xxxxxxxxx Shareholders under any existing agreement;

Xxxxxxxxx - Records and Financial Statements

  (j)     
Charter Documents. The charter documents of Xxxxxxxxx have not been altered since its incorporation date, except as filed in the record books of Xxxxxxxxx;
 
  (k)     
Corporate Minute Books . The corporate minute books of Xxxxxxxxx are complete and each of the minutes contained therein accurately reflect the actions that were taken at a duly called and held meeting or by consent without a meeting. All actions by Xxxxxxxxx which required director or shareholder approval are reflected on the corporate minute books of Xxxxxxxxx. The Xxxxxxxxx is not in violation or breach of, or in default with respect to, any term of its Certificates of Incorporation (or other charter documents) or bylaws;
 
  (l)     
Xxxxxxxxx Financial Statements. The Xxxxxxxxx Draft Financial Statements present fairly, in all material respects, the assets and liabilities (whether accrued, absolute, contingent or otherwise) of Xxxxxxxxx as the date thereof, and the sales and earnings of
 

- 19 -

   
the Xxxxxxxxx Business during the periods covered thereby, in all material respects, and have been prepared in substantial accordance with generally accepted accounting principles consistently applied, and the Audited Xxxxxxxxx Financial Statements, when delivered, will present fairly, in all material respects, the assets and liabilities (whether accrued, absolute, contingent or otherwise) of Xxxxxxxxx as of the date thereof, and the sales and earnings of the Xxxxxxxxx Business during the periods covered thereby, in all material respects, and will have been prepared in substantial accordance with generally accepted accounting principles consistently applied and the requirements of Item 310 of Regulation SB as promulgated by the Securities and Exchange Commission
   
  (m)     
Xxxxxxxxx Accounts Payable and Liabilities. There are no material liabilities, contingent or otherwise, as at March 31, 2004, which are not disclosed in Schedule "A" (Xxxxxxxxx Accounts Payable and Liabilities) and the Xxxxxxxxx Draft Financial Statements disclose all material liabilities, contingent or otherwise, of Xxxxxxxxx and as at the date thereof and at Closing Xxxxxxxxx has not and will not have guaranteed or agreed to guarantee any debt, liability or other obligation of any person, firm or corporation;
 
  (n)     
Xxxxxxxxx Accounts Receivable. All the Xxxxxxxxx Accounts Receivable result from bona fide business transactions and services actually rendered without, to the knowledge and belief of Xxxx and Xxxxxxx, any claim by the obligor for set-off or counterclaim. Without limiting the generality of the foregoing, all accounts receivable of Xxxxxxxxx as of March 31, 2004, are described in Schedule "B" (Xxxxxxxxx Accounts Receivable);
 
  (o)     
Xxxxxxxxx Bank Accounts. All of the Xxxxxxxxx Bank Accounts, their location, numbers and the authorized signatories as at March 31, 2004, and as at the Closing Date are set forth in Schedule "C" (Xxxxxxxxx Bank Accounts);
 
  (p)     
No Debt to Related Parties. Except as disclosed in the Schedule "D" (Xxxxxxxxx Debts to Related Parties), Xxxxxxxxx will not on Closing be indebted to the Xxxxxxxxx Shareholders nor to any family member thereof, nor to any Affiliate of Xxxxxxxxx or the Xxxxxxxxx Shareholders except accounts payable on account of bona fide business transactions of Xxxxxxxxx incurred in normal course of Xxxxxxxxx Business, none of which are more than 30 days in arrears;
 
  (q)     
No Related Party Debt to Xxxxxxxxx. No Xxxxxxxxx Shareholder nor any Affiliate of Xxxxxxxxx are now indebted to or under any financial obligation to Xxxxxxxxx on any account whatsoever, except for advances on account of travel and other expenses not exceeding $5,000 in total;
 
  (r)     
No Dividends. No dividends or other distributions on any shares in the capital of Xxxxxxxxx have been made, declared or authorized since the date of the Xxxxxxxxx Draft Financial Statements;
 
  (s)     
No Payments . Since the date of the Xxxxxxxxx Draft Financial Statements, no payments of any kind have been made or authorized to or on behalf of the Xxxxxxxxx Shareholders or to or on behalf of officers, directors, shareholders or employees of Xxxxxxxxx or under any management agreements with Xxxxxxxxx;
 
  (t)     
No Pension Plans. There are no pension, profit sharing, group insurance or similar plans or other deferred compensation plans affecting Xxxxxxxxx;
 
  (u)     
No Adverse Events. Since the date of the Xxxxxxxxx Draft Financial Statements:
 
    (i)     
there has not been any material adverse change in the financial position or condition of Xxxxxxxxx, its liabilities or the Xxxxxxxxx Assets or any damage,
 

- 20 -

     
loss or other change in circumstances materially affecting Xxxxxxxxx, the Xxxxxxxxx Business or the Davenport Assets or Xxxxxxxxx'x right to carry on the Xxxxxxxxx Business, other than changes in the ordinary course of business,
     
    (ii)     
there has not been any damage, destruction, loss or other event (whether or not covered by insurance) materially and adversely affecting Xxxxxxxxx, the Xxxxxxxxx Business or the Davenport Assets,
 
    (iii)     
there has not been any material increase in the compensation payable or to become payable by Xxxxxxxxx to the Xxxxxxxxx Shareholders or to any of Xxxxxxxxx'x officers, employees or agents or any bonus, payment or arrangement made to or with any of them,
 
    (iv)     
the Xxxxxxxxx Business has been and continues to be carried on in the ordinary course,
 
    (v)     
Xxxxxxxxx has not waived or surrendered any right of material value,
 
    (vi)     
Xxxxxxxxx has not discharged or satisfied or paid any lien or encumbrance or obligation or liability other than current liabilities in the ordinary course of business, and
       
    (vii) no capital expenditures in excess of $10,000 individually or $30,000 in total have been authorized or made; 

Xxxxxxxxx - Income Tax Matters

  (v)     
Tax Returns. All tax returns and reports of Xxxxxxxxx required by law to be filed have been filed and are true, complete and correct, and any taxes payable in accordance with any return filed by Xxxxxxxxx or in accordance with any notice of assessment or reassessment issued by any taxing authority have been so paid;
 
