Enertopia Corp.: Exhibit 10.1 - Filed by newsfilecorp.com






Exhibit 10.1

PETROLEUM, NATURAL GAS AND GENERAL RIGHTS
CONVEYANCE 

THIS AGREEMENT made as of the 25th day of October,
2010 

BETWEEN: 

TARGET ENERGY INC., a body corporate, having an office
in the City of Vancouver in the Province of British Columbia (hereinafter
referred to as “Vendor”) 

- and –

PRIMROSE DRILLING VENTURES LTD., a body corporate,
having an office in the City of Calgary in the Province of Alberta
(hereinafter referred to as “Purchaser”) 

WHEREAS the Vendor has agreed to sell the Assets to the
Purchaser and the Purchaser has agreed to purchase the Assets from the Vendor on
the terms and conditions set forth herein. 

	1. 	DEFINITIONS 
	 	 	 
		In this Agreement, unless the context otherwise requires:
  
	 	 	 
		(a) 	“Adjustment Date” means the hour of 8:00am, Alberta time on the 25th
      day of October, 2010; 
	 	 	 
		(b) 	“AFEs” means the authorities for expenditure, if any, set out in
      Schedule “B” under that heading; 
	 	 	 
		(c) 	“Assets” means the Petroleum and Natural Gas Rights, the Tangibles and
      the Miscellaneous Interests; 
	 	 	 
		(d) 	“Facilities” means the facility or facilities, if any, set out in
      Schedule “B” under that heading; 
	 	 	 
		(e) 	“Lands” means the lands set out in Schedule “A”; 
	 	 	 
		(f) 	“Leased Substances” means all Petroleum Substances, rights to or in
      respect of which are granted, reserved or otherwise conferred by or under
      the Agreements, or by or under the Title Documents but only to the extent
      the Title Documents pertain to the Lands and as to the zones and
      formations set out in Schedule “A”; 
	 	 	 
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	 	(g) 	“Miscellaneous Interests” means,
      subject to any and all limitations and exclusions provided for in this
      definition, all property, assets, interests, and rights (other than the
      Petroleum and Natural Gas Rights and the Tangibles) pertaining to the
      Petroleum and Natural Gas Rights and the Tangibles, or either of them, but
      only to the extent that such property, assets, interest and rights pertain
      to the Petroleum and Natural Gas Rights and the Tangibles, or either of
      them, including without limitation any and all of the following: 
	 	  	 	  
	 		(i) 	contracts and agreements relating to the
      Petroleum and Natural Gas Rights and the Tangibles, or either of them,
      including without limitation gas purchase contracts, processing
      agreements, transportation agreements and agreements for the construction,
      ownership and operation of facilities; 
	 	  	 	  
	 		(ii) 	rights to enter upon, use or occupy the surface
      of any lands for the purpose of gaining access to or otherwise using the
      Petroleum and Natural Gas Rights and the Tangibles, or either of them,
      excluding any such rights pertaining to a well or wells other than the
      Wells; 
	 	  	 	  
	 		(iii) 	all records, books, documents, licences,
      reports and data which relate to the Petroleum and Natural Gas Rights and
      the Tangibles, or either of them, excluding those that pertain to
      interpretive geological or geophysical matters; and, 
	 	  	 	  
	 	  	(iv)	the Wells, including the wellbores and any and
      all downhole casing; 
	 	  	 	  
	 	(h) 	“Party” means a party to this Agreement; 
	 	  	 	  
	 	(i) 	“Permitted Encumbrances” means: 
	 	  	 	  
	 		(i) 	liens for taxes, assessments, and governmental
      charges which are not due or the validity of which is being diligently
      contested in good faith by or on behalf of the Vendor; 
	 	  	 	  
	 		(ii) 	liens incurred or created in the ordinary
      course of business as security in favour of the person who is conducting
      the development or operation of the property to which such liens relate
      for Vendor’s proportionate share of the costs and expenses of such
      development or operation; 
	 	  	 	  
	 		(iii) 	mechanics, builder’s and materialmen’s liens in
      respect of services rendered or goods supplied for which payment is not
      due; 
	 	  	 	  
