EXHIBIT 4(D)


 


AMALGAMATION AGREEMENT


 

















 


AMALGAMATION AGREEMENT


 


THIS
AMALGAMATION AGREEMENT made as of the 29th day of August, 2005.


 


BETWEEN:


 


GLOBAL EXPRESS ENERGY INC., a body corporate incorporated under the
laws of the Province of Alberta, having an office in the City of Calgary, in
the Province of Alberta (hereinafter called “Global”)


 


OF THE FIRST PART


 


AND


 


CHALLENGER ENERGY CORP., a body corporate incorporated under the
laws of Canada, having an office in the City of Calgary, in the Province of Alberta
(hereinafter called “Challenger”)


 


OF THE SECOND PART


 


WHEREAS
Global and Challenger intend to effect a business combination transaction whereby,
among other things, Global and Challenger will amalgamate and continue as one
corporation in accordance with the terms and conditions hereof;


 


AND
WHEREAS the parties hereto intend to carry out the transactions contemplated herein
pursuant to an amalgamation under the CBCA;


 


NOW
THEREFORE IN CONSIDERATION of the covenants and agreements herein contained and
other good and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged), the parties hereto covenant and agree as follows:


 


ARTICLE 1


DEFINITIONS


 


1.1                                                                               In this Agreement, including in the recitals,
unless the context otherwise requires:


 


(a)                                 “ABCA” means the Business
Corporations Act (Alberta), R.S.A. 2000, c. B-9, as amended,
including the regulations promulgated thereunder;


 


(b)                                 “Affiliate” has the meaning set out in the Applicable
Laws;


 


(c)                                  “Agreement” means this agreement, including the recitals
and all exhibits to this agreement, as amended or supplemented from time to
time, and “hereby”, “hereof”, “herein”, “hereunder”, “herewith” and similar
terms refer to this Agreement and not to any particular provision of this
Agreement;


 


(d)                                 “Amalco” means the amalgamated corporation resulting
from the amalgamation of Challenger and Global, which will carry on business
under the name “Challenger Energy Corp.”;


 


(e)                                  “Amalco Options” means the options to purchase Amalco Shares
pursuant to the stock option plan of Amalco to be approved at the Meeting;


 

















 


(f)                                   “Amalco Shares” or “Common Shares” means the common
shares of Amalco to be created and issued in connection with the Amalgamation;


 


(g)                                  “Amalgamation” means the amalgamation of Global and
Challenger pursuant to Sections 182 and 183 of the ABCA and in accordance with
the policies of the TSXV in respect of “reverse take-over” transactions, on the
terms and conditions set forth in this Agreement;


 


(h)                                 “Applicable Laws” means applicable corporate and securities
laws, regulations and rules, all policies thereunder and rules of
applicable stock exchanges, including the TSXV, all securities laws,
regulations and rules and all policies of the provinces of Canada, the United States Securities Act of 1933, as
amended (the “1933 Act”), the United
States Securities Exchange Act of 1934, as amended (the “1934 Act”),
and the United States securities and “blue sky” laws and regulations;


 


(i)                                     “Articles of Amalgamation” means the articles of amalgamation set forth
in Exhibit 1 together with such other changes or amendments thereto as are
permitted hereby or otherwise agreed to by Challenger and Global;


 


(j)                                    “business day” means a day, other than a Saturday, Sunday
or statutory holiday, when banks are generally open in the City of Calgary for
the transaction of banking business;


 


(k)                                 “CBCA” means the Canada
Business Corporations Act, R.S. 1985, C-44, as amended, including
the regulations promulgated thereunder;


 


(l)                                     “Certificate of Amalgamation” means the certificate to be issued by the
Director pursuant to Subsection 185(4) of the ABCA giving effect to
the Amalgamation;


 


(m)                             “Challenger” means Challenger Energy Corp., a corporation
incorporated under the laws of Canada;


 


(n)                                 “Challenger Financial
Statements” means the audited consolidated financial
statements of Challenger prepared as at September 7, 2004;


 


(o)                                 “Challenger Meeting” means the annual and special meeting of the
Challenger Shareholders to be called to, inter
alia, consider and, if thought fit, authorize, approve and adopt the
Challenger Resolution, to be held on October 28, 2005 at 10:00 a.m.
(Calgary Time) (or such other time as the parties may agree) at the
offices of Burnet Duckworth & Palmer LLP (or such other venue as the
parties may agree);


 


(p)                                 “Challenger Options” means 1,750,000 outstanding options to
purchase Challenger Shares at an exercise price of $0.10 per share;


 


(q)                                 “Challenger Resolution” means the special resolution approving the
Amalgamation to be considered by the Challenger Shareholders at the Challenger
Meeting;


 


(r)                                    “Challenger Shareholders” means the holders of Challenger Shares;


 


(s)                                   “Challenger Shares” means the Class “A” voting common
shares of Challenger as constituted on the date hereof;


 


(t)                                    “Challenger Warrants” means 500,000 Challenger common share
purchase warrants, each such common share purchase warrant entitling the holder
thereof to acquire one Challenger Share at an exercise price of $0.05 per
share;


 


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(u)                                 “Change of Business” means the change of business of Global from
an “unclassified” issuer to an “oil and gas” issuer pursuant to the policies of
the TSXV;


 


(v)                                 “Closing” means the completion of the Amalgamation;


 


(w)                               “Closing Date” means the date on which the Closing takes
place, which date shall be September 30, 2005, and in any event shall be
no later than November 30, 2005, unless mutually agreed between the
parties in writing;


 


(x)                                 “control” means, with respect to control of a body
corporate by a person, the holding (other than by way of security) by or for
the benefit of that person of securities of that body corporate to which are
attached more than 50% of the votes that may be cast to elect directors of
the body corporate (whether or not securities of any other class or
classes shall or might be entitled to vote upon the happening of any event or
contingency) provided that such votes, if exercised, are sufficient to elect a
majority of the board of directors of the body corporate;


 


(y)                                 “Depositary” means: (i) for Global, Computershare
Trust Company of Canada, or such other trust company as may be designated
by Global, and (ii) for
Challenger, Challenger itself;


 


(z)                                  “Director” means the director appointed pursuant to Section 260
of the CBCA;


 


(aa)                          “Dissenting Shareholders” means the Global Shareholders or the
Challenger Shareholders, as the case may be, who exercise the right of
dissent available to such holders in respect of the Global Resolution or the
Challenger Resolution to be placed before the Global Shareholders and the
Challenger Shareholders, respectively, at the Meetings;


 


(bb)                          “Effective Date” means the date shown on the Certificate of
Amalgamation;


 


(cc)                            “Effective Time” means 12:01 p.m. on the Effective Date;


 


(dd)                          “Employee Obligations” means any obligations or liabilities of
Global or Challenger to pay any amount to or on behalf of the officers,
directors, employees or consultants of Global or Challenger, respectively,
other than for salary, bonuses under their existing bonus arrangements and directors’
fees in the ordinary course, in each case in amounts consistent with historic
practices and, without limiting the generality of the foregoing, Employee
Obligations shall include the obligations of Global or Challenger to their
respective directors, officers, or employees for severance or termination
payments or any other manner of payment whatsoever (including retention
bonuses) on or relating to a change of control, pursuant to any agreement or
severance policy;


 


(ee)                            “Encumbrance” includes, without limitation, any mortgage,
pledge, assignment, charge, lien, security interest, claim, trust, royalty or
carried, participation, net profits or other third party interest and any
agreement, option, right or privilege (whether by law, contract or otherwise)
capable of becoming any of the foregoing;


 


(ff)                              “Global” means Global Express Energy Inc., a
corporation incorporated under the laws of the Province of Alberta;


 


(gg)                            “Global Financial Statements” means the unaudited consolidated financial
statements of Global for the year ended December 31, 2004, the audited
consolidated financial statements for the years ended December 31, 2003
and 2002, and the unaudited interim financial statements for the three months
ended March 31, 2005;


 


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(hh)                          “Global Meeting” means the annual and special meeting of the
Global Shareholders to be called to, inter
alia, consider and, if thought fit, authorize, approve and adopt the
Global Resolution, to be held on October 28, 2005 at 10:30 a.m.
(Calgary Time) (or such other time as the parties may agree) at the
offices of Burnet Duckworth & Palmer LLP (or such other venue as the
parties may agree);


 


(ii)                                  “Global Public Documents” means all documents or information filed by
or on behalf of Global in compliance with or intended compliance with
Applicable Laws;


 


(jj)                                “Global Resolution” means the special resolution approving the
Amalgamation and the Change of Business to be considered by the Global
Shareholders at the Global Meeting;


 


(kk)                          “Global Shares” means the common shares in the capital stock
of Global;


 


(ll)                                  “in writing” means written information including
documents, files, records, books and other materials made available, delivered
or produced by or on behalf of a party to the other party or its agents,
advisors or representatives in the course of a party conducting its due
diligence review in respect of the other party between Global and Challenger,
prior the date of this Agreement;


 


(mm)                  “Income Tax Act” means the Income
Tax Act (Canada), R.S.C. 1985, c. 1 (5th Supp.), as amended,
including the regulations promulgated thereunder;


 


(nn)                          “Information Circular” means the joint information circular - proxy
statement of Global and Challenger, to be dated on or about September 30,
2005, or such other day as mutually agreed between Global and Challenger, to be
mailed to Global Shareholders and Challenger Shareholders in connection with
the holding of the Meetings;


 


(oo)                          “Letter Agreement” means the agreement in writing between
Challenger and Global dated July 26, 2005, in which the terms of the
Amalgamation were initially agreed to;


 


(pp)                          “Material Adverse Change” means any change (or any condition, event or
development involving a prospective change) in the business, operations,
results of operations, assets, capitalization, financial condition, licenses,
permits, rights, liabilities, prospects or privileges, whether contractual or
otherwise, of a party or its subsidiaries which is materially adverse to the
business of that party on a consolidated basis, which shall include, in respect
of each party, a determination by the other party, acting reasonably, following
due investigation, that there exists (a) a material defect or deficiency
in the title to the assets or properties of Challenger or Global, as
applicable, or (b) a previously undisclosed Encumbrance of material
significance on the assets or properties of Challenger or Global; as
applicable, but “Material Adverse Change” shall not include a change resulting
from (i) a matter of which the other party has been advised of in writing
as of the date of this Agreement, or (ii) a change in property prices;
provided however that there will not be deemed to be a Material Adverse Change
unless such change or changes in aggregate relates to one or more adverse
changes from a financial point of view of at least $200,000, in the case of
Global or Challenger, as the case may be;


