Adira Energy Corp. - Exhibit 4.10 - Filed by newsfilecorp.com






Exhibit 4.10 

AGENCY AGREEMENT 

November 22, 2010 

	Adira Energy Ltd. 	Adira Energy Israel Ltd 
	30 St. Clair Avenue West, Suite 901 	Weizmann 2 
	Toronto Ontario 	Tel Aviv 
	M4V 3A1 	64239 



	Attention: 	Mr. Alan Friedman 
	  	President 


Dear Sirs: 

DS Apex Mergers & Acquisitions Ltd. (the “Agent”)
understands that Adira Energy Ltd. ( the “Company” or
“Corporation”) and Adira Energy Israel Ltd (“Adira Israel”) propose to
issue and sell a minimum of $4,000,000 USD to a maximum of $11,000,000 USD worth
of subscription receipts of the Company (the “Subscription Receipts”) on
a brokered basis through the Agent, and directly on a non-brokered basis, at the
price of $0.40 USD per Subscription Receipt (the “Offering”). Each
Subscription Receipt shall be: 

	(a) 	
      exercised into one common share of the Corporation (each,
      a “Common Share”) and one half of one Common Share purchase Warrant
      (each whole warrant, a “Warrant”) (collectively, the Common Shares
      and Warrants shall be referenced as the “Units”):

	 	 	 
		(i) 	
      automatically upon the satisfaction of the Escrow Release
      Conditions (as defined below); or

	 	 	 
		(ii) 	
      upon non-completion of the Escrow Release Conditions in
      accordance with the subscribers instructions to exercise delivered in
      accordance with section 3 of the Subscription Agreement (as hereinafter
      defined); or

	 	 	 
	(b) 	
      upon non-completion of the Escrow Release Conditions
      redeemed for the Redemption Price (as hereinafter
  defined).



Each Warrant will be exercisable for up to 36 months from the
date of issue (the “Warrant Expiry Date”) upon payment of a price of
$0.55 USD (the “Warrant Exercise Price”). In the event the exchange the
Company is listed on is Canadian, the Common Share trading price will be quoted
in Canadian dollars.

The Offering may be completed in one or more partial closings
at the discretion of the Company and the Agent (subject to the necessary
regulatory approvals) and each such partial closing shall be made in accordance
with the terms of this Agreement. For the purposes of this Agreement, the date
of such partial closing shall be a Closing Date (as defined below). 




Upon and subject to the terms and conditions hereof, the Agent
hereby agrees to act as, and the Company hereby appoints the Agent as, its
exclusive Agent to offer the Subscription Receipts for sale on the Closing Date
to offshore investors. The Agent hereby agrees to use its reasonable best
efforts to lawfully secure the subscriptions therefor, provided the Agent shall
not be under any obligation to purchase any Subscription Receipts. 

In consideration for its services hereunder, the Agent shall be
entitled to the fee provided for in Article 9 hereof, which fee shall be payable
upon the Closing Date. 

The following are the further terms and conditions of this
Agreement: 

ARTICLE 1 

  INTERPRETATION 

	1.1 	
      Definitions: In this Agreement and the schedule
      hereto:

	 	 	 
		(a) 	
      “Agent’s counsel” means Richard Bardenstein, Adv.,
      and Fogler, Rubinoff LLP;

	 	 	 
		(b) 	
      “Applicable Securities Laws” means, as applicable,
      the securities laws, the regulations, rules, rulings and orders in the
      Reporting Jurisdictions, the applicable policy statements issued by the
      securities regulators in each of the Reporting Jurisdictions, and the
      rules of the TSX-V;

	 	 	 
		(c) 	
      “Applicable Securities Laws of the Selling
      Jurisdictions” means, as applicable, the securities laws, regulations,
      rules, rulings and orders in the State of Israel;

	 	 	 
		(d) 	
      “Assets” means the assets, undertaking, property
      and rights of the Corporation of every kind and description and
      wheresoever situated, including, without limitation, the Contracts to
      which the Corporation is a party or has rights or obligations under and
      all other assets and property that the Corporation purports to own and all
      assets and property reflected as being owned by the Corporation in its
      financial books and records;

	 	 	 
		(e) 	
      “Auditor” means MSCM LLP, Chartered Accountants,
      the auditors of the Company;

	 	 	 
		(f) 	
      “BRM” means BRM Group Ltd., a corporation duly
      registered under the laws of the State of Israel.

	 	 	 
		(g) 	
      “Broker Options” means the broker options issuable
      to the Agent entitling the Agent to acquire such number of Common Shares
      as is equal to 7% of the number of Subscription Receipts sold pursuant to
      the Brokered Offering; provided, however, that in the event that
      BRM enters into an agreement with the Company for the purchase of
      Subscription Receipts, the Agent shall be entitled to Broker Options in
      connection with such purchase by BRM, to acquire such number of Common
      Shares as is equal to 4% of the number of Subscription Receipts sold to
      BRM. Each Broker Option is exercisable for a period of 36 months at an
      exercise price of $0.40 USD per Broker Option;








	 	(h) 	
      “Brokered Offering” means that part of the
      Offering relating to Purchasers introduced to the Company by the
    Agent;

	 	 	 	 
	 	(i) 	
      “Business” means the identification, review,
      acquisition and development of oil and gas exploration properties onshore
      and offshore the State of Israel;

	 	 	 	 
	 	(j) 	
      “Business Day” means a day, other than Saturdays,
      Sundays and statutory holidays, when the banks conducting business
      in the Toronto are generally open for the transaction of banking
      business;

	 	 	 	 
	 	(k) 	
      “Closing Date” means the date of issuance of the
      Subscription Receipts, being y, 2010 or such other date(s) as the Agent
      and the Company may agree upon;

	 	 	 	 
	 	(l) 	
      “Closing Time” means 11:30 a.m. (Toronto time) or
      such other time, on the Closing Date, as the Agent and the Company may
      agree upon;

	 	 	 	 
	 	(m) 	
      “Common Shares” means the common shares in the
      capital of the Company;

	 	 	 	 
	 	(n) 	
      “Company’s counsel” means Aird & Berlis
      LLP;

	 	 	 	 
	 	(o) 	
      “Due Diligence Materials” means the materials
      appearing on the Firmex online database up to and as of October 28, 2010
      as well as the TSX Listing Application draft dated November 9, 2010, and
      other materials delivered to Agent or its counsel; provided, that
      the Company shall continue to bear responsibility for notifying Agent and
      Agent’s counsel regarding all relevant developments, documents, decisions,
      and other materials from October 28, 2010 until the date of Closing, and
      to provide Agent and its counsel with copies of all such documents,
      decisions and materials without delay.

	 	 	 	 
	 	(p) 	
      “Escrow Release Conditions” means the following
      conditions:

	 	 	 	 
	 		(i) 	
      confirmation by the TSX-V indicating that all conditions
      to the listing of the Corporation’s common shares on the TSX-V have been
      fulfilled;

	 	 	 	 
	 		(ii) 	
      there shall have been no material adverse change in the
      financial condition, business, operations or prospects of the Corporation;
      and

	 	 	 	 
	 		(iii) 	
      the Corporation shall not be in breach or default of any
      of its covenants or obligations under this Agreement, except those
      breaches or defaults that have been waived by the Agent;

	 	 	 	 
	 	(q) 	
      “Escrow Release Date” means the date the Escrow
      Release Conditions have been fulfilled and the proceeds of the Offering,
      less any fees due in accordance with this Agreement to the Agent, have
      been paid to the Company and the Agent;

	 	 	 	 
	 	(r) 	
      ”Financial Statements” means,
  collectively,








	 	(i) 	
      the comparative audited financial statements of the
      Company for the fiscal year ended September 2009, together with the notes
      thereto and the auditors’ report thereon; and

	 	 	 
	 	(ii) 	
      the comparative unaudited financial statements of the
      Company for the 9 months ended June 30, 2010, together with the notes
      thereto;




	 	(s) 	
      “Liability” of any Person means (i) any right
      against such Person to payment, whether or not such right is reduced to
      judgment, and whether or not the amount is liquidated, unliquidated,
      fixed, contingent, matured, unmatured, disputed, undisputed, legal,
      equitable, secured or unsecured; (ii) any right against such Person to an
      equitable remedy for breach of performance if such breach gives rise to a
      right to payment, whether or not such right to any equitable remedy is
      reduced to judgment, and whether or not the amount is fixed, contingent,
      matured, unmatured, disputed, undisputed, secured or unsecured; and (iii)
      any obligation of such Person for the performance of any covenant or
      agreement (whether for the payment of money or otherwise);

	 	 	 
	 	(t) 	
      “Material Adverse Effect” means a material adverse
      effect on (i) the Business, Assets, Liabilities, condition (financial or
      otherwise), management, results of operations or shareholders’ equity of
      the Corporation, or (ii) the ability of the Corporation to complete the
      Offering; provided, however, that it will not include any fact,
      circumstance, event, change, effect, or occurrence: (i) relating to the
      global economy or securities markets in general; or (ii) changes in
      general economic conditions in Canada or any country or region in the
      world, or changes in conditions in the global economy generally (to the
      extent that such effect has not had a disproportionate effect on the
      Corporation relative to other companies in the industry in which it
      carries on business);

	 	 	 
	 	(u) 	
      “Person” means an individual, a firm, a
      corporation, a syndicate, a partnership, a trust, an association, an
      unincorporated organization, a joint venture, an investment club, a
      government or an agency or political subdivision thereof and every other
      form of legal or business entity of any nature or kind
  whatsoever;

	 	 	 
	 	(v) 	
      “Public Record” means all information publicly
      filed by or on behalf of the Company pursuant to Applicable Securities
      Laws since January 1, 2002, including, without limitation;

	 	 	 
	 	(w) 	
      “Purchasers” means the purchasers of the
      Subscription Receipts;

	 	 	 
	 	(x) 	
      “Redemption Price” means the price at which the
      Company will repurchase the Subscription Receipts in the event that the
      Escrow Release Conditions are not met and the investor has elected not to
      exercise the Subscription Receipts. The Redemption Price shall equal the
      aggregate purchase price paid by the investor for the Subscription
      Receipts without any deduction but with interest, if any;

	 	 	 
	 	(y) 	
      “Reporting Jurisdictions” means the Province of
      British Columbia;








	 	(z) 	
      “Securities Act” means the United States
      Securities Act of 1933, as amended;

	 	 	 
	 	(aa) 	
      “Securities Commissions” means the securities
      commissions or similar regulatory authorities in the Selling
      Jurisdictions;