  (w)     
Taxes. All ad valorem, property, production, severance, sales, use, windfall profits and similar taxes and assessments based on or measured by the ownership of the Xxxxxxxxx Assets or the production of hydrocarbons or the receipt of proceeds therefrom that have become due and payable with respect to the Xxxxxxxxx Assets have been paid;
 
  (x)     
Current Taxes. Adequate provisions have been made for taxes payable for the current period for which tax returns are not yet required to be filed and there are no agreements, waivers, or other arrangements providing for an extension of time with respect to the filing of any tax return by, or payment of, any tax, governmental charge or deficiency by Xxxxxxxxx. Xxxx and Xxxxxxx are not aware of any contingent tax liabilities or any grounds which would prompt a reassessment including aggressive treatment of income and expenses in filing earlier tax returns;

Xxxxxxxxx - Applicable Laws and Legal Matters

  (y)     
Licenses. Xxxxxxxxx hold all governmental and tribal permits, licenses and other authorizations as may be requisite for carrying on the Xxxxxxxxx Business in the manner in which it has heretofore been carried on, which licenses and permits have been maintained and continue to be in good standing) except where the failure to obtain or maintain such licenses or permits would not have a material adverse effect on the Xxxxxxxxx Business) and no proceeding is pending or threatened relating to the challenging, revocation or limitation of any such license or authorization
 

- 21 -

  (z)     
Applicable Laws. Xxxxxxxxx has not been charged with or received notice of breach of any laws, ordinances, statutes, regulations, bylaws, orders or decrees to which it is subject or which applies to it the violation of which would have a material adverse effect on the Xxxxxxxxx Business, and, to the knowledge of Xxxx and Xxxxxxx, Xxxxxxxxx is not in breach of any laws, ordinances, statutes, regulations, bylaws, orders or decrees the contravention of which would result in a material adverse impact on the Xxxxxxxxx Business;
 
  (aa)     
Pending or Threatened Litigation. There is no suit, action, investigation, or other proceeding pending or threatened against either Xxxx, the Xxxxxxxxx Shareholders or Xxxxxxxxx, or otherwise involving the Xxxxxxxxx Assets that could reasonably be expected to adversely affect any of the Xxxxxxxxx Assets, including, without limitation, Xxxxxxxxx'x title thereto, the value thereof, operations thereon, or the marketing of production therefrom, (ii) there is no suit, action, investigation, or other proceeding pending or threatened against Xxxx or any of the Xxxxxxxxx Shareholders that could reasonably be expected to adversely affect the ability of Xxxx or any of the Xxxxxxxxx Shareholders to perform their obligations under this Agreement or that could reasonably be expected to prevent, delay or hinder the consummation of the transactions contemplated hereby; and (iii) none of Xxxx, the Xxxxxxxxx Shareholders or Xxxxxxxxx have received any notice that they have been charged with any violation of, or threatened with a charge of a violation of, any law, statute, ordinance, decree, requirement, order, judgment, rule or regulation of, including the terms of any license, permit or authorization issued by, any federal, state, local or tribal authority ("Legal Requirement") that might reasonably be expected to adversely affect any of the Xxxxxxxxx Assets, and to the knowledge of Xxxx or Xxxxxxx, no third party has been charged with any violation of any Legal Requirement that might reasonably be expected to adversely affect the Xxxxxxxxx Assets;
 
  (bb)     
No Bankruptcy . Xxxxxxxxx has not made any voluntary assignment or proposal under applicable laws relating to insolvency and bankruptcy and no bankruptcy petition has been filed or presented against Xxxxxxxxx and no order has been made or a resolution passed for the winding-up, dissolution or liquidation of Xxxxxxxxx;
 
  (cc)     
Labor Matters. Xxxxxxxxx is not party to any collective agreement relating to the Xxxxxxxxx Business with any labor union or other association of employees and no part of the Xxxxxxxxx Business has been certified as a unit appropriate for collective bargaining or, to the knowledge of Xxxx or Xxxxxxx, has made any attempt in that regard.
 
  (dd)     
Finder's Fees . Xxxxxxxxx is not party to any agreement which provides for the payment of finder's fees, brokerage fees, commissions or other fees or amounts which are or may become payable to any third party in connection with the execution and delivery of this Agreement and the transactions contemplated herein;

Execution and Performance of Agreement

  (ee)     
Authorization and Enforceability . The execution and delivery of this Agreement, and the completion of the transactions contemplated hereby, have been duly and validly authorized by all necessary corporate action on the part of Xxxxxxxxx;
 
  (ff)     
No Violation or Breach. The execution and performance of this Agreement will not
 
    (i)     
violate the charter documents of Xxxxxxxxx or result in any breach of, or default under, any loan agreement, mortgage, deed of trust, or any other agreement to which Xxxxxxxxx or Xxxx is a party,
 

- 22 -

    (ii)     
give any person any right to terminate or cancel any agreement including, without limitation, the Xxxxxxxxx Material Contracts, or any right or rights enjoyed by Xxxxxxxxx,
 
    (iii)     
result in any alteration of Xxxxxxxxx'x obligations under any agreement to which Xxxxxxxxx is a party including, without limitation, the Xxxxxxxxx Material Contracts,
 
    (iv)     
result in the creation or imposition of any lien, encumbrance or restriction of any nature whatsoever in favor of a third party upon or against the Xxxxxxxxx Assets,
 
    (v)     
result in the imposition of any tax liability to Xxxxxxxxx relating to Xxxxxxxxx Assets or the Xxxxxxxxx Shares, or
 
    (vi)     
violate any court order or decree to which either Xxxxxxxxx is subject;

Xxxxxxxxx Assets - Ownership and Condition

  (gg)     
Business Assets. The Xxxxxxxxx Assets comprise all of the property and assets of the Xxxxxxxxx Business, and neither the Xxxxxxxxx Shareholders nor any other person, firm or corporation owns any assets used by Xxxxxxxxx in operating the Xxxxxxxxx Business, whether under a lease, rental agreement or other arrangement, other than as disclosed in Schedule "F" (Xxxxxxxxx Equipment) or Schedule "I" (Xxxxxxxxx Material Contracts);
 
  (hh)     
Title. Xxxxxxxxx is the legal and beneficial owner of the Xxxxxxxxx Assets and has indefeasible title thereto, free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances or other claims whatsoever, save and except as disclosed in Schedule "J" (Xxxxxxxxx Royalty Interests), Schedule "F" (Xxxxxxxxx Equipment) or Schedule "I" (Xxxxxxxxx Material Contracts) and liens for ad valorem taxes not yet due and payable;
 