 


(qq)                          “Material Adverse Effect” means any effect that is, or would
reasonably be expected to be, material and adverse to the business, operations
or financial condition of Global or Challenger, as applicable, on a
consolidated basis; but shall not include an effect resulting from a matter of
which the other party has been advised of in writing as of the date of this
Agreement, provided however that there will not be deemed to be a Material
Adverse Effect unless such effect or effects in aggregate relates to one or
more adverse effects from a financial point of view of at least $200,000, in
the case of Global or Challenger, as the case may be;


 


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(rr)                                “Meetings” means the Challenger Meeting and the Global
Meeting;


 


(ss)                              “misrepresentation” includes any untrue statement of a material
fact, any omission to state a material fact that is required to be stated and
any omission to state a material fact that is necessary to be stated in order
for a statement not to be misleading;


 


(tt)                                “person” includes any individual, partnership, firm,
trust, body corporate, government, governmental body, agency or
instrumentality, unincorporated body of persons or association;


 


(uu)                          “Private Placement” means the private placement of a minimum of
3,000,000 Challenger Shares and a maximum of 5,000,000 Challenger Shares issued
at $0.25 per share, for aggregate proceeds of not less than $650,000 and not
more than $1,250,000;


 


(vv)                          “Related Party” means any officer, director, employee or
consultant of Challenger or any Challenger Subsidiary, and any associate or
Affiliate of any of the foregoing persons;


 


(ww)                      “Shareholders” means the holders of Common Shares;


 


(xx)                          “Subsidiary” means, when used to indicate a relationship
with another body corporate,


 


(i)                                     a body corporate which is controlled by (A) that
other, or (B) that other and one or more bodies corporate, each of which
is controlled by that other, or (C) two or more bodies corporate each of
which is controlled by that other, or


 


(ii)                                  a subsidiary of a body corporate is the other’s
subsidiary; and


 


(yy)                          “TSXV” means the TSX Venture Exchange, Inc.


 


1.2                               The following Exhibit forms part of
this Agreement:


 


Exhibit 1
- Articles of Amalgamation


 


ARTICLE 2


INTERPRETATION


 


2.1                                                                               The division of this Agreement into articles,
sections, subsections and paragraphs and the insertion of headings are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.


 


2.2                                                                               Unless the contrary intention appears,
references in this Agreement to an Article, Section, Subsection, paragraph,
clause, subclause, exhibit or schedule by number or letter or both
refer to the article, section, subsection, paragraph, clause, subclause, exhibit or
schedule, respectively, bearing that designation in this Agreement.


 


2.3                                                                               In this Agreement, unless the contrary
intention appears, words importing the singular include the plural and vice
versa; words importing gender shall include all genders.


 


2.4                                                                               In the event that the date on which any
action is required to be taken hereunder by any of the parties is not a
business day in the place where the action is required to be taken, such action
shall be required to be taken on the next succeeding day which is a business
day in such place.


 


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2.5                                                                               References in this Agreement to any statute
or sections thereof shall include such statute as amended or substituted and
any regulations promulgated thereunder from time to time in effect.


 


2.6                                                                               Unless otherwise stated, all references in
this Agreement to sums of money are expressed in lawful money of Canada.


 


2.7                                                                               All representations, warranties, covenants
and opinions in or contemplated by this Agreement as to the enforceability of
any covenant, agreement or document are subject to enforceability being limited
by applicable bankruptcy, insolvency, reorganization and other laws affecting
creditors rights generally, and the discretionary nature of certain remedies
(including specific performance and injunctive relief).


 


2.8                                                                               All references to the date of this agreement,
“the date hereof” or similar expressions or references shall mean the date
listed on the face page of this Agreement, except as is expressly provided
herein.


 


ARTICLE 3


CHALLENGER’S CLOSING CONDITIONS


 


3.1                                                                               The obligations of Challenger to complete the
transactions contemplated herein are subject to the fulfilment of the following
conditions precedent on or before the Effective Date or such other time as is
specified below:


 


(a)                                 Global shall have permitted Challenger and
its representatives to have made such “due diligence” investigations of the
assets of Global (which, for these purposes, shall include any Subsidiary or
Affiliate of Global) and of its financial and legal condition as Challenger
shall have considered necessary or advisable to familiarize itself with such
assets and such financial and legal condition, and Challenger shall, in its
sole discretion, have been satisfied with the results of its due diligence
investigations of Global;


 


(b)                                 Global shall have continued under the CBCA,
and such representations and warranties made by Global in Section 7.1 of
this Agreement relating to the ABCA shall be true under the CBCA as of the
Effective Date as if made on and as of such date;


 


(c)                                  the representations and warranties made by
Global in Section 7.1 in this Agreement shall be true as of the Effective
Date as if made on and as of such date (except to the extent such
representation and warranty speaks as of a particular date) except where the
failure of such representations and warranties to be true and correct would not
have a Material Adverse Effect on Global. Global shall have provided to
Challenger a certificate of one officer or director of Global certifying as to
such matters on the Effective Date and Challenger shall have no actual
knowledge to the contrary;


 


(d)                                 Global shall have complied in all material
respects with its respective covenants in this Agreement and Global shall have
provided to Challenger a certificate of one officer of Global certifying as to
such compliance and Challenger shall have no actual knowledge to the contrary;


 


(e)                                  there shall not have occurred any actual or
threatened change (including a proposal by the Minister of Finance of Canada to
amend the Income Tax Act (Canada)
or any announcement, governmental or regulatory initiative, condition, event or
development involving a change or a prospective change) that, in the judgment
of Challenger, acting reasonably, directly or indirectly, has or may have
a Material Adverse Effect with respect to Global, or entities in which Global
has


 


6

















 


a
material interest, with respect to the regulatory regime applicable to their
respective businesses and operations or with respect to consummating the
Amalgamation;


 


(f)                                   before giving effect to the transactions
contemplated by this Agreement, there shall have been no Material Adverse
Change, financial or otherwise, in the assets, liabilities, business,
operations, prospects, affairs, capital or financial condition of Global from
that disclosed in the Global Financial Statements and the unaudited financial statements
of Global for the three months ended March 31, 2005, or any occurrences or
circumstances which have resulted or might reasonably be expected to result in
a Material Adverse Change thereto (other than a change due to changes in
general economic conditions (including commodity prices) applicable to
corporations conducting business similar to that of Global);


 


(g)                                  the board of directors of Global shall not
have changed, withdrawn or modified its endorsement of the Amalgamation, its
determination that the Amalgamation is fair and in the best interests of Global
and the Global Shareholders. and its recommendation that Global Shareholders
vote in favour of the Amalgamation;


 


(h)                                 except as contemplated by this Agreement,
Global shall not, from the date of the Letter Agreement to the Effective Date,
without the prior written consent of Challenger, have effected or taken any
steps to effect: (i) an issuance of securities; (ii) a change to its
articles; (iii) a subdivision, consolidation or other change to the
outstanding Global Shares; (iv) the payment of any dividend; (v) any
transaction or action out of the ordinary course of its current business; (vi) the
sale or purchase of any asset; or (vii) any business other than that
necessary to complete the Amalgamation;


 


(i)                                     other than as disclosed to Challenger, Global
shall not have incurred any expenses or liabilities from July 26, 2005
until the Effective Date, other than ordinary course operating expenses, or
those expenses incurred in connection with the transactions contemplated by
this Agreement; and


 


(j)                                    not more than 5% of the issued and
outstanding Global Shares shall have exercised rights of dissent in relation to
the Amalgamation and Global shall have provided to Challenger a certificate of
an officer of Global certifying on the Effective Date the number of Global
Shares in respect of which, to such officer’s knowledge, the holders thereof
have exercised rights of dissent.


 


The
foregoing conditions precedent are for the benefit of Challenger and may be
waived, in whole or in part, by Challenger on behalf of itself in writing at
any time. If any of the said conditions precedent shall not be complied with or
waived by Challenger on or before the date required for the performance
thereof, Challenger may, in addition to the other remedies it may have at
law or equity, rescind and terminate this Agreement by written notice from
Challenger to Global.


 


ARTICLE 4


GLOBAL’S CLOSING CONDITIONS


 


4.1                                                                               The obligation of Global to complete the
transactions contemplated herein is subject to fulfilment of the following
conditions precedent on or before the Effective Date or such other time as is
specified below:


 


(a)                                 Challenger shall have permitted Global and
its representatives to have made such “due diligence” investigations of the
assets of Global (which, for these purposes, shall include any Subsidiary or
Affiliate of Challenger) and of its financial and legal condition as Global
shall have considered necessary or advisable to familiarize itself with such
assets and such financial and legal condition,


 


7

















 


and
Global shall, in its sole discretion, have been satisfied with the results of
its due diligence investigations of Challenger;


 


(b)                                 the representations and warranties made by
Challenger in Section 6.1 hereof shall be true as of the Effective Date as
if made on and as of such date (except to the extent such representations and
warranties speak to a particular date) except where the failure of such
representations and warranties to be true and correct would not have a Material
Adverse Effect on Challenger and Challenger shall have provided to Global a
certificate of one officer or director of Challenger certifying as to such
matters on the Effective Date and Global shall have no knowledge to the
contrary;


 


(c)                                  Challenger shall have complied in all
material respects with its covenants in this Agreement and Challenger shall
have provided to Global a certificate of one officer or director certifying as
to such compliance and Global shall have no actual knowledge to the contrary;


 


(d)                                 as of the Closing Date, the unallocated
working capital of Challenger, prior to the payment of expenses related to the
completion of the Amalgamation, shall not be less than $200,000;


 


(e)                                  there shall not have occurred any actual or
threatened change (including a proposal by the Minister of Finance of Canada to
amend the Income Tax Act (Canada)
or any announcement, governmental or regulatory initiative, condition, event or
development involving a change or a prospective change) that, in the judgment
of Global, acting reasonably, directly or indirectly, has or may have a
Material Adverse Effect with respect to Challenger, or entities in which
Challenger has a material interest, with respect to the regulatory regime
applicable to their respective businesses and operations or with respect to
consummating the Amalgamation;


 