	 	 	 
	 	(bb) 	
      “Selling Jurisdictions” means such jurisdictions
      outside the United States and Canada which are agreed to by the Company
      and the Agent, except that when referring to compliance with applicable
      law, it is deemed to refer only to the State of Israel;

	 	 	 
	 	(cc) 	
      “Subsidiaries” means those entities listed in
      Schedule “A” hereto;

	 	 	 
	 	(dd) 	
      “Subscription Agreements” means the agreements in
      writing to be entered into between the subscribers for Subscription
      Receipts and the Company setting out the contractual relationship between
      the subscribers for Subscription Receipts and the Company;

	 	 	 
	 	(ee) 	
      “to the best of the knowledge, information and belief
      of the Company” or “to the best of the Company’s knowledge” or
      “to the best of the knowledge of the Company” means (unless
      otherwise expressly stated) a statement of the Company’s officers’ and/or
      senior employees’ or consultants’ and/or any one of these persons’
      knowledge of the facts or circumstances to which such phrase relates after
      having made due inquiries and investigations in connection with such facts
      and circumstances;

	 	 	 
	 	(ff) 	
      “TSX-V” means the TSX Venture Exchange;

	 	 	 
	 	(gg) 	
      “TSX Listing Application” means the listing
      application delivered by the Company to the TSX-V, dated November 9, 2010,
      and disclosed to the Agent;

	 	 	 
	 	(hh) 	
      “United States” has the meaning ascribed to that
      term in Regulation S of the Securities Act;

	 	 	 
	 	(ii) 	
      “U.S. Person” has the meaning ascribed to that
      term in Regulation S of the Securities Act;

	 	 	 
	 	(jj) 	
      “Warrants” means the common share purchase
      warrants of the Company comprising part of the Units; and

	 	 	 
	 	(kk) 	
      “Warrant Shares” means the Common Shares issuable
      upon exercise of the Warrants.



1.2    Other Defined Terms: In addition,
the terms “misrepresentation”, “material change”, “material
fact”, “distribution”, “distribution to the public”
and “distribute” shall have the meanings ascribed thereto
under the Applicable Securities Laws. 

1.3    General: The terms “this
Agreement”, “hereto”, “herein”, “hereby”,
“hereunder”, “hereof” and similar expressions refer to the
agreement of the parties set forth herein and not to any particular paragraph or
other portion of this Agreement. 




1.4    Plural and Gender: Whenever used
in this Agreement, words importing the singular number only shall include the
plural and vice versa and words importing the masculine gender shall
include the feminine gender and neuter. 

1.5    Currency: All references to
monetary amounts in this Agreement are to lawful money of Canada. 

ARTICLE 2 

  THE SUBSCRIPTION RECEIPTS 

2.1    Issue of Subscription Receipts: On
the Closing Date and subject to the terms of this Agreement, the Company will
duly and validly issue the Subscription Receipts pursuant to the terms of the
Subscription Agreements. 

2.2     Attributes of the Subscription
Recipts: The material attributes and characteristics of the Subscription
Receipts shall be substantially as described herein. 

2.3    Issue of Units: Upon the exercise
of the Subscription Receipts, the Company will duly and validly issue the Units.


ARTICLE 3 

  THE OFFERING 

3.1    Sale on Exempt Basis: The Agent
will use its best efforts to arrange for Purchasers of the Subscription Receipts
in the Selling Jurisdictions. The Agent shall offer for sale on behalf of the
Company the Subscription Receipts in the Selling Jurisdictions in compliance
with the Applicable Securities Laws of the Selling Jurisdictions and only to
such Persons and in such manner so that, pursuant to the provisions of the
Applicable Securities Laws of Canada and Israel, no prospectus or offering
memorandum or other similar document need be filed with, or delivered to, any
Securities Commission in connection therewith. 

3.2    Appointment of Co-Agent and
Sub-Agents: The Company agrees that the Agent has the right to invite
one or more investment dealers to form an agency group to participate in the
soliciting of offers to purchase the Subscription Receipts. The Agent
shall have the exclusive right to control all compensation arrangements
between the members of the agency group provided that no additional compensation
is payable by the Company other than as set forth in section 9. The Company
grants all of the rights and benefits of this Agreement to any investment
dealers so appointed by the Agent and appoints the Agent as trustee of such
rights and benefits for such investment dealers, and the Agent hereby accepts
such trust and agrees to hold such rights and benefits for and on behalf of such
investment dealer. The Agent shall ensure that any investment dealers appointed
pursuant to the provisions of this paragraph or with whom the Agent has a
contractual relationship with respect to the Offering, if any, agree with the
Agent to comply with the covenants and obligations given by the Agent herein and
shall use its commercially reasonable best efforts to cause such investment
dealers to ensure that they comply with the terms of this Agreement otherwise
applicable to the Agent. 

3.3    Covenants of the Agent: The Agent
  covenants with the Company that (i) it will comply with all the Applicable
  Securities Laws of the Selling Jurisdictions in which it solicits or procures
  subscriptions for Subscription Receipts in connection with the Offering, (ii)
  it will not solicit and have not solicited offers to purchase or sell the Subscription
  Receipts so as to require the registration of, or the filing of a prospectus
  with respect to, the Subscription Receipts under the laws of the Selling Jurisdictions
  or the Reporting Jurisdiction and, without the consent of the Company or as
  otherwise contemplated in this Agreement, solicit offers to purchase or sell
  the Subscription Receipts in any jurisdiction outside of the Selling Jurisdictions
  where the solicitation or sale of the Subscription Receipts would result in
  any ongoing disclosure requirements in such jurisdiction, any registration requirements
  except for the filing of a notice or report of the solicitation or sale, or
  where the Company may be subject to liability in connection with the sale of
  the Subscription Receipts which is materially more onerous than its liability
  under, taken together with, the Applicable Securities Laws, and (iii) it will
  obtain from each Purchaser an executed Subscription Agreement in a form reasonably
  acceptable to the Company and the Agent. 




3.4    Covenants of the Company: The Company
  agrees that it will: (i) duly, punctually and faithfully perform all the obligations
  to be performed by it under the Subscription Agreements; and (ii) as soon as
  reasonably possible, and (provided it has been provided with executed Subscription
  Agreements in a form reasonably acceptable to the Company and the Agent in a
  timely fashion) in any event by the Closing Date, take all such steps as may
  reasonably be necessary to enable the Subscription Receipts to be offered for
  sale and sold on a private placement basis in the Selling Jurisdictions through
  the Agent or any other investment dealers or brokers registered in the Selling
  Jurisdictions by way of the exemptions from the requirement to prepare and file
  a prospectus set forth in the Applicable Securities Laws and the Applicable
  Securities Laws of the Selling Jurisdictions in accordance with this Agreement
  and the Subscription Agreements, and, for greater certainty, without the preparation
  and delivery of an “offering memorandum”, as defined under the Applicable
  Securities Laws, or similar document. The Agent agrees to use its best efforts
  to assist the Company in all respects to secure compliance with all the Applicable
  Securities Laws and the Applicable Securities Laws of the Selling Jurisdictions
  in connection with the sale of the Subscription Receipts. All fees payable in
  connection with such filings shall be at the expense of the Company. 

3.5    No Offering Memorandum: Neither
the Company nor the Agent shall: (i) provide to prospective purchasers of
Subscription Receipts any document or other material that would constitute an
offering memorandum within the meaning of the applicable securities laws of the
Selling Jurisdictions; or (ii) engage in any form of general solicitation or
general advertising in connection with the offer and sale of the Subscription
Receipts, including but not limited to, causing the sale of the Subscription
Receipts to be advertised in any newspaper, magazine, printed public media,
printed media or similar medium of general and regular paid circulation,
broadcast over radio, television or telecommunications, including electronic
display, or otherwise, or conduct any seminar or meeting relating to any offer
and sale of the Subscription Receipts whose attendees have been invited by
general solicitation or advertising. 

3.6    Non-U.S. and Canadian Offering:
The Agent, or any of their respective affiliates, or any person acting on behalf
of any of the Agent, will not offer or sell any of the Subscription Receipts to
U.S. or Canadian Persons or in the United States or Canada, or undertake any
activity for the purpose of, or that could reasonably be expected to have the
effect of, conditioning the market for the Subscription Receipts in the United
States or Canada. 




ARTICLE 4 

  DUE DILIGENCE REVIEW 

4.1    Due Diligence: Prior to the
Closing Time, the Company shall allow the Agent the opportunity to conduct such
due diligence, including meeting with senior management of the Company and the
Auditor, as the Agent and the Agent’s counsel reasonably require to be able to
satisfy themselves as a result of such due diligence, including without
limitation a review of the Due Diligence Materials, that the Public Record is
accurate, complete and current in all material respects, that no new information
which would have a Material Adverse Effect to the Company or the Offering has
come to light, to fulfill the Agent’s obligations, as agent, and to enable the
Agent to responsibly complete the private placement of the Subscription Receipts
described herein. 

The Company hereby represents and warrants that all documents,
correspondence and other information that it or its legal counsel or any of its
agents has placed on the Firmex online database or that the Company has
submitted to Agent or Agent’s counsel in the context of Agent’s due diligence
examination of the Company are true, accurate, and neither contain any
misstatements of any material fact nor omit any information necessary so that
each documents or information shall not be misleading. The Company further
acknowledges that Agent has relied on it and its legal counsel to bring all
materially relevant information generally covered in due diligence proceedings,
including such information that was not specifically requested.

