Exhibit
10.1


POGO ALBERTA, ULC


-and-


POGO PRODUCING COMPANY


-and-


NORTHROCK RESOURCES LTD.


-and-


1325156 ALBERTA LTD.


-and-


ABU DHABI NATIONAL ENERGY COMPANY PJSC


 








SHARE PURCHASE AGREEMENT


May 28, 2007




















SHARE PURCHASE AGREEMENT


TABLE OF CONTENTS


	
  Article 1 DEFINITIONS AND INTERPRETATION

  	
   

  	
  2

  
	
  1.1

  	
  Definitions

  	
   

  	
  2

  
	
  1.2

  	
  Certain Rules of Interpretation

  	
   

  	
  17

  
	
  1.3

  	
  Knowledge

  	
   

  	
  18

  
	
  1.4

  	
  Entire Agreement

  	
   

  	
  19

  
	
  1.5

  	
  Applicable Law

  	
   

  	
  19

  
	
  1.6

  	
  Accounting Principles

  	
   

  	
  19

  
	
  1.7

  	
  Disclosure

  	
   

  	
  19

  
	
  1.8

  	
  Schedules

  	
   

  	
  20

  
	
  1.9

  	
  Interpretation if Closing Does Not Occur

  	
   

  	
  20

  
	
  1.10

  	
  Conflicts

  	
   

  	
  21

  
	
  1.11

  	
  Guarantees

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 2 PURCHASE AND SALE

  	
   

  	
  21

  
	
  2.1

  	
  Actions by Vendor and Purchaser Regarding Purchase

  	
   

  	
  21

  
	
  2.2

  	
  Place of Closing

  	
   

  	
  22

  
	
  2.3

  	
  Tender

  	
   

  	
  22

  
	
  2.4

  	
  Right to Withhold

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 3 PURCHASE PRICE

  	
   

  	
  22

  
	
  3.1

  	
  Share Purchase Price

  	
   

  	
  22

  
	
  3.2

  	
  Payment of Purchase Price

  	
   

  	
  22

  
	
  3.3

  	
  Purchaser Subscription Payment

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 4 REPRESENTATIONS AND WARRANTIES OF
  VENDOR AND THE VENDOR GUARANTOR

  	
   

  	
  23

  
	
  4.1

  	
  Incorporation and Registration

  	
   

  	
  23

  
	
  4.2

  	
  Right to Sell

  	
   

  	
  24

  
	
  4.3

  	
  Capitalization

  	
   

  	
  25

  
	
  4.4

  	
  Corporation and Subsidiaries

  	
   

  	
  25

  
	
  4.5

  	
  Due Authorization

  	
   

  	
  26

  
	
  4.6

  	
  Residence of Vendor

  	
   

  	
  27

  
	
  4.7

  	
  Enforceability of Obligations

  	
   

  	
  27

  
	
  4.8

  	
  No Other Advisors or Consultants

  	
   

  	
  27

  
	
  4.9

  	
  Government Authorizations

  	
   

  	
  27

  
	
  4.10

  	
  Benefit Plans and Labour Matters

  	
   

  	
  28

  
	
  4.11

  	
  Financial Statements

  	
   

  	
  29

  
	
  4.12

  	
  Business Carried on in the Ordinary Course

  	
   

  	
  29

  
	
  4.13

  	
  Environmental Matters

  	
   

  	
  29

  
	
  4.14

  	
  Assets

  	
   

  	
  30

  
	
  4.15

  	
  Material Obligations

  	
   

  	
  32

  
	
  4.16

  	
  Litigation

  	
   

  	
  33

  
	
  4.17

  	
  Intellectual Property

  	
   

  	
  33

  
	
  4.18

  	
  Taxes

  	
   

  	
  33

  
	
  4.19

  	
  Absence of Certain Changes

  	
   

  	
  36

  
	
  4.20

  	
  Certain Contracts, Agreements, Plans and Commitments

  	
   

  	
  36

  
	
  4.21

  	
  Operation of Assets

  	
   

  	
  37

  



 













 


	
  4.22

  	
  Books and
  Records

  	
   

  	
  37

  
	
  4.23

  	
  Corporate
  Registers

  	
   

  	
  38

  
	
  4.24

  	
  U.S. Business
  Activities

  	
   

  	
  38

  
	
  4.25

  	
  Distributions

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  Article
  5 REPRESENTATIONS AND WARRANTIES OF PURCHASER

  	
   

  	
  38

  
	
  5.1

  	
  Incorporation

  	
   

  	
  38

  
	
  5.2

  	
  Due
  Authorization

  	
   

  	
  38

  
	
  5.3

  	
  Enforceability
  of Obligations

  	
   

  	
  39

  
	
  5.4

  	
  Investment
  Canada

  	
   

  	
  39

  
	
  5.5

  	
  Government
  Authorizations

  	
   

  	
  39

  
	
  5.6

  	
  Brokers

  	
   

  	
  40

  
	
  5.7

  	
  Purchaser as
  Principal

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  Article
  6 REGARDING REPRESENTATIONS, WARRANTIES AND COVENANTS

  	
   

  	
  40

  
	
  6.1

  	
  Materiality

  	
   

  	
  40

  
	
  6.2

  	
  Nature of
  Survival of Vendor’s Representations, Warranties, Covenants and Indemnities
  and Limitations on Claims

  	
   

  	
  41

  
	
  6.3

  	
  Nature of
  Survival of Purchaser’s Representations, Warranties, Covenants and
  Indemnities

  	
   

  	
  42

  
	
  6.4

  	
  No Consequential
  Damages

  	
   

  	
  42

  
	
  6.5

  	
  No Other
  Representations, Warranties or Covenants of Vendor

  	
   

  	
  43

  
	
  6.6

  	
  No Other
  Representation, Warranties or Covenants of Purchaser

  	
   

  	
  44

  
	
  6.7

  	
  Restrictions on
  Claims and Actions

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  Article
  7 PURCHASER’S CONDITIONS

  	
   

  	
  45

  
	
  7.1

  	
  Correctness and
  Accuracy of Representations and Warranties

  	
   

  	
  45

  
	
  7.2

  	
  Performance of
  Obligations

  	
   

  	
  46

  
	
  7.3

  	
  Governmental
  Approvals, Consents, and Authorizations

  	
   

  	
  46

  
	
  7.4

  	
  Other Consents
  and Approvals

  	
   

  	
  46

  
	
  7.5

  	
  No Injunctions
  or Restraints

  	
   

  	
  46

  
	
  7.6

  	
  Vendor’s Closing
  Deliveries

  	
   

  	
  46

  
	
  7.7

  	
  Termination of
  Debenture-Related Agreements

  	
   

  	
  48

  
	
  7.8

  	
  Material Damage

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  Article
  8 VENDOR’S CONDITIONS

  	
   

  	
  48

  
	
  8.1

  	
  Correctness and
  Accuracy of Representations and Warranties

  	
   

  	
  48

  
	
  8.2

  	
  Performance of
  Obligations

  	
   

  	
  48

  
	
  8.3

  	
  Governmental
  Approvals, Consents, and Authorizations

  	
   

  	
  49

  
	
  8.4

  	
  Other Consents
  and Approvals

  	
   

  	
  49

  
	
  8.5

  	
  No Injunctions
  or Restraints

  	
   

  	
  49

  
	
  8.6

  	
  Purchaser’s
  Closing Deliveries

  	
   

  	
  49

  
	
  8.7

  	
  Termination of
  Debenture-Related Agreements

  	
   

  	
  50

  
	
  8.8

  	
  Deposit

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  Article
  9 OTHER COVENANTS

  	
   

  	
  50

  
	
  9.1

  	
  Conduct of
  Business Prior to Closing

  	
   

  	
  50

  
	
  9.2

  	
  Negative Covenants

  	
   

  	
  51

  
	
  9.3

  	
  Dealings or
  Operations Regarding Assets

  	
   

  	
  53

  
	
  9.4

  	
  Intercorporate
  Obligations

  	
   

  	
  54

  
	
  9.5

  	
  Access to Books
  and Records and Other Assets

  	
   

  	
  55

  
	
  9.6

  	
  Confidentiality

  	
   

  	
  56

  



 



 ii
 









 


	
  9.7

  	
  Actions to Satisfy Closing Conditions

  	
   

  	
  57

  
	
  9.8

  	
  Preservation of Records

  	
   

  	
  57

  
	
  9.9

  	
  Competition Act Filing and Investment Canada Act
  Filing

  	
   

  	
  57

  
	
  9.10

  	
  Notice

  	
   

  	
  58

  
	
  9.11

  	
  Assignment of Confidentiality Agreements

  	
   

  	
  59

  
	
  9.12

  	
  Insurance

  	
   

  	
  59

  
	
  9.13

  	
  Employee Related Matters

  	
   

  	
  60

  
	
  9.14

  	
  Consent to Jurisdiction

  	
   

  	
  60

  
	
  9.15

  	
  Purchase Not Conditional on Financing

  	
   

  	
  61

  
	
  9.16

  	
  Compliance with Privacy Laws

  	
   

  	
  61

  
	
  9.17

  	
  Bank Accounts

  	
   

  	
  62

  
	
  9.18

  	
  Reserve Report

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 10 INDEMNIFICATION

  	
   

  	
  62

  
	
  10.1

  	
  Mutual Indemnifications for Breaches of Covenants
  and Warranties

  	
   

  	
  62

  
	
  10.2

  	
  Procedures Relating to Indemnification Between
  Vendor and Purchaser

  	
   

  	
  64

  
	
  10.3

  	
  Indemnification Procedures for Third Party Claims

  	
   

  	
  65

  
	
  10.4

  	
  Holding of Indemnities

  	
   

  	
  66

  
	
  10.5

  	
  Claims Net of Insurance and Taxes

  	
   

  	
  67

  
	
  10.6

  	
  Mitigation

  	
   

  	
  67

  
	
  10.7

  	
  Adjustment to Purchase Price

  	
   

  	
  67

  
	
  10.8

  	
  Subrogation

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 11 tax matters

  	
   

  	
  68

  
	
  11.1

  	
  Liabilities for Taxes

  	
   

  	
  68

  
	
  11.2

  	
  Tax Returns

  	
   

  	
  69

  
	
  11.3

  	
  Confidentiality of Tax Information

  	
   

  	
  70

  
	
  11.4

  	
  Section 338 Election

  	
   

  	
  71

  
	
  11.5

  	
  Tax Claims

  	
   

  	
  71

  
	
  11.6

  	
  Assistance and Cooperation

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 12 TERMINATION AND CLOSING

  	
   

  	
  73

  
	
  12.1

  	
  Termination

  	
   

  	
  73

  
	
  12.2

  	
  Regarding Termination by Purchaser

  	
   

  	
  73

  
	
  12.3

  	
  Regarding Termination by Vendor

  	
   

  	
  73

  
	
  12.4

  	
  Deposit

  	
   

  	
  74

  
	
  12.5

  	
  Notice of Termination

  	
   

  	
  74

  
	
  12.6

  	
  Effect of Termination

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 13 GENERAL

  	
   

  	
  75

  
	
  13.1

  	
  Non-Waiver

  	
   

  	
  75

  
	
  13.2

  	
  Public Notices

  	
   

  	
  75

  
	
  13.3

  	
  Assignment

  	
   

  	
  76

  
	
  13.4

  	
  Notices

  	
   

  	
  76

  
	
  13.5

  	
  Further Assurances

  	
   

  	
  77

  
	
  13.6

  	
  No Recourse

  	
   

  	
  78

  
	
  13.7

  	
  Time of the Essence

  	
   

  	
  78

  
	
  13.8

  	
  Amendment

  	
   

  	
  78

  
	
  13.9

  	
  Invalidity

  	
   

  	
  78

  
	
  13.10

  	
  Counterparts

  	
   

  	
  78

  
	
  13.11

  	
  Enforcement

  	
   

  	
  78

  
					



 



 iii
 









 


	
  13.12

  	
  No Third-Party Beneficiaries

  	
   

  	
  79

  
	
  13.13

  	
  Expenses

  	
   

  	
  79

  



 



 iv
 









SCHEDULES


	
  Schedule 1.1(a)

  	
   

  	
  Escrow Agreement

  
	
  Schedule 1.3

  	
   

  	
  Knowledge Individuals

  
	
  Schedule 4.2(e)

  	
   

  	
  Share and Debenture Related Issuances

  
	
  Schedule 4.4(a)

  	
   

  	
  Additional Holdings

  
	
  Schedule 4.4(c)

  	
   

  	
  Subsidiaries

  
	
  Schedule 4.5(e)

  	
   

  	
  Defaults Due to this Agreement

  
	
  Schedule 4.5(g)

  	
   

  	
  Encumbrances

  
	
  Schedule 4.5(h)

  	
   

  	
  Change of Control Provisions

  
	
  Schedule 4.10

  	
   

  	
  Benefit Plans

  
	
  Schedule 4.12

  	
   

  	
  Business Carried on in the Ordinary Course

  
	
  Schedule 4.13

  	
   

  	
  Environmental Matters

  
	
  Schedule 4.14(c)

  	
   

  	
  Notice of Defaults

  
	
  Schedule 4.14(c)

  	
   

  	
  Government Proceedings

  
	
  Schedule 4.14(e)

  	
   

  	
  Authorizations for Expenditure

  
	
  Schedule 4.14(g)

  	
   

  	
  Marketing and Transportation Agreements

  
	
  Schedule 4.14(h)

  	
   

  	
  Futures Transactions

  
	
  Schedule 4.15

  	
   

  	
  Material Contracts and Liabilities

  
	
  Schedule 4.15(d)

  	
   

  	
  Indebtedness

  
	
  Schedule 4.16

  	
   

  	
  Open Litigation Claims

  
	
  Schedule 4.17

  	
   

  	
  Intellectual Property

  
	
  Schedule 4.18(a)

  	
   

  	
  Tax Audits

  
	
  Schedule 4.18(f)

  	
   

  	
  Taxes Not Accounted for in Charges, Accruals and
  Reserves

  
	
  Schedule 4.18(b)

  	
   

  	
  Tax Agreements

  
	
  Schedule 4.18(q)

  	
   

  	
  U.S. Real Property Interests

  
	
  Schedule 4.19(d)

  	
   

  	
  Severance and Retention Plan

  
	
  Schedule 4.19(e)

  	
   

  	
  Article 9 Exceptions

  
	
  Schedule 4.20

  	
   

  	
  Material Contracts

  
	
  Schedule 4.21

  	
   

  	
  Overriding Royalties

  
	
  Schedule 4.25

  	
   

  	
  Distributions

  
	
  Schedule 5.1

  	
   

  	
  Corporate, Legal and Beneficial Ownership Structure
  of Purchaser

  
	
  Schedule 5.5

  	
   

  	
  Material Governmental Authorizations – Purchaser

  
	
  Schedule 7.6

  	
   

  	
  Vendor’s Counsel’s Opinion

  
	
  Schedule 8.6(e)

  	
   

  	
  Purchaser’s Counsel’s Opinion

  
	
  Schedule 9.4

  	
   

  	
  Guarantees

  
	
  Schedule 9.18

  	
   

  	
  Reserves Report

  



 



 v















SHARE PURCHASE AGREEMENT


THIS AGREEMENT is
made as of May 28, 2007
among:


POGO ALBERTA, ULC

an unlimited liability corporation incorporated under the
laws of Alberta


(hereinafter, “Vendor”)


- and –


NORTHROCK RESOURCES LTD.

a corporation amalgamated under the laws of Alberta


(hereinafter, the “Corporation”)


- and –


POGO PRODUCING COMPANY

a corporation incorporated under the laws of Delaware,
(hereinafter, the “Vendor Guarantor”)


-and-


1325156 ALBERTA LTD.


a corporation incorporated under the laws of Alberta 

(hereinafter, “Purchaser”)


-and-


ABU DHABI NATIONAL ENERGY COMPANY PJSC


a public joint stock company formed under the laws of the United Arab
Emirates (hereinafter, the “Purchaser Guarantor”)


RECITALS:


A.                                   Vendor
is the legal and beneficial owner of all of the Purchased Shares.


B.                                     Vendor
has agreed to sell to Purchaser, and Purchaser has agreed to purchase from
Vendor, all of the Purchased Shares, on the terms and conditions of this
Agreement.


C.                                     Purchaser has agreed to make the Purchaser
Subscription Payment, and to cause the Corporation to direct that the amount of
the Purchaser Subscription Payment be paid to PFULC in full repayment and
satisfaction of the principal and accrued interest owing on the Debenture and
thereafter PFULC shall cancel or otherwise terminate the Debenture.


D.                                    Vendor
Guarantor has agreed to guarantee the obligations of Vendor on the terms set
out herein.


E.                                    Purchaser
Guarantor has agreed to guarantee the obligations of Purchaser on the terms set
out herein.













IN CONSIDERATION of
the covenants, agreements, representations, warranties and payments herein set
forth, the Parties, the Corporation, Purchaser Guarantor and Vendor Guarantor,
covenant and agree as follows:


ARTICLE
1

DEFINITIONS AND INTERPRETATION


1.1                               Definitions


Whenever used in this Agreement, the following words
and terms shall have the meanings set out below:


“Abandonment and Reclamation
Obligations” means all past, present and future obligations of the
Corporation or any of the Subsidiaries under Contracts, Applicable Laws, equity
or common law to:


(a)                                  abandon
wells;


(b)                                 close,
decommission, dismantle and remove the tangibles and facilities that were or
that are being used in connection with the Assets;


(c)                                  restore,
remediate and reclaim the surface or subsurface of the lands used in connection
with the wells, tangible equipment and facilities that were or are being used
in connection with the Assets, including lands in or on which they are or were
located and lands which are or were used to gain access to them; and


(d)                                 restore,
remediate and reclaim the surface or subsurface of lands affected by seismic or
other geological or geophysical exploration activities conducted by or on
behalf of the Corporation or any of the Subsidiaries;


including such obligations relating to wells, facilities and tangibles
which were abandoned or decommissioned, dismantled or removed prior to the
Closing Date (whether or not included in the Assets).


“ABCA” means the Business Corporations Act (Alberta), as
amended from time to time.


“Accounting Firm” Deloitte
& Touche LLP, Chartered Accountants or another mutually agreed on,
nationally recognized accounting firm.


“Allocated Interest Payable” means the
amount described in the Audited Financial Statements under “Note 14 - Related
Party Transactions” as “interest related to financing related to major oil and
gas projects relating to Northrock,” which represents interest incurred by
Vendor or its Affiliates (other than Corporation or the Subsidiaries) and
allocated for accounting purposes to the Corporation as such amount may have
increased or decreased from time to time following the Balance Sheet Date, and
Purchaser acknowledges such increases and decreases.


“Affiliate” means, as to a
Person, any other Person controlling, controlled by or under common control
with that Person where “control”, “controlling” or “controlled” means the
possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of another Person, whether through the ownership
of voting securities or by contract, partnership agreement, trust arrangement
or other means, either directly or indirectly, that results in control in 



 2
 









fact; provided that direct or indirect ownership of shares of a
corporation carrying more than 50% of the voting rights shall constitute
control of that corporation; and further provided that:


(a)                                  the
Corporation and each of the Subsidiaries shall be conclusively deemed to be
Affiliates of Vendor as to any matter or thing relating to the period to and
including the Closing Time; and


(b)                                 the
Corporation and each of the Subsidiaries shall be conclusively deemed to be
Affiliates of Purchaser as to any matter or thing relating to the period after
the Closing Time.


“Agreement” means this Share Purchase
Agreement, including the recitals and all Schedules hereto, and includes all
written instruments supplementing, amending or confirming this Share Purchase
Agreement agreed to by the Parties after the date hereof.


“Amalgamation” means the amalgamation of
Pogo Canada, ULC and Northrock Resources Ltd. on September 27, 2005
pursuant to laws of the Province of Alberta.


“Applicable Laws” means all laws
(including Environmental Laws and Privacy Laws), statutes, rules, regulations,
official directives and orders of Government Authorities (whether
administrative, regulatory, legislative, executive or otherwise) including
judgments, orders and decrees of courts, commissions or bodies exercising
similar functions.


“Asset Acquisition Statement”
has the meaning given to that term in Section 11.4(b).


“Assets” means all of the tangible and
intangible property (whether real, personal, absolute or contingent, legal or
beneficial or mixed), rights, benefits, privileges and other assets owned or
leased by the Corporation and/or the Subsidiaries, including all oil and gas
properties and the tangible equipment and miscellaneous interests owned or held
by the Corporation and/or the Subsidiaries in connection therewith and any such
assets in respect of which the Corporation or any of the Subsidiaries share ownership
with third parties, or have a right to use.


“Audited Financial Statements” means the
audited consolidated financial statements of the Corporation and the
Subsidiaries for the fiscal year ended December 31, 2006 consisting of a
consolidated balance sheet, a consolidated statement of earnings and retained
earnings and a consolidated statement of cash flows, and the notes thereto.


“Authorizations” means, depending on the
context, (a) all permits, licenses, exemptions, orders, variances, approvals,
consents, authorizations, registrations, qualifications and filings with or
under any Applicable Laws and having the force of law or (b) consents,
approvals or notices under or pursuant to any Contracts.