(f)                                   before giving effect to the transactions
contemplated by this Agreement, there shall have been no Material Adverse
Change, financial or otherwise, in the assets, liabilities, business,
operations, prospects, affairs, capital or financial condition of Challenger
from that disclosed in the Challenger Financial Statements or any occurrences
or circumstances which have resulted or might reasonably be expected to result
in a Material Adverse Change thereto (other than a change due to changes in
general economic conditions (including commodity prices) applicable to
corporations conducting business similar to that of Challenger);


 


(g)                                  the board of directors of Challenger shall
not have changed, withdrawn or modified its endorsement of the Amalgamation,
its determination that the Amalgamation is fair and in the best interests of
Challenger and the Challenger Shareholders and its recommendation that
Challenger Shareholders vote in favour of the Amalgamation;


 


(h)                                 except as contemplated by this Agreement,
Challenger shall not, from the date of the Letter Agreement to the Effective
Date, without the prior written consent of Global, have effected or taken any
steps to effect: (i) an issuance of securities; (ii) a change to its
articles; (iii) a subdivision, consolidation or other change to the
outstanding Challenger Shares; (iv) the payment of any dividend; (v) any
transaction or action out of the ordinary course of its current business; (vi) the
sale or purchase of any asset; or (vii) any business other than that
necessary to complete the Amalgamation;


 


(i)                                     other than as disclosed to Global, Challenger
shall not have incurred any expenses or liabilities from July 25, 2005
until the Effective Date, other than ordinary course operating expenses, or
those expenses incurred in connection with the transactions contemplated by
this Agreement; and


 


8

















 


(j)                                    holders of not more than 5% of the issued and
outstanding Challenger Shares shall have exercised rights of dissent in
relation to the Amalgamation and Challenger shall have provided to Global a
certificate of an officer of Challenger certifying on the Effective Date the
number of Challenger Shares in respect of which, to such officer’s knowledge,
the holders thereof have exercised rights of dissent.


 


The
foregoing conditions precedent are for the benefit of Global and may be
waived, in whole or in part, by Global in writing at any time. If any of the
said conditions precedent shall not be complied with or waived by Global on or
before the date required for the performance thereof, Global may, in addition
to the other remedies it may have at law or equity, rescind and terminate
this Agreement by written notice to Challenger.


 


ARTICLE 5


MUTUAL CLOSING CONDITIONS


 


5.1                                                                               The obligations of Global and Challenger to
complete the transactions contemplated herein are subject to fulfilment of the
following conditions precedent on or before the Effective Date or such other
time as is specified below:


 


(a)                                 the Challenger Resolution and the Global
Resolution shall have been passed by the Challenger Shareholders and Global
Shareholders, respectively, on or before the Closing Date on terms satisfactory
to each of Global and Challenger, acting reasonably, and the TSXV, duly
approving the Amalgamation and, in the case of Global, the Change of Business;


 


(b)                                 the Amalgamation shall have become effective
on or before the Closing Date;


 


(c)                                  the Articles of Amalgamation shall be
substantially in the form attached as Exhibit 1 to this Agreement;


 


(d)                                 there shall be no action taken under any
existing Applicable Laws or regulation, nor any statute, rule, regulation or
order which is enacted, enforced, promulgated or issued by any court,
department, commission, board, regulatory body, government or governmental
authority or similar agency, domestic or foreign, that:


 


(i)                                     makes illegal or otherwise directly or
indirectly restrains, enjoins or prohibits the Amalgamation or any other
transactions contemplated herein; or


 


(ii)                                  results in a judgment or assessment of
material damages directly or indirectly relating to the transactions
contemplated herein; and


 


(e)                                  all requisite domestic and foreign regulatory
approvals and consents, including, without limitation, those of the TSXV to the
Amalgamation and the Change of Business, and the listing of the Common Shares
issuable under the Amalgamation, and of securities regulatory authorities in
respect of the Common Shares being freely tradable in Canada without
restriction (other than those associated with “control block” provisions or as
required by the TSXV) or applicable antitrust authorities, shall have been
obtained on terms and conditions satisfactory to Challenger and Global, acting
reasonably, and all applicable domestic and foreign statutory or regulatory
waiting periods to the transactions contemplated under the Amalgamation, shall
have expired or been terminated, and no objection or opposition shall have been
filed, initiated or made by any regulatory authority during any applicable
statutory or regulatory period; and


 


9

















 


(f)                                   Challenger shall have obtained a final
sponsorship report satisfactory in form and substance to both Challenger
and Global, acting reasonably, and the TSXV in accordance with TSXV Policies
2.2 and 5.2.


 


The
foregoing conditions are for the mutual benefit of Global and Challenger and may be
waived, in whole or in part, by Global and Challenger together, at any time. If
any of the said conditions precedent shall not be complied with or waived as
aforesaid on or before the date required for the performance thereof, Global or
Challenger may, in addition to the other remedies it may have at law or in
equity, rescind and terminate this Agreement by written notice to the other
party.


 


ARTICLE 6


CHALLENGER’S REPRESENTATIONS AND WARRANTIES


 


6.1                                                                               Challenger hereby represents and warrants
(and, as applicable, covenants) to Global as follows and acknowledges that
Global is relying upon these representations, warranties and covenants in
connection with the entering into of this Agreement:


 


(a)                                 Challenger is a corporation duly incorporated
and organized and validly existing under the laws of Canada and has the
requisite corporate power and authority to own its properties and conduct its
business as now owned and conducted. Challenger is duly registered to do
business and is in good standing in each jurisdiction in which the character of
its properties, owned or leased, or the nature of its activities make such
registration necessary, except where the failure to be so registered or in good
standing would not have a Material Adverse Effect on Challenger.


 


(b)                                 Challenger has the requisite corporate authority
to enter into this Agreement and all agreements contemplated hereunder and to
carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement and all agreements contemplated hereunder and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by Challenger’s board of directors, and no other corporate
proceedings on the part of Challenger are necessary to authorize this
Agreement or any other agreement contemplated hereunder and the transactions
contemplated hereby and thereby. This Agreement and all agreements contemplated
hereunder have been or will be on or before the Effective Date duly executed
and delivered by Challenger and constitute the legal, valid and binding
obligation of Challenger (if a party thereto) enforceable against Challenger in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws relating to or affecting
creditors’ rights generally, and to general principles of equity.


 


(c)                                  Challenger has the requisite corporate
authority to enter into a farm-out agreement (the “Farm-out Agreement”) with Canadian
Superior Energy Inc. (“Canadian Superior”), a
participation agreement with Canadian Superior (the “Participation Agreement”) and a
farm-out agreement (the “Trinidad Farm-out Agreement”) with
Canadian Superior Trinidad and Tobago Ltd., a wholly-owned subsidiary of
Canadian Superior, and to carry out its obligations under such agreements. The
execution and delivery of the Farm-out Agreement, the Participation Agreement
and the Trinidad Farm-out Agreement and the consummation of the transactions
contemplated thereby have been duly authorized by Challenger’s board of
directors, and no other corporate proceedings on the part of Challenger
are necessary to authorize the Farm-out Agreement, the Participation Agreement
and the Trinidad Farm-out Agreement and the transactions contemplated thereby. The
Farm-out Agreement, the Participation Agreement and the Trinidad Farm-out
Agreement have been duly executed and delivered by Challenger and constitute
the legal, valid and binding obligation of Challenger enforceable against
Challenger in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws relating to or
affecting creditors’ rights generally, and to general principles of equity.


 


10

















 


(d)                                 Except as previously disclosed in writing to
Global, neither the execution and delivery of this Agreement or any other
agreement contemplated hereunder by Challenger, the consummation of the
transactions contemplated hereby and thereby nor compliance by Challenger with
any of the provisions hereof and thereof will: (i) violate, conflict with,
or result in breach of any provision of, require any consent, approval or
notice under, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) or result in a right of termination
or acceleration under, or result in a creation of any Encumbrance upon any of
the properties or assets of Challenger under, any of the terms, conditions or
provisions of (A) the constating documents of Challenger, or (B) any
note, bond, mortgage, indenture, loan agreement, deed of trust, agreement,
lien, contract or other material instrument or obligation to which Challenger
is a party or to it, or any of its properties or assets, may be subject or
by which Challenger is bound; (ii) subject to compliance with the statutes
and regulations referred to in Section 6.1(e), violate any judgement,
ruling, order, writ, injunction, determination, award, decree, statute,
ordinance, rule or regulation applicable to Challenger (except, in the
case of each of clauses (i) and (ii) above, for such violations,
conflicts, breaches, defaults, terminations which, or any consents, approvals
or notices which if not given or received, would not have any Material Adverse
Effect on Challenger or on the ability of Challenger to consummate the
transactions contemplated hereby); or (iii) cause the suspension or
revocation of any authorization, consent, approval or license currently in
effect which would have a Material Adverse Effect on Challenger.


 


(e)                                  Except as previously disclosed in writing to
Global, and other than in connection with or in compliance with the provisions
of Applicable Laws and any pre-merger notification statutes, (i) there is
no legal impediment to Challenger’s consummation of the transactions
contemplated by this Agreement or any agreement contemplated hereunder and (ii) no
filing or registration with, or authorization, consent or approval of, any
domestic or foreign public body or authority is necessary by Challenger in
connection with the making or the consummation of the Amalgamation, except for
such filings or registrations which, if not made, or for such authorizations,
consents or approvals, which, if not received, would not have a Material
Adverse Effect on Challenger or the ability of Challenger to consummate the
transactions contemplated hereby.


 


(f)                                   Challenger has no subsidiaries and does not
have an interest (either directly or indirectly) in any person, nor is it a
party to or bound by any agreement to acquire such an interest.


 


(g)                                  Challenger is not a “reporting issuer” in any
jurisdiction.


 


(h)                                 As of the date hereof and prior to the
completion of the Private Placement, the authorized share capital of Challenger
consists of an unlimited number of Class “A” voting common shares, an
unlimited number of Class “B” voting common shares, an unlimited number of
Class “C” non-voting common shares and an unlimited number of preferred
shares. As of the date hereof, only 15,700,000 Challenger Shares and no others
are issued and outstanding.