ARTICLE 5 

  REPRESENTATIONS AND WARRANTIES 

5.1    The Company represents, warrants and
covenants to and with the Agent, and acknowledges that the Agent is relying upon
such representations and warranties, that: 

	 	(a) 	
      Incorporation and Organization: Each of the
      Company and its Subsidiaries has been duly incorporated and organized and
      is validly existing under the laws of its jurisdiction of incorporation
      and has the requisite power, authority and capacity to carry on its
      business as now conducted and to own, lease and operate its property and
      assets;

	 	 	 
	 	(b) 	
      Subsidiaries: Schedule “A” hereto lists each
      Subsidiary of the Company and accurately summarizes the percentage or
      direct or indirect ownership of each such Subsidiary by the
  Company;

	 	 	 
	 	(c) 	
      Ownership of Subsidiaries: all of the issued
      shares of or other ownership interests in each Subsidiary owned directly
      or indirectly by the Company are free and clear of any pledge, lien,
      security interest, charge, claim or encumbrance;

	 	 	 
	 	(d) 	
      Operations of Subsidiaries: other than as
      disclosed in the Due Diligence Materials and the Public Record, each of
      the Subsidiaries has no material assets or liabilities, is not a party to
      any material agreement and no material revenues are booked through such
      Subsidiaries;








	 	(e) 	
      Extra-Provincial Registration: Each of the Company
      and its Subsidiaries, to the extent required by law, is licensed,
      registered or qualified as an extra-provincial or foreign corporation in
      all jurisdictions where the character of the property or assets thereof
      owned or leased or the nature of the activities conducted by it make
      licensing, registration or qualification necessary and each is carrying on
      the business thereof in compliance with all applicable laws, rules and
      regulations of each such jurisdiction;

	 	 	 	 
	 	(f) 	
      Authorized Capital: The authorized capital of the
      Company consists of an unlimited number of Common Shares, of which
      62,640,001 are issued and outstanding as fully paid and non-assessable
      shares of the Company on the Closing Date;

	 	 	 	 
	 	(g) 	
      Issuance of Securities: The Company has taken, or
      will by the Closing Date take, all necessary corporate actions to
      authorize and approve the issue and sale of, and the delivery of
      certificates representing, the Subscription Receipts. The Common Shares
      issuable upon the exercise of the Subscription Receipts have been, or will
      by the Closing Date be, authorized and reserved for issue and the Common
      Shares will, when issued, be validly issued as fully paid and
      non-assessable shares in the capital of the Company;

	 	 	 	 
	 	(h) 	
      Warrants: The Company has taken, or will by the
      Closing Date take, all necessary corporate action to authorize and approve
      the issue, sale of and delivery of certificates representing the Warrants,
      and upon such issuance and delivery the Warrants will be a valid
      obligation of the Company enforceable in accordance with its terms. The
      Warrant Shares issuable upon exercise of the Warrants have been, or will
      by the Closing Date be, authorized and reserved and will, upon payment in
      full of the applicable exercise price therefor in accordance with the
      terms of the certificate evidencing the Warrants, when issued, be validly
      issued and outstanding as fully paid and non-assessable shares in the
      capital of the Company;

	 	 	 	 
	 	(i) 	
      Grant of Broker Options:

	 	 	 	 
	 		(i) 	
      All necessary corporate action has been taken, or will be
      taken by the Closing Date, to authorize and approve the grant of the
      Broker Options, and the delivery of the certificates representing the
      Broker Options upon the exercise of part or all of the Subscription
      Receipts, and upon such issuance and delivery to the Agent, the Broker
      Options will be valid obligations of the Company enforceable in accordance
      with their terms; and

	 	 	 	 
	 		(ii) 	
      The Common Shares issuable upon the due exercise of the
      Broker Options have been, or will by the Closing Date be, authorized and
      reserved for issuance and will, upon payment in full of the applicable
      exercise price therefor in accordance with the terms of the Broker
      Options, when issued, be validly issued and outstanding as fully paid and
      non-assessable shares of the Company;








	 	(j) 	
      Return of Funds: In the event that the Escrow
      Release Conditions are not satisfied, and the Purchaser does not opt to
      have the Subscription Receipts converted, the Company shall redeem the
      Subscription Receipts for the Redemption Price without any deduction or
      interest.

	 	 	 
	 	(k) 	
      Compliance with Laws: Each of the Company and its
      Subsidiaries has conducted and is conducting its respective business in
      compliance in all material respects with all applicable laws, rules and
      regulations in each jurisdiction where any material portion of its
      respective business is carried on and is duly licensed, registered or
      qualified in all jurisdictions in which it owns, leases or operates any
      material portion of its property or carries on any material portion of its
      business to enable its business and assets to be owned, leased and
      operated, except to the extent that the failure to so comply or to be so
      licensed, registered or qualified would not have a Material Adverse Effect
      on the Company and the Subsidiaries, on a consolidated basis, and all such
      licences, registrations or qualifications which are material are valid and
      existing in good standing;

	 	 	 
	 	(l) 	 Consents, Approvals and Conflicts: None of the
        offering and sale of the Subscription Receipts, the Common Shares issuable
        thereunder, the Warrants and the Common Shares issuable upon exercise
        of the Warrants, the Broker Options and the Common Shares issuable upon
        exercise thereof, the execution and delivery of this Agreement, the Subscription
        Agreements, the Broker Options, the compliance by the Company with the
        provisions of this Agreement, the Subscription Agreements or the consummation
        of the transactions contemplated herein and therein including, without
        limitation, the issue of the Subscription Receipts to the Purchasers for
        the consideration and upon the terms and conditions as set forth in the
        Subscription Agreements, the issue of the Common Shares issuable under
        the Subscription Receipts, the issue of the Warrants and the Common Shares
        issuable upon exercise of the Warrants, the issue of the Broker Options
        and the Common Shares issuable upon exercise thereof do or will (i) require
        the consent, approval, or authorization, order or agreement of, or registration
        or qualification with, any governmental agency, body or authority, court,
        stock exchange, securities regulatory authority or other Person, except
        (A) such as have been obtained, or (B) such as may be required under the
        Applicable Securities Laws and under the policies of the TSX-V and will
        be obtained by the Closing Date, or (ii) to the best of the knowledge
        of the Company, conflict with or result in any breach or violation of
        any of the provisions of, or constitute a default under, any indenture,
        mortgage, deed of trust, lease or other agreement or instrument to which
        the Company is a party or by which it or any of the properties or assets
        thereof is bound, or (iii) conflict with or result in any breach or violation
        of any of the provisions of, or constitute a default under, the notice
        of articles or articles of the Company or any resolution passed by the
        directors (or any committee thereof) or shareholders of the Company, or
        any statute or any judgment, decree, order, rule, policy or regulation
        of any court, governmental authority, any arbitrator, stock exchange or
        securities regulatory authority applicable to the Company or any of the
        properties or assets thereof which could have a material adverse affect
        on the condition (financial or otherwise), business, properties or results
        of operations of the Company (taken as a whole).








	 	(m) 	 No Material Changes: There has not been any material
        change in the capital, assets, Liabilities (absolute, accrued, contingent
        or otherwise) or obligations (absolute, accrued, contingent or otherwise)
        of the Company and the Subsidiaries, on a consolidated basis, from the
        position set forth in the Public Record and there has not been any change
        which would have a Material Adverse Effect in the Business, operations
        or condition (financial or otherwise) or results of the operations of
        the Company and the Subsidiaries, on a consolidated basis, and to the
        best of the knowledge, information and belief of the Company, there have
        been no material facts, transactions, events or occurrences which could
        Materially Adversely Affect such capital, assets, Liabilities (absolute,
        accrued, contingent or otherwise), obligations, business, operations,
        condition or prospects (financial or otherwise) of the Company and the
        Subsidiaries (taken as a whole) which have not been generally disclosed
        to the public or disclosed in writing to the Agent;

	 	 	 
	 	(n) 	 Description of Assets: The description of the
        assets and liabilities (absolute, accrued, contingent or otherwise) of
        the Company and its Subsidiaries set forth in the Public Record fairly
        represents, in accordance with generally accepted accounting principles
        in Canada, the financial position and condition of the Company and the
        Subsidiaries (taken as a whole) at the dates thereof and reflects all
        material liabilities (absolute, accrued, contingent or otherwise) of the
        Company and the Subsidiaries, on a consolidated basis, as at the dates
        thereof and, other than as disclosed to the Agent in writing or in the
        Due Diligence materials, the Company and the Subsidiaries, on a consolidated
        basis, have no additional Material Liabilities (absolute, accrued, contingent
        or otherwise) which are not set forth in the Financial Statements and
        the assets of the Company and the Subsidiaries, on a consolidated basis,
        are in all material respects as set forth in the Public Record;

	 	 	 
	 	(o) 	 No Litigation: There are no actions, suits, proceedings,
        inquiries or investigations existing, or to the best of the Company’s
        knowledge, pending or threatened against or adversely affecting the Company
        or any of its Subsidiaries or to which any of the property or assets thereof
        is subject, at law or equity, or before or by any court, federal, provincial,
        state, municipal or other governmental department, commission, board,
        bureau, agency or instrumentality, domestic or foreign, which may in any
        way Materially Adversely Affect the condition (financial or otherwise),
        property, assets, operations or business of the Company or its Subsidiaries
        (taken as a whole) or their ability to perform the obligations thereof
        and neither the Company nor any of its Subsidiaries is subject to any
        judgment, order, writ, injunction, decree, award, rule, policy or regulation
        of any governmental authority, which, either separately or in the aggregate,
        may result in a Material Adverse Effect on the condition (financial or
        otherwise), property, assets, operations or Business of the Company and
        the Subsidiaries, on a consolidated basis, or the ability of the Company
        to perform its obligations pursuant hereto;









	 	(p) 	
      No Default: The Company is not in default or
      breach of, and the execution, delivery and performance of this Agreement
      and the transactions contemplated hereby will not result in any breach of,
      or constitute a material default under, or create a state of facts which,
      after notice or lapse of time or both, would constitute a material default
      under the constating documents, by-laws or resolutions of the Company or
      any material mortgage, note, indenture, contract, agreement (written or
      oral), instrument, lease or other document to which it is a party or is
      bound or any judgment, decree, order, statute, rule or regulation
      applicable to the Company or its Subsidiaries which might reasonably be
      expected to materially adversely affect the capital, assets, liabilities
      (absolute, accrued, contingent or otherwise), obligations, property,
      business, operations, condition or prospects (financial or otherwise) of
      the Company and the Subsidiaries, on a consolidated basis;

	 	 	 
	 	(q) 	
      Public Disclosure: The information and statements
      set forth in the Public Record were, as of the date thereof, in compliance
      in all material respects with the Applicable Securities Laws and did not
      contain any untrue statement of a material fact or omit to state a
      material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances under which they were
      made, not misleading. There is no material fact known to the Company which
      the Company has not publicly disclosed which Materially Adversely Affects
      the assets, Liabilities (contingent or otherwise), affairs, Business,
      prospects, operations or condition (financial or otherwise) of the Company
      and the Subsidiaries, on a consolidated basis, or the ability of the
      Company to perform its obligations under this Agreement or the
      Subscription Agreements. The Company has not filed any confidential
      material change reports with any securities regulatory authority that is
      still maintained on a confidential basis;

	 	 	 
	 	(r) 	
      Timely Disclosure: The Company is in compliance
      with all timely disclosure obligations under the Applicable Securities
      Laws and, without limiting the generality of the foregoing, there has not
      occurred any material adverse change, financial or otherwise, in the
      assets, liabilities (contingent or otherwise), business, condition
      (financial or otherwise), capital or prospects of the Company and the
      Subsidiaries, on a consolidated basis, which has not been publicly
      disclosed and none of the documents filed by or on behalf of the Company
      pursuant to the Applicable Securities Laws contain a material
      misrepresentation at the date of the filing thereof;