“Balance Sheet Date” means December 31, 2006.


“Balance Sheet Date Reserve Report”
means the Reserves Report (US) prepared by Ryder Scott with an effective date
of December 31, 2006 previously delivered by the Vendor to the Purchaser.


“Base Price” has the
meaning given to that term in Section 3.1(a).


“Benefit Plans” means all plans and
arrangements to which the Corporation or any of the Subsidiaries is a party or
by which the Corporation or any of the Subsidiaries is bound or under



 3
 









which the Corporation or any of the Subsidiaries has, or will have, any
liability or contingent liability, relating to:


(a)                                  Pension
Plans;


(b)                                 Insurance
Plans; or


(c)                                  Compensation
Plans;


with respect to any of its Employees or former Employees (or any
dependants or beneficiaries of any such Employees or former Employees), other
than statutory plans with which the Corporation or any of the Subsidiaries are
required to comply, including the Canada Pension Plan and the Employment
Insurance Plan, and plans administered pursuant to applicable provincial health
and workers’ compensation legislation.


“Books and Records” means all books and
records of the Corporation and the Subsidiaries, including financial,
corporate, operations and sales books, inventory and other asset records, books
of account, sales and purchase records, the Title and Operating Documents,
customer files, production data, well files, equipment maintenance data,
accounting records, sales and promotional data, advertising materials, cost and
pricing information, supplier lists, customer lists, business reports, plans
and projections and all other similar documents, surveys, plans, files,
records, correspondence, and other data and information, financial or
otherwise, including all data and information stored on computer-related or
other electronic media but excepting therefrom all Proprietary Information.


“Business” means, collectively, the
business presently and heretofore carried on by the Corporation and the
Subsidiaries, each as a going concern.


“Business Day” means a day, other than a
Saturday or Sunday, on which the principal commercial banks located at the
cities of Calgary, Alberta and Houston, Texas are open for business during
normal banking hours.


“Canadian Dollars”  or
“Cdn $”   means lawful currency of Canada.


“Claim” means any action, claim, demand,
lawsuit, audit proceeding or arbitration, or any proceeding or investigation by
a Government Authority including a Tax Claim.


“Closing” means the completion of the
Purchase pursuant to the terms and conditions of this Agreement.


“Closing Date” means:


(a)                                  the
fifth Business Day following the day on which all of the Conditions set forth
in Articles 7 and 8 have been satisfied or duly waived by the Party
entitled to waive the same and notice of satisfaction or waiver has been given
by the applicable Party to the other Party; or


(b)                                 such
other date as the Parties may agree in writing as the date on which the Closing
shall take place.



 4
 









“Closing Time” means 9:00 a.m. on the
Closing Date, or such other time on such date as the Parties may agree in
writing, which shall be the time at which the Closing shall be deemed to take
place.


“Code” means the United
States Internal Revenue Code of 1986, as amended.


“Commissioner” means the Commissioner of
Competition appointed pursuant to the Competition Act.


“Compensation Plans” means any and all
employment benefits and plans relating to bonuses, incentive pay or
compensation, performance compensation, deferred compensation, profit sharing
or deferred profit sharing, share purchase, share option, stock appreciation,
phantom stock, vacation or vacation pay, sick pay, severance or termination
pay, employee loans or separation from service benefits, and any other type of
arrangement providing for compensation additional to base pay or salary.


“Competition Act” means the Competition Act (Canada).


“Competition
Act Approval” means, in respect of the Purchase, that:


(a)                                  an
advance ruling certificate (an “ARC”) pursuant
to Section 102 of the Competition Act shall have been issued by the
Commissioner; or


(b)                                 a
waiver under Section 113(c) of the Competition Act
of the obligation to notify the Commissioner and supply information and a “no
action letter” shall have been received from the Commissioner indicating that
he is of the view that grounds do not exist at that time to initiate
proceedings before the Competition Tribunal under Section 92 of the Competition
Act in respect of the Purchase; or


(c)                                  the
relevant waiting period under Section 123 of the Competition Act shall
have expired and there shall be no threatened or actual application by the
Commissioner for an order under Sections 92, 100 or 103.3 of the Competition
Act.


“Conditions” means, either or both of
Vendor’s Conditions and Purchaser’s Conditions, as applicable.


“Confidentiality Agreement” means the
Confidentiality Agreement dated May 14, 2007 among  the Vendor Guarantor and the Purchaser
Guarantor.


“Confidential Information” means, as to
any Person, all proprietary and confidential manufacturing, financial,
marketing, operational, organizational, know-how, personnel, customer or
vendor, technical and other data relating to the business of such person,
including, without limitation, all correspondence, memoranda, notes, summaries,
analyses, compilations, forecasts, studies, models, extracts of and documents
and records reflecting, based upon or derived from Confidential Information,
regardless of who prepares it, as well as all copies and other reproductions
thereof, whether in writing or stored or maintained in or by electronic,
magnetic or other means, media or devices.


“constating document” means the articles
of incorporation, amalgamation or continuance, bylaws,   memorandum of association, partnership
agreement, or similar constituting document of a Person, as the case may be.



 5
 









“Contracts” means, with respect to any
Person, any contracts, licences, leases, arrangements, agreements and
commitments of that Person, and includes (i) all quotations, orders or tenders
for contracts which remain open for acceptance, (ii) all manufacturers’ or
suppliers’ warranties, guarantees or commitments (express or implied) and (iii)
the Title and Operating Documents.


“Corporate Subsidiaries”
means the Subsidiaries described in Part 1 of Schedule 4.4(c).


“Corporation” means Northrock Resources
Ltd., a corporation amalgamated under the laws of Alberta.


“Corporation Trademarks” means any and
all trademarks owned by the Corporation or the Subsidiaries.


“Damage or Destruction Event”
means damage, destruction, condemnation, expropriation or other casualty losses
or impairment of use with respect to the Assets or any part or parts of the
Assets.


“Debenture”  means
the agreement dated September 27, 2005 among Pogo Canada, ULC, as borrower
(which liability became a liability of the Corporation as a result of the
Amalgamation) and Pogo Finance, ULC, as lender, evidencing debt owing in the
amount of $1,319,157,330 Cdn plus any accrued interest in the form previously
provided from Vendor to Purchaser.


“Deposit” has the meaning
given to that term in Section 3.2(a).


“Disclosed Personal Information”
has the meaning given to that term in Section 9.16(a).


“Distributions” means the aggregate amount of all
distributions or payments of cash or other property made by the Corporation or
any Subsidiary during the Lock Box Period pursuant to any of the following
transactions, except for those transactions where the Vendor Guarantor has made
a corresponding Permitted Payment to the Corporation during the Lockbox Period,
to the extent of such Permitted Payment:


(a)                                  the declaration, making or payment of any
dividend, distribution or return of capital, or any redemption, purchase or
other acquisition of shares of capital stock, partnership interests or other
securities of or ownership interests in the Corporation or any Subsidiary;


(b)                                 the payment of transaction-related bonuses,
severance or other amounts to employees of the Corporation, any Subsidiary,
Vendor or Vendor’s Affiliates or which is accelerated or  arises as a result of entering into this
Agreement or consummating the Purchase;


(c)                                  the payment of fees and expenses incurred or to
be incurred in connection with the Purchase;


(d)                                 the entry into by the Corporation or any of its
Subsidiaries of any transaction other than on arm’s length terms, to the extent
the amount received or paid by the Corporation or any of its Subsidiaries is
less than or exceeds, respectively, the amount which would be received or paid
if at arm’s-length, including, without limitation, the forgiveness of
indebtedness or any Claims not on an arm’s-length basis;



 6
 









(e)                                  the sale of any Asset, or the purchase of any
asset solely to the extent that the amount received or paid is less than or
exceeds, respectively, the fair market value thereof;


(f)                                    the making of any gift or other gratuitous
payment out of the Ordinary Course of Business or to a Related Party of Vendor
other than the Corporation or Subsidiaries;


(g)                                 the revision of the terms of remuneration of
any employee of the Corporation or any Subsidiary, other than in the Ordinary
Course of Business;


(h)                                 the entry into by the Corporation or any of its
Subsidiaries of a guarantee or indemnity relating to the obligation of a third
party, other than in the Ordinary Course of Business;


(i)                                     the repayment of any principal or interest
under the Debenture other than in accordance with Article 2 or Article 3;


(j)                                     the forgiveness or waiver of any debt or claim
outstanding against a third party, other than in the Ordinary Course of
Business;


(k)                                  the amount of repayment or settlement of any
indebtedness or other obligations (including any interest, premium or penalty
thereon) of the Corporation and the Subsidiaries to Vendor or any of Vendor’s
Affiliates (other than to the Corporation or a Subsidiary) including pursuant
to Section 9.4, other than repayment of Lock Box Period Arm’s-Length Advances
and interest thereon, and other than repayment of the principal and interest on
the Debenture in accordance with Article 2 or Article 3; or


(l)                                     the entry into by the Corporation or any of its
Subsidiaries of any commitment to take any of the foregoing actions.


Notwithstanding the foregoing, a Distribution
shall not include any payment received by the Corporation or a Subsidiary or
the elimination of the Allocated Interest Payable.


“Employees” means all individuals
employed by the Corporation or any of the Subsidiaries including, for greater
certainty, those employees on short-term or long-term disability leave,
maternity leave or other absence.


“Encumbrances” means any lien, charge,
Security Interest, burden, profits interest, option, conversion privilege,
pledge, restriction, lease, mortgage, encumbrance, or other adverse claim of
any kind or character whatsoever.


“Environment” has the meaning ascribed
thereto in the EPEA; and “Environmental”
means relating to or in respect of the Environment.


“Environmental Approvals” means all
Authorizations issued or required by Government Authorities pursuant to
Environmental Laws with respect to the Assets or the operation of the Business.


“Environmental Documentation” means all
environmental site assessments, environmental audits, environmental reports and
other similar or analogous reports or documentation relating to the application
of Environmental Laws to the Corporation, the Subsidiaries, the Assets or the
Business.



 7
 









“Environmental Laws” means all
Applicable Laws relating in whole or in part to the Environment or protection
thereof, including but not limited to the EPEA or other Applicable Laws
relating to Abandonment and Reclamation Obligations and/or the storage,
generation, use, handling, manufacture, processing, transportation, treatment,
release, disposal, reclamation and remediation of Hazardous Substances.


“Environmental Liabilities”
means all past, present and future Liabilities and Losses of the Corporation or
the Subsidiaries associated with or arising from any of the following and all
costs associated therewith:


(a)                                  the
manufacture, construction, processing, distribution, use, holding, collection,
accumulation, generation, treatment, stabilization, storage, disposal, handling
or transportation of Hazardous Substances, Petroleum Substances, oilfield wastes
or produced water;


(b)                                 compliance
with present and future Environmental Laws, Environmental Approvals and
Applicable Laws related to employee and public health and safety matters;


(c)                                  Abandonment
and Reclamation Obligations;


(d)                                 Releases
of Hazardous Substances, Petroleum Substances, oilfield wastes, produced water
or other substances;


(e)                                  sampling,
assessment and monitoring of the Environment;


(f)                                    the
removal, assessment, monitoring, sampling, response, abatement, clean-up,
investigation and reporting of contamination or pollution of or other adverse
effects on the Environment, including compensation of third parties for Losses
suffered by them in respect thereof; and


(g)                                 the
protection, reclamation, remediation or restoration of the Environment, including
related human health and safety;


that relate to the Business or the Assets or any previously owned
assets of the Corporation or any of the Subsidiaries or that have arisen or
hereafter arise from or in respect of any past, present or future operations and
activities related to the Assets, or any other activities (including activities
related to the previously owned assets and any seismic programs) conducted by
or on behalf of the Corporation or any of the Subsidiaries.


“Environmental Matters”
means any activity, event or circumstance in respect of any of the Assets or
the conduct of the Business, relating to Hazardous Substances or Petroleum
Substances, including without limitation, their storage, use, holding,
collection, accumulation, assessment, generation, manufacture, processing,
treatment, stabilization, disposition, handling, transportation or release on,
at or into the Environment, including the movement thereof, through or in
ambient air, soil, surface water, groundwater, land, wetlands or subsurface
strata.


“Environmental Order” means any
environmental protection order, enforcement order, control order, stop order,
remedial order or other administrative complaint, direction, order or sanction
issued, filed or imposed by a Government Authority pursuant to Environmental
Laws.



 8
 









“EPEA” means the Environmental
Protection and Enhancement Act (Alberta), as amended or supplemented
from time to time, and includes all Environmental Laws made in substitution
therefor, in whole or in part;


“Escrow Agent” means CIBC Mellon Trust
Company.


“Escrow Agreement” means an agreement
among Vendor, Purchaser and the Escrow Agent in the form provided in
Schedule 1.1(a).


“Exchange Rate” means,
with respect to the exchange of Canadian Dollars into U.S. Dollars or U.S.
Dollars into Canadian Dollars, as applicable, the noon spot rate of the Bank of
Canada on the second Business Day prior to the Closing Date.


“Financial Statements” means,
collectively, the Unaudited Financial Statements and the Audited Financial
Statements.


“Futures Transaction” means any
derivatives transaction (including an agreement with respect thereto) which is
commonly referred to as a hedge transaction, rate swap transaction, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transactions (including any option with
respect to any of these transaction) or any combination of these transactions.


“GAAP” means generally accepted
accounting principles in the United States.


“Government Authority” means any
government, regulatory or administrative authority, government department,
agency, commission, board or tribunal or court having jurisdiction on behalf of
any nation, province or state or subdivision thereof or any municipality,
district or subdivision thereof.


“Government Authorizations” means all
those Authorizations referred to in part (a) of the definition of “Authorizations”
in this Agreement, including any Environmental Approvals, issued to, or
required by, the Corporation or any of the Subsidiaries by, any Government
Authorities.


“Hazardous Substance” means any
substance, or material that is prohibited, controlled or regulated by any
Government Authority pursuant to Environmental Laws including pollutants,
contaminants, dangerous goods or substances, toxic or hazardous substances or
materials, petroleum and its derivatives and by-products and other
hydrocarbons, all as defined in, judicially interpreted or pursuant to any
Environmental Laws.


“Indemnification Notice”
has the meaning given to that term in Section 10.2.


“Indemnified Environmental Matters”
has the meaning given to that term in Section 10.1(a).


“Indemnified Environmental
Liabilities” has the meaning given to that term in
Section 10.1(a).


“Indemnified Party” has
the meaning given to that term in Section 10.1(a).


“Indemnified Person” means
a Vendor Indemnified Person or a Purchaser Indemnified Person, as applicable.



 9
 









“Indemnifying Party” has
the meaning given to that term in Section 10.1(a).


“Insurance Plans” means any and all
employment benefits and plans relating to disability or wage continuation
during periods of absence from work (including short term disability and long
term disability), hospitalization, health, medical or dental treatments or
expenses, life insurance, death or survivor’s benefits and supplementary
employment insurance, in each case regardless of whether or not those benefits
are insured or self-insured.


“Intellectual Property” means all
registered patents, copyrights, trademarks (including the Corporation
Trademarks), trade-names, service marks, logos, commercial symbols and
industrial designs, (including applications for all of the foregoing, and
renewals, divisions, extensions and reissues, where applicable, relating
thereto) owned by or licensed to the Corporation or any of the Subsidiaries.


“Investment Canada Act” means the Investment Canada Act (Canada).


“Investment Canada Approval” means the
responsible Minister designated pursuant to the Investment
Canada Act has sent a notice to the Purchaser that he is satisfied
that the purchase is likely to be of net benefit to Canada or is deemed to be
so satisfied pursuant to Section 21(2) of the Investment
Canada Act.


“Liabilities” means any
and all liabilities and obligations, whether under common law, in equity, under
Applicable Law or otherwise, whether tortious, contractual, vicarious,
statutory or otherwise, whether absolute or contingent, and whether based on
fault, strict liability or otherwise.


“Lock Box
Period” means the period from the Balance Sheet Date to and
including the Closing Time.


“Lock
Box Period Arm’s-Length Advances”  means cash advances made from
Vendor or any of Vendor’s Affiliates (other than the Corporation or a
Subsidiary) to the Corporation or a Subsidiary after the Balance Sheet Date for
bona fide business purposes of the Corporation or a Subsidiary, on the terms
set forth on Schedule 4.15 hereto.


“Losses” means, in respect
of a Person and in relation to a matter, any and all losses, damages, costs,
expenses, charges (including all penalties, assessments and fines) which that
Person suffers, sustains, pays or incurs in connection with that matter and
includes reasonable costs of legal counsel (on a solicitor and client basis)
and other professional advisors and consultants and reasonable costs of
investigating and defending Claims arising from the matter, regardless of
whether those Claims are sustained; and also includes Taxes on a settlement
payment or damage award in respect of that matter.


“Material” or “Materially” means material in relation to
the Assets, taken as a whole.


“Material Adverse Effect”
means any adverse effect or change that results or could reasonably be expected
to result in a reduction in the fair market value of the Purchased Shares in
excess of $30,000,000, whether that reduction arises from:


(a)                                  a
diminution in the fair market value of the Assets (including as a result of the
loss of any Assets, the impairment or loss of interests in any Assets or the
forfeiture or non-existence of any Assets);



 10
 









(b)                                 an
increase in the amount of Liabilities of the Corporation and the Subsidiaries
(on a consolidated basis);


(c)                                  the
Corporation and the Subsidiaries (on a consolidated basis) being unable to
operate the Business after the Closing Date on substantially the same basis as
the Corporation and the Subsidiaries (on a consolidated basis) operated the
Business before the Closing Date; or


(d)                                 (without
duplication) a combination of the foregoing;


but does not include any adverse effect or change caused by general
economic conditions or fiscal or monetary policies of Government Authorities,
or resulting from any changes in the price of Petroleum Substances or any
changes in the oil and gas business generally (including any change or effect
resulting from any regulatory action or intervention of general application,
including that resulting from changes to Applicable Law), or resulting from
changes in interest rates, currency exchange rates and stock markets generally,
or resulting from changes in Applicable Laws.


“Material Claim” has the meaning set out
in Section 6.1(a).


“Material Contract” means any Contract
of any of the following types:


(a)                                  a
Contract involving payments in excess of $5,000,000 by or to the Corporation or
any Subsidiary in any consecutive twelve month period (excluding any
payment by way of penalty or liquidated damages);


(b)                                 a
Contract evidencing indebtedness or guarantees for borrowed money, or the
deferred purchase price of property, excepting any guarantees by the
Corporation of any obligations of any of the Subsidiaries and any guarantees by
any of the Subsidiaries of any obligations of any of the other Subsidiaries or
of the Corporation; or


(c)                                  any
of the agreements governing the Partnership Subsidiaries;


but does not include:


(i)                                     Title
and Operating Documents;


(ii)                                  Benefit
Plans;


(iii)                               Contracts
exclusively between Subsidiaries or between the Corporation and one or more
Subsidiaries; or


(iv)                              Contracts
referred to in clauses (i) though (iv) of Section 4.14(g) that can be
terminated without penalty on notice of 90 days or less, unless such Contracts
are required to be listed in Schedule 4.5(h).


“Notice” has the meaning given to that
term in Section 13.4.


“Ordinary Course of Business” means,
with respect to an action or actions taken by a Person, that such action or
actions is or are consistent with prudent industry practice and the past
practices of the Person and is or are taken in the ordinary course of normal
day-to-day operations of that Person.



 11
 









“Outside Date” means 75
days from the date hereof; provided, however, that the Outside Date shall
automatically be extended for a period of 40 days should Sections 7.3 or
8.3 be the only conditions to closing that remain unsatisfied after the initial
75-day period (other than conditions which by their terms are not capable of
being satisfied until the Closing Time).


“Parties” means Vendor and Purchaser
collectively; and “Party” means
the applicable one of them.


“Partnership Subsidiaries”
means the Subsidiaries described in Part 2 of Schedule 4.4(c).


“Pension Plans” means arrangements
relating to retirement savings or pensions, including pension plans, pensions
or supplemental pensions whether registered or unregistered, funded or
unfunded, “registered retirement savings plans” (as defined in the Tax Act), “registered
pension plans” (as defined in the Tax Act) and “retirement compensation
arrangements” (as defined in the Tax Act).


“Permitted Contest” means action taken
by the Corporation or any Subsidiary in good faith by appropriate proceedings
diligently pursued to contest any Taxes, Claim or Encumbrance, provided that
proceeding with that action will not create a material risk of the forfeiture
or loss of, or interference with the use or operation of the Assets.