 


(i)                                     No person has any agreement or option or
right capable of becoming an agreement for the purchase of any of the
Challenger Shares, except for the Challenger Options, the Challenger Warrants
and the Challenger Shares to be issued in conjunction with the Private Placement.
Other than as disclosed in the preceding sentence, there are no options,
warrants or other rights, agreements or commitments of any character whatsoever
requiring the issuance, sale or transfer by Challenger of any shares of
Challenger (including Challenger Shares) or any securities convertible into, or
exchangeable or exercisable for, or otherwise evidencing a right to acquire,
any shares of Challenger (including Challenger Shares), nor are there any
outstanding stock appreciation rights, phantom equity or similar rights,
agreements, arrangements or commitments based upon the book value, income or
other attribute of Challenger other than the Challenger


 


11

















 


Warrants
and the Challenger Options. All outstanding Challenger Shares have been duly
authorized and validly issued, are fully paid and non-assessable and are not
subject to, nor were they issued in violation of, any pre-emptive rights.


 


(j)                                    To the best of the knowledge of Challenger,
since the date of completion of the Challenger Financial Statements, there has
not been any Material Adverse Change in respect of Challenger.


 


(k)                                 To the best of the knowledge of Challenger,
all material data and information provided by Challenger to Global and its
agents and representatives in connection with this Agreement or for the
purposes of its “due diligence” investigations is complete and true and correct
in all material respects.


 


(l)                                     Except (i) as disclosed or reflected in
the Challenger Financial Statements, and (ii) for liabilities and
obligations (A) incurred in the ordinary course of business and consistent
with past practice, (B) pursuant to the terms of this Agreement, or (C) as
disclosed in writing to Global prior to the date of this Agreement, Challenger
has not incurred any material liabilities of any nature, whether accrued,
contingent or otherwise or which would be required by generally accepted
accounting principles applicable in Canada to be reflected on a consolidated
balance sheet of Challenger as of the date hereof.


 


(m)                             Challenger’s has no Employee Obligations;


 


(n)                                 other than the engagement of Acumen Capital
Partners as sponsor to the Amalgamation in accordance with the policies of the
TSXV, Challenger has not retained nor will it retain any financial advisor,
broker, agent or finder or paid or agreed to pay any financial advisor, broker,
agent or finder on account of this Agreement, any transaction contemplated
hereby or any transaction presently ongoing or contemplated.


 


(o)                                 Since the date of the Letter Agreement,
Challenger has not taken any action that would be in violation of Section 8.1
hereof if such provision had been in effect since such date, other than
violations which would not have any Material Adverse Effect on the business,
operations or financial condition of Challenger and would not materially affect
Challenger’s ability to consummate the transactions contemplated hereby.


 


(p)                                 Challenger will during the term of this
Agreement deliver to Global as soon as reasonably practicable, true and complete
copies of any report or statement filed by it with any securities authority
under Applicable Laws subsequent to the date hereof. As of their respective
dates, such reports and statements (excluding any information therein provided
by Global, as to which Challenger makes no representation) (i) will 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 are made, not misleading, and (ii) will
comply in all material respects with all Applicable Laws. The Challenger
Financial Statements issued by Challenger or to be included in such reports and
statements (excluding any information therein provided by Global, as to which
Challenger makes no representation) will be prepared in accordance with
generally accepted accounting principles in Canada (except in the related
report of Challenger’s independent accountants), and will present fairly the
financial position, results of operations and changes in financial position of
Challenger as of the dates thereof and for the periods indicated therein.


 


(q)                                 The corporate records and minute books of
Challenger have been maintained in accordance with all applicable statutory
requirements and are complete and accurate in all material respects.


 


12

















 


(r)                                    Except as set forth or specifically reflected
in any document disclosed in writing to Global prior to the date hereof, there
is no claim, action, proceeding or investigation pending or, to the knowledge
of Challenger, threatened against or relating to Challenger or affecting any of
its properties or assets before any court or governmental or regulatory
authority or body that, if adversely determined, is likely to have a Material
Adverse Effect on Challenger or prevent or materially delay consummation of the
transactions contemplated by this Agreement or the Amalgamation, nor is
Challenger aware of any basis for any such claim, action, proceeding or
investigation. Challenger is not subject to any outstanding order, writ,
injunction or decree that has had or is reasonably likely to have a Material
Adverse Effect on Challenger or prevent or materially delay consummation of the
transactions contemplated by this Agreement or the Amalgamation.


 


(s)                                   Except as has been disclosed to Global in
writing prior to the date hereof, to the knowledge and belief of Challenger:


 


(i)                                     Neither Challenger nor its properties are in
material violation of any applicable federal, provincial, municipal or local
laws, regulations, orders, government decrees or ordinances with respect to
environmental, health or safety matters (collectively, “Environmental Laws”);


 


(ii)                                  Challenger has operated its business at all
times and has received, handled, used, stored, treated, shipped and disposed of
all contaminants without material violation of Environmental Laws;


 


(iii)                               there have been no releases, deposits or
discharges, in material violation of Environmental Laws, of any hazardous or
toxic substances, contaminants or wastes into the earth, air or into any body
of water or any municipal or other sewer or drain water systems by Challenger;
and


 


(iv)                              no material orders, directions or notices
have been issued and remain outstanding pursuant to any Environmental Laws
relating to the business or assets of Challenger other than abandonment and
similar notices issued in connection with the normal course of business of
Challenger.


 


(t)                                    Challenger is the absolute beneficial owner
of, and has good and marketable title in fee simple to its assets and
properties, free and clear of any and all Encumbrances, except for as disclosed
previously to Global:


 


(u)                                 To the knowledge of Challenger:


 


(i)                                     there are no outstanding work orders, non-compliance
orders, deficiency notices or other such notices relative to any of its
properties, which have been issued by any regulatory authority, environment,
labour, health or other governmental authorities or agencies;


 


(ii)                                  there are no matters under discussion between
Challenger and any such department or authority relating to work orders,
non-compliance orders, deficiency notices or other such notices; and


 


(iii)                               no amounts are owing by Challenger in respect
of any of its properties to any governmental authority or public utility, other
than current accounts which are not in arrears.


 


13

















 


(v)                                 Policies of insurance in force as of the date
hereof naming Challenger as an insured adequately cover all risks reasonably
and prudently foreseeable in the operation and conduct of the business of
Challenger as would be customary in respect of the businesses carried on by
Challenger. All such policies of insurance shall remain in force and effect and
shall not be cancelled or otherwise terminated as a result of the transactions
contemplated hereby or by Amalgamation.


 


(w)                               Other than as disclosed in writing to Global
prior to the date hereof, Challenger:


 


(i)                                     has no defined benefit plans or other
employee benefit plans, and has not made any promises with respect to increased
benefits under such plans;


 


(ii)                                  except as otherwise disclosed herein, is not
a party to any agreement to provide any Challenger Shares or other Challenger
securities (including any securities convertible into or exchangeable or
exercisable for, or otherwise evidencing a right to acquire Challenger Shares)
or to provide any options to acquire Challenger Shares or any other Challenger
securities convertible into or exchangeable or exercisable for, or otherwise
evidencing a right to acquire, Challenger Shares to any person.


 


(x)                                 Challenger is not aware of any defects,
failures or impairments in the title of Challenger to its oil and gas
properties or facilities, which in aggregate could have a Material Adverse
Effect on Challenger, or the anticipated cash flow of Challenger.


 


(y)                                 The head office of Challenger is located at
3300, 400 – 3rd Avenue S.W., Calgary, Alberta, T2P 4H2. The records
office where its books and records are kept is located at 1400, 350 – 7th
Avenue S.W., Calgary, Alberta, T2P 3N9.


 


(z)                                  Except as disclosed in writing to Global
prior to the date hereof, there is no non-competition, exclusivity or other
similar agreement, commitment or understanding in place, whether written or
oral, to which Challenger, or, to the knowledge of Challenger, any director,
officer, employee or consultant or any Affiliate of such persons is a party or
is otherwise bound that would now or hereafter, in any way limit the business
or operations of Challenger:  (a) in
a particular manner or to a particular locality or geographic region, or (b) for
a limited period of time.


 


(aa)                          The execution, delivery and performance of
this Agreement do not and will not result in the restriction of Challenger from
engaging in its business or from competing with any person or in any
geographical area and do not and will not result in a Material Adverse Effect
on its business or trigger or cause to arise any rights of any person under any
contract or arrangement to restrict any of the foregoing from engaging in the
business currently carried on by Challenger.


 


(bb)                          The board of directors of Challenger, upon
consultation with its advisors, has determined that the Amalgamation is fair to
the Challenger Shareholders, that the Amalgamation is in the best interests of
Challenger and Challenger Shareholders, has unanimously approved the
Amalgamation and the entering into of this Agreement and will unanimously
recommend that Challenger Shareholders vote in favour of the Amalgamation.


 


(cc)                            All offers and sales of securities in the
capital of Challenger including, without limitation, the Challenger Shares have
been made in compliance with Applicable Laws.


 


(dd)                          Challenger has conducted and is conducting
its business in compliance in all material respects with all Applicable Laws, rules and
regulations requirements of any governmental or regulatory bodies applicable to
Challenger in each jurisdiction in which it carries on business and holds all
licences, registrations and qualifications material to its business and assets
in all jurisdictions in


 


14

















 


which
it carries on business which are necessary or desirable to carry on the
business of Challenger, as now conducted, and where the failure to so conduct
business or be in such compliance would have a Material Adverse Effect on
Challenger and none of such licences, registrations or qualifications contains
any burdensome term, provision, condition or limitation which has or is likely
to have any Material Adverse Effect on Challenger.


 


(ee)                            All information relating to Challenger in the
Information Circular shall be true and complete in all material respects and
shall not contain any misrepresentation.


 


ARTICLE 7


GLOBAL’S REPRESENTATIONS AND WARRANTIES


 


7.1                                                                               Global hereby represents and warrants (and,
as applicable, covenants) to Challenger as follows and acknowledges that
Challenger is relying upon these representations and warranties in connection
with the entering into of this Agreement:


 


(a)                                 Global is a corporation duly incorporated and
organized and validly existing under the laws of Alberta and has the requisite
corporate power and authority to own its properties and conduct its business as
now owned and conducted. Global is duly registered to do business only in
Alberta;


 


(b)                                 Global has the requisite corporate authority
to enter into this Agreement and all agreements contemplated hereunder and to
carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement and all agreements contemplated hereunder and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by Global’s board of directors, and no other corporate proceedings
on the part of Global are necessary to authorize this Agreement or any
other agreement contemplated hereunder and the transactions contemplated hereby
and thereby. This Agreement and all agreements contemplated hereunder have been
or will be on or before the Effective Date duly executed and delivered by
Global and constitute the legal, valid and binding obligation of Global (if a
party thereto) enforceable against Global in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws relating to or affecting creditors’ rights generally,
and to general principles of equity.