	 	 	 
	 	(s) 	
      No Cease Trade Order: No order preventing, ceasing
      or suspending trading in any securities of the Company or prohibiting the
      issue and sale of securities by the Company has been issued and no
      proceedings for either of such purposes have been instituted or, to the
      best of the knowledge of the Company, are pending, contemplated or
      threatened;

	 	 	 
	 	(t) 	 Financial Statements: The Financial Statements
        have been prepared in accordance with Canadian generally accepted accounting
        principles applied on a basis consistent with prior periods (except as
        disclosed in such financial statements), are substantially correct in
        every particular and present fairly the financial condition and position
        of the Company as at the dates thereof and such financial statements contain
        no direct or implied statement of a material fact which is untrue on the
        date of such financial statements and do not omit to state any material
        fact which is required by Canadian generally accepted accounting principles
        or by applicable law to be stated or reflected therein or which is necessary
        to make the statements contained therein not misleading;








	 	(u) 	 Changes in Financial Position: Since
        February 6, 2006:

	 	 	 	 
	 		(i) 	 the Company has not paid or declared any dividend or
        incurred any material capital expenditure or made any commitment therefore;

	 	 	 	 
	 		(ii) 	 the Company has not incurred any obligation or liability,
        direct or indirect, contingent or otherwise, except in the ordinary course
        of business and which is not, and which in the aggregate are not, material;
        and

	 	 	 	 
	 		(iii) 	 the Company has not entered into any material transaction,

	 	 	 	 
	 		 except in each case as disclosed in the
        Public Record;

	 	 	 	 
	 	(v) 	 No Contemplated Changes: Except as
        disclosed in the Due Diligence Materials and the Public Record, the Company
        and each of its Subsidiaries has not, other than in the ordinary course
        of business, approved, is not contemplating, has not entered into any
        agreement in respect of, nor has any knowledge of:

	 	 	 	 
	 		(i) 	 the purchase of any property or assets or any interest
        therein or the sale, transfer or other disposition of any property or
        assets or any interest therein currently owned, directly or indirectly,
        by the Company or any of its Subsidiaries whether by asset sale, transfer
        of shares or otherwise;

	 	 	 	 
	 		(ii) 	 the change of control (by sale or transfer of shares
        or sale of all or substantially all of the property and assets of the
        Company or any of its Subsidiaries or otherwise) of the Company; or

	 	 	 	 
	 		(iii) 	 a proposed or planned disposition of shares by any shareholder
        who owns, directly or indirectly, 10% or more of the outstanding shares
        of the Company;

	 	 	 	 
	 	(w) 	 Convertible Securities: Other than
        subscribers for Warrants, the Broker Options and as disclosed in the Public
        Record and as permissible under the Company’s Stock Option Plan,
        no person holds any securities convertible or exchangeable into securities
        of the Company or any of the Subsidiaries or has any agreement, warrant,
        option, right or privilege being or capable of becoming an agreement,
        warrant, option or right for the purchase, subscription or issuance of
        any unissued Common Shares or other securities of the Company or any of
        its Subsidiaries;

	 	 	 	 
	 	(x) 	 No Pre-emptive Rights: The issuance
        of the Subscription Receipts, the Common Shares issuable thereunder, the
        Warrants and the Common Shares issuable upon exercise of the Warrants,
        the Broker Options and the Common Shares issuable upon exercise thereof
        will not be subject to any pre-emptive right or other contractual right
        to purchase securities granted by the Company or to which the Company
        is subject;









	 	(y) 	 Authority and Enforceability: The Company
        has all the necessary corporate power and authority to enter into this
        Agreement and the Subscription Agreements and to do all acts and things
        and execute and deliver all documents as are required hereunder or thereunder
        to be done, observed, performed or executed and delivered by it in accordance
        with the terms hereof or thereof and the Company has taken, or will by
        the Closing Date take, all necessary corporate action to authorize the
        creation, execution, delivery and performance of this Agreement, the Subscription
        Agreements, the certificates representing the Subscription Receipts and
        the certificates representing the Broker Options, to sell and issue the
        Subscription Receipts, the Common Shares issuable thereunder, the Warrants
        and the Common Shares issuable upon exercise of the Warrants, the Broker
        Options and the Common Shares issuable upon exercise thereof, and to observe
        and perform the provisions of this Agreement, the Subscription Agreements,
        the certificates representing and the certificates representing the Broker
        Options in accordance with the provisions hereof or thereof; this Agreement,
        the Subscription Agreements, the certificates representing the Subscription
        Receipts and the certificates representing the Broker Options have been
        or will be duly authorized, executed and delivered by the Company, and
        this Agreement, the Subscription Agreements, the certificates representing
        the Warrants and the certificates representing the Broker Options will,
        on the Closing Date, be legal, valid and binding obligations of the Company
        enforceable against it in accordance with their respective terms, subject
        to the general qualifications that:

	 	 	 	 
	 		(i) 	 enforceability may be limited by bankruptcy, insolvency
        or other laws affecting creditors’ rights generally;

	 	 	 	 
	 		(ii) 	 equitable remedies, including the remedies of specific
        performance and injunctive relief, are available only at the discretion
        of the applicable court; and

	 	 	 	 
	 		(iii) 	 rights to indemnity and contribution hereunder may be
        limited under applicable law;

	 	 	 	 
	 	(z) 	 Compliance with the Applicable Securities
        Laws: The Company has taken, or will by the Closing Date take, all
        such steps as may be necessary to comply with the Applicable Securities
        Laws such that the execution of this Agreement, the Subscription Agreements,
        the certificates representing the Subscription Receipts and the certificates
        representing the Broker Options and the issuance of the Subscription Receipts,
        the Common Shares issuable thereunder, the Warrants and the Common Shares
        issuable upon exercise of the Warrants, the Broker Options and the Common
        Shares issuable upon exercise thereof and the Units by the Company to
        the Purchasers will be exempt from the registration and prospectus requirements
        of the Applicable Securities Laws, subject to the filing of all necessary
        reports, certificates or undertakings and fees required to be filed and
        paid under the Applicable Securities Laws;









	 	(aa) 	 Transfer Agent: Computershare Investor Services
        Inc., at its principal office in the City of Toronto, is the duly appointed
        registrar and transfer agent for the Common Shares;

	 	 	 
	 	(bb) 	 Listing: The Company has received conditional
        approval for the listing of its Common Shares for trading through the
        facilities of the TSX-V upon the Company fulfilling all of the necessary
        reports, certificates or undertakings and fees required to be filed with
        and paid to the TSX-V;

	 	 	 
	 	(cc) 	 Reporting Issuer: The Company is a “reporting
        issuer” not in default of the Applicable Securities Laws in the Reporting
        Jurisdiction;

	 	 	 
	 	(dd) 	 Ownership of Assets: Other than as disclosed
        in the Due Diligence Materials and the Public Record and with such exceptions
        as are not material to it: (i) the Company (or its Subsidiaries) is the
        sole legal and beneficial owner of all of the material assets of the Company,
        including, without limitation, the concessions, licences, leases or other
        instruments conferring the oil and gas rights and all other interests
        in natural resource properties as described in the Due Diligence Materials
        and the Public Record, free of all mortgages, liens, charges, pledges,
        security interests, encumbrances, claims or demands whatsoever; (ii) no
        other material property rights are necessary for the conduct of current
        business of the Company and its Subsidiaries in respect of the properties
        the Company or its Subsidiaries currently hold; and (iii) there are no
        material restrictions on the ability of the Company or its Subsidiaries
        to use, transfer or otherwise exploit any such property rights, and the
        Company does not know of any claim or basis for a claim that may materially
        adversely affect such rights;

	 	 	 
	 	(ee) 	 Exploitation of Oil and Gas Properties: The Company
        and each of its Subsidiaries has all necessary surface rights, access
        rights and other necessary rights and interests relating to the properties
        on which the Company and each of its Subsidiaries conducts business or
        proposes to conduct business granting the Company and each of its Subsidiaries
        the right and ability to explore for oil and gas for development purposes
        as are appropriate in view of the rights and interest therein of the Company
        and its Subsidiaries with only such exceptions as do not materially interfere
        with the use made by the Company of the rights or interests so held and
        each of the proprietary interests or rights and each of the documents,
        agreements and instruments and obligations relating thereto referred to
        above is currently in good standing in the name of the Company or its
        Subsidiaries, as applicable;

	 	 	 
	 	(ff) 	 Property Agreements: Any and all of the agreements
        and other documents and instruments pursuant to which the Company holds
        the property and assets thereof are valid and subsisting agreements, documents
        or instruments in full force and effect, enforceable in accordance with
        the terms thereof, the Company is not in default of any of the material
        provisions of any such agreements, documents or instruments, nor to the
        best of the Company’s knowledge, has any such default been alleged,
        and such properties and assets in the jurisdictions in which they are
        situated, all leases, licenses and claims pursuant to which the Company
        or its Subsidiaries derive the interests thereof in such property and
        assets are in good standing and there has been no material default under
        any such lease, license or claim and all taxes required to be paid with
        respect to such properties and assets to the date hereof have been paid;









	 	(gg) 	 Minute Books: To the best of the Company’s
        knowledge, the minute books of the Company and each of its Subsidiaries
        contain full, true and correct copies of the constating documents of the
        Company and its Subsidiaries, as applicable, and, at the Closing Time,
        will contain copies of substantially all minutes of all meetings and substantially
        all resolutions of the directors, committees of directors and shareholders
        of the Company and its Subsidiaries, respectively, and all such meetings
        were duly called and properly held and such minutes were properly adopted
        and approved;

	 	 	 
	 	(hh) 	 Taxes and Tax Returns: With the sole exception
        of the Company’s 2009 tax returns, which the Company represents will
        be filed before the end of December 2010, the Company and its Subsidiaries
        have filed in a timely manner all necessary tax returns and notices and
        have paid all applicable taxes of whatsoever nature for all tax years
        ended prior to the date hereof to the extent that such taxes have become
        due or have been alleged to be due and the Company is not aware of any
        tax deficiencies or interest or penalties accrued or accruing, or, to
        the best of the Company’s knowledge, alleged to be accrued or accruing,
        thereon where, in any of the above cases, it might reasonably be expected
        to have a Material Adverse Effect on the condition (financial or otherwise),
        or in the earnings, business affairs or business prospects of the Company
        and the Subsidiaries, on a consolidated basis, 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 the Company or its Subsidiaries
        or the payment of any material tax, governmental charge, penalty, interest
        or fine against the Company or its Subsidiaries, there are no material
        actions, suits, proceedings, investigations or claims now threatened or,
        to the best of its knowledge, pending against the Company which could
        result in a material liability in respect of taxes, charges or levies
        of any governmental authority, penalties, interest, fines, assessments
        or reassessments or any matters under discussion with any governmental
        authority relating to taxes, governmental charges, penalties, interest,
        fines, assessments or reassessments asserted by any such authority and
        the Company and its Subsidiaries have withheld from each payment to each
        of the present and former officers, directors and employees thereof the
        amount of all taxes and other amounts, including, but not limited to,
        income tax and other deductions, required to be withheld therefrom, and
        has paid the same or will pay the same when due to the proper tax or other
        receiving authority within the time required under applicable tax legislation;

	 	 	 
	 	(ii) 	 Agreements and Actions: The Company is not in
        violation of any term of its constating documents. The Company is not
        in violation of any term or provision of any agreement, indenture or other
        instrument applicable to it which would, or could, result in any Material
        Adverse Effect on the Business, condition (financial or otherwise), affairs
        or operations of the Company.