“Permitted Encumbrance” means:


(a)                                  undetermined
or inchoate liens arising in the Ordinary Course of Business and incidental to
construction by or current operations of such Person (including liens of
carriers, warehousemen, mechanics, materialmen, builders, operators, processors
and landlords) which have not been filed pursuant to Applicable Laws against
such Person or in respect of which no steps or proceedings to enforce such lien
have been initiated or which relate to obligations which are not due or
delinquent, or if due or delinquent, any such lien which is being contested by
a Permitted Contest;


(b)                                 easements,
rights-of-way, covenants, servitudes, licenses, zoning or other similar rights
or restrictions in respect of property owned, leased or otherwise held by that
Person, whether or not recorded (including rights-of-way and servitudes for
railways, sewers, drains, pipelines, gas and water mains, electric light and
power and telephone or telegraph or cable television conduits, poles, wires and
cables) which, either alone or in the aggregate, do not materially detract from
the value of such property or materially impair its use in the operation of the
business of that Person;


(c)                                  any
lien or trust arising in connection with workers’ compensation, unemployment
insurance, pension or employment laws or regulations;


(d)                                 the
right reserved to or vested in any Government Authority by the terms of any
lease, easement, license, franchise, grant or permit held by such Person or by
any statutory provision to terminate any such lease, easement, license,
franchise, grant or permit or to require annual or other periodic payments as a
condition of the continuance thereof;


(e)                                  liens
for Taxes, assessments or other charges or levies by Government Authorities
which are not at the time delinquent or, if delinquent, are being contested in
good faith by a Permitted Contest and reserved for on the Financial Statements
in accordance with, and to the extent required by, GAAP;



 12
 









(f)                                    rights
of general application reserved to or vested in any Government Authority to
levy Taxes on any of the Assets or the income therefrom, or to limit, control
or regulate any of the Assets or operations in respect of the Assets in any
manner;


(g)                                 all
reservations, limitations, provisos and conditions in the original grants or
transfers from the Crown of any lands and premises or any interests therein and
all statutory exceptions, qualifications and reservations in respect of title,
including those mentioned in Sections 61 and 62 of the Land Titles Act (Alberta);


(h)                                 public
and statutory liens not yet due arising by operation of law;


(i)                                     the
terms and conditions of the Title and Operating Documents, including provisions
for penalties, suspensions and forfeitures arising under or pursuant to any of
the Title and Operating Documents;


(j)                                     rights
of first refusal applicable to the Assets which are not triggered by the
Purchase;


(k)                                  the
rights of third parties to purchase Petroleum Substances pursuant to production
sale contracts;


(l)                                     any
defects or deficiencies in title to the Assets disclosed by Vendor to Purchaser
that are specifically waived in writing by the Purchaser;


(m)                               Encumbrances:


(i)                                     to
secure obligations on surety or appeal bonds and other obligations of a like
nature; or


(ii)                                  to
secure performance of tenders, statutory obligations, leases and licenses;


provided that each of those liens is entered into in the Ordinary
Course of Business and must only secure sums not overdue or sums being
contested by a Permitted Contest;


(n)                                 security
given by the Corporation or any Subsidiary to a public utility or any
Government Authority when required by such utility or Government Authority in
connection with the operation of the Business, which individually and in the
aggregate do not materially detract from the value of the Assets or materially
impair the use of the Assets in the operation of the Business;


(o)                                 Encumbrances
reflected in Material Contracts listed in Schedule 4.20;


(p)                                 leases
entered into the Ordinary Course of Business;


(q)                                 any
Encumbrance registered in the Personal Property Registries in British Columbia,
Saskatchewan, Alberta and the Northwest Territories, against the Corporation
and its Subsidiaries as of April 30, 2007;


(r)                                    zoning
entitlement and other land use and Environmental Laws by Government Authority;


(s)                                  Encumbrances
in favour of, held by, or created by, Purchaser;



 13
 









(t)                                    Encumbrances
securing obligations of the Corporation to a Subsidiary, a Subsidiary to the
Corporation, or between Subsidiaries;


(u)                                 any
extension, renewal or replacement (or successive extensions, renewals or
replacements), as a whole or in part, of any Encumbrance referred to in the
preceding subparagraphs, so long as any extension, renewal or replacement of
such Encumbrance is limited to all or any part of the same property that
secured the Encumbrance extended, renewed or replaced (plus improvement on such
property) and the indebtedness or obligation secured thereby is not increased;


(v)                                 any
Security Interest held by a Person encumbering the Corporation’s interest in
the Assets or any part or portion thereof, in respect of which the Corporation
delivers a valid written release or no interest letter to Purchaser at or prior
to Closing; and


(w)                               Encumbrances
described in Schedules 4.14(c), 4.14(d), 4.15 or 4.21 to this Agreement.


“Permitted Payment” means a subscription
for additional shares in the Corporation in order to fund a Distribution, or a
capital contribution to the Corporation in order to fund a Distribution.


“Person” means any individual, sole
proprietorship, partnership, limited partnership, corporation, limited or
unlimited liability company, unincorporated association, unincorporated
syndicate, unincorporated organization, trust, body corporate, Government
Authority, or any other entity, and a natural person in such person’s capacity
as trustee, executor, administrator or other legal representative.


“Personal Information”
means identifiable information about an Employee.


“Petroleum Substances”
means petroleum, natural gas, natural gas derived from coal and all related
hydrocarbons (including liquid hydrocarbons) and all other mineral substances,
whether solid or gaseous and whether hydrocarbon or not (including sulphur and
hydrogen sulphide) produced in association with petroleum, natural gas, natural
gas derived from coal or related hydrocarbons.


“PFULC” means Pogo Finance, ULC, an
unlimited liability corporation incorporated under the laws of Alberta.


“Privacy Laws” means any
and all Applicable Laws relating to privacy and the collection, use and
disclosure of Personal Information in all applicable jurisdictions, including
the Personal Information Protection and Electronic
Documents Act (Canada) and/or any comparable provincial law
(including the Personal Information Protection Act
(Alberta)).


“Proprietary Information” means all
books and records in respect of or in connection with:


(a)                                  the
valuation of the Corporation, the Subsidiaries, the Assets or the Business;


(b)                                 any
advice from Vendor’s Counsel, Vendor’s Investment Bankers and any other
consultant or advisor of Vendor, the Corporation or the Subsidiaries with
respect to the divestiture of the Corporation, the Subsidiaries or their
respective Assets or Businesses; and


(c)                                  the
process and proceedings with respect to any such proposed divestiture.



 14
 









“Purchase” means the purchase by
Purchaser of the Purchased Shares from Vendor in accordance with the provisions
of this Agreement.


“Purchase Price” has the meaning given
to that term in Section 3.1.


“Purchased Shares” means all of the
issued and outstanding shares in the capital of the Corporation.


“Purchaser” means 1325156
Alberta Ltd.,  a corporation incorporated under the laws of Alberta.


“Purchaser Guarantor” means Abu Dhabi
National Energy Company PJSC.


“Purchaser Indemnified Persons”
has the meaning given to that term in Section 10.1(a)


“Purchaser Subscription Payment”
means the payment by the Purchaser for 1 common share in the capital of the
Corporation for a subscription price equal to the amount owing under the
Debenture inclusive of accrued interest through and including the Closing Date,
to be denominated in U.S. Dollars.


“Purchaser’s Conditions” has the meaning
given to that term in Article 7.


“Purchaser’s Counsel” means Latham & Watkins LLP and Heenan
Blaikie LLP, as applicable.


“Purchaser’s Process Agent” has the
meaning given to that term in Section 9.14.


“Related Party” means, in
reference to a Party:


(a)                                  its
Affiliates, successors and assigns;


(b)                                 its
directors, officers and employees;


(c)                                  its
Affiliates’ directors, officers and employees; and


(d)                                 its
Representatives.


“Releases” means any
release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration of a Hazardous Substance, oilfield
wastes or produced water into or through the Environment.


“Representatives” means,
in reference to a Party, its and its Affiliates’ representatives, agents, legal
counsel, consultants and advisors; and with regard to Vendor includes Vendor’s
Counsel and Vendor’s Investment Bankers.


“Required Approvals” means
the Competition Act Approval and the Investment Canada Approval.


“Reserves Report (US)”
means a report containing estimates of the proved reserves of Petroleum
Substances attributable to the Assets and to be completed in accordance with
SEC guidelines and principles.


“Ryder Scott” means Ryder
Scott Company Petroleum Engineers.



 15
 









“SEC” means the United States Securities
and Exchange Commission.


“section 338 election”
has the meaning given to that term in Section 11.4(a).


“Security Interest” has the meaning
given to that term under the Personal
Property Security Act (Alberta).


“Senior Officers” means with respect to:


(a)                                  Vendor,
the President and Secretary of the Vendor;


(b)                                 the
Corporation or any Subsidiary, the President, Senior Vice President and Chief
Financial Officer and Vice President (Corporate Development) thereof; and


(c)                                  Purchaser,
the President and Secretary of the Purchaser.


“Subsidiary” or “Subsidiaries”
means the applicable entity or entities listed in Part 1 and Part 2 of
Schedule 4.4(c).


“Tax Act” means the Income Tax Act (Canada).


“Tax Claim” has the meaning given to
that term in Section 11.5(a).


“Tax Returns” includes all returns,
reports, declarations, elections, notices, filings, forms, information returns,
remittances and similar statements filed or required to be filed with a
Government Authority or provided or required to be provided to any Government
Authority in respect of Taxes.


“Tax” or “Taxes”
means all taxes, duties, fees, premiums, assessments, imposts, levies and other
charges of any kind whatsoever imposed by any Government Authority, together
with all interest, penalties, fines, additions to tax or other additional
amounts imposed in respect thereof, including those levied on, or measured by,
or referred to as, income, gross receipts, profits, capital, large corporation,
capital gain, alternative minimum, transfer, land transfer, sales, goods and
services, harmonized sales, use, value-added, excise, stamp, withholding,
business, franchising, property, employer health, payroll, employment, health,
social services, education and social security taxes, all surtaxes, all customs
duties and import and export taxes, all employment insurance, health insurance
and Canada and other Government Authority pension plan and workers compensation
premiums or contributions including any interest, fines or penalties for
failure to withhold, collect or remit any tax and any liability for such taxes
imposed by law with respect to any other Person arising pursuant to any tax
sharing, indemnification or other agreements or any liability for taxes of any
predecessor or transferor entity and whether disputed or not.


“Title and Operating Documents”  means
documents of title to which no Related Parties of Vendor, other than the
Corporation and its Subsidiaries, are parties including:


(a)                                  Freehold
certificates of title, petroleum and/or natural gas leases, permits and licenses
(whether freehold or Crown and similar instruments); and


(b)                                 operating
procedures; unit agreements; unit operating agreements; agreements for the
construction, ownership and operation of gas plants, pipelines, gas gathering
systems and similar facilities; pooling agreements; royalty agreements; net
carried interest



 16
 









agreements; net profit
interest agreements; farmin and farmout agreements; participation and
subparticipation agreements; trust declarations and agreements; agreements
providing for the gathering, measurement, processing, compression or
transportation of Petroleum Substances; well operating contracts and surface
leases, pipeline easements, road use agreements and other contracts granting
surface interests;


by virtue of which the Assets are held or which pertain to the
ownership, development or operation of the Assets.


“Unaudited Financial Statements” means the unaudited consolidated
financial statements of the Corporation and the Subsidiaries for the
three month period ended March 31, 2007, consisting of a consolidated
balance sheet, a consolidated statement of earnings and retained earnings and a
consolidated statement of cash flows, and the notes thereto, if any, prepared
in accordance with GAAP.


“United States Dollars”, “U.S. Dollars” and “U.S. $” means
lawful money of the United States of America.


“U.S. Dollar Equivalent Amount” means, with respect to amounts denominated
in Canadian Dollars, the equivalent amount in U.S. Dollars after giving effect
to a conversion of such amount of Canadian Dollars to U.S. Dollars at the
Exchange Rate.


“Vendor” means Pogo Alberta, ULC, an
unlimited liability corporation incorporated under the laws of Alberta.


“Vendor Guarantor”  means
Pogo Producing Company, a corporation incorporated under the laws of Delaware.


“Vendor Indemnified Persons”
has the meaning given to that term in Section 10.1(a).


“Vendor’s Conditions” has the meaning
given to that term in Article 8.


“Vendor’s Counsel” means Fraser Milner
Casgrain LLP.


“Vendor’s Insurance” has the meaning given
to that term in Section 9.12.


“Vendor’s Interest Rate”
means the rate per annum for three month Government of Canada Treasury Bills
from time to time, as posted on Bloomberg screen GGR, plus 0.025% per annum.


“Vendor’s Investment Bankers” means,
collectively, Goldman Sachs & Co. and TD Securities Inc.


“Vendor’s Process Agent” has the meaning
given to that term in Section 9.14.


1.2                               Certain
Rules of Interpretation


In this Agreement (including the Schedules):


(a)                                  all
references to a time are references to local time in Calgary, Alberta;


(b)                                 unless
otherwise expressly specified, all references to money amounts are to Canadian
currency;



 17
 









(c)                                  references
to Article or Section mean and refer to the specified Article or Section of
this Agreement;


(d)                                 descriptive
headings or titles of Articles and Sections have been inserted solely for
convenience of reference and are not intended as complete or accurate
descriptions of the content of those Articles or Sections, and shall not be
used in interpreting those Articles or Sections;


(e)                                  use
of words in the singular or plural, or with a particular gender, shall include
the other and shall not limit the scope or exclude the application of any
provision of this Agreement, to any Person or Persons or circumstances as the
context otherwise permits;


(f)                                    whenever
a provision of this Agreement requires an approval or consent by a Party to
this Agreement:


(i)                                     unless
otherwise provided herein, that approval or consent may not be unreasonably
withheld or delayed; and


(ii)                                  if
notification of that approval or consent (or the refusal of that approval or
consent) is not delivered within the applicable time limit, then, unless
otherwise expressly specified herein, the Party whose consent or approval is
required shall be conclusively deemed not to have provided its approval or
consent;


(g)                                 unless
otherwise expressly specified herein, time periods within or following which
any payment is to be made or act is to be done shall be calculated by excluding
the day on which the period commences and including the day on which the period
ends, and by extending the period to the next Business Day following, if the
last day of the period is not a Business Day;


(h)                                 whenever
any payment is to be made or action to be taken under this Agreement is
required to be made or taken on a day other than a Business Day, that payment
shall be made or action taken on the next Business Day following that day;


(i)                                     where
the words “including” or “includes” appear in this Agreement, including the
Schedules, those words mean “including (or includes) without limitation”;


(j)                                     any
references herein to an agreement, instrument or writing shall be a reference
to that agreement, instrument or writing, as amended from time to time prior to
the date hereof;


(k)                                  any
reference herein to a law, statute, regulation or other enactment shall be a
reference to that law, statute, regulation or enactment as amended, replaced or
superseded from time to time; and


(l)                                     all
references in this Agreement to the words “herein”, “hereby”, “hereof”, “hereto”,
and words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or Schedule unless expressly stated.


1.3                               Knowledge


(a)                                  Any
reference in this Agreement (including in the Schedules) to “the knowledge” or “to
the best of the knowledge” of Vendor, the Corporation or a Subsidiary or to any
matter



 18
 









that Vendor, the
Corporation or any Subsidiary is “aware” will be deemed to mean a reference to
the actual knowledge of the applicable individuals set forth in Part 1 of
Schedule 1.3 without any obligation on those individuals to make
investigation or inquiry.


(b)                                 Except
as provided in Section 6.5(d) or as specifically provided otherwise in
this Agreement, any reference herein to the “knowledge” or to “the best of the
knowledge” of Purchaser or of which Purchaser is “aware” will be deemed to mean
the actual knowledge of the applicable individuals set forth in Part 2 of
Schedule 1.3, without any obligation on those individuals to make
investigation or inquiry.


1.4                               Entire
Agreement


This Agreement, including the Schedules, constitutes
the entire agreement among the Parties pertaining to the subject matter of this
Agreement and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the Parties.  The Confidentiality Agreement shall terminate
on Closing.


1.5                               Applicable
Law


This Agreement shall be governed by and interpreted in
accordance with the laws of Alberta and the laws of Canada applicable therein,
and shall be treated in all respects as an Alberta contract.


1.6                               Accounting
Principles


Except as otherwise provided herein:


(a)                                  references
to generally accepted accounting principles herein means a reference to
principles recommended from time to time; and


(b)                                 all
accounting terms not otherwise defined in this Agreement have the meanings
assigned to them;


in accordance with GAAP.


1.7                               Disclosure


Reference to any matter on any Schedule shall not be
deemed to be an acknowledgement by Vendor, or to otherwise imply, that the
matter meets or exceeds any applicable threshold of materiality or any other
relevant threshold.  Any reference in any
Schedule to a document refers to such document in the form provided by Vendor
to Purchaser, which shall be a true and correct copy thereof.



 19
 









1.8                               Schedules


The Schedules to this
Agreement, as listed below, are attached to and are an integral part of this
Agreement:


SCHEDULES


	
  Schedule 1.1(a)

  	
   

  	
  Escrow Agreement

  
	
  Schedule 1.3

  	
   

  	
  Knowledge Individuals

  
	
  Schedule 4.2(e)

  	
   

  	
  Share and Debenture Related Issuances

  
	
  Schedule 4.4(a)

  	
   

  	
  Additional Holdings

  
	
  Schedule 4.4(c)

  	
   

  	
  Subsidiaries

  
	
  Schedule 4.5(e)

  	
   

  	
  Defaults Due to this Agreement

  
	
  Schedule 4.5(g)

  	
   

  	
  Encumbrances

  
	
  Schedule 4.5(h)

  	
   

  	
  Change of Control Provisions

  
	
  Schedule 4.10

  	
   

  	
  Benefit Plans

  
	
  Schedule 4.12

  	
   

  	
  Business Carried on in the Ordinary Course

  
	
  Schedule 4.13

  	
   

  	
  Environmental Matters

  
	
  Schedule 4.14(c)

  	
   

  	
  Notice of Defaults

  
	
  Schedule 4.14(c)

  	
   

  	
  Government Proceedings

  
	
  Schedule 4.14(e)

  	
   

  	
  Authorizations for Expenditure

  
	
  Schedule 4.14(g)

  	
   

  	
  Marketing and Transportation Agreements

  
	
  Schedule 4.14(h)

  	
   

  	
  Futures Transactions

  
	
  Schedule 4.15

  	
   

  	
  Material Contracts and Liabilities

  
	
  Schedule 4.15(d)

  	
   

  	
  Indebtedness

  
	
  Schedule 4.16

  	
   

  	
  Open Litigation Claims

  
	
  Schedule 4.17

  	
   

  	
  Intellectual Property

  
	
  Schedule 4.18(a)

  	
   

  	
  Tax Audits

  
	
  Schedule 4.18(f)

  	
   

  	
  Taxes Not Accounted for in Charges, Accruals and
  Reserves

  
	
  Schedule 4.18(b)

  	
   

  	
  Tax Agreements

  
	
  Schedule 4.18(q)

  	
   

  	
  U.S. Real Property Interests

  
	
  Schedule 4.19(d)

  	
   

  	
  Severance and Retention Plan

  
	
  Schedule 4.19(e)

  	
   

  	
  Article 9 Exceptions

  
	
  Schedule 4.20

  	
   

  	
  Material Contracts

  
	
  Schedule 4.21

  	
   

  	
  Overriding Royalties

  
	
  Schedule 4.25

  	
   

  	
  Distributions

  
	
  Schedule 5.1

  	
   

  	
  Corporate, Legal and Beneficial Ownership Structure
  of Purchaser

  
	
  Schedule 5.5

  	
   

  	
  Material Governmental Authorizations – Purchaser

  
	
  Schedule 7.6

  	
   

  	
  Vendor’s Counsel’s Opinion

  
	
  Schedule 8.6(e)

  	
   

  	
  Purchaser’s Counsel’s Opinion

  
	
  Schedule 9.4

  	
   

  	
  Guarantees

  
	
  Schedule 9.18

  	
   

  	
  Reserves Report

  



 


1.9                               Interpretation
if Closing Does Not Occur


If Closing does not occur, each provision of this
Agreement which presumes that Purchaser has acquired the Purchased Shares shall
be construed as having been contingent on Closing having occurred.



 20














1.10                        Conflicts


Except as specifically provided herein, if there is
any conflict or inconsistency between a provision of the body of this Agreement
and that of a Schedule or a conveyance document, the provision of the body of
this Agreement shall prevail.


1.11                        Guarantees


(a)                                  In
consideration of, and as an inducement for Purchaser entering into this
Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Vendor Guarantor hereby guarantees
the performance by Vendor of all of its covenants, obligations and liabilities
under this Agreement (the “Vendor Guarantor
Obligations”) and covenants with Purchaser that Vendor Guarantor is
and that it shall be directly liable as principal obligor for the performance of
any of those covenants, obligations and liabilities without the necessity or
requirement for Purchaser to pursue or exhaust its remedies or recourse against
Vendor.  If Vendor fails to pay any
amounts due under the Vendor Guarantor Obligations, the Vendor Guarantor shall
make payments therefor upon demand from Purchaser provided however, that upon
such payment Vendor Guarantor shall be subrogated to the rights of Purchaser
with respect to amounts paid under the Vendor Guarantor Obligations.