	 		(iv) 	easements, rights of way, servitudes and other
      similar rights in land (including, without limitation, rights of way and
      servitudes for highways and other roads, railways, sewers, drains, gas and
      oil pipelines, gas and water mains, electric light, power, telephone, telegraph and cable
      television conduits, poles, wires and cables) which do not materially
      impair the use of the Assets affected thereby; 


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	 		(v) 	the terms and conditions of the Title Documents; 
	 	 	 	 
	 		(vi) 	the right reserved to or vested in any municipality or government or
      other public authority by the terms of any lease, licence, franchise,
      grant or permit or by any statutory provisions, to terminate any such
      lease, licence, franchise, grant or permit or to require annual or other
      periodic payments as a condition of the continuance thereof; 
	 	 	 	 
	 		(vii)	any agreements respecting the processing, treating or transmission of
      Petroleum Substances to the point of custody transfer, contracts for the
      sale of Petroleum Substances comprising part of the Assets and agreements
      for the contract operation of the Assets, or any of them, by a Third
      Party; 
	 	 	 	 
	 		(viii)	rights of general application reserved to or vested in any
      governmental authority to levy taxes on Leased Substances or any of them
      or the income therefrom, and governmental requirements and limitations of
      general application as to production rates on the operations of any
      property; 
	 	 	 	 
	 		(ix)	the reservations, limitations, provisos and conditions in any original
      grants from the Crown of any of the Lands or interests therein and
      statutory exceptions to title; 
	 	 	 	 
	 		(x)	provisions for penalties and forfeitures under the Title Documents as
      a consequence of non-participation in operations; and, 
	 	 	 	 
	 		(xi)	all royalty burdens, liens and other encumbrances set out in Schedule
      “A”; 
	 	 	 	 
	 	(j) 	“Petroleum and Natural Gas Rights” means all
      rights to and in respect of the Agreements, the Leased Substances and the
      Title Documents (but only to the extent that the Title Documents pertain
      to the Lands), including without limitation the interests set out in
      Schedule “A”; 
	 	 	 	 
	 	(k) 	“Petroleum Substances” means any of crude oil,
      crude bitumen and products derived therefrom, synthetic crude oil,
      petroleum, natural gas, natural gas liquids and hydrocarbons related to
      any of the foregoing and any and all other substances (including sulphur),
      whether liquid, solid or gaseous and whether hydrocarbons or not;
  


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	 	(l) 	“Potential Payout” means a 10% net profit
      interest on production from the Vendor’s original Lands. 
	 	  	  
	 	(m)	“Purchase Price” means the sum of
      money first set out in Section 3;  
	 	  	  
	 	(n) 	“Take or Pay Obligations” means obligations to
      sell or deliver Petroleum Substances or any of them, rights to which are
      granted, reserved or otherwise conferred pursuant to the Title Documents,
      without being entitled in due course to receive and retain full payment
      for such Petroleum Substances; 
	 	  	  
	 	(o) 	“Tangibles” means the Facilities and any and
      all tangible, depreciable property and assets other than the Facilities
      which are located within, upon or in the vicinity of the Lands as of the
      Date hereof and which are used or intended to be used in producing,
      processing, gathering, treating, measuring, making marketable or injecting
      the Leased Substances or any of them or in connection with water injection
      or removal operations that pertain to the Petroleum and Natural Gas
      Rights, or are otherwise used or intended to be used in exploiting the
      Petroleum and Natural Gas Rights, including without limitation any and all
      gas plants, oil batteries, buildings, production equipment, pipelines,
      pipeline connections, meters, generators, motors, compressors, treaters,
      dehydrators, scrubbers, separators, pumps, tanks, boilers and
      communication equipment; 
	 	  	  
	 	(p) 	“Third Party” means any individual or entity
      other than Vendor and Purchaser, including without limitation any
      partnership, corporation, trust, unincorporated organization, union,
      government and any department and agency thereof and any heir, executor,
      administrator or other legal representative or individual; 
	 	  	  
	 	(q) 	“the Agreement”, “herein”, “hereto”, “hereof”
      and similar expressions mean and refer to this Petroleum, Natural Gas and
      General Rights Conveyance; 
	 	  	  