  (ii)     
Lease Obligations. With respect to the Xxxxxxxxx Leasehold Interests, (a) there are no royalty provisions (other than those allowing a lessor the right to take in kind and other than royalties due to governmental entities) requiring the payment of royalties on any basis other than proceeds actually received by the lessee, (b) there are no Xxxxxxxxx Leasehold Interests which are subject to a fixed term of duration, and (c) there are no unfulfilled drilling obligations affecting the Xxxxxxxxx Leasehold Interests and all royalties, rentals and other payments due in respect of the Xxxxxxxxx Leasehold Interests have been timely paid and all other conditions necessary to keep such properties and interests in full force and effect during their primary term, and thereafter if commercial production has been established thereon or on lands pooled therewith, have been fully performed;
 
  (jj)     
Obligations Relating to Operations. With respect to operations relating to the Xxxxxxxxx Assets: (i) there are no gas production, processing, sales, transportation or other imbalances as of the Closing Time between Xxxxxxxxx and any third party, (ii) there are no material non-consent operations with respect to any Xxxxxxxxx Leasehold Interest which have resulted or will result in a temporary or permanent increase or decrease in Xxxxxxxxx'x interest in such Leasehold Interest from that set forth on Schedule "K" (Xxxxxxxxx Xxxxx) for the applicable unit or well, (iii) there are no binding commitments with respect to the Xxxxxxxxx Assets that will result in Xxxxxxxxx incurring after the Closing Date capital expenditures with respect to any one unit or well in excess of $5,000 or $25,000 with respect to the Xxxxxxxxx Assets in the aggregate, and (iv) with the exception of the Operating Agreement to be entered into at Closing and the current operating agreement which will be terminated at the Closing, there are no operating,
 

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    management or similar agreements affecting the Assets;
     
  (kk)     
Documents and Instruments. All documents and instruments creating or giving rise to the Xxxxxxxxx Leasehold Interests and all agreements, contracts, easements, rights-of-way and other surface use rights, and all governmental and tribal licenses, permits, approvals and other authorizations necessary to own, maintain and operate the Xxxxxxxxx Assets in compliance with applicable laws and in the manner in which they have historically been owned, maintained and operated (all such documents and instruments being herein referred to as the "Material Documents"), in full force and effect and no breach or default exists thereunder. The Material Documents (i) do not subject all or any portion of the Xxxxxxxxx Assets to any tax partnership or to any obligation requiring a partnership income tax return to be filed under the application of Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue Code, or any similar state statute, and Xxxxxxxxx has complied with all conditions necessary to maintain a valid election to be excluded from said Subchapter K, and (ii) will not subject the Xxxxxxxxx Leasehold Interests to any area of mutual interest, non-competition or similar provision restricting Xxxxxxxxx from independently conducting operations in any geographic area. Xxxxxxxxx nor, to knowledge of Xxxx or Xxxxxxx, any other party to the Material Documents (x) is in breach or default, or with the lapse of time or the giving of notice, or both, would be in breach or default, with respect to any of its obligations thereunder, or (y) has given or threatened to give notice of any default under, inquiry into any possible default under, or action to alter, terminate, rescind or procure a judicial reformation of any Material Document or any provision thereof. There are no amounts claimed to be due to Xxxxxxxxx in respect of the Xxxxxxxxx Assets that are being held in suspense because of a dispute as to title to such Xxxxxxxxx Assets or for any other reason, and Xxxxxxxxx is currently being paid its Net Revenue Interest specified on Schedule "K" (Xxxxxxxxx Xxxxx") for each unit or well listed thereon without indemnity or guarantee other than those customarily found in division orders and other similar agreements and documents;
 
  (ll)     
Preferential Rights and Restrictions on Assignment. None of the Xxxxxxxxx Leasehold Interests are subject to any preferential rights to purchase or restrictions on assignment, including, but not limited to, requirements for consents from third parties to any assignment;
 
  (mm)     
Xxxxx. All of the Xxxxxxxxx Xxxxx have been drilled and completed within the boundaries of the Xxxxxxxxx Leasehold Interests or within the limits otherwise permitted by contract, pooling or unit agreement, and by law; and no such well is subject to penalties on allowable because of any over production or any other violation of applicable Legal Requirements that would prevent such well from being entitled to its full legal and regular allowable from and after the Closing Time as prescribed by any governmental authority;
 
  (nn)     
No Option . No person, firm or corporation has any agreement or option or a right capable of becoming an agreement for the purchase of any of the Xxxxxxxxx Assets;
 
  (oo)     
Xxxxxxxxx Insurance Policies. Xxxxxxxxx maintains the public liability insurance and insurance against loss or damage to the Xxxxxxxxx Assets and the Xxxxxxxxx Business as described in the in Schedule "G" (Xxxxxxxxx Insurance);
 
  (pp)     
Xxxxxxxxx Material Contracts. The Xxxxxxxxx Material Contracts listed in Schedule "I" (Xxxxxxxxx Material Contracts) constitute all of the material contracts of Xxxxxxxxx;
 
  (qq)     
No Default . There has not been any default in any material obligation of Xxxxxxxxx or any other party to be performed under any of Xxxxxxxxx Material Contracts, each of which is in good standing and in full force and effect and unamended (except as disclosed
 

- 24 -

   
in the Statement of Xxxxxxxxx Material Contracts), and neither Xxxx nor Xxxxxxx are aware of any default in the obligations of any other party to any of the Xxxxxxxxx Material Contracts;
     
  (rr)     
No Compensation on Termination. There are no agreements, commitments or understandings relating to severance pay or separation allowances on termination of employment of any employee of Xxxxxxxxx. Xxxxxxxxx is not obliged to pay benefits or share profits with any employee after termination of employment except as required by law;

Xxxxxxxxx Assets - Xxxxxxxxx Equipment

  (ss)     
Xxxxxxxxx Equipment. The Xxxxxxxxx Equipment has been maintained in a manner consistent with that of a reasonably prudent owner and such equipment is in good working condition;
 