	 		
       The Company is not in default in the payment of any obligation
        owed which is now due and there is no action, suit, proceeding or investigation
        commenced or, to the knowledge of the Company after due inquiry, pending
        or threatened which, either in any case or in the aggregate, might result
        in any Material Adverse Effect on the business, condition (financial or
        otherwise), affairs, prospects or operations of the Company or in any
        of the material properties or assets thereof or in any material liability
        on the part of the Company or which places, or could place, in question
        the validity or enforceability of this Agreement, the Subscription Agreements
        or any document or instrument delivered, or to be delivered, by the Company
        pursuant hereto or thereto;

	 	 	 
	 	(jj) 	
      No Defaults: Neither the Company nor any of its
      Subsidiaries is in default of any material term, covenant or condition
      under or in respect of any judgment, order, agreement or instrument to
      which it is a party or to which it or any of the property or assets
      thereof are or may be subject, and no event has occurred and is
      continuing, and to the best of the Company’s knowledge no circumstance
      exists which has not been waived, which constitutes a default by any party
      in respect of any material commitment, agreement, document or other
      instrument to which the Company or any of its Subsidiaries is a party or
      by which it is otherwise bound entitling any other party thereto to
      accelerate the maturity of any amount owing thereunder which could have a
      material adverse affect upon the condition (financial or otherwise),
      property, assets, operations or business of the Company and the
      Subsidiaries, on a consolidated basis;

	 	 	 
	 	(kk) 	 Compliance with Employment Laws: The Company
        and its Subsidiaries are in compliance with all laws and regulations respecting
        employment and employment practices, terms and conditions of employment,
        pay equity and wages, except where such non-compliance would not constitute
        an adverse material fact concerning the Company or result in an adverse
        material change to the Company, and has not and is not engaged in any
        unfair labour practice, there is no labour strike, dispute, slowdown,
        stoppage, complaint or grievance pending or, to the best of the knowledge
        of the Company, threatened against the Company or its Subsidiaries, no
        union representation question exists respecting the employees of the Company
        or its Subsidiaries and no collective bargaining agreement is in place
        or currently being negotiated by the Company or any of its Subsidiaries,
        neither the Company nor any of its Subsidiaries have received any notice
        of any unresolved matter and there are no outstanding orders under the
        Employment Standards Act (British Columbia), the Human Rights Code
        (British Columbia), the Occupational Health and Safety Act (British
        Columbia) or the Workers’ Compensation Act (British Columbia)
        or any other similar legislation in any jurisdiction in which the Company
        or its Subsidiaries carries on business, no employee has any agreement
        as to the length of notice required to terminate his or her employment
        with the Company or its Subsidiaries in excess of twelve months or equivalent
        compensation and all benefit or pension plans of the Company are funded
        in accordance with applicable laws and no past service funding liability
        exists thereunder; and








	 	(ll) 	 Environmental Compliance: The Company and its
        Subsidiaries:





	 	(i) 	
      and the property, assets and operations thereof comply,
      to the best of the Company’s knowledge, in all material respects with all
      applicable Environmental Laws (which term means and includes, without
      limitation, any and all applicable international, federal, provincial,
      state, municipal or local laws, statutes, regulations, treaties, orders,
      judgments, decrees, ordinances, official directives and all authorizations
      relating to the environment, occupational health and safety, or any
      Environmental Activity (which term means and includes, without limitation,
      any past, present or future activity, event or circumstance by or in
      respect of a Contaminant (which term means and includes, without
      limitation, any pollutants, hazardous wastes, hazardous materials,
      hazardous substances or contaminants or any other matter (including any of
      the foregoing), which is defined or described as such pursuant to any such
      applicable Environmental Law), including, without limitation, the storage,
      use, holding, collection, purchase, accumulation, assessment, generation,
      manufacture, construction, processing, treatment, stabilization,
      disposition, handling or transportation thereof, or the release, escape,
      leaching, dispersal or migration thereof into the natural environment,
      including the movement through or in the air, soil, surface water or
      groundwater));




	 	(ii) 	
      do not have any knowledge of, and have not received any
      notice of, any material claim, judicial or administrative proceeding,
      pending or threatened against, or which may materially adversely affect,
      the Company and the Subsidiaries, on a consolidated basis, or any of the
      property, assets or operations thereof, relating to, or alleging any
      violation of any Environmental Laws, the Company is not aware of any facts
      which could give rise to any such claim or judicial or administrative
      proceeding and, to the best of the Company’s knowledge, neither the
      Company nor any of its Subsidiaries nor any of the property, assets or
      operations thereof is the subject of any investigation, evaluation, audit
      or review by any Governmental Authority (which term means and includes,
      without limitation, any national, federal government, province, state,
      municipality or other political subdivision of any of the foregoing, any
      entity exercising executive, legislative, judicial, regulatory or
      administrative functions of or pertaining to government and any
      corporation or other entity owned or controlled (through stock or capital
      ownership or otherwise) by any of the foregoing) to determine whether any
      violation of any Environmental Laws has occurred or is occurring or
      whether any remedial action is needed in connection with a release of any
      Contaminant into the environment, except for compliance investigations
      conducted in the normal course by any Governmental
  Authority;








	 	(iii) 	
      has not given or filed any notice under any federal,
      state, provincial or local law with respect to any Environmental Activity
      that to the best of the Company’s knowledge would result in the Company
      nor any of its Subsidiaries having any liability (whether contingent or
      otherwise) in connection with any Environmental Activity and the Company
      is not aware of any notice being given under any federal, state,
      provincial or local law or of any liability (whether contingent or
      otherwise) with respect to any Environmental Activity relating to or
      affecting the Company or its Subsidiaries or the property, assets,
      business or operations thereof; and

	 	 	 
	 	(iv) 	
      is not, to the best of the Company’s knowledge, subject
      to any contingent or other liability relating to the restoration or
      rehabilitation of land, water or any other part of the environment or
      non-compliance with Environmental Law.



5.2    The Agent represents, warrants and
covenants to and with the Company, and acknowledges that the Company is relying
on such representations and warranties, that: 

	 	(a) 	
      Incorporation and Organization: The Agent has been
      duly incorporated and organized and is validly existing under the laws of
      its jurisdiction of incorporation and has the requisite power, authority
      and capacity to carry on its business as now conducted and to own, lease
      and operate its property and assets.

	 	 	 
	 	(b) 	
      Qualification: The Agent and, to the best of its
      knowledge after due inquiry, all sub-Agents, are qualified to so act in
      the Selling Jurisdictions, and the Agent is an “accredited investor” under
      the Applicable Securities Laws

	 	 	 
	 	(c) 	
      Offering: In connection with the Offering, the
      Agent will solicit and sell the Subscription Receipts in compliance with
      all the Applicable Securities Laws of the Selling Jurisdictions. The Agent
      has not solicited and will not solicit offers to purchase or sell the
      Subscription Receipts so as to require the registration of or the filing
      of a prospectus with respect to the Units under the laws of any
      jurisdiction and has not solicited and will not solicit offers to purchase
      or sell the Subscription Receipts in any jurisdiction outside of the
      Selling Jurisdictions.



ARTICLE 6 

  COVENANTS 

	6.1 	
      Covenants: The Company agrees that:

	 	 	 
		(a) 	
      the Company shall duly, punctually and faithfully perform
      all the obligations to be performed by it under this Agreement;

	 	 	 
		(b) 	 the Company shall fulfill all legal requirements to
        permit the creation, issue, offering and sale of the Subscription Receipts
        and the Common Shares and Warrants underling the Subscription Receipts
        and the Common Shares comprising the Broker Options, including, without
        limitation, assuming that the representations and warranties in the Subscription
        Agreements of the subscribers for the Subscription Receipts are true and
        correct and that the Agent complies with the provisions of this Agreement,
        the Company will comply with all applicable laws to enable the Subscription
        Receipts to be offered for sale and sold in the Selling Jurisdictions
        without the necessity of filing a prospectus or an offering memorandum
        under the applicable laws through investment dealers or brokers registered
        under the applicable securities laws of the Selling Jurisdictions who
        have complied with the relevant provisions of such laws;








	 	(c) 	 the Company shall make all necessary arrangements with
        the TSX-V in order to comply with the conditional consent provided by
        the TSX-V in order that the the Common Shares underlining the Subscription
        Receipts, and the Warrants and the Common Shares underlying the Broker
        Options are listed and posted for trading on the TSX-V on or as soon as
        practicable after the Closing Time;

	 	 	 
	 	(d) 	 the Company shall use reasonable commercial efforts
        to maintain its status as a reporting issuer in the Reporting Jurisdiction;

	 	 	 
	 	(e) 	 within the required time limits, the Company shall file
        such documents as may be required under the Applicable Securities Laws
        relating to the private placement of the Subscription Receipts which,
        without limiting the generality of the foregoing, shall include, if applicable,
        a Form 45-106F1 as prescribed by National Instrument 45-106 adopted by
        the Canadian Securities Administrators and any other corresponding filings
        under the applicable securities laws of the Selling Jurisdictions;

	 	 	 
	 	(f) 	 it will not, without the prior written consent of the
        Agent, issue or announce the issuance of any securities of the Company
        other than the securities contemplated in this Agreement during the period
        commencing from the date hereof up to the Closing Date, other than any
        shares issued upon the exercise of previously issued options and share
        purchase warrants and shares issued in the normal course of business for
        the purpose of minor property acquisitions; and

	 	 	 
	 	(g) 	 except for the Offering, the Company shall not issue
        or sell any Common Shares or financial instruments convertible or exchangeable
        into Common Shares, other than for purposes of director, officer, consultant
        or employee stock options, or to satisfy existing instruments of the Company
        already issued as of the date hereof, for a period of 120 days from the
        Closing Date, without the prior consent of the Agent, such consent not
        to be unreasonably withheld.