	 	(r) 	“Title Documents” means collectively, any and
      all leases, reservations, permits, licences, unit agreements, assignments,
      trust declarations, operating agreements, royalty agreements, gross
      overriding royalty agreements, participation agreements, farmin
      agreements, sale and purchase agreements, pooling agreements, and any
      other documents and agreements granting, reserving or otherwise conferring
      rights to (i) explore for, drill for, produce, take, use or market
      Petroleum Substances; (ii) share in production of Petroleum Substances;
      (iii) share in the proceeds from, or measured or calculated by reference
      to the value or quantity of, Petroleum Substances which are produced and
      (iv) acquire any of the rights described in items (i) to (iii) of this
      definition; including without limitation those, if any, set out in
      Schedule “A” under the heading “Leases”, but only to the extent that the foregoing pertain to Petroleum Substances within, upon or
      under the Lands and, further, to the zones and formations set out in
      Schedule “A”;
    


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		(s) 	“Unit Agreements” means any and all unit
      agreements, unit operating agreements or statutory plans of unit
      operation, including any and all amendments thereto, pertaining to the
      unit or units, if any, set out in Schedule “B” under the heading “Units”;
    
	 	 	 	 
		(t) 	“Well(s)’ means all wells located on the
      Lands, excluding abandoned wells, but including without limitation
      producing, non-producing, shut-in, water source, water disposal and water
      injection wells and the wells set out in Schedule “B” under the heading
      “Wells”. 
	 	 	 	 
	2. 	INTERPRETATION 
	 	 	 	 
		(a) 	The expressions “section”, “subsection”,
      “clause”, “subclause”, “paragraph”, and “Schedule” followed by a number or
      letter or combination thereof mean and refer to the specified section,
      subsection, clause, subclause, paragraph and schedule of or to this
      Agreement. 
	 	 	 	 
		(b) 	The division of this Agreement into sections,
      subsections, clauses, subclauses and paragraphs and the provision of
      headings for all or any thereof are for convenience and reference only and
      shall not affect the construction or interpretation of this Agreement.
  
	 	 	 	 
		(c) 	When the context reasonably permits, words
      suggesting the singular shall be construed as suggesting the plural and
      vice versa, and words suggesting gender or gender neutrality shall be
      construed as suggesting the masculine, feminine and neutral genders.

	 	 	 	 
		(d) 	There are appended to this Agreement the
      following schedules: 
	 	 	 	 
			 	Schedule “A” - Lands and specified Petroleum and Natural Gas Rights
  
	 	 	 	 
			 	Schedule “B” - AFE(s), Facilities, Take or Pay Obligations, Unit(s)
      and Wells(s). 
	 	 	 	 
			 	The schedules appended hereto are incorporated herein by reference as
      though contained in the body hereof. Whenever any term or condition,
      express or implied, of such schedules conflicts or is at variance with any
      term or condition in the body of this Agreement, such term or condition in
      the body of this Agreement shall prevail. 


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	 	(e) 	All losses, costs, claims, damages, expenses and liabilities in which
      a Party has a claim pursuant to this Agreement include without limitation,
      reasonable legal fees and disbursements on a solicitor and client basis.
    
	 	 	 
	 	(f) 	Where in this Agreement a representation and warranty is made on the
      basis of the knowledge, information or belief of a Party, such awareness
      consists only of the actual knowledge, information or belief, as the case
      may be, of the officers of such Party, and does not include the knowledge,
      information or belief of any other person or persons.




	3. 	CONVEYANCE AND PAYMENT



Vendor, for the price and sum of
One Hundred Thousand Dollars and Zero Cents CANADIAN ($100,000.00 Cdn.) net of
GST or HST if/as applicable, to be paid as to $50,000 as of October 29, 2010 and
$50,000 as of November 29, 2010, hereby sells, assigns, transfers, conveys and
sets over to Purchaser, all of the right, title estate and interest of Vendor
(whether absolute or contingent, legal or beneficial) in and to the Assets, TO
HAVE AND TO HOLD the same, together with all benefit and advantage to be derived
therefrom, absolutely, subject to the terms of this Agreement. The Parties shall
allocate the Purchase Price as follows: 

	 	Petroleum and Natural Gas Rights: 	$	 99,990.00 	 
	 	Tangibles: 	$	 0.00 	 
	 	Miscellaneous Interests: 	$	 10.00 	 
	 	  	 	  	 
	 	Total: 	$	 100,000.00 	 



	 	(a) 	There shall be an additional Potential Payout
      which shall be based on a 10% profit interest on any and all productive
      wells drilled on the Lands, subject to the Vendor’s original 50% Lands and
      subject to a maximum Potential Payout of $150,000 from the Lands. The
      Potential Payout payments shall be governed by Alberta oil industry
      standards.  