  (tt)     
Improvements, Personalty, Equipment and Fixtures. All xxxxx, platforms, fixtures, facilities, improvements, pipelines, personal property and equipment constituting a part of the Xxxxxxxxx Assets (a) are in a good and operable state of repair so as to be adequate for normal operations in accordance with standard industry practice in the areas in which they are operated, (b) are adequate together with all related Xxxxxxxxx Assets to comply with the requirements of all applicable contracts, including sales contracts, and (c) meet and comply with all applicable Legal Requirements. However, Xxxx and Xxxxxxx make no warranties of whatsoever nature, express or implied, concerning equipment and fixtures included in the Xxxxxxxxx Assets, it being the intention of Sellers and Buyer to expressly negate and to exclude all warranties concerning equipment and fixtures included in the Xxxxxxxxx Assets, including, without limitation, any implied warranties of merchantability and fitness for any particular purpose, warranties created by an affirmation of fact or promise of any description of any kind whatsoever contained in or created by the Uniform Commercial Code as adopted in Oklahoma or by any other applicable law. Huron hereby waives any claim it may or might have now or in the future against Xxxx or Xxxxxxx for any loss, damage or expense caused by any of the equipment or fixtures included in the Xxxxxxxxx Assets or by defect therein, use or maintenance thereof or servicing or adjustment thereto and, as to Xxxx and Xxxxxxx, acquires the equipment and fixtures "as is -where is."

Davenport Assets - Davenport Goodwill and Other Assets

  (uu)     
Xxxxxxxxx Goodwill . Xxxxxxxxx carries on the Xxxxxxxxx Business only under the name "Davenport", "Xxxxxxxxx Field" and variations thereof and under no other business or trade names. The Xxxxxxxxx Shareholders do not have any knowledge of any infringement by Xxxxxxxxx of any patent, trademark, copyright or trade secret;

Xxxxxxxxx Assets – Environmental Matters

  (vv)     
Compliance with Laws. All operations (including, without limitation, the exploration and development of all leases, the drilling, completion and production of all xxxxx thereon, and the marketing of all production therefrom) relating to the Xxxxxxxxx Leasehold Interests have been conducted in compliance with, and all items of tangible personal property and fixtures constituting part of the Xxxxxxxxx Assets, conform with all Legal Requirements, including but not limited to, any Environmental Laws;
 
  (ww)     
Environmental Matters. With respect to environmental matters, to knowledge and belief of Xxxx and Xxxxxxx (i) the Xxxxxxxxx Assets do not violate any order or requirement of any governmental authority or any Environmental Laws, nor are there any conditions
 

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existing on or resulting from the operations of the Assets that may give rise to any on-site or off-site remedial obligations under any Environmental Laws, (ii) the Xxxxxxxxx Assets are not in violation of or subject to any existing, pending or threatened action, suit, investigation, inquiry or proceeding by or before any court, any applicable tribal authority or any other governmental authority, (iii) all notices, permits, licenses or similar authorizations, if any, required to be obtained or filed in connection with the Xxxxxxxxx Assets, including, without limitation, those relating to the past or present treatment, storage, disposal or release of a hazardous substance or solid waste into the environment have been duly obtained or filed, and Xxxxxxxxx is in compliance with the terms and conditions of all such notices, permits, licenses and, similar authorizations, (iv) all hazardous substances or solid waste generated at or as a result of the Assets have, since the effective date of the relevant requirements of RCRA (as hereinafter defined), been transported, treated and disposed of only by carriers maintaining valid authorizations under RCRA and any other Environmental Laws and only at treatment storage and disposal facilities maintaining valid authorizations under RCRA and any other Environmental Law, which carriers and facilities have been and are operating in compliance with such authorizations and are not the subject of any existing, pending or overtly threatened action, investigation or inquiry by any governmental authority in connection with any Environmental Laws, (v) no hazardous substance or solid waste has been disposed of or otherwise released (including without limitation discharges or releases into pits) and there has been no threatened release of any hazardous substances or solid waste on, to or as a result of the Xxxxxxxxx Assets except in compliance with Environmental Laws, and there are no storage tanks or other containers on or under any of the Assets from which hazardous substances, petroleum products or other contaminants may be released into the surrounding environment, and (vi) there is no liability (contingent or otherwise) in connection with any release or threatened release of any hazardous substance or solid waste into the environment as a result of or with respect to the Assets;

The Business of Xxxxxxxxx

  (xx)     
Maintenance of Business . Since the date of the Xxxxxxxxx Draft Financial Statements, the Xxxxxxxxx Business has been carried on in the ordinary course and Xxxxxxxxx has not entered into any material agreement or commitment except in the ordinary course; and
 
  (yy)     
Subsidiaries . Xxxxxxxxx does not own any subsidiaries and does not otherwise own, directly or indirectly, any shares or interest in any other corporation, partnership, joint venture or firm.

Non-Merger and Survival

6.2 The representations and warranties of Xxxx and Xxxxxxx contained herein will be true at and as of Closing in all material respects as though such representations and warranties were made as of such time. Notwithstanding the completion of the transactions contemplated hereby, the waiver of any condition contained herein (unless such waiver expressly releases a party from any such representation or warranty) or any investigation made by Huron, the representations and warranties of Xxxx and Xxxxxxx shall survive the Closing.

Indemnity

6.3 Xxxx and Xxxxxxx jointly and severally agree to indemnify and save harmless Huron from and against any and all claims, demands, actions, suits, proceedings, assessments, judgments, damages, costs, losses and expenses, including attorneys' fees incurred in contesting any such claims and any payment made in good faith in settlement of any claim (subject to the right of Xxxx and Xxxxxxx to defend any such claim), resulting from the breach by any of them of any representation or warranty of such party

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made under this Agreement or from any misrepresentation in or omission from any certificate or other instrument furnished or to be furnished by Xxxxxxxxx, Xxxx or the Xxxxxxxxx Shareholders to Huron hereunder.