(b)                                 In
consideration of, and as an inducement for Vendor entering into this Agreement
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Purchaser Guarantor hereby guarantees the performance
by Purchaser of all of its covenants, obligations and liabilities under this
Agreement (the “Purchaser  Guarantor
Obligations”) and covenants with Vendor that Purchaser Guarantor is
and that it shall be directly liable as principal obligor for the performance
of any of those covenants, obligations and liabilities without the necessity or
requirement for Vendor to pursue or exhaust its remedies or recourse against
Purchaser.  If Purchaser fails to pay any
amounts due under the Purchaser Guarantor Obligations, the Purchaser Guarantor shall
make payments therefor upon demand from Vendor provided however, that upon such
payment Purchaser Guarantor shall be subrogated to the rights of Vendor with
respect to amounts paid under the Purchaser Guarantor Obligations.


ARTICLE
2

PURCHASE AND SALE


2.1                               Actions
by Vendor and Purchaser Regarding Purchase


Subject to the terms and conditions of this Agreement:


(a)                                  at
the Closing Time, Vendor shall sell, transfer and deliver to Purchaser, and
Purchaser shall purchase and receive from Vendor, the Purchased Shares, in
consideration for the payment by Purchaser to Vendor of the Purchase Price,
payable as provided for in this Agreement;


(b)                                 immediately
after the Closing Time, Purchaser shall subscribe for 1 common share in the
capital of the Corporation in exchange for the Purchaser Subscription Payment;


(c)                                  immediately
after the Purchaser Subscription Payment occurs, the Corporation shall repay to
PFULC the full amount owing under the Debenture plus any interest accrued up 



 21
 








to and including the
Closing Date in full satisfaction of the Debenture such that the Debenture and
all obligations of the Corporation under the Debenture and each of the
Agreements listed in Schedule 4.2(e) is terminated; and


(d)                                 at
or immediately after the Closing Time, as applicable, each Party shall deliver
to the other Party all documents required to be delivered by it pursuant to
Article 7 and Article 8.


2.2                               Place
of Closing


The Closing shall take place at the Closing Time at
the offices of Vendor’s Counsel located at 3000, 237 - 4th Avenue, SW, Calgary, Alberta, or at such other
place as may be agreed on in writing by Vendor and Purchaser.


2.3                               Tender


Any tender of documents or money under this Agreement
may be made on the Parties or their respective counsel and, subject to any
express provisions of this Agreement to the contrary, money shall be tendered
by wire transfer of immediately available funds to the account specified by the
Party to which payment is being made.


2.4                               Right
to Withhold


Purchaser shall be entitled to deduct and withhold
from the Purchase Price otherwise payable pursuant to this Agreement such
amounts as Purchaser is required under any provision of Applicable Law to
deduct and withhold with respect to the making of such payment.  To the extent that amounts are so withheld by
Purchaser, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to Vendor.


ARTICLE
3

PURCHASE PRICE


3.1                               Share
Purchase Price


The amount payable by Purchaser to Vendor for the
Purchased Shares (the “Purchase Price”)
shall be an aggregate amount equal to:


(a)                                  U.S.
$2,000,000,000 (the “Base Price”); minus


(b)                                 the
Purchaser Subscription Payment; and minus


(c)                                  the
U.S. Dollar Equivalent Amount of any Distributions made during the Lock Box
Period.


3.2                               Payment
of Purchase Price


The Purchase Price shall be paid by Purchaser to
Vendor as follows:


(a)                                  Within
two Business days of the execution and delivery of this Agreement, Purchaser
shall pay to the Escrow Agent to be held by the Escrow Agent pursuant to the
Escrow



 22
 








Agreement an amount equal
to U.S. $100,000,000
(being Five Percent (5%) of the Base
Price (the “Deposit”)) as a
deposit against the payment of the Purchase Price;


(b)                                 at
the Closing Time, Purchaser shall pay to Vendor an aggregate amount equal to:


(i)                                     the
Purchase Price; minus


(ii)                                  the
Deposit plus any interest earned on the Deposit;


(c)                                  In
addition to the foregoing, the Deposit shall be paid by the Escrow Agent to
Vendor as part of the Purchase Price at the Closing Time.  Subject to this Agreement and the Escrow
Agreement, the Parties shall cause the Escrow Agent to deliver the Deposit and
any interest earned on the Deposit to Vendor at the Closing Time.


3.3                               Purchaser
Subscription Payment


(a)                                  Immediately
following the Closing Time, and subject to Article 12, Purchaser shall pay to
the Corporation an amount equal to the Purchaser Subscription Payment.


(b)                                 Immediately
following the payment described in Section 3.3(a), and subject to Article 12,
Purchaser shall cause the Corporation to pay the Purchaser Subscription Payment
to PFULC in full satisfaction of the amount owing under the Debenture including
interest accrued thereon up to and including the Closing Date.


ARTICLE
4

REPRESENTATIONS AND WARRANTIES OF VENDOR AND THE VENDOR GUARANTOR


Vendor represents and warrants to Purchaser, and where
expressly indicated, Vendor Guarantor represents and warrants to Purchaser, as
of the date hereof and (except where a representation and warranty is expressed
to be made as of the date hereof) as of Closing Time the matters set out below:


4.1                               Incorporation
and Registration


(a)                                  Vendor
is a duly incorporated unlimited liability corporation, validly existing under
the ABCA.  Vendor Guarantor is a duly
incorporated corporation and validly existing under the laws of Delaware.


(b)                                 Vendor
is current in the filing of all necessary corporate returns under the ABCA.


(c)                                  The
Corporation has delivered to the Purchaser true, correct and complete copies of
the constating documents of the Corporation and each Subsidiary, as currently
in effect.


(d)                                 The
Corporation and each of the Corporate Subsidiaries is a corporation
incorporated and existing under the ABCA or the Business
Corporations Act (British Columbia), as applicable,  is in good standing under the laws of their
respective jurisdictions of incorporation, including being current in the
filing of all necessary corporate returns under the relevant statute and has
all necessary corporate power and capacity to own and lease its property and
assets (including the Assets, as applicable) owned and leased by it and to
carry on its Business as presently conducted by it and is duly licensed or
qualified to carry on its Business in each jurisdiction as the nature of its
business requires.



 23
 








(e)                                  Each
of the Partnership Subsidiaries is a general partnership formed pursuant to the
Partnership Act (Alberta), each
of the Partnership Subsidiaries is validly existing under the laws of its
jurisdiction of formation and each of the Partnership Subsidiaries is duly
organized and has all necessary partnership power and authority to own and
lease property and assets (including the Assets) and to carry on its Business
as presently conducted.


(f)                                    Neither
the nature of the Business nor the locations or character of the Assets owned
or leased by the Corporation or any of the Subsidiaries requires the
Corporation or any of the Subsidiaries to be registered, licensed or otherwise
qualified as an extra-provincial or foreign corporation in any jurisdiction
where they are not so registered, licensed or qualified.


(g)                                 The
Corporation and each of the Subsidiaries is a “private issuer” as defined in
Multilateral Instrument 45-106 “Prospectus and
Registration Exemption” adopted by, among others, the Alberta
Securities Commission.


4.2                               Right
to Sell


(a)                                  Vendor
is the sole legal registered and beneficial owner of the Purchased Shares with
good marketable and beneficial title thereto, free and clear of all
Encumbrances and adverse claims other than restrictions on transfers set out in
the articles of incorporation of the Corporation and any Encumbrances arising
out of any action taken by Purchaser, and there are no actions, suits,
proceedings or claims that have been served on the Corporation or any of its
Subsidiaries, or to the best of the knowledge of Vendor or the Corporation, are
pending or threatened with respect to or in any manner challenging the
ownership or disposition of such Purchased Shares or the exercise of any rights
which are derived or attached thereto.


(b)                                 Vendor
has the exclusive right to sell, assign and transfer the Purchased Shares as
provided in this Agreement.


(c)                                  At
the Closing Time any restrictions on transfers of the Purchased Shares that are
set out in the articles of incorporation of the Corporation will have been
complied with so as to permit the transfer of the Purchased Shares to
Purchaser.


(d)                                 On
the completion of the Purchase, Purchaser shall acquire from Vendor good
marketable and beneficial title to the Purchased Shares, free and clear of any
Encumbrances and adverse claims, except restrictions on transfers set out in
the articles of incorporation of the Corporation and any Encumbrances arising
out of any action taken by Purchaser.


(e)                                  There
is no contract, option or other right of another binding upon Vendor or which
may become binding upon:  (i) Vendor to
sell, assign, pledge, charge, mortgage or transfer (or in any other way dispose
of or encumber any of the Purchased Shares or shares, partnership units or
other equity interests of any of the Subsidiaries, other than pursuant to this
Agreement, or (ii) the Corporation to allot or issue any of the unissued shares
of the Corporation or to create any additional classes of shares except as set
out in Schedule 4.2(e).



 24
 








(f)                                    Vendor
is not required to give any notice to, make any filing with, or obtain any Government
Authorization in order to consummate the transactions contemplated by this
Agreement (other than the Required Approvals).


4.3                               Capitalization


(a)                                  The
authorized capital of the Corporation consists of an unlimited number of Common
Shares and an unlimited number of Series 1 Special Preferred Shares of which
the following are issued and outstanding:


	
  Shareholder

  	
   

  	
  Common Shares

  	
   

  	
  Series 1 Special Preferred 

  Shares

  
	
  Vendor

  	
   

  	
  801,299,081

  	
   

  	
  nil

  



 


(b)                                 The
authorized capital of Northrock Energy, ULC consists of an unlimited number of
Class “A”, Class “B”, Class “C”, Class “D”, Class “E”, Class “F”, Class “G”,
Class “H” and Class “I” shares.


(c)                                  The
authorized capital of Prairie Pacific Energy Corporation consists of an
unlimited number of common shares and an unlimited number of preferred shares.


(d)                                 The
authorized capital of Six Mile Resources Inc. consists of an unlimited number
of Class “A”, Class “B”, Class “C”, and Class “D” shares.


4.4                               Corporation
and Subsidiaries


(a)                                  Except
as disclosed in Schedule 4.4(a), the only Persons in which the Corporation
directly or indirectly holds shares, units, partnership interests or other
securities or ownership interests are the Subsidiaries.


(b)                                 The
Corporation is the sole registered and beneficial owner of all of the issued
and outstanding shares of the Corporate Subsidiaries as set forth in
Part 1 of Schedule 4.4(c) and the Corporation and/or one or more of
the Subsidiaries are the sole owners of the units of or partnership interests
in each of the Partnership Subsidiaries set forth in Part 2 of
Schedule 4.4(c), and there are no actions, suits, proceedings or claims
that have been served on the Corporation or any of its Subsidiaries to the best
of the knowledge of Vendor and the Corporation, are pending or threatened with
respect to or in any manner challenging the ownership of such securities or the
exercise of any rights which are derived or attached thereto.


(c)                                  The
ownership of the Subsidiaries is set forth in Schedule 4.4(c).


(d)                                 Each
of the shares, units and partnership interests referred to in
Section 4.4(b) are free and clear of all Encumbrances other than
restrictions on transfers set out in the articles of incorporation of the
Corporate Subsidiaries or in the applicable partnership agreement in respect of
a Partnership Subsidiary and any Encumbrances arising out of any action taken
by Purchaser.


(e)                                  All
of the Purchased Shares and all of the issued and outstanding shares of the
Corporate Subsidiaries and the units of or the partnership interests in the
Partnership Subsidiaries, as



 25
 








applicable, have been
duly and validly issued and are outstanding as fully paid and non-assessable
shares, units or partnership interests, as applicable.


(f)                                    There
are no options, warrants, pre-emptive rights, commitments, subscriptions
or other rights to purchase, or obligations to transfer or sell, issued or
unissued shares or other securities of the Corporation or any of the Corporate
Subsidiaries or units of or partnership interests in the Partnership
Subsidiaries, or create any additional class of shares, and no securities or
obligations convertible into or exchangeable for shares or other securities of
or units of or partnership interests in any of the Corporation or any of the
Subsidiaries, have been issued, granted, authorized, allotted or agreed to be
issued or are outstanding other than, in the case of the Purchased Shares,
rights in favour of Purchaser pursuant to this Agreement, except as listed in
Schedule 4.2(e).


4.5                               Due
Authorization


(a)                                  Vendor
has all necessary corporate power, authority and capacity to enter into this
Agreement and all documents to be delivered pursuant hereto and to perform its
obligations hereunder and thereunder including, without limitation, to transfer
the legal and beneficial ownership of the Purchased Shares to the Purchaser
free and clear of all Claims and Encumbrances.


(b)                                 Vendor
Guarantor has all necessary corporate power, authority and capacity to enter
into this Agreement and to carry out its obligations under this Agreement.


(c)                                  The
execution and delivery of this Agreement and all documents to be delivered
pursuant hereto, the completion of the Purchase and the performance of Vendor’s
obligations under this Agreement hereunder and thereunder have been duly
authorized by all necessary corporate action on the part of Vendor.


(d)                                 The
execution and delivery of this Agreement and the completion of the Purchase and
the performance of Vendor Guarantor’s obligations under this Agreement have
been duly authorized by all necessary corporate action on the part of Vendor
Guarantor.


(e)                                  Except
as provided in Schedule 4.5(e), the execution and delivery of this Agreement
and all documents to be delivered pursuant hereto, the completion of the Purchase
and the performance of Vendor’s obligations under this Agreement will not
conflict with or result in the violation or breach of, or render Vendor in
default of, or result in the termination or in a right of termination or
cancellation of, or accelerate the performance required by or result in being
declared void, voidable or without further binding effect, any of the terms,
conditions or provisions of:


(i)                                     any
provision of Vendor’s constating documents;


(ii)                                  any
agreement, instrument, license, permit or other Governmental Authorization to
which Vendor is a party or by which Vendor is bound; or


(iii)                               any
Applicable Laws or licenses applicable to Vendor.


(f)                                    None
of the execution and delivery of this Agreement, the completion of the Purchase
and the performance of Vendor Guarantor’s obligations under this Agreement will
conflict with or result in the violation or breach of or render Vendor
Guarantor in default



 26
 








of, or result in the
termination or in a right of termination or cancellation of, or accelerate the
performance required by or result in being declared void, voidable or without
further binding effect, any of the terms, conditions or provisions of:


(i)                                     any
provisions of the constating documents of Vendor Guarantor;


(ii)                                  any
Contract to which Vendor Guarantor is a party or by which Vendor Guarantor is
bound; or


(iii)                               any
Applicable Laws or licenses applicable to Vendor Guarantor.


(g)                                 No
Encumbrances, rights of first refusal or preferential rights to purchase will
be created or triggered by, and no Material consent or approval of any third
party, including any Government Authority will be required in conjunction with,
the execution, delivery or performance of obligations under this Agreement by
Vendor, except for the Required Approvals, and except as has been provided in
Schedule 4.5(g).


(h)                                 Except
as provided in Schedule 4.5(h), the execution and delivery of this Agreement,
the completion of the Purchase and the performance of Vendor’s obligations
under this Agreement will not result in any “change of control” or similar
event or circumstance, under the terms of any Contract to which the Corporation
or any Subsidiary is a party, that is Material.


4.6                               Residence
of Vendor


Vendor is not a non-resident of Canada for the
purposes of the Tax Act.


4.7                               Enforceability
of Obligations


(a)                                  This
Agreement constitutes a legal, valid and binding obligation of Vendor,
enforceable against Vendor in accordance with its terms, subject to bankruptcy,
winding-up, insolvency, moratorium, arrangement, reorganization and other
similar laws affecting creditors’ rights generally, and to general principles
of equity.


(b)                                 This
Agreement constitutes a legal, valid and binding obligation of Vendor
Guarantor, enforceable against Vendor Guarantor in accordance with its terms,
subject to bankruptcy, winding-up, insolvency, moratorium, arrangement,
reorganization and other similar laws affecting creditors’ rights generally,
and to general principles of equity.


4.8                               No
Other Advisors or Consultants


None of the Vendor, Vendor Guarantor, the Corporation
or any Subsidiary has incurred any obligation or liability, contingent or
otherwise, for brokerage fees, finder’s fees, agent’s commission or other
similar forms of compensation with respect to the transaction contemplated
herein which will be or may become the responsibility of the Corporation, any
Subsidiary, Purchaser or Purchaser Guarantor.


4.9                               Government
Authorizations


No material Government Authorizations are required on
the part of Vendor or the Vendor Guarantor in connection with the Purchase or
the performance of its other obligations under this Agreement except the
Required Approvals.



 27
 








4.10                        Benefit
Plans and Labour Matters


(a)                                  Except
as disclosed in Schedule 4.10 or Schedule 4.19(d), neither the Corporation nor any of the Subsidiaries:


(i)                                     is
a party to or bound by or subject to any agreement or arrangement with respect
to Benefit Plans;


(ii)                                  is
in arrears for any payment, contribution or assessment required to be made by
it pursuant to any Benefit Plans (as set out in Schedule 4.10);


(iii)                               is
a party to or bound by or subject to any collective agreement or arrangement
with any labour union or employee association;


(iv)                              is a
party to or bound by or subject to any employment agreement, consulting or
service agreement with or respecting its Employees, which cannot be terminated
without cause by the Corporation or any of its Subsidiaries only upon providing
such notice as may be required by law, or pay, bonus and benefits in lieu of
notice as required under common law (either actual or as a result of a damage
award); or


(v)                                 has
entered into any severance or similar arrangement in respect of any present
employee of the Corporation or any of its Subsidiaries that will result in any
obligation (absolute or contingent) of Purchaser, the Corporation or any of its
Subsidiaries to make any payment to any present employee of the Corporation or
any of its Subsidiaries following termination of employment or upon a change of
control of Vendor or any of its Subsidiaries.


(b)                                 No
collective bargaining agreement is currently being negotiated by the
Corporation or any of its Subsidiaries with respect to any Employees.  There are no certification proceedings
outstanding in respect of the Employees and, to the knowledge of Vendor, there
are no attempts to organize or certify any of the Employees.  There is no current or pending labour strike,
dispute, work slowdown or work stoppage against the Corporation or any of its
Subsidiaries and the same have not been threatened against the Corporation or
any of its Subsidiaries.  No trade union
or employee association has applied to have the Corporation or any of its
Subsidiaries declared a related or successor employer pursuant to any
Applicable Law.


(c)                                  To
the knowledge of Vendor, neither the Corporation nor any of its Subsidiaries
has committed any unfair labour practices. 
As of the date hereof, no unfair labour practice complaint, grievance or
arbitration proceeding has been served on the Corporation or any of its
Subsidiaries or is, to Vendor’s and the Corporation’s knowledge, pending or
threatened against the Corporation or any of its Subsidiaries.


(d)                                 All
Benefit Plans have been administered in material compliance with Applicable
Laws and their respective terms.  No
promises have been made in respect of changes to any of the Benefit Plans,
other than those that are set out in the current texts of the Benefit
Plans.  No Pension Plan is a
multi-employer pension plan as that term is defined in pension benefits
legislation.  Neither the Corporation or
any of its Subsidiaries has ever sponsored or participated in a Pension Plan
that is a registered pension plan under the Tax Act.



 28
 








(e)                                  Except
as disclosed in Schedule 4.10 or Schedule 4.19(d), neither the Corporation nor
any of its Subsidiaries are parties to any severance or retention agreements
involving the Employees.


(f)                                    There
are no claims or complaints against the Corporation or any of its Subsidiaries
relating to employment standards, occupational health and safety, human rights,
privacy, labour relations, workers compensation, pay equity or employment
equity.


(g)                                 Except
as disclosed in Schedule 4.10 or Schedule 4.19(d), the Corporation and its
Subsidiaries have complied in all material respects with all laws, rules and
regulations relating to employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective bargaining,
employment and reemployment rights of members of the uniformed services, the
payment of employment-related taxes, occupational safety and health and plant
closings.


4.11                        Financial
Statements


The Financial Statements are:


(a)                                  complete
and accurate in all material respects;


(b)                                 in
accordance with the Books and Records of each of the Corporation and the
Subsidiaries, respectively;


(c)                                  prepared
in accordance with GAAP consistently applied during the periods presented
(subject to usual year end adjustments with respect to the Unaudited Financial
Statements);


and fairly present in all material respects
(x) the financial information they purport to present as of the relevant
dates set forth therein and (y) the financial position of the Corporation
and the Subsidiaries as of the dates thereof and results of their operations
and their cash flows for the periods then ended.


4.12                        Business
Carried on in the Ordinary Course


Since the Balance Sheet Date, except as set forth in
Schedule 4.12:


(a)                                  the
Business has been carried on in the Ordinary Course of Business; and


(b)                                 the
Business has been conducted in material compliance with all Applicable Laws.


4.13                        Environmental
Matters


(a)                                  Vendor
has provided to Purchaser all Environmental Documentation in the possession of
Vendor or the Corporation or any of the Subsidiaries in respect of the Business
or the Assets produced for or received by Vendor, the Corporation or the
Subsidiaries since January 1, 2005.