 


(c)                                  Except as previously disclosed in writing to
Challenger, neither the execution and delivery of this Agreement or any other
agreement contemplated hereunder by Global, the consummation of the
transactions contemplated hereby and thereby nor compliance by Global with any
of the provisions hereof and thereof will: (i) violate, conflict with, or
result in breach of any provision of, require any consent, approval or notice
under, or constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default) or result in a right of termination or
acceleration under, or result in a creation of any Encumbrance upon any of the
properties or assets of Global under, any of the terms, conditions or
provisions of (A) the constating documents of Global or (B) any note,
bond, mortgage, indenture, loan agreement, deed of trust, agreement, lien,
contract or other material instrument or obligation to which Global is a party
or to it, or any of its properties or assets, may be subject or by which
Global is bound; (ii) subject to compliance with the statutes and
regulations referred to in Section 7.1(d), violate any judgement, ruling,
order, writ, injunction, determination, award, decree, statute, ordinance, rule or
regulation applicable to Global (except, in the case of each of clauses (i) and
(ii) above, for such violations, conflicts, breaches, defaults,
terminations which, or any consents, approvals or notices which if not given or
received, would not have any Material Adverse Effect on Global or on the
ability of Global to consummate the transactions contemplated hereby); or (iii) cause
the suspension or revocation of any authorization, consent, approval or license
currently in effect which would have a Material Adverse Effect on Global.


 


15

















 


(d)                                 Except as previously disclosed in writing to
Challenger, other than in connection with or in compliance with the provisions
of Applicable Laws, the rules of the TSXV and any pre-merger notification
statutes, (i) there is no legal impediment to Global’s consummation of the
transactions contemplated by this Agreement 
or any agreements contemplated hereunder and (ii) no filing or registration
with, or authorization, consent or approval of, any domestic or foreign public
body or authority is necessary by Global in connection with the making or the
consummation of the Amalgamation, except for such filings or registrations
which, if not made, or for such authorizations, consents or approvals, which,
if not received, would not have a Material Adverse Effect on the ability of
Global to consummate the transactions contemplated hereby.


 


(e)                                  Global is a “reporting issuer” in British
Columbia and Alberta and is in material compliance with all Applicable Laws;
provided, however, that Global is late in holding its annual shareholders’
meeting for 2004.


 


(f)                                   The Global Shares are listed and posted for
trading on the NEX board of the TSXV.


 


(g)                                  As of the date hereof, the authorized capital
of Global consists of an unlimited number of Global Shares. As of the date
hereof 1,586,874 Global Shares are issued and outstanding.


 


(h)                                 No person has any agreement or option or
right capable of becoming an agreement for the purchase of any of the
Challenger Shares, except for an aggregate of up to 300,000 Global Shares (or
Global Shares and warrants to purchase Global Shares) issuable to John Mackay
on conversion of certain outstanding debts of Global in the approximate
aggregate amount of $30,000. Other than as disclosed in the preceding sentence,
as of the date hereof, there are no options, warrants or other rights,
agreements or commitments of any character whatsoever requiring the issuance,
sale or transfer by Global of any Global Shares of or any securities
convertible into, or exchangeable or exercisable for, or otherwise evidencing a
right to acquire, any Global Shares nor are there any outstanding stock
appreciation rights, phantom equity or similar rights, agreements, arrangements
or commitments based upon the book value, income or other attribute of Global. All
outstanding Global Shares have been duly authorized and validly issued, are
fully paid and non-assessable, and all Global Shares to be issued in connection
with the Amalgamation will be duly authorized and validly issued, fully paid
and non-assessable.


 


(i)                                     Since the date of completion of the March 31,
2005 unaudited financial statements of Global, there has not been any Material
Adverse Change with respect to Global.


 


(j)                                    To the best of the knowledge of Global, all
material data and information provided by Global to Challenger and its agents
and representatives in connection with this Agreement or for the purposes of
its “due diligence” investigations  is
complete and true and correct in all material respects.


 


(k)                                 Except (i) as disclosed or reflected in
the Global Financial Statements, and (ii) for liabilities and obligations (A) incurred
in the ordinary course of business and consistent with past practice, (B) pursuant
to the terms of this Agreement, or (C) as disclosed in the Global Public
Documents or writing to Challenger prior to the date of this Agreement, Global
has not incurred any material liabilities of any nature, whether accrued,
contingent or otherwise or which would be required by generally accepted
accounting principles applicable in Canada to be reflected on the balance sheet
of Global as of the date hereof.


 


(l)                                     Global does not have Employee Obligations.


 


16






 













 


(m)                               Since December 31, 2004 and except as
disclosed in the Global Public Documents, Global has not taken any action that
would be in violation of Section 9.1 if such provision had been in effect
since such date, other than violations which would not have any Material
Adverse Effect on Global and would not materially affect Global’s ability to
consummate the transactions contemplated hereby.


 


(n)                                 Global will post to SEDAR a true and complete
copy of the Information Circular relating to the Global Meeting and Global has
posted to SEDAR true and complete copies of; (i) Global’s Information
Circular relating to Global’s 2003 annual meeting of Shareholders and (ii) all
prospectus or other offering documents used by Global in the offering of its
securities or filed with securities authorities since December 31, 2004. As
of their respective dates, such documents (including all exhibits and schedules
thereto and documents incorporated by reference therein) (i) 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, and (ii) complied
in all material respects with Applicable Laws. The audited financial statements
and unaudited interim financial statements of Global publicly issued by Global,
posted to SEDAR were prepared in accordance with generally accepted accounting
principles in Canada (except (i) as otherwise indicated in such financial
statements and the notes thereto or, in the case of audited statements, in the
related report of Global’s independent accountants, or (ii) in the case of
unaudited interim financial statements), and fairly present the financial
position, results of operations and changes in financial position of Global as
of the dates thereof and for the periods indicated therein (subject, in the
case of any unaudited interim financial statements, to normal year-end audit
adjustments).


 


(o)                                 Global will during the term of this Agreement
deliver to Challenger, as soon as reasonably practicable, true and complete
copies of any report or statement filed by it with any securities regulatory
body subsequent to the date hereof. As of their respective dates, such reports
and statements (excluding any information therein provided by Challenger as to
which Global make no representation) (i) will 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 are made, not misleading, and (ii) will
comply in all material respects with all Applicable Laws. The financial
statements of Global issued by Global or to be included in such reports and statements
(excluding any information therein provided by Challenger, as to which Global
make no representation) will be prepared in accordance with generally accepted
accounting principles in Canada (except (i) as otherwise indicated in such
financial statements and the notes thereto or, in the case of audited
statements, in the related report of Global’s independent accounts, or (ii) in
the case of unaudited interim financial statements, to the extent they may not
include footnotes or may be condensed or summary statements) and will
present fairly the financial position, results of operations and changes in
financial position of Global as of the dates thereof and for the periods
indicated therein (subject, in the case of any unaudited interim financial statements,
to normal year-end audit adjustments).


 


(p)                                 The corporate records and minute books of
Global have been maintained in accordance with all applicable statutory
requirements and are complete and accurate in all material respects.


 


(q)                                 Except as set forth or specifically reflected
in any document disclosed in writing to Challenger prior to the date hereof or
in the Global Public Documents, there is no claim, action, proceeding or
investigation pending or, to the knowledge of Global, threatened against or
relating to Global or affecting any of their respective properties or assets
before any court or governmental or regulatory authority or body that, if
adversely determined, is likely to have a Material Adverse Effect on Global or
its subsidiaries, taken as a whole, or prevent or materially delay consummation
of the transactions contemplated by this Agreement or the Amalgamation, nor is


 


17

















 


Global
aware of any basis of any such claim, action, proceeding or investigation. Global
is not subject to any outstanding order, writ, injunction or decree that has
had or is reasonably likely to have a Material Adverse Effect on Global or any
of its subsidiaries, taken as a whole, or prevent or materially delay consummation
of the transactions contemplated by this Agreement or the Amalgamation.


 


(r)                                    All offers and sales of securities in the
capital of Global have been made in compliance with Applicable Laws.


 


(s)                                  Global currently carries on no business,
other than the pursuit of completion of the transactions contemplated by this
Agreement.


 


(t)                                    The head office of Global is located at 306,
908 – 17th Avenue SW, Calgary, Alberta, T2T 0A5. The registered
office is located at 3300, 421 – 7th Avenue S.W., Calgary, Alberta.


 


(u)                                 The execution, delivery and performance of
this Agreement do not and will not result in the restriction of Global from
engaging in its business or from competing with any person or in any
geographical area and do not and will not result in a Material Adverse Effect
on its business or trigger or cause to arise any rights of any person under any
contract or arrangement to restrict any of the foregoing from engaging in the
business currently carried on by Global.


 


(v)                                 The board of directors of Global has determined
that the Amalgamation and the Change of Business are fair to the Global
Shareholders, that the Amalgamation and the Change of Business are in the best
interests of Global and the Global Shareholders, has unanimously approved the
Amalgamation and the Change of Business and the entering into of this Agreement
and will unanimously recommend that Global Shareholders vote in favour of the
Amalgamation and the Change of Business.


 


(w)                               No securities commission or similar
regulatory authority has issued any order preventing or suspending trading of
any securities of Global, and Global is not in default of any requirement of
Applicable Laws where any such default would have any Material Adverse Effect
on Global.


 


(x)                                   The information and statements set forth in
the Global Public Documents were true, correct and complete and did not contain
any misrepresentations, as of their respective dates, no material change has
occurred in relation to Global which is not disclosed in such public record,
and Global has not filed any confidential material change reports which
continue to be confidential.


 


(y)                                 All information relating to Global provided
by Global to Challenger for inclusion in the Information Circular shall be true
and complete in all material respects and shall not contain any
misrepresentation.