	4. 	ADJUSTMENTS 


Subject to all other provisions of this Agreement, whether
expressed or implied, all benefits and obligations of any kind and nature
accruing, payable or to be paid in respect of the operation of the Assets
conveyed pursuant to this Agreement, including without limitation rentals,
royalties, capital costs, operating costs and proceeds from the sale of
production, shall be adjusted between Vendor and Purchaser as of the Adjustment
Date on an accrual basis, provided that the Parties agree to make no adjustment
for surface lease payments, municipal taxes nor electrical bills.

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	5. 	REPRESENTATIONS AND WARRANTIES OF VENDOR
    


Purchaser acknowledges that it is purchasing the Assets on an
“as is, where is” basis, without representation and warranty and without
reliance on any information provided to or on behalf of Purchaser by Vendor or
any Third Party, except that Vendor makes the following representations and
warranties to Purchaser, no claim in respect of which shall be made or be
enforceable by Purchaser unless written notice of such claim, with reasonable
particulars, is given by Purchaser to Vendor within a period of twelve (12)
months from the date hereof: 

	 	(a) 	Vendor is a body corporate, duly incorporated and validly existing
      under the laws of the jurisdiction of incorporation of Vendor, is
      authorized to carry on business in all jurisdictions in which the Assets
      are located, and now has good right, full power and absolute authority to
      sell, assign, transfer, convey and set over the interest of Vendor in and
      to the Assets according to the true intent of this Agreement; 
	 	 	 
	 	(b) 	the execution, delivery and performance of this Agreement has been
      duly and validly authorized by any and all requisite shareholders’ and
      directors’ actions and will not result in any violation of, be in conflict
      with or constitute a default under any articles, charter, bylaw or other
      governing document to which Vendor is bound; 
	 	 	 
	 	(c) 	the execution, delivery and performance of this Agreement will not
      result in any violation of, be in conflict with or constitute a default
      under any term or provision of any agreement or document to which Vendor
      is party or by which Vendor is bound, nor under any judgment, decree,
      order, statute, regulation, rule or licence applicable to Vendor excepting
      provisions in the Title Documents pursuant to which consents to assignment
      are required; 
	 	 	 
	 	(d) 	this Agreement and any other agreements delivered in connection
      herewith constitute valid and binding obligations of Vendor enforceable
      against Vendor in accordance with their terms; 
	 	 	 
	 	(e) 	no authorization or approval or other action by and no notice to or
      filing with any governmental authority or regulatory body exercising
      jurisdiction over the Assets is required for the due execution, delivery
      and performance by Vendor of this Agreement, other than authorizations,
      approvals, or exemptions from requirement therefore, previously obtained
      and currently in force; 
	 	 	 
	 	(f) 	Vendor has not incurred any obligation or liability, contingent or
      otherwise, for brokers’ or finders’ fees in respect of this Agreement or
      in the transaction effected by it for which Purchaser shall have any
      obligation or liability; 


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	 	(g) 	Vendor is a non-resident within the meaning of
      Section 116 of the Income Tax Act (Canada); 
	 	  	  
	 	(h) 	other than the Permitted Encumbrances, the
      Assets are now free and clear of all liens, royalties and encumbrances
      created by, through or under Vendor and Vendor has not alienated the
      Assets or any part or portion thereof; 
	 	  	  
	 	(i) 	none of the Assets are subject to any
      preferential, pre-emptive or first purchase rights, created by, through or
      under Vendor that become operative by virtue of this Agreement or the
      transaction effected by it which have not been waived as of the date
      hereof or in respect of which the time periods for exercising such rights
      have not expired as of the date hereof; 
	 	  	  
	 	(j) 	with respect to the Assets, to the knowledge,
      information and belief of Vendor, it has not received notice of default
      and is not in any default under any obligation, agreement, document,
      order, writ, injunction or decree of any court or of any commission or
      administrative agency; 
	 	  	  