(b)                                 Except
as set out in Schedule 4.13, neither the Corporation nor any Subsidiary
has received, nor to Vendor’s and the Corporation’s knowledge has any other
Person received:



 29
 








(i)                                     any
Environmental Order which relates to Environmental Liabilities and which
requires any work, repairs, construction or capital expenditures which is
outstanding, where that Environmental Order has not been complied with in all
material respects; or


(ii)                                  since
January 1, 2005, any demand or notice issued with respect to the breach of
Environmental Laws that relates to the Business or the Assets or any previously
owned assets of the Corporation or any of the Subsidiaries or any operations
and activities related to the Assets, or any other activities (including activities
related to the previously owned assets and any seismic programs) conducted by
or on behalf of the Corporation or any of the Subsidiaries.


(c)                                  To
Vendor’s and the Corporation’s knowledge, Vendor, the Corporation and its
Subsidiaries are in compliance, and have complied since January 1, 2005, in all
material respects with all Environmental Laws and Environmental Approvals.


(d)                                 Except
as listed in Schedule 4.14(d), to Vendor’s and the Corporation’s knowledge
there are no Material Environmental Liabilities of Vendor or its Subsidiaries
that have not been remedied in accordance with Applicable Law.


4.14                        Assets


(a)                                  Vendor
does not warrant title to the Assets of the Corporation and the Subsidiaries,
but does warrant that, to Vendor’s or the Corporation’s knowledge, the
interests of the Corporation and the Subsidiaries in and to the Assets are now,
and will be at Closing Date, free and clear of all Encumbrances created by,
through or under Vendor, the Corporation or the Subsidiaries other than:


(i)                                     Permitted
Encumbrances;


(ii)                                  other
restrictions on transfers set out in the constating documents of the
Corporation and the Subsidiaries; and


(iii)                               those
that are created after the date hereof in compliance with Sections 9.1, 9.2 and
9.3.


(b)                                 Neither
the Corporation nor any of the Subsidiaries:


(i)                                     is
in default or will be in default on the completion of the Purchase under any
Material Contract or Contract of the type set forth in clauses (i) through (iv)
of Section 4.14(g), or to the Vendor’s or Corporation’s knowledge, any Title
and Operating Document; or


(ii)                                  has
failed to comply with, perform, observe or satisfy, in any material respect,
any term, condition, obligation or liability which has heretofore arisen under
the provisions of any Material Contract or Contract of the type set forth in
clauses (i) through (iv) of Section 4.14(g), or to the Vendor’s or Corporation’s
knowledge any Title and Operating Document;


(c)                                  Except
as described in Schedule 4.14(c), neither the Corporation nor any Subsidiary
has received notice of default under, and none of them is to Vendor’s or the
Corporation’s



 30
 








knowledge in default
under, any obligation, agreement or document or under any order, writ,
injunction or decree of any Government Authority, nor is the Corporation or any
Subsidiary to Vendor’s or the Corporation’s knowledge in breach of any
Applicable Laws, in each such case which could, individually or in the
aggregate,  reasonably be expected to
have a Material Adverse Effect.


(d)                                 Except
as described in Schedule 4.14(d), in the case of claims by Persons other than
Government Authorities, no action before any Government Authority has been
served upon the Corporation nor, to Vendor’s or the Corporation’s knowledge, is
pending or threatened, against the Corporation or any Subsidiary.


(e)                                  Except
as set forth in Schedule 4.14(e) and except for operating costs incurred
in the Ordinary Course of Business, there are no outstanding authorizations for
expenditure or other financial commitments respecting the Assets pursuant to
which individual expenditures of greater than $100,000 may be required by the
Corporation or any Subsidiary after the Closing Date except as has been
consented to by the Purchaser in accordance with Article 9.


(f)                                    To
the Vendor’s and the Corporation’s knowledge, all ad valorem, property,
royalties, production, severance and similar Taxes based on or measured by the
ownership of the Assets, the production of Petroleum Substances from the Assets
or the receipt of proceeds therefrom have been timely paid and discharged.


(g)                                 Without
limiting the generality of the foregoing, except for agreements that can be
terminated without penalty on notice of 90 days or less, neither the
Corporation nor any of the Subsidiaries is a party to or bound by any Material:


(i)                                     contracts
for the sale of Petroleum Substances;


(ii)                                  gas
balancing or similar agreements pertaining to Petroleum Substances;


(iii)                               agreements
for the transportation, processing or disposal of Petroleum Substances; or


(iv)                              take
or pay arrangements;


relating to the Assets, except as provided on Schedule 4.14(g).


(h)                                 The
Corporation and the Subsidiaries are not party to any Futures Transactions,
either as principal or surety except as listed in Schedule 4.14(h).


(i)                                     After
Closing there are no support agreements or other services, personnel, assets or
facilities that need to be provided by Vendor or any of its Affiliates in order
for the Corporation and the Subsidiaries to be able to conduct the Business
substantially in the manner as presently conducted; and no such agreements will
exist, it being acknowledged by Purchaser that Vendor’s Insurance will
terminate on Closing.


(j)                                     To
the knowledge of the Vendor and the Corporation (which shall be reasonable)
there will be no Material disruption in the operations of or in the production
of Petroleum Substances by the Corporation and the Subsidiaries, and no
Material increases in costs or expenses in respect thereto, as a result of the
expiration, surrender or termination of any



 31
 








petroleum and/or natural
gas leases, permits and licenses (whether freehold or Crown and similar
instruments). The Corporation and the Subsidiaries manage the expiries,
surrenders and terminations of their petroleum and/or natural gas leases,
permits and licenses (whether freehold or Crown and similar instruments) in a
prudent manner substantially similar to comparable companies in Western
Canada..


4.15                        Material
Obligations


(a)                                  Neither
the Corporation nor any Subsidiary is a party to or bound by any agreement of
any nature to acquire any shares or other securities of any corporation,
partnership interests in any partnerships or any other equity interests or to
merge or consolidate with any other entity, to sell or acquire any assets
having a fair market value, individually or in the aggregate, in excess of
$10,000,000; or to acquire, capitalize or invest in any business except as have
been consented to by the Purchaser in accordance with Article 9 hereof.


(b)                                 Neither
the Corporation nor any Subsidiary has guaranteed, endorsed, assumed or
indemnified, contingently or otherwise, the obligations or indebtedness of any
Person except:


(i)                                     in
the Ordinary Course of Business;


(ii)                                  pursuant
to the Title and Operating Documents; or


(iii)                               in
respect of obligations between the Corporation and the Subsidiaries.


(c)                                  There
exists no shareholder or other agreement which affects the transferability of
the Purchased Shares and none of the Corporation, any Subsidiary or Vendor is a
party to any voting trust agreement, unanimous shareholder agreement, share
pooling agreement, or other Contract, commitment, plan, or understanding
restricting or otherwise relating to voting or dividend rights with respect to
the Purchased Shares.


(d)                                 Neither
the Corporation nor any of the Subsidiaries will have any indebtedness for
borrowed money at the Closing Time except as listed on Schedule 4.15(d) or
except as have been consented to by the Purchaser in accordance with Article 9
hereof.


(e)                                  Neither
the Corporation nor any of the Subsidiaries will have any Liabilities at the
Closing Time that are Material, other than:


(i)                                     Environmental
Liabilities;


(ii)                                  Liabilities
under the Title and Operating Documents;


(iii)                               Liabilities
pursuant to the Debenture;


(iv)                              Liabilities
for Taxes incurred or arising in the Ordinary Course of Business;


(v)                                 Liabilities
described or referred to in the Unaudited Financial Statements or the Audited
Financial Statements; and


(vi)                              Liabilities
described or referred to in Schedule 4.15 and commitments described in
Schedule 4.14(e);



 32
 








except as have been consented to by the Purchaser in accordance with
Article 9 hereof and at the Closing Time no Person will hold any power of
attorney from the Corporation or a Subsidiary other than powers of attorney
granted by a Subsidiary to the Corporation or another Subsidiary or as may have
been provided under the Title and Operating Documents in the Ordinary Course of
Business.


(f)                                    Since
the Balance Sheet Date, there has been no transfer of funds or other assets or
properties or making of obligations in respect of the Allocated Interest
Payable.


4.16                        Litigation


(a)                                  As
of the date hereof Schedule 4.16 sets forth a list of open litigation Claims
(including those which are the subject of arbitration and, to Vendor’s or the
Corporation’s knowledge, any threatened Claims) which have been served on, or
to the Vendor’s or the Corporation’s knowledge, are pending or threatened
against the Corporation or any of the Subsidiaries where the amounts claimed or
threatened exceeds or could reasonably be expected to exceed $500,000, except
to the extent all such Claims exceed in the aggregate $5,000,000.  Vendor makes no representations or warranties
with respect to validity or effect of any of those Claims.


(b)                                 Except
as set forth in Schedule 4.16, there are no unsatisfied judgments against the
Corporation or any Subsidiary or any consent decrees or injunctions to which
the Corporation or Subsidiary is subject.


4.17                        Intellectual
Property


Schedule 4.17 sets forth and describes all
material Intellectual Property used in whole or part in the Business and
specifies, for each item, whether the Intellectual Property is owned by the
Corporation or a Subsidiary, or whether the Intellectual Property is used by
the Corporation or a Subsidiary under a license agreement or other arrangement
with another Person.


4.18                        Taxes


(a)                                  Vendor
has caused the Corporation and the Subsidiaries to duly and timely:


(i)                                     file
all Tax Returns required to be filed by them and those Tax Returns are true,
complete and accurate in all material respects;


(ii)                                  pay
all Taxes (including instalments) due and payable by them; and


(iii)                               collect
or withhold and timely remit to the appropriate Government Authorities all
Taxes required to be collected or withheld by them;


and, except as provided in Schedule 4.18(e), there are no Claims
pending or threatened in writing by any Government Authority against the
Corporation or any Subsidiary in respect of Taxes.


(b)                                 Neither
the Corporation nor any Subsidiary is the subject of a tax ruling, nor have
they entered into any agreement, waiver or other arrangement with any Government
Authority respecting Taxes payable by them or Tax Returns required to be filed
by them or statute of limitations with respect to Taxes.



 33
 








(c)                                  The
Corporation and each of the Corporate Subsidiaries are taxable Canadian
corporations (as defined in the Tax Act) and each of the Partnership
Subsidiaries is a Canadian partnership (as defined in the Tax Act).


(d)                                 The
Corporation and each of the Subsidiaries are duly registered under Subdivision
(d) of Division V of Part IX of the Excise Tax Act
(Canada) with respect to the goods and services tax.


(e)                                  Except
as provided in Schedule 4.18(e), no Material matter is under audit or
appeal with any Government Authority relating to Taxes of the Corporation or
any of the Subsidiaries nor is any such audit pending or, to Vendor’s or the
Corporation’s knowledge, threatened and no deficiencies have been asserted by
any Government Authority in connection with any audit or review of any Tax or
Tax Return.


(f)                                    Except
as provided in Schedule 4.18(f), the charges, accruals and reserves for Taxes
with respect to the Corporation and the Subsidiaries reflected in the Audited
Financial Statements and the Unaudited Financial Statements (whether or not due
and whether or not shown on any Tax Return) are adequate under GAAP to cover Taxes
accruing through December 31, 2006 and March 31, 2007, respectively. 
The Corporation and the Subsidiaries have withheld or will withhold and
have timely paid or will timely pay to the appropriate Government Authority all
amounts required to be withheld from Employees on account of Taxes that are
required to be withheld or paid after the Balance Sheet Date  and on or before the Closing Date.  All accruals for unpaid vacation pay,
premiums for unemployment insurance health premiums, Canada Pension Plan premiums,
accrued wages, salaries and commissions, related source deductions and employee
benefit plan payments in respect of the period beginning immediately after the
Balance Sheet Date have been accurately reflected in the books and records of
the Corporation and the Subsidiaries.


(g)                                 The
tax basis of the assets of the Corporation and the Subsidiaries by category
including the classification of such assets as being depreciable, amortizable
or resource properties giving rise to resource pools as reflected in the Tax
Returns of the Corporation and the Subsidiaries is true and correct in all
material respects.


(h)                                 None
of Sections 78, 80, 80.01, 80.02, 80.03 or 80.04 of the Tax Act or any
equivalent provision of the Tax legislation of any of the provinces or any
other jurisdiction, have applied or will apply to any of the Corporation or the
Subsidiaries at any time up to and including the Closing Date, none of such
provisions will apply to the elimination of any of the payables or other
indebtedness shown on the Audited Financial Statements as being owed to
Vendor  or any Affiliate of Vendor (as
such amounts may change or have changed from time to time), and to Vendor’s or
the Corporation’s knowledge, there will not be any circumstances existing at or
prior to the Closing Date which could, in themselves, result in the application
of any such provisions to the Corporation or any of the Subsidiaries for
taxation years (or fiscal years in the case of Partnership Subsidiaries) ending
after the Closing Date.


(i)                                     None
of the Corporation or the Subsidiaries has acquired property from a non-arm’s
length Person, within the meaning of the Tax Act, for consideration, the value
of which is less than the fair market value of the property acquired in
circumstances which would subject it to a liability under section 160 of the
Tax Act.



 34
 








(j)                                     For
all transactions between any of the Corporation and the Subsidiaries and any
non-resident Person with whom any of them was not dealing at arm’s length
during a taxation year (or portion thereof) ending on or before the Closing
Date, each has made or obtained records or documents that meet the requirements
of paragraphs 247(4)(a) to (c) of the Tax Act.


(k)                                  Neither
the Corporation nor any of the Subsidiaries has claimed or will claim in any Tax
Return for any taxation year (or fiscal year in the case of Partnership
Subsidiaries) ending on or before the Closing Date (in the case of income
Taxes) or the Balance Sheet Date (in the case of non-income Taxes) any reserve
(including, without limitation, any reserve under paragraph 20(1)(n) or
subparagraph 40(1)(a)(iii) of the Tax Act or any analogous provision under the
legislation of any province or other jurisdiction) of any amount which could be
included in the income of the Corporation or any of the Subsidiaries for any
period ending after the Closing Date (in the case of income Taxes) or the
Balance Sheet Date (in the case of non-income Taxes).


(l)                                     Neither
the Corporation nor any of the Subsidiaries has ever been deemed for the
purposes of the Tax Act or any applicable provincial legislation to have
acquired or had the use of property for proceeds greater than the fair market
value thereof from, or disposed of property for proceeds less than the fair
market value thereof to, or received or performed services for amounts other
than the fair market value from or to, or paid or received interest or any
other amount other than at a fair market value rate to or from, any person
inside or outside Canada with whom it does not deal at arm’s length within the
meaning of the Tax Act.


(m)                               Neither
the Corporation nor any of the Subsidiaries is party to any tax sharing
agreement, tax indemnification agreement or other agreement or arrangement
relating to Taxes with any Person except as provided on Schedule 4.18(m).  The Corporation and the Subsidiaries have not
been a member of an affiliated, combined or unitary group filing a combined,
unitary or other return in respect of Taxes reflecting the income, assets or
activities of affiliated companies, nor have they any liability for the Taxes
of any other Person under any Applicable Law, as a transferee or successor, by
contract or otherwise.


(n)                                 The
taxation year of each of the Corporation and the Subsidiaries is as
follows:  


	
  

  	
   

  	
  Taxation Year-End

  
	
  Northrock
  Resources Ltd.

  	
   

  	
  December 31

  
	
  Northrock
  Energy, ULC

  	
   

  	
  December 31

  
	
  Prairie Pacific
  Energy Corporation

  	
   

  	
  September 30

  
	
  Six Mile
  Resources Inc.

  	
   

  	
  December 31

  
	
  Northrock
  Resources

  	
   

  	
  January 1

  



 


(o)                                 Neither
the Corporation nor any of the Subsidiaries has an obligation to file on or
before the Closing Date any Tax Return required to be made, prepared or filed,
or to pay any Tax on or before the Closing Date, under the laws of any
jurisdiction other than Canada in respect of any Taxes or will be obligated to
file any such Tax Return or to pay any such Tax after the Closing Date as a
result of Assets owned or activities conducted on or before the Closing Date.



 35
 








(p)                                 No
election pursuant to U.S. Treasury Regulations Section 301.7701-3 has been made
with respect to the Corporation or any of the Subsidiaries.


(q)                                 Except
as provided in Schedule 4.18(q), neither the Corporation nor any of the
Subsidiaries owns any United States real property interest, within the meaning
of section 897(c)(1)(A) of the Code.


(r)                                    Neither
the Corporation nor any of the Subsidiaries owns any Asset, gain on the sale of
which would be effectively connected or treated as effectively connected with
the conduct of a trade or business in the United States, within the meaning of
section 882(b)(2) of the Code.


(s)                                  The
resource pools and undepreciated capital cost balances with respect to the
Corporation and its Subsidiaries (“Tax Pools”), as of February 28, 2007, were
no less than $670,000,000, computed on the assumption that each of the activities
of the Partnership Subsidiaries had been conducted by the Corporation, that the
Closing Date was February 27, 2007 and the Corporation and its Corporate
Subsidiaries have each deducted for their respective taxation years ending on
or before the Closing Date the maximum amount in respect of the Tax Pools
permitted under the Tax Act.


4.19                        Absence of Certain Changes


Except as disclosed to Purchaser in this Agreement or
the Schedules to this Agreement, since the Balance Sheet Date, there has not
been:


(a)                                  any
change in the financial condition, Assets, Business, Liabilities, operations of
the Corporation and the Subsidiaries taken as a whole that, individually or in
the aggregate, has had a Material Adverse Effect;


(b)                                 any
Damage or Destruction Event to any of the Assets that has had, individually or
in the aggregate, a Material Adverse Effect;


(c)                                  other
than as contemplated herein, a reduction in the Corporation’s or any of the
Subsidiaries’ stated capital, as applicable;


(d)                                 any
bonus or similar payment not in the Ordinary Course of Business that has been
authorized or paid to any officer or director of the Corporation or the
Subsidiaries in excess of $100,000
per officer or director or in the aggregate for all officers and directors, $1,000,000 except as described in Schedule
4.19(d); and


(e)                                  any
action or failure to act that would be prohibited by Sections 9.1, 9.2 or 9.3
had such action or failure to act taken place after the date hereof except as
described in Schedule 4.19(e).


4.20                        Certain
Contracts, Agreements, Plans and Commitments


As of the date hereof, other than in respect of the
Title and Operating Documents and the agreements required to be disclosed on a
Schedule to this Agreement, Schedule 4.20 is a complete and correct list of all
Material Contracts to which the Corporation or any of the Subsidiaries is a
party or by which it is bound, or to which any of them adhere or in which any
of them participates (complete and



 36
 








correct copies or descriptions of each of which, as in
effect on the date hereof, have been made available to Purchaser), and:


(a)                                  any
written agreements that contain any Liability of the Corporation or any
Subsidiary after the Closing Date for severance pay, or Liabilities in respect
of termination or severance of employment;


(b)                                 any
contract or agreement under which the Corporation or any Subsidiary has
outstanding indebtedness for borrowed money or the deferred purchase price of
property in an amount which is in the aggregate in excess of $1,000,000 or has
the right or obligation to incur any such indebtedness;


(c)                                  any
guarantee or surety entered into by the Corporation or any Subsidiary that
continues after Closing;


(d)                                 any
confidentiality or non-competition agreement outside the Ordinary Course of
Business which materially restricts the right of the Corporation or any
Subsidiary to continue the Business as currently conducted after Closing; and


(e)                                  any
lease or sublease entered into by the Corporation or any Subsidiary for office
space.


4.21                        Operation
of Assets


(a)                                  To
Vendor’s or the Corporation’s knowledge there are no areas of mutual interest
or area of exclusion provisions applicable to or binding on the Corporation or
the Subsidiaries that Materially restricts the right of the Corporation or any
Subsidiary to continue the Business as currently conducted after completion of
the Purchase, except as has been consented to by the Purchaser in accordance
with Article 9.


(b)                                 Except
as set forth in Schedule 4.21, no officer, director or consultant of the
Corporation or any of the Subsidiaries, any associate or Affiliate of any such
person or any party not at arm’s length to the Corporation will own or will
have or be entitled to any royalty, net profits interest, carried interest or
other encumbrance of any nature whatsoever or any revenue or rights attributed
to the Assets.


(c)                                  To
Vendor’s or the Corporation’s knowledge, since the Balance Sheet Date all
operations in respect of the Assets have been conducted in accordance with good
oilfield practices in Canada in effect at the time that the operations were
conducted.


(d)                                 The
Corporation and the Subsidiaries have obtained all permits, licenses and other
authorizations which are required under Applicable Law to own or operate the
Assets, except where the failure to do so would, individually or in the
aggregate, reasonably not be expected to have a Material Adverse Effect.


4.22                        Books and
Records


(a)                                  The
minute books of the Corporation and the Subsidiaries are complete and correct
in all material respects with respect to all resolutions of the directors and
shareholders.



 37
 








(b)                                 The
Corporation and the Subsidiaries make and keep books, records and accounts
which, in reasonable detail, accurately and fairly reflect their transactions
and dispositions in all material respects.


4.23                        Corporate
Registers


The register of shareholders, register of partners,
register of transfers of the Corporation and the Subsidiaries contained in
their respective minute books are complete and accurate in all material
respects since the later of June 1, 2000 or the date that the applicable
Subsidiary was incorporated or formed.