 


ARTICLE 8


CHALLENGER’S COVENANTS


 


8.1                                                                                 Challenger covenants and agrees that, until
the Closing or the termination of this Agreement, unless Global shall otherwise
agree in writing, except as required by law or as otherwise expressly permitted
or specifically contemplated by this Agreement:


 


(a)                                  the business of Challenger and other entities
controlled by Challenger shall be conducted only in, and Challenger shall not
take any action except in, the usual and ordinary course of business and
consistent with past practice, and Challenger shall use all commercially
reasonable efforts to


 


18

















 


maintain
and preserve its business organization, assets, employees and advantageous business
relationships;


 


(b)                                 other than pursuant to commitments entered
into by Challenger prior to the date of this Agreement and which have been
disclosed to Global in writing, Challenger shall not, directly or indirectly,
do any of the following (i) sell, pledge, dispose of or encumber any
assets; (ii) acquire (by merger, amalgamation, consolidation or
acquisition of shares or assets) any corporation, partnership or other business
organization or division thereof, or, make any investment either by purchase of
shares or securities, contributions of capital, property transfer, or, except
in the ordinary course of business, purchase of any property or assets of any
other individual or entity, (iii) incur any indebtedness for borrowed
money or any other material liability or obligation or issue any debt
securities or assume, guarantee, endorse or otherwise as an accommodation
become responsible for, the obligations of any other individual or entity, or
make any loans or advances, except in the ordinary course of business; (iv) except
for Employee Obligations if any, payable on the completion of the Amalgamation,
pay, discharge or satisfy any material claims, liabilities or obligations other
than the payment, discharge or satisfaction in the ordinary course of business,
consistent with past practice, of liabilities reflected or reserved against in
its financial statements or incurred in the ordinary course of business
consistent with past practice; (v) authorize, recommend or propose any
release or relinquishment of any material contract right other than in the
ordinary course of business, consistent with past practice; (vi) waive,
release, grant or transfer any rights of material value or modify or change in
any material respect any existing material license, lease, contract or other
document, other than in the ordinary course of business, consistent with past
practice; (vii) other than as contemplated by this Agreement, the Farm-out
Agreement, the Participation Agreement and the Trinidad Farm-out Agreement,
incur any expenditures in excess of $50,000; or (viii) authorize or
propose any of the foregoing, or enter into or modify any contract, agreement,
commitment or arrangement to do any of the foregoing;


 


(c)                                  Challenger shall use its reasonable
commercial efforts to cause its current insurance (or re-insurance) policies
not to be cancelled or terminated or any of the coverage thereunder to lapse,
unless simultaneously with such termination, cancellation or lapse, replacement
policies underwritten by insurance and re-insurance companies of nationally
recognized standing providing coverage equal to or greater than the coverage
under the cancelled, terminated or lapsed policies for substantially similar
premiums are in full force and effect;


 


(d)                                 Challenger shall:


 


(i)                                     use its reasonable commercial efforts, to
preserve intact its business organizations and goodwill, to keep available the
services of its officers and employees as a group and to maintain satisfactory
relationships with suppliers, agents, distributors, customers and others having
business relationships with it;


 


(ii)                                  not take any action that would render, or
that reasonably may be expected to render, any representation or warranty
made by it in this Agreement untrue in any material respect;


 


(iii)                               promptly notify Global orally and in writing
of any Material Adverse Change in respect of Challenger and of any material
governmental or third party complaints, investigations or hearings (or
communications indicating that the same may be contemplated); and


 


(iv)                              confer, prior to taking action (other than in
emergency situations) with Global with respect to all material operational
matters involved in its business;


 


19

















 


(e)                                  Challenger shall not create any new Employee
Obligations other than as agreed between the parties, Challenger shall not
grant to any officer, director or employee an increase in compensation in any
form, grant any general salary increase other than in accordance with the
requirements of any existing collective bargaining or union contracts, grant to
any other employee any increase in compensation in any form other than
routine increases in the ordinary course of business consistent with past
practices, make any loan to any officer, director or employee, or take any
action with respect to the grant of any severance or termination pay (other
than as contemplated herein or as agreed to by Global, acting reasonably)
arising from the Amalgamation or a change of control of Challenger, or enter
into any employment agreement with, any person, or increase any benefits
payable under its current severance or termination pay policies;


 


(f)                                    Challenger shall not adopt or amend or make
any contribution to any bonus, profit sharing, option, pension, retirement,
deferred compensation, insurance, incentive compensation, other compensation or
other similar plan, agreement, trust, fund or arrangements for the benefit of
employees, except as is necessary to comply with the law or with respect to
existing provisions of any such plans, programs, arrangements or agreements;


 


(g)                                 Challenger shall not enter into or modify any
contract, agreement, commitment or arrangement with respect to any of the
matters set forth in this Section 8.1, except as specifically permitted in
this Section 8.1, without the prior consent of Global;


 


(h)                                 it will make available and cause to be made
available to Global, its agents and advisors, as Global may reasonably
request, all documents and agreements (including without limitation, any
correspondence between Challenger and its advisors or any governmental body and
all minute books) and access to Challenger’s premises, records, computer
systems and employees in any way relating to or affecting the business of
Challenger, or the business, operations, prospects, affairs or financial status
of Challenger and such other documents or agreements as may be necessary
to enable Global to verify the truth of the representations and warranties of
Challenger herein and compliance by Challenger with the terms and conditions
hereof, except where Challenger is contractually precluded from making such
document or agreement available, and cooperate with Global in securing access
for Global to any such documentation not in the possession or under the control
of Challenger;


 


(i)                                     it will not disclose to any person, other
than officers, directors and key employees and professional advisors of
Challenger, any confidential information relating to Global except information
disclosed in the Information Circular, required to be disclosed by law or
otherwise known to the public;


 


(j)                                     it will not take any action that would
render, or that may reasonably be expected to render, any representation
or warranty made by Challenger in this Agreement untrue at any time prior to
the Effective Time;


 


(k)                                  it will make other necessary filings and
applications under applicable Canadian federal and provincial laws and
regulations required on the part of Challenger in connection with the
transactions contemplated herein and take all reasonable commercial action
necessary to be in compliance with such laws and regulations;


 


(l)                                     it will promptly advise Global of the number
of Challenger Shares for which Challenger has received notices of dissent or
written objections to the Amalgamation and will provide Global with copies of
such notices or written objections; and


 


20

















 


(m)                               it will conduct its affairs so that all of
Challenger representations and warranties contained herein, in so far as the
accuracy of such representations and warranties constitute a condition of
closing under Section 4.1 shall be true and correct on and as of the date
of Closing as if made thereon.


 


ARTICLE 9


GLOBAL’S COVENANTS


 


9.1                                                                                 Global covenants and agrees that until the
Closing or the termination of this Agreement, whichever is the earlier:


 


(a)                                  the business of Global, shall be conducted
only in, and Global shall not take any action except in, the usual and ordinary
course of business and consistent with past practice, and Global shall use all
commercially reasonable efforts to maintain and preserve its business
organization, assets, employees and advantageous business relationships;


 


(b)                                 other than pursuant to commitments entered
into by Global prior to the date of this Agreement and which have been
disclosed to Challenger in writing, Global shall not, directly or indirectly,
do any of the following (i) sell, pledge, dispose of or encumber any
assets; (ii) acquire (by merger, amalgamation, consolidation or
acquisition of shares or assets) any corporation, partnership or other business
organization or division thereof, or, make any investment either by purchase of
shares or securities, contributions of capital, property transfer, or, except
in the ordinary course of business, purchase of any property or assets of any
other individual or entity, (iii) incur any indebtedness for borrowed
money or any other material liability or obligation or issue any debt
securities or assume, guarantee, endorse or otherwise as an accommodation
become responsible for, the obligations of any other individual or entity, or
make any loans or advances, except in the ordinary course of business; (iv) except
for Employee Obligations if any payable
on the completion of the Amalgamation, pay, discharge or satisfy any material
claims, liabilities or obligations other than the payment, discharge or
satisfaction in the ordinary course of business, consistent with past practice,
of liabilities reflected or reserved against in its financial statements or
incurred in the ordinary course of business consistent with past practice; (v) authorize,
recommend or propose any release or relinquishment of any material contract
right other than in the ordinary course of business, consistent with past
practice; (vi) waive, release, grant or transfer any rights of material
value or modify or change in any material respect any existing material
license, lease, contract or other document, other than in the ordinary course
of business, consistent with past practice; (vii) other than as contemplated by
this Agreement, incur any capital expenditures in excess of $50,000; or (viii) authorize
or propose any of the foregoing, or enter into or modify any contract,
agreement, commitment or arrangement to do any of the foregoing;


 


(c)                                  Global shall not create any new Employee
Obligations other than as agreed between the parties, Global shall not grant to
any officer, director or employee an increase in compensation in any form,
grant any general salary increase other than in accordance with the requirements
of any existing collective bargaining or union contracts, grant to any other
employee any increase in compensation in any form other than routine
increases in the ordinary course of business consistent with past practices,
make any loan to any officer, director or employee, or take any action with
respect to the grant of any severance or termination pay (other than as
contemplated herein or as agreed to by Challenger, acting reasonably) arising
from the Amalgamation or a change of control of Global, or enter into any
employment agreement with, any person, or increase any benefits payable under
its current severance or termination pay policies;


 


(d)                                 Global shall not adopt or amend or make any
contribution to any bonus, profit sharing, option, pension, retirement,
deferred compensation, insurance, incentive compensation, other


 


21

















 


compensation
or other similar plan, agreement, trust, fund or arrangements for the benefit
of employees, except as is necessary to comply with the law or with respect to
existing provisions of any such plans, programs, arrangements or agreements;


 


(e)                                  it will not take any action that would
render, or that may reasonably be expected to render, any representation
or warranty made by Global in this Agreement untrue at any time prior to the
Effective Time;


 


(f)                                    it will promptly advise Challenger of the
number of Global Shares for which Global has received notices of dissent or
written objections to the Amalgamation and will provide Challenger with copies
of such notices or written objections;


 


(g)                                 Global will:


 


(i)                                     use its reasonable commercial efforts to
fulfil or cause the fulfilment of the conditions set forth in Sections 3.1 and
5.1 as soon as reasonably possible to the extent the fulfilment of the same is
within the control of Global;


 


(ii)                                  use its reasonable commercial efforts, to
preserve intact its business organizations and goodwill, to keep available the
services of its officers and employees as a group and to maintain satisfactory
relationships with suppliers, agents, distributors, customers and others having
business relationships with it;


 


(iii)                               not take any action that would render, or
that reasonably may be expected to render, any representation or warranty
made by it in this Agreement untrue in any material respect; and


 