	 	(k) 	no suit, action or other proceeding before any
      court or governmental agency is pending against Vendor or, to the
      knowledge, information and belief of Vendor, has been threatened against
      Vendor, which might result in impairment or loss of interest of Vendor in
      and to the Assets or which might otherwise adversely affect the Assets;
  
	 	  	  
	 	(l) 	all ad valorem, property, production, severance
      and similar taxes and assessments based upon or measured by the ownership
      or production of Leased Substances or any of them or the receipt of
      proceeds therefore have been properly paid, however, in the case of any
      and all amounts due and payable prior to the time Vendor acquired an
      interest in and to the Assets to which such amounts pertain, Vendor makes
      this representation and warranty only to the best of its knowledge,
      information and belief; 
	 	  	  
	 	(m) 	in respect of the Assets, except in connection
      with the AFE(s), there are no outstanding authorizations for expenditure
      in respect of which Vendor’s share is in excess of Twenty-five Thousand
      Dollars ($25,000.00) pursuant to which expenditures will or may be made in
      respect of the Assets; 
	 	  	  
	 	(n) 	in respect of the Assets that are operated by
      Vendor, if any, Vendor holds all valid licences, permits and similar
      rights and privileges that are required and necessary under applicable law
      to operate the Assets as presently operated; 
	 	  	  
	 	(o) 	Vendor is not aware of and has not received:
  
	 	 	 


	 		(i) 	 any orders or directives which relate to
      environment matters and which require any work, repairs, construction or
      capital expenditures with respect to the Assets, where such orders or directives have not been
      complied in all material respects; or,


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	 		(ii) 	any demand or notice issued with respect to the breach of any
      environmental, health or safety law applicable to the Assets, including
      without limitation, respecting the use, storage, treatment, transportation
      or disposition of environmental contaminants, which demand or notice
      remains outstanding on the date hereof; and, 
	 	 	 	 
	 	(p) 	except as may be set out in Schedule “B”, there are no Take
      or Pay Obligations. 



	6. 	REPRESENTATIONS AND WARRANTIES OF
      PURCHASER 


Purchaser makes the following representations and warranties to
Vendor, no claim in respect of which shall be made or be enforceable by Vendor
unless written notice of such claim, with reasonable particulars, is given by
Vendor to Purchaser within a period of twelve (12) months from the date hereof:


	 	(a) 	Purchaser is a body corporate, duly incorporated and validly existing
      under the laws of the jurisdiction of incorporation of Purchaser, is
      authorized to carry on business in all jurisdictions in which the Assets
      are located, and now has good right, full power and absolute authority to
      purchase the interest of Vendor in and to the Assets according to the true
      intent and meaning of this Agreement; 
	 	 	 
	 	(b) 	the execution, delivery and performance of this Agreement has been
      duly and validly authorized by any and all requisite corporate,
      shareholders’ and directors’ actions and will not result in any violation
      of, be in conflict with or constitute a default under any articles,
      charter, bylaw or other governing document to which Purchaser is bound;
  
	 	 	 
	 	(c) 	the execution, delivery and performance of this Agreement will not
      result in any violation of, be in conflict with or constitute a default
      under any term or provision of any agreement or document to which
      Purchaser is party or by which Purchaser is bound, nor under any judgment,
      decree, order, statute, regulation, rule or licence applicable to
      Purchaser; 
	 	 	 
	 	(d) 	this Agreement and any other agreements delivered in connection
      herewith constitute valid and binding obligations of Purchaser enforceable
      against Purchaser in accordance with their terms; 
	 	 	 
	 	(e) 	no authorization or approval or other action by, an no notice to or
      filing with, any governmental authority or regulatory body exercising
      jurisdiction over the Assets is required for the due execution, delivery
      and performance by Purchaser of this Agreement, other than authorizations,
      approvals or exemptions from requirement therefore, previously obtained and
      currently in force; 


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	 	(f) 	Purchaser meets all qualification requirements of all governmental
      agencies to purchase, to take a transfer of and to hold the Assets,
      including without limitation, the requirements to have the licences for
      all or a portion of the Wells transferred to it; 
	 	 	 
	 	(g) 	Purchaser has not incurred any obligation or liability, contingent or
      otherwise, for brokers’ or finders’ fees in respect of this Agreement or
      the transaction effected by it for which Vendor shall have any obligation
      or liability; 
	 	 	 
	 	(h) 	Purchaser is acquiring the Assets in its capacity as a principal and
      is not purchasing the Assets for the purpose of resale or distribution to
      a Third Party; and, 
	 	 	 
	 	(i) 	Purchaser is not a non-Canadian person for the purposes of the
      Investment Canada Act. 