ARTICLE 7 

  CLOSING 

7.1    Closing. The sale of the Subscription
  Receipts shall be completed at the Closing Time at the offices of the Company’s
  Counsel, Brookfield Place, 181 Bay Street, Suite 1800, Toronto, Ontario at 11:30
  a.m. (Toronto time) or at such other place as the Company and the Agent may
  agree. Subject to the satisfaction of the conditions set forth in Article 8,
  the Agent, on the Closing Date, shall deliver to the Company all completed Subscription
  Agreements with completed schedules attached thereto against delivery by the
  Company of the certificates referred to in Sections 8.1(e) and (f). 




ARTICLE 8 

  CONDITIONS OF CLOSING 

8.1    Conditions of Closing: The
obligations of the Agent hereunder shall be conditional upon the Agent
receiving, and the Agent shall have the right on the Closing Date on behalf of
subscribers for the Subscription Receipts to withdraw all subscriptions
delivered and not previously withdrawn by subscribers unless the Agent receives,
on the Closing Date: 

	 	(a) 	
      a legal opinion of the Company’s counsel, in form and
      substance satisfactory to the Agent, both acting reasonably, with respect
      to such matters as the Agent may reasonably request, and including,
      inter alia, an opinion to the effect that:

	 	 	 	 
	 		(i) 	
      the Company and each of its Subsidiaries are corporations
      existing under the laws of their jurisdiction of incorporation and has not
      been dissolved;

	 	 	 	 
	 		(ii) 	
      the Company and each of its Subsidiaries has all
      requisite corporate capacity and power to own and operate its property and
      assets and to carry on its business as now conducted by it;

	 	 	 	 
	 		(iii) 	
      the Company has all requisite corporate capacity and
      power to make the Offering and to execute and deliver this Agreement,
      including the certificates representing the Broker Options, and to perform
      all of its obligations contemplated thereunder, including the issue of the
      Common Shares issuable upon the exercise of the Broker Options;

	 	 	 	 
	 		(iv) 	
      as at the Closing Date, the authorized capital of the
      Company consists of an unlimited number of Common Shares, of which,
      62,640,001 Common Shares are issued and outstanding;

	 	 	 	 
	 		(v) 	
      the execution and delivery of this Agreement, including
      the certificate representing the Broker Options and the performance by the
      Company of its obligations thereunder, including the issue of the Common
      Shares issuable upon the exercise of the Broker Options do not and will
      not result in a breach of, and do not and will not conflict with, any of
      the terms, conditions or provisions of the constating documents of the
      Company or the resolutions of the directors or shareholders of the
      Company;

	 	 	 	 
	 		(vi) 	
      all necessary corporate action has been taken by the
      Company to authorize the execution and delivery of this Agreement and
      other necessary documents, including the certificates representing the
      Broker Options and the completion of the Offering; this Agreement and each
      of such necessary documents has been duly executed and delivered by the
      Company and constitutes a legal, valid and binding obligation of the
      Company, enforceable in accordance with its terms (subject to the usual
      qualifications);








	 	(vii) 	
      all necessary corporate action has been taken by the
      Company to authorize the allotment and issue of the Subscription Receipts,
      the creation, allotment and issue of the Broker Options upon exercise of
      any part of the Subscription Receipts and the Common Shares issuable upon
      the due exercise of the Broker Options have been allotted and reserved for
      issuance by the Company and, when issued in accordance with the due
      exercise of the Broker Options, in accordance with the terms and
      conditions of the certificates representing the Options, such Common
      Shares shall be issued as fully-paid and non-assessable shares of the
      Company;

	 	 	 
	 	(viii) 	
      the issuance and sale of the Subscription Receipts and
      the issuance of the Broker Options have been and will be effected in such
      a manner as to be exempt, by instrument or statute or regulation or order,
      from the prospectus requirements of the Selling Jurisdictions, and no
      documents are required to be filed, proceedings taken or approvals,
      permits, consents or authorizations of regulatory authorities obtained
      under Applicable Securities Laws and Applicable Securities Laws of the
      Selling Jurisdictions to permit the issue and sale by the Company of the
      Subscription Receipts and the issuance of the Broker Options (subject to
      filing private placement forms and paying requisite filing
fees);

	 	 	 
	 	(ix) 	
      no prospectus will be required and no documents are
      required to be filed, proceedings taken or approvals, permits, consents or
      authorizations of regulatory authorities obtained under applicable
      securities legislation to permit the issue and delivery by the Company of
      the Common Shares upon the exercise of the Subscription Receipts, Warrants
      or Broker Options in accordance with the terms and conditions of the
      certificates representing such securities (subject to the usual filings,
      if any);

	 	 	 
	 	(x) 	
      the first trade of the Subscription Receipts, the
      Warrants, the Broker Options and the Common Shares issuable thereunder
      will be a distribution unless at the time of such trade the usual
      qualifications are met;

	 	 	 
	 	(xi) 	
      the certificates representing the Common Shares, Warrants
      and the Broker Options have been approved by the directors of the
      Corporation and comply with applicable law, including any necessary
      legends; and

	 	 	 
	 	(xii) 	
      such other matters as the Agent or counsel for the Agent
      may reasonably require;




	 	(b) 	 a favourable legal opinion dated the Closing Date of
        local counsel to the Company, addressed to the Agent, in form and substance
        satisfactory to the Agent and its counsel, acting reasonably, with respect
        to the title and/or interest of the Company and any of its Subsidiaries
        in the Eitan, Notera, Gabriela, Samuel, Yitzhak, Sara and Myra Licenses;
        and also to the effect that each of the Company’s Subsidiaries is
        in full compliance, as of the Closing Date, with the representations and
        warranties contained in subsections a, f, k, o, p, dd, ee, ff, hh, jj,
        and kk of section 5 above, mutatis mutandis.








	 		 It is understood that the Company’s counsel may
        rely on certificates of officers of the Company on its own behalf and
        on behalf of the Company as to matters of fact. It is further understood
        that the Agent’s counsel may rely on the opinion of the Company’s
        counsel as to matters which specifically relate to the Company;

	 	 	 
	 	(c) 	 a certificate of the Company, dated the Closing Date,
        addressed to the Agent and signed by the Chief Executive Officer or the
        Chief Financial Officer, regarding the articles and by-laws of the Company,
        the resolutions of the directors and shareholders of the Company, and
        also certifying that:





	 	(i) 	
      the Company has complied with and satisfied at or prior
      to the Closing Time all terms and conditions of this Agreement on its part
      to be complied with;

	 	 	 
	 	(ii) 	
      the representations and warranties of the Company set
      forth in this Agreement are true and correct, in all material respects, at
      the Closing Time, as if made at such time; and

	 	 	 
	 	(iii) 	
      no event of the nature referred to in Sections 10.2 (b)
      and/or (d) has occurred or to the knowledge of such officers is pending,
      contemplated or threatened;




	 	(d) 	
      definitive certificates representing, in the aggregate,
      all of the Subscription Receipts, registered in such name or names as the
      Agent shall notify the Company in writing of not less than forty-eight
      (48) hours prior to the Closing Time; and

	 	 	 
	 	(e) 	
      such other documentation, certificates, opinions or the
      like that Agent may reasonable require;

	 	 	 
	 		
      all in a form and substance satisfactory to
  Agent.



8.2    The Closing and the obligations of
the Company and the Agent to complete the issue and sale of the Subscription
Receipts are subject to receipt of all required regulatory approval for or
acceptance of the Offering.

8.3    To the extent that an agreement for any
other financing for the issuance and sale of the Company’s shares, involving
terms that are preferable to those offered to the Purchasers brought by Agent
under this agreement, within 30 days prior to or after the execution of this
agreement, then the Agent shall, as a condition of Closing, inform the
Purchasers of such other financing and the preferred terms, and enable the
Purchasers to choose whether they wish to receive Subscription Receipts, or to
exercise the Subscription Receipts into Units; or rather, they wish not to
proceed with the transaction contemplated hereunder and to receive their
Redemption Price. 




ARTICLE 9 

  FEES, EXPENSES AND RIGHT OF FIRST REFUSAL 

9.1    Fees: In consideration for their
services hereunder, the Company and/or Adira Israel shall pay to the Agent on
the Escrow Release Date in accordance with the provisions of section 9.3 below
(as a deduction from the amount to be paid to the Company in respect of the
subscriptions for Subscription Receipts delivered to and accepted by the
Company), a cash commission equal to seven per cent (7%) of the aggregate gross
proceeds of the Brokered Offering, including any Subscription Receipts purchased
by the Agent as principal hereunder, plus VAT in accordance with Israeli law. In
addition, in the event that BRM purchases Subscription Receipts from the
Company, then Agent shall be entitled to a cash commission equal to 4% (four
percent) of the aggregate gross proceeds received from the purchase by BRM, plus
VAT in accordance with Israeli law.

9.2     Broker Options: In addition
to the cash commission and fees set forth in Section 9.1 hereof, the Company
agrees to grant to the Agent on the Escrow Release Date, the Broker Options,
plus VAT on the Broker Options in accordance with Israeli law, and in accordance
with the provisions of section 9.3 below. The Broker Options shall be
exercisable following the Escrow Release Date until the date which is 36 months
from the Closing Date. The terms governing the Broker Options will be set out in
the certificate representing the Broker Options, as applicable. The certificate
representing the Broker Options will include, among other things, provisions for
the appropriate adjustment in the class, number and price of the Broker Options
and Common Shares upon exercise of the Broker Options, upon the occurrence of
certain events, including any subdivision, consolidation or reclassification of
the Common Shares, the payment of stock dividends and the amalgamation of the
Company. 

9.3    To effect payment of the cash amounts
(fees and VAT) referred to in sections 9.1 and 9.2 above, the Agent will issue
the invoice(s) + VAT to Adira Israel (per this agreement and as presented to the
Agent) and Adira Israel shall, on the Escrow Release Date, give the Agent checks
payable to the Agent, each postdated to five days after the Escrow Release Date
– one check shall be in an amount equal to the total of all fees plus VAT
payable under section 9.1; and the second check shall be in an amount equal to
the VAT payable on the Broker Options, according to their fair market value
based on the Black-Scholes model. On the day preceding the Escrow Release Date,
the Agent shall notify the Company in writing regarding the amount of each of
the above checks in New Israeli Shekels.