(iv)                              promptly notify the Challenger orally and in
writing of any Material Adverse Change in respect of Global and of any material
governmental or third party complaints, investigations or hearings (or
communications indicating that the same may be contemplated);


 


(h)                                 it will make available and cause to be made
available to Challenger, its agents and advisors, as Challenger may reasonably
request, all documents and agreements (including without limitation, any correspondence
between Global and its advisors or any governmental body and all minute books)
and access to Global’s premises, records, computer systems and employees in any
way relating to or affecting the business of Global, or the business,
operations, prospects, affairs or financial status of Global and such other
documents or agreements as may be necessary to enable Challenger to verify
the truth of the representations and warranties of Global herein and compliance
by Global with the terms and conditions hereof, except where Global is
contractually precluded from making such document or agreement available, and
cooperate with Challenger in securing access for Challenger to any such
documentation not in the possession or under the control of Global;


 


(i)                                     except for proxies and other non-substantive
communications with securityholders, Global will furnish promptly to Challenger
a copy of each notice, report, schedule or other document delivered, filed
or received by Global in connection with (i) the Amalgamation and the
Change of Business, (ii) the Global Meeting, (iii) any filings under
Applicable Laws, and (iv) any dealings with regulatory agencies in
connection with the transactions contemplated herein;


 


(j)                                     will make all other necessary filings and
applications under applicable federal, provincial and state laws and
regulations in Canada required on the part of Global in connection with
the


 


22

















 


transactions
contemplated herein and take all reasonable commercial action necessary to be
in compliance with such laws and regulations; and


 


(k)                                  will conduct its affairs so that all of
Global’s representations and warranties contained herein, insofar as the
accuracy of such representations and warranties constitute a condition of
closing under Subsection 3.1(a), shall be true and correct on and as of
the Effective Date as if made thereon.


 


ARTICLE 10

MUTUAL COVENANTS


 


10.1                                                                           Challenger and Global each mutually covenant
and agree that until the Closing or the termination of this Agreement,
whichever is the earlier, neither Global nor Challenger shall, from the date
hereof to and including the earlier of the Closing Date and the termination of
this Agreement, solicit, initiate, or encourage proposals or offers from any person,
entity or group in connection with: (i) the acquisition by such person,
entity or group of all or substantially all of the issued and outstanding
Challenger Shares or Global Shares, as applicable, or securities convertible or
exchangeable into Challenger Shares or Global Shares, as applicable, (ii) any
amalgamation, merger or sale of all or substantially all of the assets of
Challenger or Global, or any of their respective subsidiaries; (iii) any
take-over bid or other similar business combination involving Challenger or
Global, or any of their respective subsidiaries; or (iv) an issuance of
any securities of Challenger or Global;


 


10.2                                                                           In addition, Challenger and Global each
mutually covenant and agree that until the Closing Date or the Termination of this
Agreement, whichever is earlier:


 


(a)                                  Challenger and Global will each convene the
Meetings and distribute copies of this Agreement (or a written summary thereof
prepared jointly by Challenger and Global);


 


(b)                                 Challenger and Global will each solicit proxies
to be voted at the Meetings in favour of the Amalgamation and the Change of
Business, as applicable; and


 


(c)                                  Challenger and Global will each conduct the
Meetings in accordance with their respective bylaws and any instrument
governing such Meetings, as applicable, and as otherwise required by law.


 


10.3                                                                           Challenger and Global will prepare file and
distribute to the Challenger Shareholders and Global Shareholders,
respectively, in a timely and expeditious manner, the Information Circular, and
any amendments or supplements to the Information Circular, all as required by
Applicable Laws, in all jurisdictions where the same is required complying in
all material respects with all applicable legal requirements on the date of
issue thereof;


 


10.4                                                                           Global and Challenger will include in the
Information Circular the unanimous recommendation of the board of directors of
Challenger and Global that the Challenger Shareholders and Global Shareholders
vote in favour of the Amalgamation, and in the case of the Global Shareholders
the Amalgamation and the Change of Business;


 


10.5                                                                           Except for proxies and other non-substantive
communications with securityholders, Challenger and Global will each furnish
promptly to the other a copy of each notice, report, schedule or other document
delivered, filed or received by Challenger or Global in connection with (i) the
Amalgamation and the Change of Business, (ii) the Meeting, (iii) any
filings under Applicable Laws, and (iv) any dealings with regulatory
agencies in connection with the transactions contemplated herein;


 


23

















 


10.6                                                                           Challenger and Global agree that all
currently outstanding Challenger Warrants and Challenger Options or other
convertible securities shall rollover to become Amalco Warrants or Amalco
Options or other convertible securities, respectively, having regard for the 1
to 1 exchange ratio set forth in Article 14.1 herein.


 


10.7                                                                           Challenger and Global agree that in
conjunction with the Closing, Challenger will be permitted to nominate those
individuals who will comprise the board of directors and management of Amalco
on a going-forward basis as set out in Section 12.2 herein.


 


ARTICLE 11

AMALGAMATION


 


11.1                                                                           Challenger and Global hereby agree to
amalgamate pursuant to the provisions of the ABCA and to continue as one
corporation on the terms and conditions set forth in this Agreement.


 


11.2                                                                           On the Effective Date, subject to the ABCA
and the specific terms and provisions of this Agreement:


 


(a)                                  the amalgamation of Challenger and Global and
their continuation as one corporation, Amalco, under the terms and conditions
prescribed in this Agreement shall be effective;


 


(b)                                 the property of each of Challenger and Global
shall continue to be the property of Amalco;


 


(c)                                  Amalco shall continue to be liable for the
obligations of each of Challenger and Global;


 


(d)                                 any existing cause of action, claim or
liability to prosecution with respect to either or both of Challenger or Global
shall be unaffected;


 


(e)                                  any civil, criminal or administrative action
or proceeding pending by or against Challenger or Global may be continued
to be prosecuted by or against Amalco; and


 


(f)                                    any conviction against, or ruling, order or
judgment in favour of or against, Challenger or Global may be enforced by
or against Amalco.


 


ARTICLE 12

AMALCO


 


12.1                                                                           Certain provisions applicable to Amalco:


 


(a)                                  The name of Amalco shall be “Challenger
Energy Corp.”;


 


(b)                                 The registered office of Amalco shall be
located at Burnet, Duckworth & Palmer LLP, 1400, 350 — 7th
Ave. S.W., Calgary, Alberta T2P 3N9;


 


(c)                                  Amalco shall be authorized to issue an
unlimited number of common shares as well as an unlimited number of first and
second preferred shares, which shall have the rights, privileges, restrictions
and conditions set forth in the Articles of Amalgamation;


 


(d)                                 The minimum number of directors of Amalco
shall be three (3) and the maximum number of directors of Amalco shall be
eleven (11);


 


(e)                                  There shall be no restrictions on the right
to transfer any shares of Amalco as set forth in the Articles of Amalgamation;
and


 


24

















 


(f)                                    There shall be no restriction on the business
that Amalco may carry on.


 


12.2                                                                           Amalco Directors


 


(a)                                  The first directors of Amalco, all of whom
are resident Canadians, shall be the persons whose names and addresses appear
below:


 


	
  Name

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
  Greg Noval

  	
   

  	
  P.O. Box 447

  Turner Valley, Alberta T0L 2A0

  
	
   

  	
   

  	
   

  
	
  Neil MacKenzie

  	
   

  	
  1577 – 73rd
  Street SW

  Calgary, Alberta T3H 3X1

  
	
   

  	
   

  	
   

  
	
  Jim Brown

  	
   

  	
  PMB 339 109B, 5095
  Napilihau Street,

  Lahaina, Hawaii 96761

  
	
   

  	
   

  	
   

  
	
  Joe Chatoor

  	
   

  	
  18 Goodwood Ridge,
  Goodwood Park,

  Trinidad & Tobago

  
	
   

  	
   

  	
   

  
	
  Mike Hibberd

  	
   

  	
  24226 Aspen Drive

  Calgary, Alberta T3R 1A4

  



 


(b)                                 The first directors of Amalco shall hold
office until the first annual meeting of the shareholders of Amalco or until
their successors are duly elected or appointed.


 


12.3                                                                           Certificates


 


On
the Effective Date:


 


(a)                                  upon surrender to the Depositary of the
certificates representing Challenger Shares held by the Challenger
Shareholders, other than Dissenting Shareholders, the registered holders of
Challenger Shares shall be entitled to receive one (1) Amalco Share for
every one (1) Challenger Share, as set forth in Article 14 of this
Agreement;


 


(b)                                 upon surrender of the certificates
representing the Global Shares held by Global Shareholders, other than
Dissenting Shareholders, the registered holders of Global Shares shall be
entitled to receive one (1) Amalco Share for every one (1) Global
Share, as set forth in Article 14 of this Agreement;


 


(c)                                  each outstanding convertible security of
Challenger will be exchanged for a comparable convertible security of Amalco,
having regard for the 1 to 1 exchange ratio set forth above;


 


(d)                                 fractional Amalco Shares will not be issued
to holders of Global Shares or Challenger Shares. Where the exchange ratio
would have less result in the holder of Global Shares or Challenger Shares
being entitled to receive a fractional Amalco Share, such holder will be
entitled to receive the next greater whole number of Amalco Shares. In
calculating such fractional interest, all shares held be a beneficial holder
shall be aggregated; and


 


(e)                                  the share certificates evidencing Challenger
Shares or Global Shares shall cease to represent any claim upon or interest in
Challenger or Global or Amalco other than the right of the holder to receive,
pursuant to the terms hereof and the Amalgamation, Common Shares in accordance
with Article 14 hereof.


 


25

















 


12.4                                                                           The first auditors of Amalco shall be Meyers
Norris Penny LLP, Chartered Accountants, Calgary, Alberta, which shall hold
office until the first annual meeting of Amalco following the Amalgamation or
until their successors are elected or appointed.


 


12.5                                                                           Amalco shall adopt new by-laws on terms
mutually agreed between Challenger and Global, acting reasonably.


 


ARTICLE 13


ARTICLES OF AMALGAMATION


 


13.1                                                                           Challenger and Global hereby agree that the
articles of amalgamation of Amalco shall be the Articles of Amalgamation.


 


13.2                                                                           Subject to the provisions hereof, Challenger
and Global will jointly file, with the Director, the Articles of Amalgamation
of Amalco and such other documents as may be required by the Act to give
effect to the Amalgamation as contemplated herein on the Closing Date.