	7. 	INDEMNITIES FOR REPRESENTATIONS AND
      WARRANTIES 



	 	(a) 	Vendor shall indemnify Purchaser from and against all losses, costs,
      claims, damages, expenses, and liabilities suffered, sustained, paid or
      incurred by Purchaser which would not have been suffered, sustained, paid
      or incurred had all of the representations and warranties section 5 been
      accurate and truthful, provided however that nothing in this subsection
      7(a), whether express or implied, shall be construed so as to cause Vendor
      in indemnify Purchaser in connection with any representation or warranty
      contained in section 5 if and to the extent that Purchaser did not rely
      upon such representation or warranty. 
	 	 	 
	 	(b) 	Purchaser shall indemnify Vendor from and against all losses, costs,
      claims, damages, expenses and liabilities suffered, sustained, paid or
      incurred by Vendor which would not have been suffered, sustained, pain or
      incurred had all of the representations and warranties contained in
      section 6 been accurate and truthful, provided however that nothing in
      this subsection 7(b), whether express or implied, shall be construed so as
      to cause Purchaser to indemnify Vendor in connection with any
      representation or warranty contained in section 6 if and to the extent
      that Vendor did not rely upon such representation or warranty. 
	 	 	 
	 	(c) 	No claim under this section 7 shall be made or be enforceable by a
      Party unless written notice of such claim, with reasonable particulars, is
      given by such Party to the Party against whom the claim is made within a
      period of twelve (12) months from the date hereof. 


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	8. 	PURCHASER’S INDEMNITIES




	 	(a) 	Purchaser shall be responsible for and shall indemnify Vendor from and
      against all losses, costs, claims, damages, expenses and liabilities
      suffered, sustained, paid or incurred by Vendor which arise out of any
      matter or thing occurring or arising from and after the date hereof and
      which relate to the Assets. This subsection 8(a) does not apply to matters
      governed by section 4. 
	 	 	 
	 	(b) 	Purchaser shall be responsible for and see to the timely performance
      of all abandonment and reclamation obligations pertaining to the Assets
      which in the absence of this Agreement would be the responsibility of the
      Vendor, and shall indemnify Vendor from and against all losses, costs,
      claims, damages, expenses and liabilities suffered, sustained, paid or
      incurred by Vendor in respect thereof. 
	 	 	 
	 	(c) 	Purchaser shall be responsible for and shall indemnify Vendor from and
      against all losses, costs, claims, damages, expenses and liabilities
      suffered, sustained, paid or incurred by Vendor which pertain to
      environmental damage or contamination or other environmental problems
      pertaining to or caused by the Assets or operations thereon or related
      thereto which in the absence of this Agreement would be the responsibility
      of Vendor, however and by whomsoever caused, and whether such
      environmental damage or contamination or other environmental problems
      occur or arise, in whole or in part prior to, on or subsequent to the date
      hereof. Purchaser shall not be entitled to exercise and hereby waives any
      rights or remedies Purchaser may now or in the future have against Vendor
      in respect of such environmental damage or contamination or other
      environmental problems, whether such rights and remedies are pursuant to
      the common law or statute or otherwise, including without limitation, the
      right to name Vendor as a third party to any action commenced by any Third
      Party against Purchaser. Without limiting the generality of the foregoing,
      such environmental damage or contamination or other environmental problems
      shall include (i) surface, underground, air, ground water or surface water
      contamination, (ii) the abandonment or plugging of or failure to abandon
      or plug any of the Wells, (iii) the restoration of reclamation of or
      failure to restore or reclaim any part of the Assets, (iv) the breach of
      applicable government rules and regulations in effect at any time, and (v)
      the removal of or failure to remove any foundations, structures or
      equipment from the Lands. 
	 	 	 