ARTICLE 7
COVENANTS OF DAVENPORT, CANO, AND
THE XXXXXXXXX SHAREHOLDERS

Covenants of Xxxxxxxxx, Xxxx and the Xxxxxxxxx Shareholders

7.1 Xxxxxxxxx, Xxxx and the Xxxxxxxxx Shareholders covenant and agree with Huron that they will:

  (a)     
Conduct of Business. Until the Closing, conduct the Xxxxxxxxx Business diligently and in the ordinary course consistent with the manner in which the Xxxxxxxxx Business generally has been operated up to the date of execution of this Agreement;
 
  (b)     
Preservation of Business. Until the Closing, use their best efforts to preserve the Xxxxxxxxx Business and the Xxxxxxxxx Assets and, without limitation, preserve for Huron Xxxxxxxxx'x relationships with their suppliers, customers and others having business relations with them;
 
  (c)     
Standstill. From the date of this Agreement and until the Closing Xxxxxxxxx and the Xxxxxxxxx Shareholders shall not, directly or indirectly, seek, solicit or entertain competitive offers to purchase the Xxxxxxxxx Shares or the Xxxxxxxxx Assets, or otherwise discuss the sale of the Xxxxxxxxx Shares or the Xxxxxxxxx Assets with any party other than Huron and its Affiliates; and
 
  (d)     
Best Efforts. The Xxxxxxxxx Shareholders shall use their commercially reasonable best efforts to cause all of their respective representations and warranties herein (if any) to remain true and correct in all respect until the Closing and to satisfy the conditions precedent set forth in section 8.1 hereof.

Covenants of Xxxxxxxxx and Xxxxxxx

7.2 Xxxxxxxxx and Xxxxxxx covenant and agree with Huron that they will:

  (a)     
Audited Xxxxxxxxx Financial Statements. Use their commercially reasonable best efforts to cause the Audited Xxxxxxxxx Financial Statements to be prepared and delivered to Huron on or before May 28, 2004;
 
  (b)     
Name Change. Forthwith after the Closing, take such steps are required to change the name of Huron to "Xxxx Petroleum, Inc.";
 
  (c)     
No Reverse Stock Splits. For a period of twelve (12) months following the Closing, take any action to cause or result in any way in a reverse stock split of the capital stock of Huron;
 
  (d)     
1934 Act Reports. From and after the Closing Date, take all such steps as are necessary to discharge all reporting obligations imposed upon them by the Securities Exchange Act of 1934, as amended;
 
  (e)     
Reporting and Internal Controls. From and after the Effective Time, take all required actions to implement internal controls on the business of the Surviving Company to
 

- 27 -

   

ensure that the Surviving Company and Huron comply with Section 13(b)(2) of the Securities and Exchange Act of 1934, as amended;
   
  (f)     
No Material Adverse Change. The Audited Xxxxxxxxx Financial Statements shall comply with the Xxxxxxxxx Draft Financial Statements in all material respects;
 
  (g)     
Establishment of Operator. Xxxxxxx shall cause Huron (or a subsidiary thereof) to assume the responsibilities as operator of the Xxxxxxxxx Leasehold Interests within three months of the Closing Date; and
 
  (h)     
Access. Until the Closing, give Huron and its representatives full access to all of the properties, books, contracts, commitments and records of Xxxxxxxxx relating to Xxxxxxxxx, the Xxxxxxxxx Business and the Xxxxxxxxx Assets, and furnish to Huron and its representatives all such information as they may reasonably request; and
 
  (i)     
Procure Consents. Until the Closing, take all reasonable steps required to obtain, prior to Closing, any and all third party consents required to permit the Merger and to preserve and maintain the Xxxxxxxxx Assets, including the Xxxxxxxxx Material Contracts, notwithstanding the change in control of Xxxxxxxxx arising from the Merger.

Authorization

7.3 Xxxxxxxxx hereby agrees to authorize and direct any and all federal, state, municipal, foreign and international governments and regulatory authorities having jurisdiction respecting Xxxxxxxxx to release any and all information in their possession respecting Xxxxxxxxx to Huron. Xxxxxxxxx shall promptly execute and deliver to Huron any and all consents to the release of information and specific authorizations which Huron reasonably require to gain access to any and all such information.

Survival

7.4 The covenants set forth in this Article shall survive the Closing for the benefit of Huron.

ARTICLE 8
CONDITIONS PRECEDENT

Conditions Precedent in favor of Huron

8.1 Huron's obligations to carry out the transactions contemplated hereby are subject to the fulfillment of each of the following conditions precedent on or before the Closing:

  (a)     
all documents or copies of documents required to be executed and delivered to Huron hereunder will have been so executed and delivered;
 
  (b)     
all of the terms, covenants and conditions of this Agreement to be complied with or performed by Xxxxxxxxx, the Xxxxxxxxx Shareholders or Xxxx at or prior to the Closing will have been complied with or performed;
 
  (c)     
Xxxxxxxxx will have caused the Audited Xxxxxxxxx Financial Statements to be prepared and delivered to Huron and the Audited Xxxxxxxxx Financial Statements shall comply with the Xxxxxxxxx Draft Financial Statements in all material respects;
 
  (d)     
Huron shall have received a business plan (including financial projections) and an engineering report on the Xxxxxxxxx Leasehold Interests in form and substance satisfactory to Buyer;
 

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  (e)     
Huron shall have completed its review and inspection of the Xxxxxxxxx Business and the Audited Xxxxxxxxx Financial Statements and shall be satisfied with same in all material respects;
 
  (f)     
title to the Xxxxxxxxx Shares held by the Xxxxxxxxx Shareholders and to the Xxxxxxxxx Assets will be free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances or other claims whatsoever, save and except as disclosed herein;
 
  (g)     
the Xxxxxxxxx Shareholders shall have delivered to Huron a consent, in form and substances satisfactory to Huron and its legal counsel, executed by Xxxxx Xxxxxx Trading Partners L.P., the holder of an unrecorded security interest in the assets and properties of Xxxx, to this Agreement and the transactions contemplated hereby;
 
  (h)     
Huron having received executed Subscriptions for the minimum amount of the Financing;
 
  (i)     
Xxxx shall have delivered to Huron a release executed by a corporate officer other than Xxxxxxx releasing Xxxxxxx from any all future obligations to Xxxx and its Affiliates;
 
  (j)     
Xxxx and Huron shall have entered into the Xxxx Energy Management Agreement;
 
  (k)     
the Xxxxxxxxx Shareholders and the Escrow Agent shall have entered into the Investment Escrow Agreement;
 
  (l)     
the appropriate Xxxxxxxxx Shareholders shall have entered into the Employment Agreements;
 
  (m)     
the Xxxxxxxxx Shareholders and the Escrow Agent shall have executed the Management Stock Pool Agreement and the Management Stock Pool Escrow Agreement;
 
  (n)     
Xxxxxxxxx shall have terminated the operating agreement between the Xxxxxxxxx and the Operator dated May 15, 2003 and shall have entered into the Operating Agreement;
 