4.24                        U.S.
Business Activities


The Corporation and its Subsidiaries in the aggregate
do not have assets in the United States of a value of U.S. $53,000,000 or
greater nor have they individually or collectively made direct sales to any
Persons in the United States of a value of U.S. $53,000,000 or greater in
the last two years.


4.25                        Distributions


No Distributions have been made from or after the
Balance Sheet Date, to the date hereof, except for cash Distributions set forth
on Schedule 4.25.


ARTICLE
5

REPRESENTATIONS AND WARRANTIES OF PURCHASER


Purchaser represents and warrants to Vendor, and where
expressly indicated, Purchaser Guarantor represents and warrants to Vendor as
of the date hereof and as of Closing Time (unless otherwise indicated) the
matters set out below:


5.1                               Incorporation


Purchaser is a duly incorporated corporation and
validly existing under the laws of Alberta.  Purchaser
Guarantor is a public joint stock company validly existing under the laws of
the United Arab Emirates. The details of the corporate and legal and beneficial
ownership structure of Purchaser is set out in Schedule 5.1.


5.2                               Due
Authorization


(a)                                  Purchaser
has all necessary corporate power, authority and capacity to enter into this
Agreement and to carry out its obligations under this Agreement.


(b)                                 The
execution and delivery of this Agreement and the completion of the Purchase and
the performance of Purchaser’s obligations under this Agreement have been duly
authorized by all necessary corporate action on the part of Purchaser.


(c)                                  None
of the execution and delivery of this Agreement, the completion of the Purchase
and the performance of Purchaser’s obligations under this Agreement will
conflict with or result in the violation or breach of or render Purchaser in
default of, or result in the termination or in a right of termination or
cancellation of, or accelerate the performance required by or result in being
declared void, voidable or without further binding effect, any of the terms,
conditions or provisions of:



 38
 








(i)                                     any
provisions of the constating documents of Purchaser;


(ii)                                  any
Contract to which Purchaser is a party or by which Purchaser is bound; or


(iii)                               any
Applicable Laws or licenses applicable to Purchaser.


(d)                                 Purchaser
Guarantor has all necessary corporate power, authority and capacity to enter
into this Agreement and to carry out its obligations under this Agreement.


(e)                                  The
execution and delivery of this Agreement and the completion of the Purchase and
the performance of Purchaser Guarantor’s obligations under this Agreement have
been duly authorized by all necessary corporate action on the part of Purchaser
Guarantor.


(f)                                    None
of the execution and delivery of this Agreement, the completion of the Purchase
and the performance of Purchaser Guarantor’s obligations under this Agreement
will conflict with or result in the violation or breach of or render Purchaser
Guarantor in default of, or result in the termination or in a right of
termination or cancellation of, or accelerate the performance required by or
result in being declared void, voidable or without further binding effect, any
of the terms, conditions or provisions of:


(i)                                     any
provisions of the constating documents of Purchaser Guarantor;


(ii)                                  any
Contract to which Purchaser Guarantor is a party or by which Purchaser
Guarantor is bound; or


(iii)                               any
Applicable Laws or licenses applicable to Purchaser Guarantor.


5.3                               Enforceability
of Obligations


(a)                                  This
Agreement constitutes a legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, subject to
bankruptcy, winding-up, insolvency, moratorium, arrangement,
reorganization and other similar laws affecting creditors’ rights generally,
and to general principles of equity.


(b)                                 This
Agreement constitutes a legal, valid and binding obligation of Purchaser
Guarantor, enforceable against Purchaser Guarantor in accordance with its
terms, subject to bankruptcy, winding-up, insolvency, moratorium,
arrangement, reorganization and other similar laws affecting creditors’ rights
generally, and to general principles of equity.


5.4                               Investment
Canada


Purchaser is a “WTO
Investor” within the meaning of
the Investment Canada Act.


5.5                               Government
Authorizations


Assuming the accuracy of Section 4.24 no Material
Government Authorizations are required on the part of Purchaser or Purchaser
Guarantor in connection with the Purchase or the performance of its other
obligations under this Agreement except for those set forth in
Schedule 5.5.



 39
 








5.6                               Brokers


Purchaser has not incurred any liability or obligation
for any brokerage fees, commissions, finders’ fees or similar compensation with
respect to this Agreement or the transactions contemplated hereby for which
Vendor will be liable.


5.7                               Purchaser
as Principal


Purchaser is an accredited investor within the meaning
of the Securities Act (Alberta) and is
acquiring the Purchased Shares in its capacity as principal, and is not
purchasing the Purchased Shares for the purpose of resale or distribution to a
third party.


ARTICLE
6

REGARDING REPRESENTATIONS, WARRANTIES 

AND COVENANTS


6.1                               Materiality


(a)                                  Purchaser may not refuse to complete the
Purchase on the basis of any representations or warranties by Vendor in this
Agreement being incorrect or inaccurate, or any covenants of Vendor being
breached or any Damage or Destruction Event, unless, as a result thereof:


(i)                                     there occurs or could reasonably be expected
to occur a reduction in the fair market value of the Purchased Shares or the
Assets in excess of $300,000 in the case of any single incorrect or inaccurate
representations or warranties or breaches of any covenant, it being understood
and agreed that Purchaser may aggregate similar individual claims arising out
of similar events, acts, occurrences or circumstances (a “Material Claim”) or any Damage or
Destruction Event for any reason including:


(A)                              a
diminution in the fair market value of the Assets (including as a result of the
loss of any Assets, title defects in relation to such Assets, the impairment or
loss of interests in any Assets or the forfeiture or non-existence of any
Assets);


(B)                                an
increase in the amount of Liabilities of the Corporation and the Subsidiaries
(on a consolidated basis);


(C)                                the
Corporation and the Subsidiaries (on a consolidated basis) being unable to
operate the Business after the Closing Date on substantially the same basis as
the Corporation and the Subsidiaries (on a consolidated basis) operated the
Business before the Closing Date; or


(D)                               (without
duplication) a combination of the foregoing; and


the
aggregate amount of all uncured Claims of Purchaser and all Damage or
Destruction Events exceeds $175,000,000 at the Closing Time; or


(ii)                                  Purchaser would be unable to complete the
Purchase substantially in accordance with the provisions of this Agreement.



 40














(b)                                 Prior to Purchaser terminating the Agreement
pursuant to Section 6.1(a), Vendor shall have the right to cause Purchaser to
negotiate in good faith for a period of ten (10) days to complete the Purchase
by inter alia, reducing the Purchase Price.


(c)                                  For purposes of this Section 6.1, any
applicable representation and warranty or covenant of Vendor shall be deemed
not to be qualified by any reference in the text thereof to material, Material
or to a Material Adverse Effect.


6.2                               Nature
of Survival of Vendor’s Representations, Warranties, Covenants and Indemnities
and Limitations on Claims


(a)                                  The
representations and warranties of Vendor set forth in Article 4 shall survive
the Closing for the benefit of Purchaser for a period of eighteen months from
the Closing, after which time Purchaser shall not be entitled to advance, make
or bring any Claims whatsoever against Vendor with respect to those
representations and warranties, or any indemnities relating thereto, except:


(i)                                     the
representations and warranties in Sections 4.1, 4.2(a-d), 4.3, 4.4,
4.5(a-d), 4.5(e)(i) and 4.5(f)(i) and the indemnities related thereto shall
survive for an indefinite period from the Closing;


(ii)                                  the
representations and warranties in Section 4.18 and the indemnities related
thereto and the indemnities in Article 11 shall continue in full force and
effect for the benefit of Purchaser until 120 days after the later of:


(A)                              the
last date on which an assessment or reassessment for Taxes under the Tax Act or
under any other Applicable Laws imposing Taxes can be made against the
Corporation or the Subsidiaries in respect of the dates or periods covered by
those representations and warranties; and


(B)                                the
date on which the period for an appeal from an assessment, reassessment or
other determination of those Taxes, or decision of a court or other competent
tribunal in respect thereof may be filed has expired and that appeal has not
been filed;


(iii)                               the
covenants and agreements herein which by their terms contemplate performance
after the Closing Date shall survive the Closing indefinitely in accordance
with their terms; and


(iv)                              Claims
which arise from breaches of the covenants and agreements in Sections 9.1, 9.2,
9.3 and 9.4 shall survive for a period of eighteen months following the
Closing.


For purposes of the
limitations on the ability of Purchaser to make claims set forth in this
Section 6.2(a), if a notice of default pursuant to Section 10.2(a) is given
prior to the expiration of the relevant period, the Claim relating thereto
shall be deemed to have been made as of the same time.


(b)                                 Purchaser
shall not be entitled to make any Claim under this Agreement (other than in
respect of any Tax matter and the indemnities related thereto) unless each such
Claim is a Material Claim and the aggregate amount of all of those Claims as a
result of all incorrect



 41
 








or inaccurate
representations and warranties and the breaches of all covenants of Vendor
contained in this Agreement (including any Claims for indemnity arising out of
those incorrect or inaccurate representations or warranties and those breaches
of covenants) is equal to or greater than $20,000,000, in which case Purchaser
will be entitled (subject to Section 6.2(c)) to recover all Losses of
Purchaser related to those Claims in excess of $20,000,000.  For purposes of this Section 6.2(b), and the
making of any Claims pursuant to Article 10, any applicable representation and
warranty or covenant of Vendor shall be deemed not to be qualified by any
reference in the text thereof to material, Material or to a Material Adverse
Effect and Vendor’s representation and warranty in Section 4.14(a) shall not be
deemed to be qualified by any reference in the text thereof to “to Vendor’s or
the Corporation’s knowledge” or words to that effect.


The foregoing dollar minimums in this Section 6.2(b) shall not apply to
any Claims in respect of inaccurate or incorrect representations and warranties
in Sections 4.1, 4.2(a-d), 4.3, 4.4., 4.5(a-d), 4.5(e)(i), 4.5(f)(i), 4.8,
4.15(d), 4.18 or 4.25 or breaches of any covenants.


(c)                                  The
maximum cumulative Liability of Vendor and Vendor Guarantor in the aggregate in
respect of all Claims (other than in respect of any Tax matter) regarding:


(i)                                     other
than as set forth in Section 6.2(c)(ii), incorrect or inaccurate representations
and warranties in this Agreement (including on indemnities arising therefrom)
will be limited to an amount in Canadian Dollars, converted at the Exchange
Rate, equal to U.S. $700,000,000, being 35% of the Base Price; and


(ii)                                  incorrect
or inaccurate representations and warranties in Sections 4.1, 4.2(a-d),
4.3, 4.4, 4.5(a-d), 4.5(e)(i), 4.5(f)(i), 4.8, 4.15(d) and 4.25 and any breach
of a covenant to be performed by the Vendor or Vendor Guarantor in this
Agreement shall be limited to the Base Price.


For the avoidance
of doubt, and notwithstanding any other provision in this Agreement, Section
6.2(b) and (c) shall not apply to any breach of Section 4.18 or the
indemnification obligation related thereto or the indemnification obligation
pursuant to Article 11.


6.3                               Nature
of Survival of Purchaser’s Representations, Warranties, Covenants and
Indemnities


The representations and warranties of Purchaser set
forth in Article 5 shall survive the Closing for the benefit of Vendor for a
period of eighteen months from the Closing, after which time Vendor shall not
be entitled to advance, make or bring any Claims whatsoever against Purchaser
with respect to those representations and warranties, or any other indemnities
relating thereto.


6.4                               No
Consequential Damages


Neither Party will, in any circumstances whatsoever,
be liable under this Agreement to the other Party for indirect, incidental,
consequential, exemplary or punitive damages suffered, sustained, paid,
incurred or claimed by the other Party or the other Party’s Related
Parties.  However, nothing in this
Agreement shall in any way limit the right of any Indemnified Person to be
indemnified pursuant to Article 10 for any and all indirect, incidental,
consequential, exemplary or punitive damages of every nature and kind
whatsoever that are part of any Claim by a Person other than a Party to this
Agreement or a Related Party.



 42
 








6.5                               No
Other Representations, Warranties or Covenants of Vendor


Purchaser acknowledges to, and agrees with, Vendor as
follows:


(a)                                  Vendor
makes no other representations, warranties, covenants or agreements to or with
Purchaser except as expressly set forth in this Agreement or any document or
certificate provided in connection with this Agreement, and this Agreement and
such documents and certificates contain all the representations, warranties,
covenants and agreements of Vendor relating to the Purchase, including with
respect to the Corporation, the Subsidiaries, the Assets and the Business.  No oral statements or representations
(whether express or implied) by any Person have induced or influenced Purchaser
to enter into this Agreement or to agree to any of its terms, or have been
relied on in any way by Purchaser as being accurate or have been taken into
account by Purchaser as being important to Purchaser’s decision to enter into
this Agreement or agree to any of its terms;


(b)                                 except
as set forth in Articles 4, 9, 10 and 11 of this Agreement, neither Vendor, the
Corporation nor any Subsidiary nor anyone acting on their behalf (including any
of their Related Parties) have made any representation, warranty, covenant or
agreement whatsoever, either express or implied, with respect to the
Corporation or any of the Subsidiaries, or their respective Assets, Liabilities
or Business activities.  Without limiting
the foregoing, no representation, warranty, covenant or agreement has been made
by Vendor, the Corporation, any Subsidiary or any other such Person in relation
to:


(i)                                     any
data or information provided or made available to Purchaser by Vendor’s
Investment Bankers, on plant or site visits, in management presentations, in
meetings with Vendor’s management or employees or otherwise;


(ii)                                  the
value of the Assets or the future cash flow therefrom;


(iii)                               the
Environmental condition of any Asset or any Environmental Liability;


(iv)                              any
engineering or geological information or interpretations thereof or any
economic evaluations (including the Reserve Report (US));


(v)                                 title
to the Assets;


(vi)                              Liabilities
or Claims related to the Assets or any operations related to the Assets;


(vii)                           the
past, present or future exercise of any regulatory, administrative or
ministerial discretion under any Applicable Law;


(viii)                        the past,
present or future performance, action, operation, ownership or profitability of
the oil and gas industry in western Canada and the Northwest Territories;


(ix)                                the
existence of any present or future business opportunities of the Corporation or
the Subsidiaries of any type whatsoever, including in respect of the oil and
gas industry in western Canada and the Northwest Territories; or


(x)                                   the
state or condition of the Assets (which are acknowledged by Purchaser to be on
an “as-is” basis), including the physical condition of the Assets or the
fitness



 43
 








for a particular purpose
thereof, or the merchantability, Environmental condition, existence of latent
or patent defects, quality or other aspect or characteristic of the Assets;


provided that nothing in this Section 6.5(b) shall be deemed to limit
the scope or effect of the express provisions of Articles 4, 9, 10 and 11;


(c)                                  Vendor
has provided Purchaser with the opportunity to conduct all such enquiries,
investigations and due diligence regarding the Corporation, the Subsidiaries,
and the respective Assets, Liabilities and Business activities of the
Corporation and the Subsidiaries and all such other matters as Purchaser
considered necessary or desirable in connection with the completion of the
Purchase in accordance with this Agreement and, provided that the foregoing
will not limit in any way the Purchaser’s rights hereunder, Purchaser has
entered into this Agreement as a result of its own due diligence,
investigations, enquiries, advice and knowledge and the representations,
warranties and covenants contained in this Agreement and, except as otherwise
expressly provided herein, assumes full business and financial risk in
connection with the Purchase, including the Assets and the Business;


(d)                                 Purchaser
has knowledge and experience in the oil and gas industry generally, and is
capable of evaluating the merits associated with entering into and performing
its obligations under this Agreement (provided that the foregoing does not
limit in any way Purchaser’s rights hereunder); and


(e)                                  Except
in the case of fraud and its rights under this Agreement, Purchaser hereby
waives all rights and remedies (whether now existing or hereafter arising and
including all common law, tort, contractual, equitable and statutory rights and
remedies) against Vendor, the Corporation or any Subsidiary or anyone acting on
their behalf in respect of the Purchased Shares, the Assets, the Business or
any representations or statements made, or information or data furnished, to
Purchaser or anyone acting on Purchaser’s behalf in connection therewith or
otherwise (whether made or furnished by or on behalf of Vendor and whether made
or furnished orally or by electronic, faxed, written or other means); provided
that nothing in this Section 6.5(e) shall limit the scope or effect of the
express provisions of Articles 4, 9, 10 and 11.


6.6                               No
Other Representation, Warranties or Covenants of Purchaser


Vendor acknowledges to, and agrees with, Purchaser as
follows:


(a)                                  Purchaser
makes no other representations, warranties, covenants or agreements to or with
Vendor except as expressly set forth in this Agreement, and this Agreement
contains all the representations, warranties, covenants and agreements of
Purchaser relating to the Purchase.  No
other statements or representations (whether express or implied) by any Person
have induced or influenced Vendor to enter into this Agreement or to agree to
any of its terms, or have been relied on in any way by Vendor as being accurate
or have been taken into account by Vendor as being important to Vendor’s
decision to enter into this Agreement or agree to any of its terms; and


(b)                                 except
in the case of fraud and its rights under this Agreement, Vendor hereby waives
all rights and remedies (whether now existing or hereafter arising and
including all common law, tort, contractual, equitable and statutory rights and
remedies) against Purchaser, the



 44
 








Corporation or any
Subsidiary or anyone acting on their behalf in respect of the Purchased Shares,
the Assets, the Business or any representations or statements made, or
information or data furnished, to Vendor or anyone acting on Vendor’s behalf in
connection therewith or otherwise (whether made or furnished by or on behalf of
Purchaser and whether made or furnished orally or by electronic, faxed, written
or other means) provided that nothing in this section 6.6(b) shall limit the
scope or effect of the express provisions of Article 4, 9, 10 and 11.


6.7                               Restrictions
on Claims and Actions


Without in any way restricting the provisions of
Section 6.5, Purchaser acknowledges to and agrees with Vendor that Vendor
will not be liable for, and Purchaser will not make or advance, any Claim to
the extent that:


(a)                                  Other
than with respect to any Tax matter, adequate provision has been made in the
Financial Statements for any fact, matter or circumstance on which the Claim is
based;


(b)                                 the
Claim is based on any fact which was registered in the Personal Property
Registries in British Columbia, Alberta, Saskatchewan and the Northwest
Territories, against the Corporation and its Subsidiaries as at April 30, 2007;


(c)                                  except
as provided in Article 4, the Claim including with respect to any Tax matter is
based on any forecasts, projections or estimates as to the future of the
Business (including any revenue or profits which may be derived from the
Business) given by Vendor, the Corporation, any Subsidiary, any Person
representing Vendor, the Corporation or any Subsidiary (including its
directors, officers, employees, consultants, agents or advisors, including
Vendor’s Investment Bankers and Vendor’s Counsel) to Purchaser or Purchaser’s
Representatives;


(d)                                 the
Claim (other than with respect to any Tax matter) is as a result of, in respect
of or arises from any act, omission, transaction, fact, matter or circumstance
which would not have occurred but for any Applicable Law not in force at the
date of this Agreement or any change of any law or administrative practice of
any Government Authority, including any such Applicable Law or change which
takes effect retrospectively; and


(e)                                  the
Claim is a result of, in respect of or arises from any act, matter, omission,
transaction or arrangement of or on behalf of Purchaser, the Corporation or any
Subsidiary after the Closing Date, except as otherwise expressly contemplated
by this Agreement.


ARTICLE
7

PURCHASER’S CONDITIONS


The obligation of Purchaser to complete the Purchase
in accordance with this Agreement shall be subject to the satisfaction of, or
compliance with, at or before the Closing Time, each of the following
conditions (collectively, the “Purchaser’s Conditions”)
in this Article 7 each of which is acknowledged to be inserted for the
exclusive benefit of Purchaser and may be waived by Purchaser in whole or in
part.


7.1                               Correctness
and Accuracy of Representations and Warranties


Subject to Section 6.1, the representations and
warranties of Vendor contained in Article 4 shall be correct and accurate in
all material respects as at the Closing Time with the same effect as if made at



 45
 








and as of the Closing
Time (except to the extent those representations and warranties expressly
relate to an earlier date, in which case such representations and warranties
shall be correct and accurate in all material respects on and as of such
earlier date, and except to the extent those representations and warranties are
affected by actions or omissions consented to or waived by Purchaser),  and Purchaser shall have received a
certificate to that effect at or before the Closing Time from a Senior Officer
of Vendor.


7.2                               Performance
of Obligations


Subject to Section 6.1, Vendor shall, at or before the
Closing Time, have performed or complied with, in all material respects, all
its obligations, covenants and agreements under this Agreement required to be
performed or complied with by it prior to or on the Closing Time, and Purchaser
shall have received a certificate to that effect at or before the Closing Time
from a Senior Officer of Vendor.


7.3                               Governmental
Approvals, Consents, and Authorizations


(a)                                  The
Required Approvals shall have been obtained and shall be in full force and
effect.