	 	(d) 	Notwithstanding any other provision in this Agreement, whether express
      or implied, Purchaser shall not be required to indemnify Vendor in respect
      of any losses, costs, claims, damages, expenses and liabilities suffered,
      sustained, paid or incurred by Vendor in respect of which Vendor has
      indemnified Purchaser pursuant to subsection 7(a), and Vendor shall not be
      required to indemnify Purchaser in respect of any losses, costs, claims,
damages, expenses and liabilities suffered, sustained, paid or incurred by
Purchaser in respect of which Purchaser has indemnified Vendor pursuant to
subsection 7(b), in both cases disregarding the time limit set out in subsection
7(c).


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	9. 	LIMIT OF LIABILITY 


In no event shall the liability
of Vendor to Purchaser in respect of claims of Purchaser arising out of or in
connection with this Agreement exceed, in the aggregate, the Purchase Price.
Purchaser shall not be entitled to any claim for indemnity against Vendor
pursuant to subsection 7(a) unless the aggregate amount of the claim or claims
by Purchaser exceeds five percent (5%) of the Purchase Price. 

	10. 	 FURTHER ASSURANCES


Each Party will, from time to
time and at all times hereafter upon request, without further consideration, do
such further acts and deliver all such further assurances, deeds and documents
as shall reasonably be required in order to fully perform and carry out the
terms of this Agreement. Until Purchaser is novated into the Title Documents and
any other agreements and documents to which the Assets are subject, Vendor shall
act as Purchaser’s agent (including without limitation to serve operations
notices and authorizations for expenditure) as Purchaser reasonably and lawfully
directs. Purchaser shall indemnify Vendor from and against all losses, costs,
claims, damages expenses and liabilities suffered, sustained, paid or incurred
by Vendor arising in connection with all acts or omissions of Vendor in its
capacity as agent of Purchaser to the extent that such acts and omissions were
expressly or impliedly authorized by Purchaser. 

	11. 	 NO MERGER 


The covenants, representations,
warranties and indemnities contained in this Agreement shall be deemed to be
restated in any and all assignments, conveyances, transfers and other documents
conveying the interests of Vendor in and to the Assets to Purchaser, subject to
any and all time and other limitations contained in this Agreement. There shall
not be any merger of any covenant, representation, warranty or indemnity in such
assignments, conveyances, transfers or other documents notwithstanding any rule
of law, equity, or statute to the contrary and such rules are hereby waived.


	12. 	 ENTIRE AGREEMENT 


The provisions contained in any and all documents and
agreements collateral hereto shall at all times be read subject to the
provisions of this Agreement and, in the event of conflict, the provisions of
this Agreement shall prevail. No amendments shall be made to this Agreement unless in writing and executed by the
Parties. This Agreement supersedes all other agreements, documents, writings and
verbal understandings among the Parties relating to the subject matter hereof. 

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	13. 	 SUBROGATION 


The assignment and conveyance effected by this Agreement is
made with full right of substitution and subrogation of Purchaser in and to all
covenants, representations, warranties and indemnities previously given or made
by others in respect of the Assets or any part or portion thereof.

	14. 	 GOVERNING LAW 


This Agreement shall, in all respects, be subject to,
interpreted, construed and enforced in accordance with and under the laws of the
Province of Alberta and the laws of Canada applicable therein and shall, in
every regard, be treated as a contract made in the Province of Alberta. The
Parties irrevocably attorn and submit to the jurisdiction of the Courts of the
Province of Alberta and courts of appeal therefrom in respect of all matters
arising out of this Agreement. 

	15. 	 TIME OF ESSENCE 


Time shall be of the essence in this Agreement 

	16. 	 NOTICES 


The addresses for service and the facsimile numbers of the Parties shall be as follows: 

	 	Vendor: 	Target Energy Inc. 
	 	  	Suite 950, 1130 West Pender 
	 	  	Vancouver, BC, V6E 4A4 
	 	  	Attention: CFO, Ms. Bal Bhullar 
	 	  	Facsimile: 604-685-1602 
	 	  	  
	 	Purchaser: 	Primrose Drilling Ventures Ltd 
	 	  	Suite 440, 333 – 5th Ave. S. W.
  