 


ARTICLE 14


EFFECT OF THE AMALGAMATION


 


14.1                                                                           Subject to Section 14.2 hereof, on the
Effective Date:


 


(a)                                  each Challenger Shareholder, other than
Dissenting Shareholders, shall receive one (1) Amalco Common Share for
each one (1) Challenger Share held by such Challenger Shareholder;


 


(b)                                 each Global Shareholder, other than
Dissenting Shareholders, shall receive one (1) Amalco Common Share for
each one (1) Global Share held by such Global Shareholder;


 


(c)                                  each outstanding convertible security of
Global and Challenger will be exchanged for a comparable convertible security
of Amalco, having regard for the exchange ratios set forth above;


 


(d)                                 fractional Amalco Shares will not be issued
to holders of Global Shares or Challenger Shares. Where the exchange ratio would
have less result in the holder of Global Shares or Challenger Shares being
entitled to receive a fractional Amalco Share, such holder will be entitled to
receive the next greater whole number of Amalco Shares. In calculating such
fractional interest, all shares held by a beneficial holder shall be
aggregated; and


 


(e)                                  notwithstanding the provisions of this Article 14,
all Challenger Shares and Global Shares held by or on behalf of Challenger or
Global immediately prior to the Closing Time on the Effective Date and pursuant
to the Amalgamation shall be cancelled without reimbursement to Challenger or
Global for the capital represented by such Challenger Shares or Global Shares.


 


14.2                                                                           On the Effective Date:


 


(a)                                  the registers of transfer for the Challenger Shares
and Global Shares shall be closed;


 


(b)                                 subject to Section 14.1, the registered
holders of Challenger Shares and Global Shares shall cease to be holders of
Challenger Shares or Global Shares, respectively.


 


26

















 


ARTICLE 15

TERMINATION


 


15.1                                                                           Notwithstanding any other rights contained
herein, either Global or Challenger may terminate this Agreement upon
notice to the other party:


 


(a)                                  if the Amalgamation has not become effective
on or before November 30, 2005, or such other date as may be agreed
to by Challenger and Global;


 


(b)                                 in the event that the board of directors of
Challenger or of Global changes, withdraws or modifies its recommendation to
Challenger Shareholders and Global Shareholders, respectively, to vote in
favour of the Amalgamation; or


 


(c)                                  upon any other circumstances hereunder that
give rise to a termination of this agreement by Global or Challenger, including
those set forth in Sections 3.1, 4.1 and 5.1 hereof.


 


15.2                                                                           The exercise by any party of any right of
termination hereunder shall be without prejudice to any other remedy available
to such party.


 


ARTICLE 16


ADDITIONAL AGREEMENTS


 


16.1                                                                           Subject to the termination of this Agreement
as provided in Article 15, the Closing will take place at the offices of
Burnet, Duckworth & Palmer LLP on the Closing Date and at a time to be
mutually agreed upon by the parties, which date shall be no later than the
first business day after all conditions to Closing set forth herein shall have
been satisfied or waived, unless another place, time and date is mutually
selected by Global and Challenger. Each of Global and Challenger hereby agree
to use their reasonable best efforts to cause their respective legal counsel to
render opinions, dated as of the Effective Date, in respect of such matters
related to the transactions contemplated by this Agreement and the Amalgamation
as may be reasonably requested by the other party. Concurrently with the
Closing, the Amalgamation will be filed with the Director under the CBCA.


 


16.2                                                                           Provided all other conditions of this
Agreement have been satisfied or waived, Challenger shall, on the Effective
Date, file Articles of Amalgamation pursuant to Section 184 of the CBCA to
give effect to the Amalgamation.


 


16.3                                                                           Global agrees that all rights to
indemnification existing in favour of the present or former directors and
officers of Challenger (as such) or present or former directors and officers
(as such) of Challenger serving or who served at Challenger’s request as a
director, officer, employee, agent or representative of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
(each such present or former director or officer of Challenger an “Indemnified Party”),
as provided by contract or in Challenger’s charter or bylaws in effect as of
the date hereof with respect to matters occurring prior to the Effective Date,
shall survive and shall continue in full force and effect and without
modification for a period of not less than the statutes of limitations
applicable to such matters.


 


ARTICLE 17

AMENDMENT


 


17.1                                                                           Any term or provision of this Agreement may be
amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a writing signed by the party to be bound thereby which
writing expressly refers to this Agreement and the operation of the provisions
of Article 17.1. The waiver by a party of any


 


27

















 


breach hereof or default in
the performance hereof will not be deemed to constitute a waiver of any other
default or any succeeding breach or default. This Agreement may be amended
by the parties hereto at any time before or after approval of the Challenger
Shareholders but, after such approval, no amendment will be made which by
Applicable Laws requires the further approval of the Challenger Shareholders
without obtaining such further approval.


 


ARTICLE 18

COSTS


 


18.1                                                                           Except as contemplated in the Amalgamation
and herein, Challenger covenants and agrees to bear the reasonable costs and
expenses in connection with the transactions contemplated hereby.


 


ARTICLE 19

DISCLOSURE


 


19.1                                                                           Upon execution of this Agreement, the parties
hereto shall issue a joint press release which announces that the parties
hereto have entered into a formal agreement providing for the implementation of
the Amalgamation. No party hereto shall disclose, by press release, any aspect
of the transactions contemplated hereby, without prior written consent of the
other party. Notwithstanding the foregoing, if either party is required by law
or administrative regulation to make any disclosure relating to the
transactions contemplated herein, such disclosure may be made, but that
party will inform, to the extent reasonably feasible, the other party as to the
wording of such disclosure prior to its being made.


 


ARTICLE 20

MISCELLANEOUS


 


20.1                                                                           Any notice, consent, waiver, direction or
other communication required or permitted to be given under this Agreement by a
party to any other party shall be in writing and may be given by
delivering same or sending same by facsimile transmission or by hand delivery
addressed to the party to whom the notice is to be given at its address for
service herein. Any notice, consent, waiver, direction or other communication
aforesaid shall, if delivered, be deemed to have been given and received on the
date on which it was delivered to the address provided herein (if a business
day and, if not, the next succeeding business day) if actually received prior
to 4:00 p.m. at the point of delivery and if sent by facsimile
transmission be deemed to have been given and received at the time of receipt
unless actually received after 4:00 p.m. at the point of delivery in which
case it shall be deemed to have been given and received on the next business
day. The address for service of each of the parties hereto shall be as follows:


 


if
to Challenger:


 


Challenger
Energy Corp.


3300,
400 – 3rd Avenue S.W.


Calgary,
Alberta


T2P
4H2


Telecopier No.:               (403) 503-8811


Attention:                                         Neil Mackenzie


 


28

















 


with
a copy to:


 


Burnet,
Duckworth & Palmer LLP


Suite 1400,
350 – 7th Avenue S.W.


Calgary,
Alberta


T2P
3N9


Telecopier No.:               (403) 260-0337


Attention:                                         J.G. (Jeff) Lawson


 


if
to Global:


 


Global
Express Energy Inc.


306,
908 – 17th Avenue SW


Calgary,
Alberta


T2T
0A5


Telecopier No.:               (403) 234-9978


Attention:                                         John Mackay


 


with
a copy to:


 


McCarthy
Tetrault LLP


3300,
421 – 7th Avenue S.W.


Calgary,
Alberta


T2P
4K9


Telecopier No.:               (403) 260-3501


Attention:                                         David Phillips


 


20.2                                                                           Time shall be of the essence in this
Agreement.


 


20.3                                                                           This Agreement, which includes the Exhibits
and Schedules hereto between Global and Challenger and any other documents
referred to herein or contemplated hereby (a) constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof; (b) are not
intended to confer upon any other person any rights or remedies
hereunder (except that

Article 16.3 is for the benefit of Challenger’s directors and
officers and is intended to confer rights on such persons); and (c) shall
not be assigned by operation of law or otherwise except as otherwise
specifically provided.


 


20.4                                                                           If any one or more of the provisions or parts
thereof contained in this Agreement should be or become invalid, illegal or
unenforceable in any respect in any jurisdiction, the remaining provisions or
parts thereof contained herein shall be and shall be conclusively deemed to be,
as to such jurisdiction, severable therefrom and:


 


(a)                                  the validity, legality or enforceability of
such remaining provisions or parts thereof shall not in any way be affected or
impaired by the severance of the provisions or parts thereof severed; and


 


(b)                                 the invalidity, illegality or
unenforceability of any provision or part thereof contained in this
Agreement in any jurisdiction shall not affect or impair such provision or part thereof
or any other provisions of this Agreement in any other jurisdiction.


 


20.5                                                                           Each party hereto shall, from time to time,
and at all times hereafter, at the request of the other party hereto, but
without further consideration, do all such further acts and execute and deliver
all


 


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such further documents and
instruments as shall be reasonably required in order to fully perform and
carry out the terms and intent hereof.


 


20.6                                                                           This Agreement shall be governed by, and be
construed in accordance with, the laws of the Province of Alberta and
Applicable Laws of Canada but the reference to such laws shall not, by conflict
of laws rules or otherwise, require the application of the law of any
jurisdiction other than the Province of Alberta. Each party hereto hereby
irrevocably attorns to the exclusive jurisdiction of the Courts of the Province
of Alberta in respect of all matters arising under or in relation to this
Agreement.


 


20.7                                                                           This Agreement may be executed in
identical counterparts, each of which is and is hereby conclusively deemed to
be an original, including any counterpart transmitted by facsimile, and
counterparts collectively are to be conclusively deemed one instrument.


 


20.8                                                                           No waiver by any party hereto shall be
effective unless in writing and any waiver shall affect only the matter, and
the occurrence thereof, specifically identified and shall not extend to any
other matter or occurrence.


 


20.9                                                                           This Agreement shall enure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns. This Agreement may not be assigned by any party hereto without
the prior consent of the other party hereto.


 


IN
WITNESS WHEREOF the parties hereto have executed this Agreement.


 


 


	
   

  	
  GLOBAL EXPRESS ENERGY
  INC.

  
	
   

  	
   

  
	
   

  	
  Per:

  	
   /s/ John Mackay

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CHALLENGER ENERGY CORP.

  
	
   

  	
   

  
	
   

  	
  Per:

  	
   /s/ Neil Mackenzie

  



 


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[Schedules intentionally deleted]