(b)                                 All
other Government Authorizations required in connection with the completion of
the Purchase in accordance with this Agreement shall have been obtained and be
in full force and effect, other than any such Government Authorizations, the
failure of which to obtain would not enjoin, materially restrict, prohibit or
make illegal the Purchase.


(c)                                  There
shall not be in effect any Applicable Law which enjoins, materially restricts,
prohibits or makes illegal the Purchase; provided that all Government
Authorizations have been obtained.


7.4                               Other
Consents and Approvals


(a)                                  The
consent of Scotia Centre Limited to the change of control of the Corporation
under the Lease of Office Space, dated November 1, 2001, between the
Corporation, as tenant, and Scotia Centre Limited, as landlord, shall have been
obtained.


(b)                                 All
Authorizations (other than Government Authorizations) required in connection
with the completion of the Purchase in accordance with this Agreement shall
have been obtained, other than those consents and approvals, the failure of which
to obtain, individually or in the aggregate, would not enjoin, materially
restrict, prohibit or make illegal the completion of the Purchase in accordance
with this Agreement.


7.5                               No
Injunctions or Restraints


No restraining order, injunction or other order or
decree issued by any Government Authority of competent jurisdiction enjoining,
restraining or otherwise preventing the completion of the Purchase in
accordance with this Agreement shall be in effect; provided, however, that each
of the Parties shall use commercially reasonable efforts to prevent the entry
of any such restraining order, injunction or other order or decree and to cause
any such restraining order, injunction or other order or decree that may be
entered to be vacated or otherwise rendered of no effect.


7.6                               Vendor’s
Closing Deliveries


(a)                                  At
least five Business Days before the Closing Time, Vendor shall deliver to
Purchaser:



 46
 








(i)                                     a
statement setting forth the aggregate amount of all Distributions made during
the Lock Box Period, if any; and


(ii)                                  the
list of bank accounts and safety deposit boxes referred to in
Section 9.17.


(b)                                 At
or before the Closing Time, a statement of the amount of the Purchaser
Subscription Payment, being the total amount of U.S. Dollars that the
Corporation will require in order to pay and satisfy in full the Debenture and
all interest accrued thereon.


(c)                                  At
or before the Closing Time, Vendor shall have delivered to Purchaser the
following, in form and substance satisfactory to Purchaser, acting reasonably:


(i)                                     share
certificates representing the Purchased Shares, duly endorsed in blank for
transfer, or accompanied by irrevocable security transfer powers of attorney
duly executed in blank, in either case by the holders of record, together with
evidence satisfactory to Purchaser (acting reasonably) that Purchaser or its
nominee(s) have been entered on the books of the Corporation as the registered
holder of the Purchased Shares;


(ii)                                  certified
copies of:


(A)                              the
articles of incorporation and bylaws of Vendor, Vendor Guarantor, the
Corporation and each Subsidiary and the partnership agreements and other
constating documents of the Partnership Subsidiaries and the partners thereof;


(B)                                all
resolutions of the boards of directors of Vendor, Vendor Guarantor, the
Corporation and a resolution of the shareholders of the Corporation approving
the entering into and completion of the Purchase (in the case of Vendor) and
the transfer of the Purchased Shares (in the case of the Corporation); and


(C)                                a
list of the officers of Vendor and Vendor Guarantor authorized to sign
agreements, certificates, transfers and any other writings in respect of the
Purchase, together with their specimen signatures;


(iii)                               certificates
of status with respect to Vendor, Vendor Guarantor, the Corporation and each of
the Corporate Subsidiaries, issued by the appropriate Government Authority;


(iv)                              a
certificate confirming the matters described in Section 7.1 and
Section 7.2.


(v)                                 an
opinion of Vendor’s counsel as to the matters set forth in Schedule 7.6
which opinion may be given by in-house counsel of Vendor Guarantor or Vendor’s
Counsel may rely on an opinion given by Vendor Guarantor’s in-house counsel and
may be subject to customary assumptions, qualifications and limitations.  With respect to any factual matter relevant
to the opinion, such counsel may rely on a certificate of a Senior Officer of
Vendor;


(vi)                              a
duly executed release and resignation, effective as of the Closing Time, of
each director of the Corporation and of each of the Subsidiaries;



 47
 








(vii)                           a
receipt for payment of the amount provided in Section 3.3(a);


(viii)                        original
share books, share ledgers and minute books and corporate seals and an
undertaking from Vendor to deliver to Purchaser promptly after Closing all
Books and Records of the Corporation and each of the Subsidiaries;


(ix)                                a
certificate signed by a Senior Officer of PFULC, the Corporation, Vendor and
Vendor Guarantor evidencing full satisfaction and discharge of the Debenture
and inter-company debt and all Liabilities, Encumbrances and Claims related
thereto; and


(x)                                   any
other documents reasonably required to be delivered by Vendor to Purchaser at
Closing Time pursuant to this Agreement.


7.7                               Termination
of Debenture-Related Agreements


At the Closing
Time, such documents as are reasonably required in order to terminate the
agreements referred to in Schedule 4.2(e) shall have been executed and
delivered in form and substance satisfactory to Purchaser, acting reasonably.


7.8                               Material
Damage


Subject
to Section 6.1, there shall have been no Damage or Destruction Event in
relation to the Assets.


ARTICLE
8

VENDOR’S CONDITIONS


The obligation of Vendor to complete the Purchase in
accordance with this Agreement shall be subject to the satisfaction of, or
compliance with, at or before the Closing Time, each of the following
conditions (collectively, the “Vendor’s Conditions”)
in this Article 8 each of which is acknowledged to be inserted for the
exclusive benefit of Vendor and may be waived by Vendor in whole or in part.


8.1                               Correctness
and Accuracy of Representations and Warranties


The representations and warranties of Purchaser
contained in Article 5 shall be correct and accurate in all material respects
as at the Closing Time with the same effect as if made at and as of the Closing
Time (except to the extent those representations and warranties expressly
relate to an earlier date, in which case such representations and warranties
shall be correct and accurate in all material respects on and as of such
earlier date, and except to the extent that such representations and warranties
are affected by actions and omissions consented to or waived by Vendor), and
Vendor shall have received a certificate to that effect at or before the
Closing Time from a Senior Officer of Purchaser.


8.2                               Performance
of Obligations


Purchaser shall, at or before the Closing Time, have
performed or complied with, in all material respects, all its obligations,
covenants and agreements under this Agreement required to be performed or
complied with by it prior to or on the Closing Time, and Vendor shall have
received a certificate to that effect at or before the Closing Time from a
Senior Officer of Purchaser.



 48
 








8.3                               Governmental
Approvals, Consents, and Authorizations


(a)                                  The
Required Approvals shall have been obtained and shall be in full force and
effect.


(b)                                 All
other Government Authorizations required in connection with the completion of
the Purchase in accordance with this Agreement shall have been obtained and be
in full force and effect, other than any such Government Authorizations, the
failure of which to obtain would not enjoin, materially restrict, prohibit or
make illegal the Purchase.


(c)                                  There
shall not be in effect any Applicable Law which enjoins, materially restricts,
prohibits or makes illegal the Purchase; provided that all Government
Authorizations have been obtained.


8.4                               Other
Consents and Approvals


All Authorizations (other than Government
Authorizations) required in connection with the completion of the Purchase in
accordance with this Agreement shall have been obtained, other than those
consents and approvals, the failure of which to obtain, individually or in the
aggregate, would not enjoin, materially restrict, prohibit or make illegal the
completion of the Purchase in accordance with this Agreement.


8.5                               No
Injunctions or Restraints


No restraining order, injunction or other order or
decree issued by any Government Authority of competent jurisdiction enjoining,
restraining or otherwise preventing the completion of the Purchase in
accordance with this Agreement shall be in effect; provided, however, that each
of the Parties shall use commercially reasonable efforts to prevent the entry
of any such restraining order, injunction or other order or decree and to cause
any such restraining order, injunction or other order or decree that may be
entered to be vacated or otherwise rendered of no effect.


8.6                               Purchaser’s
Closing Deliveries


At or before the Closing Time, Purchaser shall have
delivered to Vendor the following, in form and substance satisfactory to
Vendor, acting reasonably:


(a)                                  the
amount of the Purchase Price provided in Section 3.3(a) by wire transfer
in accordance with Section 2.3;


(b)                                 certified
copies of:


(i)                                     the
constating documents of Purchaser and Purchaser Guarantor;


(ii)                                  all
resolutions of the board of directors of Purchaser and Purchaser Guarantor
approving the entering into and completion of the Purchase contemplated by this
Agreement; and


(iii)                               a
list of the officers and directors of Purchaser and Purchaser Guarantor
authorized to sign agreements and any certificates, transfers and other
writings in respect of the Purchase, together with their specimen signatures;



 49
 








(c)                                  a
certificate of status with respect to Purchaser issued by an appropriate
Government Authority and a certified true copy of the commercial license of
Purchaser Guarantor issued by the Ministry of Economy and Planning of the
United Arab Emirates;


(d)                                 a
certificate confirming the matters described in Section 8.1 and
Section 8.2;


(e)                                  an
opinion of counsel to Purchaser and Purchaser Guarantor as to the matters set
forth in Schedule 8.6(e) which opinion with respect to Purchaser Guarantor
may be given by the in-house counsel of Purchaser Guarantor or Purchaser’s
Counsel may rely on an opinion given by in-house counsel of Purchaser Guarantor
and may be subject to customary assumptions, qualifications and
limitations.  With respect to any factual
matter relevant to the opinion, such counsel may rely on a certificate of a
Senior Officer of Purchaser or Purchaser Guarantor as applicable;


(f)                                    copies
of the Required Approvals and other required Government Authorizations;


(g)                                 a
notice to the Escrow Agent in the form prescribed by the Escrow Agreement
authorizing the Escrow Agent to release the Deposit (and any interest earned
thereon less any applicable withholding Taxes) to Vendor; and


(h)                                 any
other documents reasonably required to be delivered by Purchaser to Vendor at
Closing Time pursuant to this Agreement.


8.7                               Termination
of Debenture-Related Agreements


At the Closing
Time, such documents as are reasonably required in order to terminate the
agreements referred to in Schedule 4.2(e) shall have been executed and
delivered in form and substance satisfactory to Vendor, acting reasonably.


8.8                               Deposit


The Deposit and any interest earned on the Deposit (less
any applicable withholding Taxes) shall have been paid to Vendor by the Escrow
Agent.


ARTICLE
9

OTHER COVENANTS


9.1                               Conduct
of Business Prior to Closing


From the date of this Agreement until the Closing
Time, Vendor shall cause the Corporation and the Subsidiaries to do the
following:


(a)                                  conduct
the Business in the Ordinary Course of Business except as otherwise
specifically contemplated, permitted or restricted by this Agreement;


(b)                                 use
commercially reasonable efforts to maintain good relations with Persons having
business relationships with the Corporation and any of the Subsidiaries and the
Employees; and


(c)                                  comply
in all material respects with all Applicable Laws and Contracts applicable to
the Corporation, any of the Subsidiaries and the Assets;



 50
 








provided that where the Corporation or any Subsidiary
is not the operator of any Asset, Vendor shall be obligated to cause to be done
only that which a prudent non-operator would be expected to do in similar
circumstances in accordance with accepted Canadian oilfield industry practices.


From the Date of this
Agreement until the Closing Time, Vendor Guarantor shall continue to make
available advances consistent with past practices pursuant to the terms of the
Credit Agreement listed on Schedule 4.15(d).


9.2                               Negative
Covenants


From the date of this Agreement until the Closing Time
Vendor shall not, without the written consent of Purchaser:


(a)                                  amend
the constating documents or bylaws of the Corporation or of any Subsidiary;


(b)                                 cause
or permit the Corporation or any Subsidiary to:


(i)                                     issue,
sell or agree to issue or sell:


(A)                              any
shares of its capital stock or any of its units or partnership interests, as
applicable; or


(B)                                any
securities convertible into, or options with respect to, or warrants to
purchase or rights to subscribe for, any shares of its capital stock any of its
units or partnership interests, as applicable;


(ii)                                  merge
into, amalgamate into, or with or consolidate with any other Person or acquire
all or substantially all of the business or assets of any other Person or agree
to do any of the foregoing;


(iii)                               declare,
set aside, make or pay any Distributions; or


(iv)                              sell,
transfer or otherwise dispose of any of its oil and gas properties having a
fair market value for any such property of greater than $1,000,000 or if the
aggregate fair market values of any such properties that are sold, transferred
or otherwise disposed of by the Corporation and the Subsidiaries during this
period would exceed $5,000,000;


(v)                                 directly
or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise
acquire, any shares of capital stock or partnership interests or other
securities of the Corporation;


(c)                                  cause
or permit the Corporation or any Subsidiary to sell, lease, transfer or
otherwise dispose of any of the Assets, other than the oil and gas properties
that are referred to in Section 9.2(b)(iv), having an individual or aggregate
fair market value in excess of $10,000,000
except:


(i)                                     the
sale of Petroleum Substances and other Assets, other than the oil and gas
properties that are referred to in Section 9.2(b)(iv), in the Ordinary Course
of Business; or



 51
 








(ii)                                  to
the Corporation or any Subsidiary;


(d)                                 create
any new Encumbrances on the Assets other than Permitted Encumbrances or
pursuant to the Title and Operating Documents;


(e)                                  except
to the extent required by the terms of written employment or consulting
agreements as in effect on the date of this Agreement, or as otherwise
expressly contemplated by the terms of this Agreement or set out in the Schedules
to this Agreement:


(i)                                     increase
the benefits pursuant to Benefit Plans except in the Ordinary Course of
Business;


(ii)                                  enter
into any contracts of employment involving annual base compensation in excess
of $200,000 (other than the contracts terminable by Purchaser without liability
immediately following the Closing); or


(iii)                               increase,
except consistent with previous practice of the Corporation, any salary, wages
or other compensation payable to Employees by more than $50,000 per Employee or
$1,000,000 in the aggregate for all Employees;


(f)                                    except
in the case of an emergency, make any capital expenditures other than capital
expenditures in the amounts, at the times and within the scope specified in the
Corporation’s capital budget as approved in writing by Purchaser; provided that
the Corporation shall also obtain Purchaser’s prior written consent of any
capital expenditures in excess of $10,000,000 in the aggregate, including so in
accordance with the Corporation’s capital budget; provided further that in
seeking Purchaser’s consent for such expenditures at any time, the Corporation
shall be entitled to seek consent for related groups of expenditures and submit
investment memos or other documentation supporting the business case for such
expenditures, and Purchaser shall respond to the Corporation’s request within 3
Business Days or be deemed to have granted its consent, and also provided that
if the Purchaser withholds its consent for an expenditure and the expenditure
is so in accordance with the Corporation’s capital budget but the Corporation
or the Vendor Guarantor deems that the subject expenditure is necessary to
maintain the integrity of the Assets, then the Corporation may, acting
reasonably, make such necessary expenditure and the making of such expenditure
shall not be a breach of this Section 9.2(f);


(g)                                 except
as provided in Section 9.2(h), incur any indebtedness for borrowed money,
other than indebtedness for borrowed money incurred in the Ordinary Course of
Business that is paid in full before the Closing;


(h)                                 enter
into or amend in any material respect or terminate before the end of the term
thereof any Material Contract or Contract of the type set forth in clauses (i)
through (iv) of Section 4.14(g), or any Title and Operating Document, except in
the Ordinary Course of Business (including processing of assignments by third
parties in the Ordinary Course of Business);


(i)                                     enter
into any leases for new equipment if the equipment which is the subject matter
of any such lease has a value in excess of $5,000,000;



 52
 








(j)                                     except
in the Ordinary Course of Business, enter into any joint venture, partnership
or other similar arrangement or form any other new material arrangement for the
conduct of the Business or acquire, purchase or lease any interest in petroleum
and natural gas, real property or real property interests;


(k)                                  purchase
any securities of any Person, excepting any shares of the Corporation or
shares, units or partnership interests in any of the Subsidiaries;


(l)                                     adopt
or change any material accounting method with respect to Taxes; amend any Tax
Return; enter into any private letter ruling, closing agreement or similar
ruling or agreement with any taxing authority; settle any audit or proceeding
with respect to a material amount of Taxes owed by the Corporation or any of
its Subsidiaries;


(m)                               except
in respect of any original Tax Return for a taxable period for which no such
Tax Return previously has been filed, make any election with respect to Taxes;


(n)                                 enter
into any Contract or arrangement of the type described in clauses (a)-(e) of
Section 4.20;


(o)                                 transfer
funds or other assets or properties or make obligations in respect of the
Allocated Interest Payable; and


(p)                                 enter
into any commitments to take any of the actions prohibited by any of the
foregoing.


9.3                               Dealings
or Operations Regarding Assets


Except in an emergency in order to prevent loss of
life, injury to persons or damage to or loss of property and subject to
Section 9.2, from the date of this Agreement until the Closing Time Vendor
shall not permit the Corporation or any Subsidiary, without the prior written
consent of Purchaser, to:


(a)                                  voluntarily
assume any obligation or commitment with respect to the Assets, except in the
amounts, at the times and within the scope specified in Corporation’s capital
budget; provided that prior to assuming any
obligations or commitments, including so in accordance with the Corporation’s
capital budget, in excess of $10,000,000 in the aggregate, the Corporation
shall obtain the Purchaser’s prior written consent; provided
further that in seeking Purchaser’s consent for such assumption at any time,
the Corporation shall be entitled to seek consent for related groups of
obligations and commitments to be assumed and submit investment memos or other
documentation supporting the business case therefor, and Purchaser shall
respond to the Corporation’s request within 3 Business Days or be deemed to
have granted its consent, and also provided that if the Purchaser withholds its
consent for an assumption of any obligation or commitment and such obligation
or commitment is so in accordance with the Corporation’s capital budget but the
Corporation or the Vendor Guarantor deems that the subject obligation or
commitment is necessary to maintain the integrity of the Assets, then the
Corporation may, acting reasonably, assume such necessary obligation or
commitment and the assumption of such obligation or commitment shall not be a
breach of this Section 9.3(a);


(b)                                 surrender,
abandon or allow to expire any of the Assets except:


(i)                                     Assets
which have become obsolete;



 53
 








(ii)                                  where
the rights of the Corporation or the Subsidiaries to those Assets have expired
or terminated; or


(iii)                               otherwise
in the Ordinary Course of Business;


(c)                                  propose
or initiate the exercise of any right (including bidding rights at Crown sales,
rights under areas of mutual interest provisions and rights of first refusal)
or option relative to, or arising as a result of the ownership of, any of the
Assets, or propose or initiate any operations on the Assets which have not
commenced or have not been committed to by the Corporation or any Subsidiary as
of the date hereof, except in the amounts, at the times and within the scope
specified in the Corporation’s capital budget, or that could, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the value of any of the Assets; provided that
prior to taking any of the foregoing actions, including so in accordance with
the Corporation’s capital budget, in excess of $10,000,000 in the aggregate the
Corporation shall obtain Purchaser’s prior written consent; provided further that in seeking Purchaser’s consent for
such actions at any time, the Corporation shall be entitled to seek consent for
related groups of such actions and submit investment memos or other
documentation supporting the business case therefor, and Purchaser shall
respond to the Corporation’s request within 3 Business Days or be deemed to
have granted its consent, and also provided that if the Purchaser withholds its
consent for taking such action and such action is so in accordance with the
Corporation’s capital budget but the Corporation or the Vendor Guarantor deems
that the subject action is necessary to maintain the integrity of the Assets,
then the Corporation may, acting reasonably, take such necessary action and the
taking of such action shall not be a breach of this Section 9.3(c); or


(d)                                 resign,
or take any action which would result in its resignation or replacement, as
operator of any of the Assets.


Provided however, that Vendor shall be obligated to
cause the Corporation and the Subsidiaries to promptly provide to Purchaser any
notices, communication and other documentation received in respect of any
proposals that would exceed the limits set forth in sections Error! Reference source not found. and Error! Reference source not found.
above.  If Vendor, the Corporation or any
Subsidiary makes expenditures or takes actions necessary to prevent loss of
life or injury to individuals, damage to or loss of property, Vendor shall, or
shall cause the Corporation or the applicable Subsidiary to, give notice to
Purchaser of those expenditures or actions and Vendor’s, the Corporation’s or
the applicable Subsidiary’s estimate of the amounts expended or to be expended
in connection therewith as soon as reasonably possible in the circumstances.


9.4                               Intercorporate
Obligations


On or before the Closing Time and notwithstanding
anything to the contrary provided herein:


(a)                                  Vendor
shall cause any indebtedness of the Corporation and the Subsidiaries to Vendor
or to any of Vendor’s Affiliates (other than to the Corporation or a
Subsidiary) to be paid or otherwise satisfied, including by set-off,
except as contemplated by Articles 2 and 3 hereof;


(b)                                 Vendor
shall, and shall cause its Affiliates (other than the Corporation or the
Subsidiaries) to, pay or otherwise satisfy any amounts owed by them to the
Corporation and the Subsidiaries; and



 54
 








(c)                                  Vendor
shall use reasonable commercial efforts to cause any guarantees, credit support
or other financial assurances provided by Vendor or its Affiliates (other than
the Corporation or the Subsidiaries) to counterparties who have Contracts with
the Corporation or any Subsidiary, which are listed on Schedule 9.4(c), to be
released in a manner that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect subject to Purchaser
complying with its obligations in this Section 9.4.