9.4    Expenses: The Company will pay all
  reasonable costs and expenses incurred in connection with the distribution of
  the Subscription Receipts, including without limitation, reasonable fees and
  expenses of the Agent, including fees and disbursements of legal counsel, up
  to a maximum of $37,500 plus disbursements and taxes if applicable, all expenses
  of or incidental to the creation, issuance, sale or distribution of the Subscription
  Receipts, transfer agent and filing fees, all reasonable expenses of the Agent
  in connection with the marketing of the Offering up to a maximum of $7,000 plus
  disbursements and taxes if applicable, and such other expenses as agreed between
  the parties. All fees and expenses of the Agent will be paid by the Company
  on the Closing Date upon the Company receiving an invoice from the Agent (as
  a deduction from the amount to be paid to the Company in respect of the subscriptions
  for Subscription Receipts delivered to and accepted by the Company). Notwithstanding
  the foregoing, such costs and expenses of the Agent will be payable by the Company
  whether or not the distribution of the Subscription Receipts is completed. 




9.5    Right of First Refusal: If the Company
  initiates any financings or listing activities in Israel or on the Tel Aviv
  Stock Exchange (TASE) within twelve months from the Escrow Release Date (the
  “Exclusive Period”), the Company agrees to offer to the Agent
  the right to participate in the capacity of lead agent, lead underwriter, lead
  adviser or IPO manager. The Agent at its discretion may choose to accept the
  lead role as above, or to act as co-lead, in which latter event it is agreed
  that Agent will have the right to handle at least 50% of any such financing.
  For the sake of clarity, the financing transactions in Israel covered by this
  section shall also include, without limitation, subscription of participation
  units or other partnership financings that do not involve sale of Company securities.
  If the Agent cannot confirm within 10 days of receiving written notice that
  it can fill the lead (or co-lead) capacity as mentioned above on a best efforts
  basis, the Company is free to offer the proposed financing to another firm,
  with the Agent as a syndicate member for up to 15% of syndicate, in the event
  an alternative lead agent, lead underwriter, lead adviser or IPO manager agrees
  to same, or proceed on the financing on its own accord as a transaction where
  no agent, underwriter or advisor is involved. Notwithstanding the above, if
  the Company receives a bona fide “bought deal” offer in writing, the
  Company does not have the obligation to present such offer to the Agent under
  the right of first refusal; if, however, a “bought deal” offer is
  amended at any time to a “best efforts” offer, then the Company shall
  be obligated to comply with the terms of this section without delay. In addition,
  the Agent will cooperate in good faith with the Company’s Canadian agent
  in the Offering, to enable each to participate in subsequent financings led
  by the other, in accordance with the level of financing each agent can bring.


ARTICLE 10 

  EARLY TERMINATION 

10.1   Breach of Representations, etc. All
representations, warranties, covenants, terms and conditions of this Agreement
shall be construed as conditions, and any breach or failure by the Company to
comply with any such representation, warranty, covenant, term or condition shall
entitle the Agent to terminate its obligations to distribute the Subscription
Receipts by written notice to that effect given to the Company prior to the
Closing Date. The Agent may waive, in whole or in part, any breach of, default
under or non-compliance by the Company with, any representation, warranty, term
or condition hereof, or extend the time for compliance therewith, without
prejudice to any of its rights in respect of any other representation, warranty,
term or condition hereof, any other breach of, default under or non-compliance
with any other representation, warranty, term or condition hereof, provided that
any such waiver or extension shall be binding on the Agent only if the same is
in writing. 

10.2   Rights of Termination: The Agent may
terminate its obligations hereunder in the event that after the date hereof and
at or prior to the Closing Time: 

	 	(a) 	
      the Agent is not satisfied in its sole discretion with
      the results of the due diligence review and investigation of the Company
      conducted by the Agent;








	 	(b) 	
      any inquiry, investigation or other proceeding is
      commenced or any order is issued under or pursuant to any statute of
      Canada or of any of the provinces of Canada, or any other applicable law
      or regulatory authority (unless solely based on the activities or alleged
      activities of the Agent or its agent), or there is any change of law,
      regulation or policy or the interpretation or administration thereof,
      which operates to materially prevent or restrict trading in the
      Subscription Receipts or the marketability or distribution to the public,
      as the case may be, of the Subscription Receipts, and has not been
      rescinded, revoked or withdrawn;

	 	 	 
	 	(c) 	
      the state of the financial markets is such that the
      Subscription Receipts and the Common shares underlining the Subscription
      Receipts cannot, in the sole opinion of the Agent, acting reasonably, be
      successfully marketed;

	 	 	 
	 	(d) 	
      any order to cease or suspend trading of any securities
      of the Company, or prohibiting or restricting the distribution of the
      Subscription Receipts is made, or proceedings are announced or commenced
      for the making of any such order, by any securities regulatory authority,
      the TSX-V or any other comparable authority, and has not been rescinded,
      revoked or withdrawn;

	 	 	 
	 	(e) 	
      there shall occur any material change (actual,
      contemplated or threatened) or any change in a material fact or occurrence
      of a material fact or event in respect of the business, operations, assets
      or affairs of the Company, which in the opinion of the Agent, acting
      reasonably, could be expected to have a material adverse affect on the
      market price or value of the Subscription Receipts;

	 	 	 
	 	(f) 	
      there should develop, occur or come into effect or
      existence any event, action, state, condition or major financial
      occurrence of national or international consequence or any action by
      government, law or regulation, inquiry or other occurrence of any nature
      whatsoever which, in the sole opinion of the Agent, acting reasonably,
      materially adversely affects or may materially adversely affect the
      Canadian, U.S. or international financial markets, the marketing or
      distribution of the Subscription Receipts or the business, operations or
      affairs of the Company such that it would not be practical (in the sole
      opinion of the Agent, acting reasonably) to market the Subscription
      Receipts or which would render the Subscription Receipts unsaleable;
    or

	 	 	 
	 	(g) 	
      the Company is in breach of default under or
      non-compliance with any material term, covenant or condition of this
      Agreement or the Subscription Agreements or a representation or warranty
      given by the Company in this Agreement or the Subscription Agreements is
      or becomes false on or before the Closing Time.



10.3  Waiver: The Agent may exercise any or all of
  the rights provided for in Sections 8.1, 10.1 or 10.2 notwithstanding any act
  or thing taken or done by the Agent or any action by the Agent, whether before
  or after the occurrence of any material change, including, without limitation,
  any act of the Agent related to the offering or continued offering of the Subscription
  Receipts for sale, other than any unlawful act relating solely to the Agent,
  and the Agent shall only be considered to have waived or be estopped from expressing
  or relying upon any of its rights under or pursuant to Sections 8.1, 10.1 or
  10.2 if such waiver or estoppel is in writing and specifically waives or estops
  such exercise or reliance. 




10.4  Notice: Any termination pursuant to the terms
  of this Agreement shall be effected by notice in writing delivered to the Company,
  provided that no termination shall discharge or otherwise affect any obligation
  of the Company under Sections 9.3 or 11. The rights of the Agent to terminate
  its obligations hereunder are in addition to, and without prejudice to, any
  other remedies it may have. 

ARTICLE 11 

  INDEMNIFICATION AND CONTRIBUTION 

11.1  Indemnity: The Company hereby covenants and
agrees to indemnify and save harmless the Agent and each investment dealer which
is a member of any agency group formed by the Agent in connection with the
Offering, each of the affiliates of each of them and the respective directors,
officers, employees and agents of the Agent and each investment dealer which is
a member of any agency group formed by the Agent in connection with the Offering
and of each of the affiliates of each of them (in this section each an
“Indemnified Person” and collectively the “Indemnified Persons”)
from and against all losses (other than a loss of profits), claims, damages,
liabilities, costs and expenses caused or incurred by reason of or in any way
arising, directly or indirectly, out of enforcing this Agreement or: 

	 	(a) 	
      any statement or information contained in the Public
      Record to the Closing Date (except information and statements relating
      solely to, and provided by, the Agent or any investment dealer which is a
      member of any agency group formed by the Agent in connection with the
      Offering) which at the time and in light of the circumstances under which
      it was made containing a misrepresentation or being untrue, false or
      misleading;

	 	 	 
	 	(b) 	
      the omission or alleged omission to state in the Public
      Record to the Closing Date (except information and statements relating
      solely to, and provided by, the Agent or any investment dealer which is a
      member of any agency group formed by the Agent in connection with the
      Offering) any material fact required to be stated therein or necessary to
      make any statement therein not misleading in light of the circumstances
      under which it was made;

	 	 	 
	 	(c) 	
      any order made or inquiry, investigation or proceeding
      commenced or threatened by any officer or official of the TSX-V, any
      securities commission or authority or any other competent authority, not
      based upon the activities or the alleged activities of the Agent or any
      member of any agency group formed by the Agent in connection with the
      Offering, based upon any untrue, false or misleading statement or omission
      or alleged untrue, false or misleading statement or omission or any
      misrepresentation or alleged misrepresentation in the Public Record which
      prevents or restricts trading in the Subscription Receipts in any of the
      Selling Jurisdictions;

	 	 	 
	 	(d) 	
      the non-compliance by the Company with any of the
      Applicable Securities Laws or other applicable laws in connection with the
      transactions contemplated herein;








	 	(e) 	
      any gross negligence or willful misconduct by the Company
      relating to or connected with the sale by the Company of the Subscription
      Receipts; or

	 	 	 
	 	(f) 	
      the material breach of, or default under, any term,
      condition, covenant or agreement of the Company made or contained herein
      or in any other document of the Company delivered pursuant hereto or made
      by the Company in connection with the sale of the Subscription Receipts or
      any representation or warranty of the Company made or contained herein or
      in any other document of the Company delivered pursuant hereto or in
      connection with the sale of the Subscription Receipts being or being
      alleged to be untrue, false or misleading,



provided that the Company shall not be liable under this
Section 11 to the extent that a court of competent jurisdiction shall have
determined by a final judgement that such loss, claim, damage, liability, cost
or expense resulted from any act or failure to act undertaken or omitted to be
undertaken by the Indemnified Party through its bad faith, negligence, wilful
misconduct or fraud. If any matter or thing contemplated by this Section 11
shall be asserted against any Indemnified Person in respect of which
indemnification is or might reasonably be considered to be provided hereunder,
or in any potential claim contemplated by this section shall come to the
knowledge of an Indemnified Person, such Indemnified Person shall notify the
Company as soon as possible of the nature of such claim and the Company shall be
entitled, but not required, to participate in or assume the defence of any suit
brought to enforce such claim; provided, however, that the defence shall be
through legal counsel reasonably acceptable to the Indemnified Person and that
no settlement may be made by the Company or the Indemnified Person without the
prior written consent of the other of them and the Company shall not be liable
for any settlement of any such claim unless it has consented in writing to such
settlement. 