  (o)     
the Certificate of Merger shall be executed by Xxxxxxxxx in form acceptable for filing with the Secretaries of State for the States of Texas and Oklahoma;
 
  (p)     
subject to Article 9 hereof, there will not have occurred
 
    (i)     
any material adverse change in the financial position or condition of Xxxxxxxxx, its liabilities or the Xxxxxxxxx Assets or any damage, loss or other change in circumstances materially and adversely affecting Xxxxxxxxx, the Xxxxxxxxx Business or the Davenport Assets or Xxxxxxxxx'x right to carry on the Xxxxxxxxx Business, other than changes in the ordinary course of business, none of which has been materially adverse, or
 
    (ii)     
any damage, destruction, loss or other event, including changes to any laws or statutes applicable to Davenport or the Xxxxxxxxx Business (whether or not covered by insurance) materially and adversely affecting Davenport, the Xxxxxxxxx Business or the Davenport Assets; and
 
  (q)     
the transactions contemplated hereby shall have been approved by all other regulatory authorities having jurisdiction over the subject matter hereof, if any.
 

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Waiver by Huron

8.2 The conditions precedent set out in the preceding section are inserted for the exclusive benefit of Huron and any such condition may be waived in whole or in part by Huron at or prior to the Closing by delivering to Xxxxxxxxx a written waiver to that effect signed by Huron. In the event that the conditions precedent set out in the preceding section are not satisfied on or before the Closing, Huron shall be released from all obligations under this Agreement.

Conditions Precedent in Favor of the Xxxxxxxxx Shareholders

8.3 The obligations of the Xxxxxxxxx Shareholders to carry out the transactions contemplated hereby are subject to the fulfillment of each of the following conditions precedent on or before the Closing:

  (a)     
all documents or copies of documents required to be executed and delivered to Xxxxxxxxx or the Xxxxxxxxx Shareholders hereunder will have been so executed and delivered;
 
  (b)     
all of the terms, covenants and conditions of this Agreement to be complied with or performed by Huron at or prior to the Closing will have been complied with or performed;
 
  (c)     
the Xxxxxxxxx Shareholders shall have completed their review and inspection of Huron and shall be satisfied with same in all material respects;
 
  (d)     
Huron will have delivered the Acquisition Shares to be issued pursuant to the terms of the Merger to the Escrow Agent and the Acquisition Shares will be registered on the books of Huron in the names of the holders of Xxxxxxxxx Shares at the Effective Time;
 
  (e)     
title to the Acquisition Shares will be free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances or other claims whatsoever, save and except as provided for in the Management Stock Pool Agreement;
 
  (f)     
the Return to Treasury and Debt Forgiveness Agreement shall have been executed by Huron and Big Sky Management Ltd. and the certificate representing the shares to be returned to treasury and the promissory note representing the debt to be forgiven shall have been delivered to Huron, duly endorsed as required;
 
  (g)     
Huron shall have received executed Subscriptions for the minimum amount of the Financing;
 
  (h)     
the Escrow Agent shall have received the Cash Purchase Price and the Investment and Huron shall have entered into the Investment Escrow Agreement;
 
  (i)     
Huron shall have executed the Management Stock Pool Agreement and the Management Stock Pool Escrow Agreement;
 
  (j)     
Huron shall have entered into the Employment Agreements;
 
  (k)     
the Certificate of Merger shall be executed by the Acquirer in form acceptable for filing with the Secretaries of State for the States of Texas and Oklahoma;
 
  (l)     
subject to Article 9 hereof, there will not have occurred
 
    (i)     
any material adverse change in the financial position or condition of Huron, its subsidiaries, their liabilities or the Huron Assets or any damage, loss or other
 

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change in circumstances materially and adversely affecting Huron, the Huron Business or the Huron Assets or Huron' right to carry on the Huron Business, other than changes in the ordinary course of business, none of which has been materially adverse, or
       
    (ii)     
any damage, destruction, loss or other event, including changes to any laws or statutes applicable to Huron or the Huron Business (whether or not covered by insurance) materially and adversely affecting Huron, its subsidiaries, the Huron Business or the Huron Assets; and
 
  (r)     
the transactions contemplated hereby shall have been approved by all other regulatory authorities having jurisdiction over the subject matter hereof, if any.

Waiver by the Xxxxxxxxx Shareholders

8.4 The conditions precedent set out in the preceding section are inserted for the exclusive benefit of the Xxxxxxxxx Shareholders and any such condition may be waived in whole or in part by the Xxxxxxxxx Shareholders at or prior to the Closing by delivering to Huron a written waiver to that effect signed by the Xxxxxxxxx Shareholders. In the event that the conditions precedent set out in the preceding section are not satisfied on or before the Closing, the Xxxxxxxxx Shareholders shall be released from all obligations under this Agreement.

Nature of Conditions Precedent

8.5 The conditions precedent set forth in this Article are conditions of completion of the transactions contemplated by this Agreement and are not conditions precedent to the existence of a binding agreement. Each party acknowledges receipt of the sum of $1.00 and other good and valuable consideration as separate and distinct consideration for agreeing to the conditions of precedent in favor of the other party or parties set forth in this Article.

Termination

8.6 Notwithstanding any provision herein to the contrary, if the Closing does not occur on or before June 2, 2004, this Agreement will be at an end and will have no further force or effect, unless otherwise agreed upon by the parties in writing.

Confidentiality

8.7 Notwithstanding any provision herein to the contrary, the parties hereto agree that the existence and terms of this Agreement are confidential and that if this Agreement is terminated pursuant to the preceding section the parties agree to return to one another any and all financial, technical and business documents delivered to the other party or parties in connection with the negotiation and execution of this Agreement (or destroy same and provide as duly sworn affidavit thereof to the other) and shall keep the terms of this Agreement and all information and documents received from Xxxxxxxxx and Huron and the contents thereof confidential and not utilize nor reveal or release same, provided, however, that Huron will be required to issue a news release regarding the execution and consummation of this Agreement, file the Certificate of Merger with the Secretaries of State for the States of Texas and Oklahoma and file a Current Report on Form 8-K with the Securities and Exchange Commission respecting the proposed Merger contemplated hereby together with such other documents as are required to maintain the currency of Huron's filings with the Securities and Exchange Commission.