	 	  	Calgary, Alberta, T2P 3B6 
	 		 Attention:
      President  
	 	  	Facsimile: 403-232-6875



All notices, communications, and statements required, permitted
or contemplated hereunder shall be in writing, and shall be delivered as
follows: 

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	 	(a) 	by personal service on a Party at the address of such Party as set out
      above, in which case the item so served shall be deemed to have been
      received by that Party when personally served; 
	 	 	 
	 	(b) 	by facsimile transmission to a Party to the facsimile number of such
      Party as set out above, in which case the item so transmitted shall be
      deemed to have been received by that Party when transmitted; or, 
	 	 	 
	 	(c) 	except in the event of an actual or threatened postal strike or other
      labour disruption that may affect mail service, by mailing first class
      registered post, postage prepaid, to a Party at the address of such Party
      set out above, in which case the item so mailed shall be deemed to have
      been received by that Party on the fifth day following the date of
      mailing. 


A Party may from time to time change its address for service or
its facsimile number or both by giving written notice of such change to the
other Party. 

	17 	ENUREMENT 


This Agreement shall be binding upon and shall enure to the
benefit of the Parties and their respective administrators, receivers,
successors and assigns. 

	18 	 COUNTERPART EXECUTION 


This Agreement may be executed in counterpart, no one copy of
which need be executed by Vendor and Purchaser. A valid and binding contract
shall arise if and when counterpart execution pages are executed and delivered
by Vendor and Purchaser. 

IN WITNESS WHEREOF the Parties have executed and delivered this
Agreement on the date first above written. 

	TARGET ENERGY INC. 	 	PRIMROSE DRILLING VENTURES LTD. 	 
	(as Vendor) 	 	(as Purchaser) 	 
	  	 	  	 
	  	 	  	 
	Per:
    	 	Per:
    	 
	  	 	  	 
	  	 	  	 
	
    
      Per:
    

    	 	Per:
    	 


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SCHEDULE “A” 

Attached to and forming part of a Petroleum, Natural Gas and
General Rights 
Conveyance dated October 25, 2010 between Target Energy Inc.,
as 
Vendor and Primrose Drilling Ventures Ltd., as Purchaser 

	Sask Cr. PNG 	Description 	Vendor 	   
	Lease No. 	and Rights  	  	Interest 	Encumbrances
     
	  	  	  	  	   
	PN59841 	1-20W2M: S/10
     		50% 	Sask Cr. Lessor Royalty
     
	  	PNG from surface to basement
    	   
	  	  	  	  	   
	PN61991 	1-20W2M: N/10
     		50% 	Sask Cr. Lessor Royalty
     
	  	PNG from surface to basement
    	   
	  	  	  	  	   
	  	  	  	  	   
	PN59842 	1-20W2M: W/11
     		50% 	Sask Cr. Lessor Royalty
     
	  	PNG from surface to basement
    	   
	  	  	  	  	   
	  	  	  	  	   
	PN59843 	1-20W2M: Sec 15
     		50% 	Sask Cr. Lessor Royalty
     
	  	PNG from surface to basement
    	   
	  	  	  	  	   
	PN61987 	1-20W2M: NW/2
     		50% 	Sask Cr. Lessor Royalty
     
	  	PNG from surface to basement
    	   
	  	  	  	  	   
	PN61989 	1-20W2M: NW/3
     		50% 	Sask Cr. Lessor Royalty
     
	  	PNG from surface to basement
    	   
	  	  	  	  	   
	  	  	  	  	   
	PN61990 	1-20W2M: NE/3
     		50% 	Sask Cr. Lessor Royalty
     
	  	PNG from surface to basement
    	   
	  	  	  	  	   
	  	  	  	  	   
	PN61991 	1-20W2M: N2/10
     		50% 	Sask Cr. Lessor Royalty
     
	  	PNG from surface to basement
    	   


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SCHEDULE “B” 

Attached to and forming part of a Petroleum, Natural Gas and
General Rights 
Conveyance dated Ocotober 25, 2010 between Target Energy
Inc., as 
Vendor and Primrose Drilling Ventures Ltd., as Purchaser 

	 	 
	 	 
	AFEs: 	None 
	 	 
	 	 
	FACILITIES: 	None 
	 	 
	 	 
	TAKE OR PAY OBLIGATIONS: 	None 
	 	 
	 	 
	UNITS: 	None 
	 	 
	 	 
	WELLS: 	None 


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