11.2  Counsel: In any claim referred to in Section
11.1 hereof, the Indemnified Person shall have the right to retain separate
legal counsel to act on his, her or its behalf, provided that the fees and
disbursements of such separate legal counsel shall be paid by the Indemnified
Person unless: 

	 	(a) 	
      the Company fails to assume the defence of such claim on
      behalf of the Indemnified Person within ten days of receiving written
      notice of such claim;

	 	 	 
	 	(b) 	
      the Company and the Indemnified Person shall have
      mutually agreed in writing to the retention of such separate legal
      counsel; or

	 	 	 
	 	(c) 	
      the named parties to any such claim (including any added,
      third or impleaded parties) include both the Company and the Indemnified
      Person and the Indemnified Person has been advised by legal counsel
      thereto that representation of both the Company and the Indemnified Person
      by the same legal counsel would be inappropriate due to actual or
      potential differing interests between them;



in which event or events the reasonable fees and disbursements
  of such separate legal counsel shall be paid by the Company, subject as hereinafter
  provided. Where more than one Indemnified Person is entitled to retain separate
  counsel in the circumstances described in this Section 11.2 above, all Indemnified
  Persons shall be represented by one separate legal counsel and the reasonable
  fees and disbursements of only one separate legal counsel for all Indemnified
  Persons shall be paid by the Company, unless: 




	 	(i) 	
      the Company and the Indemnified Persons have mutually
      agreed in writing to the retention of more than one legal counsel for the
      Indemnified Persons; or

	 	 	 
	 	(ii) 	
      the Indemnified Persons have or any of them has been
      advised in writing by legal counsel in a written opinion that
      representation of all of the Indemnified Persons by the same legal counsel
      would be inappropriate due to actual or potential differing interests
      between them.



11.3  Waiver of Right: The Company hereby waives
its right to recover contribution from the Agent and the other Indemnified
Persons with respect to any liability of the Company by reason of or arising out
of the indemnity provided by the Company in this Section 11, provided, however,
that such waiver shall not apply in respect of an Indemnified Person for
liability caused or incurred by reason or arising out of any act or failure to
act undertaken or omitted to be undertaken by the Agent or other Indemnified
Person through its bad faith, negligence, wilful misconduct or fraud, any
information or statements relating solely to, and provided by, the Agent
or any member of an agency group formed by the Agent in connection with the
Offering or any failure by the Agent or any member of an agency group formed by
the Agent in connection with the Offering to provide to Purchasers any document
which the Company is required to provide to the Purchasers and which the Company
has provided or made available to the Agent or any member of an agency group
formed by the Agent in connection with the Offering to forward to the
Purchasers. 

11.4  Contribution: 

	 	(a) 	
      In order to provide for just and equitable contribution
      in circumstances in which the indemnity contained in this Section 11 is,
      for any reason of policy or otherwise, held by a court to be unavailable,
      in whole or in part, to an Indemnified Person other than in accordance
      with the terms of such section, each of the Company, the Agent and the
      party or parties seeking indemnification shall contribute to the aggregate
      liabilities, claims, demands, losses (other than losses of profit in
      connection with the distribution of the Subscription Receipts), costs,
      damages and expenses (including legal or other expenses reasonably
      incurred in connection with investigation or defence of the same) to which
      they may be subject or which they may suffer or incur:

	 	 	 	 
	 		(i) 	
      in such proportion as is appropriate to reflect the
      relative benefit received by the Company on the one hand, and by the party
      or parties seeking indemnity on the other hand, from the Offering;
    or

	 	 	 	 
	 		(ii) 	 if the allocation provided by Section 11.4(a)(i) above
        is not permitted by applicable law, in such proportion as is appropriate
        to reflect not only the relative benefits referred to in Section 11.4(a)(i)
        above, but also to reflect the relative fault of the party or parties
        seeking indemnity, on the one hand, and the parties from whom indemnity
        is sought, on the other hand, in connection with the statements, commissions
        or omissions or other matters which resulted in such liabilities, claims,
        demands, losses, costs, damages or expenses as well as any other relevant
        equitable considerations. 







The relative benefits received by the
Company, on the one hand, and the Agent, on the other hand, shall be deemed to
be in the same proportion that the total proceeds of the Offering received by
the Company (net of fees but before deducting expenses) bear to the fees
received by the Agent, provided in no event shall the amount paid or payable by
the Agent as a result of such expense, loss, claim, damage or liability exceed
the amount of the fees received by the Agent hereunder. 

The Company agrees that it would not
be just and equitable if contributions pursuant to this Agreement were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to in the
immediately preceding paragraphs. The rights to contribution provided in this
paragraph shall be in addition to, and without prejudice to, any other right to
contribution which the Agent may have. Notwithstanding the foregoing, a person
guilty of fraudulent misrepresentation, bad faith, negligence or wilful
misconduct shall not be entitled to contribution from the other party. 

11.5  Held in Trust: To the extent that the
indemnity contained in Section 11.1 hereof is given in favour of a Person who is
not a party to this Agreement, the Company hereby constitutes the Agent as
trustee for such Person for such indemnity and the covenants given by Company in
this Agreement. The Agent agrees to accept such trust and hold it and
such indemnity and covenants for the benefit of such Persons. The benefit of
such indemnity and covenants shall be held by the Agent in trust for the Persons
in favour of whom such indemnities and covenants are given and may be enforced
directly by such Persons. 

ARTICLE 12 
SURVIVAL OF REPRESENTATIONS,
WARRANTIES,

  COVENANTS, TERMS AND CONDITIONS 

12.1  Survival: It is understood that all
representations, warranties, covenants, terms and conditions herein or contained
in certificates or documents submitted pursuant to or in connection with the
transactions contemplated herein shall survive the payment by the Agent for the
Subscription Receipts, the termination of this Agreement and shall continue in
full force and effect for the benefit of the Agent or the Company, as the case
may be, regardless of any investigation by or on behalf of the Agent or the
Company, as the case may be, with respect thereto for a period of 40 months from
the date of issuance of the Broker Options. 

ARTICLE 13 

  NOTICES 

13.1  Notices: Any notice or other communication to
be given hereunder shall be addressed to: 





	 	(a) 	the Company: 
	 	  	 
	 	  	120 Adelaide St. West 
	 	  	Suite 1204 
	 	  	Toronto, Ontario M5H 1T1 
	 	  	 
	 	  	Attention: 
	 	  	Fax: 
	 	  	 
	 	  	with a copy to : 
	 	  	 
	 	  	Aird & Berlis LLP 
	 	 	Brookfield Place,
      181 Bay Street 
	 	  	Toronto, Ontario M5J 2T9 
	 	  	 
	 	  	Attention:               
      Daniel Bloch 
	 	  	Fax:                       
      416.863.1515 
	 	  	 
	 	  	 
	 	(b) 	the Agent at: 
	 	  	 
	 	  	23 Yehuda Halevi
      St., 26th floor 
	 	  	Discount Tower 
	 	  	Tel Aviv, Israel 
	 	  	 
	 	  	 
	 	  	Attention:               
      Yair Ephrati 
	 	  	Fax:                       
      +972-3-516-5505 
	 	  	 
	 	  	with a copy to : 
	 	  	 
	 	  	Richard Bardenstein, Adv. 
	 	  	2 Ben Sira Street 
	 	  	Jerusalem 94181 
	 	  	Israel 
	 	  	Fax: +972-2-624-1040 
	 	  	 
	 	  	and 
	 	  	 
	 	  	Fogler Rubinoff LLP 
	 	  	95 Wellington Street West, Suite
      1200 
	 	  	Toronto, Ontario M5J 2Z9 
	 	  	 
	 	  	Attention: 
	 	  	Fax:                         
      416.941.8852 






Any such notice or other communication
shall be in writing and may be given by telecopy or delivery, and shall be
deemed to have been given twelve (12) hours after being telecopied provided that
there is no indication such transmission failed (provided further that, if such
time does not fall on a Business Day, the notice shall be deemed to have been so
given on the next Business Day) or upon receipt by a responsible officer of the
addressee if delivered.

ARTICLE 14 

  GENERAL 

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

14.2  Governing Law: This agreement shall be
governed by and construed in accordance with the laws of the Province of Ontario
and the laws of Canada applicable therein. 

14.3  Time of the Essence: Time shall be of the
essence of this Agreement. 

14.4  Counterparts: This agreement may be executed
in one or more counterparts, either in original or facsimile form, each of which
so executed shall constitute an original and all of which together shall
constitute one and the same agreement. 

14.5  Entire Agreement: It is understood that the
terms and conditions of this Agreement supersede any previous verbal or written
agreement between the Agent and the Company. 

[THE REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY] 




If the foregoing is in accordance with your understanding and
is agreed to by you, please confirm your acceptance by signing the enclosed
copies of this letter at the place indicated and by returning the same to the
Agent’s counsel.

DS APEX
MERGERS & ACQUISITIONS
LTD. 

	 	“Yair
      Ephrati” 
	Per:    	  
	Name:    	Yair Ephrati 
	Title:    	Chief Executive Officer
  



	  	“Victor Shamrich” 
	Per:    	  
	Name:    	Victor Shamrich 
	Title:    	Director 


I/we have authority to bind the
corporation. 

ACCEPTED AND AGREED TO
as of the date of this Agreement.



ADIRA ENERGY
LTD. 

	  	“Alan Rootenberg” 
	Per:    	  
	Name:    	Alan Rootenberg 
	Title:    	Chief Financial Officer 
	 	 
	  	I/we have authority to bind the
      Corporation. 






ACCEPTED AND AGREED TO 
as of the date of this Agreement.



ADIRA ENERGY
ISRAEL LTD. 

 

	  	“Gadi Levin” 
	Per:    	  
	Name:    	Gadi Levin 
	Title:    	Chief Financial Officer 
	  	I/we have authority to bind the
      Corporation. 






SCHEDULE “A” 
SUBSIDIARIES 



	Name of Subsidiary 	Jurisdiction of Incorporation 	Percentage and Type of Ownership
    
	Adira Energy Holding Corp. 	Ontario 	100% 
	Adira Energy Israel Ltd. 	Israel 	100% owned by Adira Energy Holding Corp. 
	Adira Energy Israel Services Ltd. 	Israel 	100% owned by Adira Energy Holding Corp. 
	Adira Oil Technology Ltd. 	Israel 	100% owned by Adira Energy Holding Corp. 
	Adira GeoGlobal Ltd. 	Israel 	60% owned by Adira Energy Holding Corp.