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ARTICLE 9
RISK

Material Change in the Business of Xxxxxxxxx

9.1 If any material loss or damage to the Xxxxxxxxx Business occurs prior to Closing and such loss or damage, in Huron' reasonable opinion, cannot be substantially repaired or replaced within sixty (60) days, Huron shall, within two (2) days following any such loss or damage, by notice in writing to Xxxxxxxxx, at its option, either:

  (a)     
terminate this Agreement, in which case no party will be under any further obligation to any other party; or
 
  (b)     
elect to complete the Merger and the other transactions contemplated hereby, in which case the proceeds and the rights to receive the proceeds of all insurance covering such loss or damage will, as a condition precedent to Huron' obligations to carry out the transactions contemplated hereby, be vested in Xxxxxxxxx or otherwise adequately secured to the satisfaction of Huron on or before the Closing Date.

Material Change in the Huron Business

9.2 If any material loss or damage to the Huron Business occurs prior to Closing and such loss or damage, in Xxxxxxxxx'x reasonable opinion, cannot be substantially repaired or replaced within sixty (60) days, Xxxxxxxxx shall, within two (2) days following any such loss or damage, by notice in writing to Huron, at its option, either:

  (a)     
terminate this Agreement, in which case no party will be under any further obligation to any other party; or
 
  (b)     
elect to complete the Merger and the other transactions contemplated hereby, in which case the proceeds and the rights to receive the proceeds of all insurance covering such loss or damage will, as a condition precedent to Xxxxxxxxx'x obligations to carry out the transactions contemplated hereby, be vested in Huron or otherwise adequately secured to the satisfaction of Xxxxxxxxx on or before the Closing Date.

ARTICLE 10
CLOSING

Closing

10.1 The Merger and the other transactions contemplated by this Agreement will be closed at the Place of Closing in accordance with the closing procedure set out in this Article.

Documents to be Delivered by Xxxxxxxxx and the Xxxxxxxxx Shareholders

10.2 On or before the Closing, Xxxxxxxxx and the Xxxxxxxxx Shareholders will deliver or cause to be delivered to Huron:

  (a)     
the original or certified copies of the charter documents of Xxxxxxxxx and all corporate records documents and instruments of Xxxxxxxxx and all books and accounts of Xxxxxxxxx;
 
  (b)     
all reasonable consents or approvals required to be obtained by Xxxxxxxxx for the purposes of completing the Merger and preserving and maintaining the interests of Xxxxxxxxx under any and all Xxxxxxxxx Material Contracts and in relation to Xxxxxxxxx Assets;
 

- 32 -

  (c)     
certified copies of such resolutions of the shareholders and directors of Xxxxxxxxx and Xxxx as are required to be passed to authorize the execution, delivery and implementation of this Agreement;
 
  (d)     
an acknowledgement from the Xxxxxxxxx Shareholders of the satisfaction of the conditions precedent set forth in section 8.3 hereof;
 
  (e)     
legal opinions, in form and substance acceptable to Huron, covering the matters detailed in Schedule "Y" hereto; and
 
  (f)     
such other documents as Huron may reasonably require to give effect to the terms and intention of this Agreement.

Documents to be Delivered by Huron

10.3 On or before the Closing, Huron shall deliver or cause to be delivered to the Xxxxxxxxx Shareholders or the Escrow Agent:

  (a)     
to the Xxxxxxxxx Shareholders, certified copies of such resolutions of the directors of Huron as are required to be passed to authorize the execution, delivery and implementation of this Agreement;
 
  (b)     
to the Xxxxxxxxx Shareholders, a certified copy of a resolution of the directors of Huron dated as of the Closing Date appointing Xxxxxxx, Xxxxxxx Xxxxxxxx and Xxx Xxxxxxxx as officers of Huron;
 
  (c)     
to the Xxxxxxxxx Shareholders, an undated resolution of the director of Huron appointing the nominees of the Xxxxxxxxx Shareholders listed below in Article 11 to the board of directors of Huron;
 
  (d)     
to the Xxxxxxxxx Shareholders, undated resignation of Xxxx Xxxxxxx as a director of Huron;
 
  (e)     
to the Xxxxxxxxx Shareholders, an acknowledgement from Huron of the satisfaction of the conditions precedent set forth in section 8.1 hereof; and
 
  (f)     
such other documents as the Xxxxxxxxx Shareholders may reasonably require to give effect to the terms and intention of this Agreement.

ARTICLE 11
POST-CLOSING MATTERS

Forthwith after the Closing, Huron, Xxxxxxxxx and the Xxxxxxxxx Shareholders, as the case may be, agree to use all their best efforts to:

  (a)     
file the Certificate of Merger with Secretaries of State for the States of Texas and Oklahoma;
 
  (b)     
issue a news release reporting the Closing;
 
  (c)     
file with the Securities and Exchange Commission a report on Form 14f1 disclosing the change in control of Huron and, 10 days after such filing, date the resolutions appointing to the board of directors of Huron Xxxx Xxxxxxx, Xxx Xxxx and Xxxxxxx Xxxxxxxx and accept the resignation of Xxxx Xxxxxxx as a director of Huron;
 

- 33 -

  (d)     
file a Form 8-K with the Securities and Exchange Commission disclosing the terms of this Agreement within 15 days of the Closing and, not more than 60 days following the filing of the Form 8-K, file an amended Form 8-K which includes the audited financial statements of Xxxxxxxxx as well as pro forma financial information of Xxxxxxxxx and Huron as required by Item 310 of Regulation SB as promulgated by the Securities and Exchange Commission;
 
  (e)     
file reports on Forms 13D and 3 with the Securities and Exchange Commission disclosing the acquisition of the Acquisition Shares by the Xxxxxxxxx Shareholders, as required by law;
 
  (f)     
within 4 business days of the Closing, take such steps are required to change the name of Huron to "Xxxx Petroleum, Inc."; and
 
  (g)     
return to treasury the 6,500,000 Huron Common Shares pursuant to the Return to Treasury and Debt Forgiveness Agreement.

ARTICLE 12
GENERAL PROVISIONS

Arbitration

12.1 The parties hereto shall attempt to resolve any dispute, controversy, difference or claim arising out of or relating to this Agreement by negotiation in good faith. If such good negotiation fails to resolve such dispute, controversy, difference or claim within thirty (30) days after any party delivers to any other party a notice of its intent to submit such matter to arbitration, then any party to such dispute, controversy, difference or claim may submit such matter to arbitration.

Any action or proceeding seeking to enforce any provision of, or based upon any right arising out of, this Agreement shall be settled by binding arbitration by a panel of three (3) arbitrators in accordance with the Commercial Arbitration Rules of the American Arbitration Association and governed by the laws of the State of Texas (without regard to the choice-of-law rules or principles of that jurisdiction). Judgment upon the award may be entered in any court located in the State of Texas, and all the parties hereto hereby consent to submit to the jurisdiction of such courts and expressly waive any objections or defense based upon lack of personal jurisdiction or venue.

Each of the plaintiff and defendant party to the arbitration shall select one (1) arbitrator (or where multiple plaintiffs and/or defendants exist, one (1) arbitrator shall be chosen collectively by such parties comprising the plaintiffs and one (1) arbitrator shall be chosen collectively by those parties comprising the defendants) and then the two (2) arbitrators shall mutually agree upon the third arbitrator. Where no agreement can be reached on the selection of either a third arbitrator or an arbitrator to be named by either a group of plaintiffs or a group of defendants, any implicated party may apply to a judge of the courts of the State of Texas, to name an arbitrator. The location of any arbitration shall be in the State of Texas. Process in any such action or proceeding may be served on any party anywhere in the world.

Notice

12.2 Any notice required or permitted to be given by any party will be deemed to be given when in writing and delivered to the address for notice of the intended recipient by personal delivery, prepaid single certified or registered mail, or telecopier. Any notice delivered by mail shall be deemed to have been received on the fourth business day after and excluding the date of mailing, except in the event of a disruption in regular postal service in which event such notice shall be deemed to be delivered on the

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actual date of receipt. Any notice delivered personally or by telecopier shall be deemed to have been received on the actual date of delivery.

Addresses for Service

12.3 The address for service of notice of each of the parties hereto is as follows:

  (a)      Huron or the Acquirer:
 
    Huron Ventures Inc.
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xxxx Xxxxxxx
Telecopy No.: 000-000.0000
 
  (b)      Xxxxxxxxx or the Xxxxxxxxx Shareholders:
 
    c/o Xxxx Xxxxxxx
    000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Telecopy No.: 000-000-0000

Change of Address

12.4 Any party may, by notice to the other parties change its address for notice to some other address in North America and will so change its address for notice whenever the existing address or notice ceases to be adequate for delivery by hand. A post office box may not be used as an address for service.

Further Assurances

12.5 Each of the parties will execute and deliver such further and other documents and do and perform such further and other acts as any other party may reasonably require to carry out and give effect to the terms and intention of this Agreement.

Time of the Essence

12.6 Time is expressly declared to be the essence of this Agreement.

Entire Agreement

12.7 The provisions contained herein constitute the entire agreement among Xxxxxxxxx, the Xxxxxxxxx Shareholders, Huron, the Acquirer, Xxxx and Big Sky respecting the subject matter hereof and supersede all previous communications, representations and agreements, whether verbal or written, among Xxxxxxxxx, the Xxxxxxxxx Shareholders, Huron, the Acquirer, Xxxx and Big Sky with respect to the subject matter hereof.

Enurement

12.8 This Agreement will enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.

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Assignment

12.9 This Agreement is not assignable without the prior written consent of the parties hereto.

Counterparts

12.10 This Agreement may be executed in counterparts, each of which when executed by any party will be deemed to be an original and all of which counterparts will together constitute one and the same Agreement. Delivery of executed copies of this Agreement by telecopier will constitute proper delivery, provided that originally executed counterparts are delivered to the parties within a reasonable time thereafter.

Applicable Law

12.11 This Agreement is subject to the laws of the State of Texas.

[Remainder of page intentionally left blank.]

IN WITNESS WHEREOF the parties have executed this Agreement effective as of the day and year first above written.

 
  HURON VENTURES, INC. 
   
  By: /s/ Xxxx Xxxxxxx 
       Xxxx Xxxxxxx., President 
   
  XXXXXXXXX ACQUISITION CORP. 
   
  By: /s/ Xxxx Xxxxxxx 
       Xxxx Xxxxxxx., President 
   
  XXXXXXXXX FIELD UNIT INC 
   
  By: /s/ S. Xxxx Xxxxxxx 
       S. Xxxx Xxxxxxx., President 
   
  XXXX ENERGY CORPORATION 
   
  By: /s/ S. Xxxx Xxxxxxx 
       S. Xxxx Xxxxxxx., President 
   
  BIG SKY MANAGEMENT LTD. 
   
  By: /s/ Xxxx Xxxxxxx 
       Xxxx Xxxxxxx., President 

This is page 36 of the Agreement and Plan of Merger dated May 26, 2004 among Huron Ventures, Inc., Xxxxxxxxx Acquisition Corp., Xxxxxxxxx Field Unit Inc., the shareholders of Xxxxxxxxx Field Unit Inc., Xxxx Energy Corporation and Big Sky Management Ltd.


  /s/ Xxxxxx Xxxxxxx Xxxxxxx 
  Xxxxxx Xxxxxxx Xxxxxxx 
   
   
   
   
  /s/ Xxxxxxx Xxxxxx Xxxxxxxx 
  Xxxxxxx Xxxxxx Xxxxxxxx 
   
   
   
   
  /s/ Xxx Xxxxxxxx 
  Xxx Xxxxxxxx 
   
   
   
   
  /s/ Xxxxxx Xxxx Xxxx 
  Xxxxxx Xxxx Xxxx 
   
   
   
   
  /s/ Xxx Xxxxxxxxx 
  Xxx Xxxxxxxxx 
   
   
   
   
  /s/ Xxxxxx X. Xxxxxxx 
  Xxxxxx X. Xxxxxxx 
   
   
   
   
  /s/ Xxxxxxxx Xxx Xxxxxxxx 
  Xxxxxxxx Xxx Xxxxxxxx 
   
   
   
   
  /s/ Xxxxx X. Xxxxxx 
  Xxxxx X. Xxxxxx 

This is page 37 of the Agreement and Plan of Merger dated May 26, 2004 among Huron Ventures, Inc., Xxxxxxxxx Acquisition Corp., Xxxxxxxxx Field Unit Inc., the shareholders of Xxxxxxxxx Field Unit Inc., Xxxx Energy Corporation and Big Sky Management Ltd.

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Filed: June 8th, 2004
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