For purposes of Section 9.4(a) above, the Allocated
Interest Payable shall on or prior to the Closing Time be eliminated without
any transfer of funds or other assets, or properties or making of obligations,
and on and after the Closing Time any and all obligations of the Corporation
and any Subsidiary therefor shall be deemed to be fully satisfied and
terminated.  Purchaser will at Vendor’s
request at any time as part of the Closing furnish any guarantees, credit
support or other financial assurances as may be required by the counterparties
referred to in Section 9.4(c) above so that Vendor and its Affiliates can
be released from their obligations in that regard, so long as Purchaser’s
compliance with this provision would not reasonably be expected to have a
Material Adverse Effect, a material adverse effect on Purchaser or substantially
increase the cost of providing such guarantees, credit supports or other
financial assurances compared to those costs in place and incurred by Vendor
and its Affiliates as of the date hereof.


9.5                               Access
to Books and Records and Other Assets


(a)                                  Vendor
shall permit Purchaser and its Representatives, between the date of this
Agreement and the Closing Time, on reasonable notice, to the Senior Officers of
Vendor, the Corporation and any Subsidiary, to have access during normal
business hours to:


(i)                                     all
locations of the Corporation or any Subsidiary where Books and Records or other
material relevant to the Business is stored;


(ii)                                  all
the Books and Records; and


(iii)                               the
Assets of the Corporation and the Subsidiaries and other material relevant to
the Business and in the possession or control of the Corporation or any
Subsidiary, provided that such access does not unreasonably interfere with the
operation of the Business in the Ordinary Course of Business.


(b)                                 Vendor
shall permit Purchaser and its Representatives, between the date of this
Agreement and the Closing Time, on reasonable notice to the Senior Officers of
Vendor, the Corporation and any Subsidiary, to have reasonable access to the
Employees, auditors and inside counsel of the Corporation and any Subsidiary
during normal business hours; provided that such access does not unreasonably
interfere with such Employees’, auditors’ and counsel’s responsibilities or the
Ordinary Course of Business.


(c)                                  Notwithstanding
Section 9.5(a), Vendor shall not be required to disclose any information,
records, files or other data to Purchaser:


(i)                                     where
Vendor, the Corporation or any Subsidiary is prohibited by any Applicable Law
(including the Competition Act); or


(ii)                                  where
to do so would cause Vendor, the Corporation or any Subsidiary to be in
violation of a confidentiality obligation to another Person.



 55
 








If any consent of any Person is required to permit the
release of any information to Purchaser, Vendor shall, on the request of
Purchaser, make all commercially reasonable efforts to obtain that consent.


9.6                               Confidentiality


(a)                                  From and after the Closing, for a period of two
years from the Closing Date, Vendor shall, and shall cause each of its
Affiliates and Representatives to maintain in strict confidence any and all
Confidential Information concerning the Assets and the Business of the
Corporation and the Subsidiaries.  It is
understood that the Vendor shall not have any liability hereunder with respect
to information that (i) is in or, through no fault of the Vendor or any of its
Representatives, comes into the public domain, (ii) Vendor is legally required
to disclose, or (iii) is or becomes available to Vendor from a source (other
than Purchaser or any of its Affiliates or Representatives) which, to the best
of Vendor’s knowledge, is not prohibited from disclosing such information to
Vendor by a legal, contractual or fiduciary obligation.


(b)                                 In the event that Vendor or any of its Affiliates
or Representatives are required by law to disclose any such information, Vendor
shall promptly notify the Purchaser in writing so that Purchaser may seek a
protective order and/or other motion to prevent or limit the production or
disclosure of such information.  If such
motion has been denied, then the Person required to disclose such information
may disclose only such portion of such information which, based on advice of
Vendor’s outside legal counsel, is required by law to be disclosed (provided
that the Person required to disclose such information shall use all reasonable
efforts to preserve the confidentiality of the remainder of such
information).  Vendor shall continue to
be bound by its obligations pursuant to this Section 9.6 for any information
that is not required to be disclosed, or that has been afforded protective
treatment, pursuant to such motion.


(c)                                  From and after the Closing, for a period of two
years from the Closing Date Purchaser shall, and shall cause each of its
affiliates and Representatives to, maintain in strict confidence any and all
Confidential Information concerning Vendor which is not related to the Assets
or the business of the Corporation and the Subsidiaries and which Purchaser is
not purchasing in connection with the transactions contemplated by this
Agreement.  It is understood that Purchaser
shall not have any liability hereunder with respect to information that (i) is
in or, through no fault of Purchaser or any of its Representatives, comes into
the public domain, (ii) Purchaser is legally required to disclose, or (iii) is
or becomes available to Purchaser from a source (other than Vendor or any of
its Affiliates or representatives) which, to the best of Purchaser’s knowledge,
is not prohibited from disclosing such information to Purchaser by a legal,
contractual or fiduciary obligation.


(d)                                 In the event that Purchaser or any of its
Affiliates or Representatives are required by law to disclose any such
information, Purchaser shall promptly notify Vendor in writing so that Vendor
may seek a protective order and/or other motion to prevent or limit the
production or disclosure of such information. 
If such motion has been denied, then the Person required to disclose
such information may disclose only such portion of such information which,
based on advice of Purchaser’s Counsel, is required by law to be disclosed
(provided that the Person required to disclose such information shall use all
reasonable efforts to preserve the confidentiality of the remainder of such
information).  Purchaser shall continue
to be bound by its obligations pursuant to this Section 9.6 for



 56
 








any
information that is not required to be disclosed, or that has been afforded
protective treatment, pursuant to such motion.


9.7                               Actions
to Satisfy Closing Conditions


Without derogating from any Party’s rights or
obligations under this Agreement, it is agreed that Vendor shall act in good
faith and use commercially reasonable efforts to satisfy, or cause to be
satisfied, all of the Conditions set forth in Article 7, including the waiver
of notice and other requirements for performance of the actions set forth in
Section 2.1, and Purchaser shall act in good faith and use commercially
reasonable efforts to satisfy, or cause to be satisfied, the Conditions set out
in Article 8.  Each Party shall cooperate
with the other Party and provide the other Party or its Representatives with
information in its possession, and not otherwise available to the other Party,
necessary to seek the approvals or waivers referred to in Articles 7 and
8.  Each of Purchaser and Vendor shall
act in good faith in determining whether or not a Condition in its favour has
been satisfied.


9.8                               Preservation
of Records


Purchaser shall take all reasonable steps to preserve
and keep the Books and Records for a period of ten years from the Closing
Date, or for any longer period as may be required by any Applicable Law or
Government Authority or by Section 11.2(c), and shall make those Books and
Records available to Vendor as may be reasonably required by Vendor in
connection with a Claim by Purchaser or any other Person against Vendor under
or relating to this Agreement or the Purchase. 
Vendor acknowledges that Purchaser shall not be liable to Vendor in the
event of any accidental destruction of those Books and Records, caused otherwise
than by the gross negligence or wilful misconduct of Purchaser.


9.9                               Competition
Act Filing and Investment Canada Act Filing


Without limiting the
provisions of Section 9.7:


(a)                                  Purchaser
and Vendor shall, and shall use all commercially reasonable efforts to cause
their respective officers, employees, representatives, advisors and agents to:


(i)                                     make
the filings required of Purchaser, Vendor, the Corporation or any of their
Affiliates to obtain the Competition Act Approval and the Investment Canada
Approval within fourteen days after the date of this Agreement;


(ii)                                  comply
at the earliest practicable date with any request for additional information or
documentary material received by Purchaser, Vendor, the Corporation or any of
their Affiliates from the Canadian Competition Bureau pursuant to the Competition
Act, the Investment Review Division of Industry Canada pursuant to the
Investment Canada Act or any other Government Authority, as the case may be;
and


(iii)                               consult
and cooperate in connection with any investigation, review or other inquiry in
each case concerning the Purchase commenced by any Government Authority;



 57
 








(b)                                 each
Party shall:


(i)                                     
promptly inform the other Party of any material, applicable, communication
received by that Party from the Canadian Competition Bureau or any other Government
Authority regarding the Purchase;


(ii)                                  not
agree to participate in any substantive meeting or discussion with the Canadian
Competition Bureau or any representative thereof in respect of any filings,
investigation or inquiry concerning the Purchase contemplated by this
Agreement, whether oral or in person, unless it consults with the other Party
in advance and, to the extent permitted by the Canadian Competition Bureau or
any representative thereof, gives the other Party the opportunity to attend and
participate thereat; and if that participation is either declined or not
permitted, to furnish promptly thereafter a memorandum setting forth the
material terms of that meeting or those discussions; and


(iii)                               furnish
the other Party in advance with copies of all correspondence, filings and
communications between them and their Affiliates and their respective
Representatives, on the one hand, and the Canadian Competition Bureau or any
representative thereof, on the other hand, with respect to this Agreement and
the Purchase contemplated by this Agreement and provide the other Party a
reasonable opportunity to comment thereon and agrees to consider those comments
in good faith;


(c)                                  Purchaser
shall advise Vendor promptly in advance of any understandings, undertakings or
agreements which Purchaser and the Corporation propose to make or enter into
with the Canadian Competition Bureau in connection with the Purchase; and


(d)                                 Without
limiting the foregoing, Purchaser agrees to use commercially reasonable efforts
to obtain any Government Authorization (including the Investment Canada
Approval) necessary to enable the Parties to consummate the Purchase as soon as
practicable, but in any event no later than the Outside Date, including
committing to undertakings under the Investment Canada Act and/or registration
of a consent agreement under the Competition Act, on terms and conditions
(including such undertakings and consent agreement, if any) which could not,
individually or in the aggregate, reasonably be expected to cause a Material
Adverse Effect and are otherwise acceptable to Purchaser (acting reasonably).


9.10                        Notice


Each Party will give prompt notice to the other if it
becomes aware of the occurrence, or failure to occur, at any time from the date
hereof until the Closing, of any event or state of facts which occurrence or
failure would or would be likely to:


(a)                                  cause
any of the representations or warranties of the other Party contained herein to
be incorrect or inaccurate on the date hereof or on the Closing Date; or


(b)                                 result
in the failure to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by the other Party hereunder before the
Closing Date.



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9.11                        Assignment
of Confidentiality Agreements


Vendor and Vendor Guarantor shall assign to Purchaser
and, to the extent necessary shall cause the Corporation to assign to
Purchaser, at or prior to, and with effect from and after, the Closing Time,
all of its respective rights under any confidentiality agreements relating to
the Corporation with third parties, but only to the extent that those
agreements permit those assignments without consent.  To the extent those agreements do not permit
assignments without consent, at Purchaser’s request and at Purchaser’s expense,
provided that Vendor and Vendor Guarantor receives an indemnity from Purchaser
in form and substance satisfactory to Vendor in its sole discretion, Vendor and
Vendor Guarantor shall, to the extent permitted by Applicable Law and the terms
of such confidentiality agreements, appoint Purchaser as Vendor’s and Vendor
Guarantor’s representative and agent in respect of the confidential information
relating to the Business, the Assets, and the Corporation or the Subsidiaries
under those confidentiality agreements, and any amounts recovered or expenses
incurred by Purchaser or Vendor and Vendor Guarantor in connection therewith
shall be for the account of Purchaser. 
In any event, Vendor and Vendor Guarantor shall strictly enforce any
applicable rights under all such confidentiality agreements; and copies of all
such agreements shall be provided to Purchaser on or prior to the Closing Date.


9.12                        Insurance


(a)                                  Insurance
coverage required by the Corporation and the Subsidiaries is maintained and
provided by Vendor or Vendor’s Affiliates (“Vendor’s
Insurance”).  Purchaser
acknowledges that, from and after the Closing, the Corporation and the
Subsidiaries will no longer have the benefit of the Vendor’s Insurance.  Vendor will refund to the Corporation an
amount equal to the portion of the insurance premiums paid by the Corporation
to Vendor for the Vendor’s Insurance for the period from the Closing Time to
the expiry date of the coverage paid for under each applicable policy providing
Vendor’s Insurance, to the extent that those amounts are recoverable from the
applicable insurer providing the Vendor’s Insurance.


(b)                                 From
and after the Closing Date (i) the Purchaser will have the right to assert
claims (and the Vendor will use commercially reasonable efforts to assist the
Purchaser in asserting claims if so requested) for any Loss with respect to the
Corporation or its Subsidiaries under Vendor’s Insurance that are “occurrence
based” insurance policies and any workers’ compensation insurance policies
and/or comparable workers’ compensation self-insurance, state or country
programs arising out of insured incidents occurring from the date coverage
thereunder first commenced until Closing to the extent that the terms and
conditions of any such “occurrence based” policies and agreements relating
thereto so allow; and (ii) the Purchaser will have the right to manage,
monitor, mediate, prosecute and settle claims with respect to the Corporation
and its Subsidiaries properly asserted with any and all insurance policies and
any workers’ compensation insurance policies and/or comparable workers’
compensation self-insurance, state or country programs prior to Closing (and
the Vendor will use commercially reasonable efforts to assist the Purchaser in
connection therewith if so requested) under Vendor’s Insurance. The Vendor’s
obligation to use commercially reasonable efforts to assist the Purchaser in
asserting claims under applicable Vendor’s Insurance will include using
commercially reasonable efforts in assisting the Purchaser to establish their
right to coverage under such Vendor’s Insurance.


(c)                                  Vendor
shall cause Vendor’s Insurance to be maintained until Closing.



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9.13                        Employee
Related Matters


From and after the Closing, Purchaser will ensure that
the Corporation and the Subsidiaries will:


(a)                                  honour
their obligations to present and former Employees relating to their employment
with the Corporation or any Subsidiary, including all obligations and
Liabilities relating to the Benefit Plans, regardless of whether those
obligations arose or relate to any period before or after Closing; and


(b)                                 recognize
each Employee’s original hire date with the Corporation or any Subsidiary, and
credit the Employee with all service so recognized by the Corporation or any
Subsidiary in their Benefit Plans, including all periods of employment leave,
for all purposes including defined contribution participation service credit
(as recognized in Benefit Plans), eligibility for, vesting of and locking in of
benefits, as applicable, under each of the Benefit Plans, and in the event of
future termination of employment, entitlement to severance payments.


Provided that nothing in this Section 9.13 shall provide any Employee
of the Corporation or any Subsidiary any greater rights to employment or
benefits than applied with respect to such Employee prior to the Closing Date.


9.14                        Consent to
Jurisdiction


Each of the Parties and the Vendor Guarantor and
Purchaser Guarantor:


(a)                                  irrevocably
attorns and submits to the non-exclusive jurisdiction of each court of
competent jurisdiction sitting in Calgary, Alberta in any Claim arising out of
or related to this Agreement and irrevocably agrees that all Claims may be
heard and determined in that Alberta court;


(b)                                 irrevocably
waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of any such Claim;


(c)                                  agrees
that a final judgment in any such Claim shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by Applicable Law; and


(d)                                 waives
trial by jury to any Claim arising out of or relating to this Agreement and
waives any claim to punitive damages with respect to any Claim.


Each of Purchaser and Purchaser Guarantor irrevocably appoint Heenan
Blaikie LLP (the “Purchaser’s Process Agent”),
with an office on the date hereof at 12th Floor, Fifth Avenue Place, 425 – 1st
Street SW, Calgary, Alberta Canada, for the attention of Lloyd E. Symons, as
its agent to receive on its behalf service of copies of a statement of claim
and any other process which may be served in any such Claim.  That service may be made by delivering a copy
of that statement of claim or other process to Purchaser in care of Purchaser’s
Process Agent at Purchaser’s Process Agent’s address above or at such other address
as Purchaser’s Process Agent shall have last notified the parties hereto by
giving notice of such address in accordance with Section 13.4.



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Each of Vendor and Vendor Guarantor irrevocably appoint Fraser Milner
Casgrain LLP (the “Vendor’s Process Agent”),
with an office on the date hereof at 30th Floor, Fifth Avenue Place, 237 – 4th
Avenue SW, Calgary Alberta Canada, for the attention of Miles Pittman, as its
agent to receive on its behalf service of copies of a statement of claim and
any other process which may be served in any such Claim.  That service may be made by delivering a copy
of that statement of claim or other process to Vendor, as the case may be, in
care of Vendor’s Process Agent at Vendor’s Process Agent’s address above or at
such other address as Vendor’s Process Agent shall have last notified the
parties hereto by giving notice of such address in accordance with Section
13.4.


9.15                        Purchase
Not Conditional on Financing


Nothing in this Agreement shall make Purchaser’s
obligation to complete the Purchase, including Purchaser’s obligation to make
the payments referred to in Section 3.1 on a timely basis, conditional on
Purchaser being able to obtain or complete any financing for the Purchase.


9.16                        Compliance
with Privacy Laws


(a)                                  Vendor
acknowledges and confirms that the Corporation and the Subsidiaries have
complied at all times with Privacy Laws which govern the collection, use and disclosure
of Personal Information disclosed to Purchaser pursuant to or in connection
with this Agreement (the “Disclosed
Personal  Information”).  Vendor hereby covenants and agrees to advise
Purchaser of all purposes for which Disclosed Personal Information was
initially collected from or in respect of the Employee to which that Disclosed
Personal Information relates and all additional purposes where Vendor has
notified the Employee of that additional purpose, and disclosure of Personal
Information, if any, unless that use or disclosure is permitted or authorized
by law, without notice to, or consent from, that Employee; provided, however,
that in such case Vendor shall have advised Purchaser of the legislative
provisions on which Vendor is relying.


(b)                                 Before
Closing, none of the Parties shall use the Disclosed Personal Information for
any purposes other than those related to the performance of this Agreement and
the completion of the Purchase.


(c)                                  Each
of the Parties acknowledges and confirms that the disclosure of Personal
Information is necessary for the purposes of determining if the Parties shall
proceed with the Purchase, and that the disclosure of Personal Information
relates solely to the carrying on of the Business, or the completion of the
Purchase.


(d)                                 Purchaser
shall at all times keep strictly confidential all Disclosed Personal
Information provided to it, and shall instruct those employees responsible for
processing such Disclosed Personal Information to protect the confidentiality
of that information in a manner consistent with Purchaser’s obligations
hereunder.  Purchaser shall ensure that
access to the Disclosed Personal Information shall be restricted to those
employees or service providers of Purchaser who have a bona fide need to access
to that information in order to fulfil their obligations in the course of their
employment or in providing services to Purchaser.


(e)                                  The
Parties shall fully co-operate with one another, with the Employees to whom the
Personal Information relates, and any Government Authority charged with
enforcement



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of Privacy Laws, in
responding to inquiries, complaints, requests for access, and Claims in respect
of Disclosed Personal Information.


(f)                                    Purchaser
undertakes, after Closing, to utilize the Disclosed Personal Information only
for those purposes for which the Disclosed Personal Information was initially
collected from or in respect of the applicable Employees.


(g)                                 If
Closing does not occur, on the request of Vendor, Purchaser shall forthwith
cease all use of the Disclosed Personal Information acquired by Purchaser in
connection with this Agreement and will return to Vendor or, at Vendor’s
request, destroy in a secure manner, the Disclosed Personal Information (and
any copies thereof).


9.17                        Bank
Accounts


Vendor will provide Purchaser within five Business
Days before the Closing Date a complete and correct list of all bank accounts
and safety deposit boxes maintained by the Corporation and the Subsidiaries.


9.18                        Reserve
Report


Vendor shall, at least five (5) Business Days prior to
the Closing Date, deliver to Purchaser a reserves audit prepared by Ryder Scott
with respect to at least 80% of the proven reserves of the Corporation (as
determined in accordance with SEC requirements) as at March 31, 2007, which
reserves audit (i) shall be prepared in a manner consistent with, and shall be
based on the same pricing assumptions as those contained in, the Balance Sheet
Date Reserve Report, (ii) shall include an opinion letter prepared by Ryder
Scott substantially in the form attached hereto as Schedule 9.18 and (iii)
shall describe reserves that are not materially less than those described in
the Balance Sheet Date Reserves Report except to the extent that reductions in
such reserves are attributable to the conduct of the Business in the Ordinary
Course of Business since the Balance Sheet Date or to the disposition of oil
and gas properties after the date hereof made with the written consent of the
Purchaser or pursuant to Section 9.2(b)(iv).


ARTICLE
10

INDEMNIFICATION


10.1                        Mutual
Indemnifications for Breaches of Covenants and Warranties


(a)                                  From
and after the Closing, Vendor covenants and agrees with Purchaser, and
Purchaser covenants and agrees with Vendor (the Party covenanting and agreeing
to indemnify the other Party being called in this Agreement the “Indemnifying Party” and the Party being indemnified being
called in this Agreement the “Indemnified Party”)
to indemnify and hold harmless, the Indemnified Party, its Affiliates and its
and their respective successors and permitted assigns and the directors,
officers, employees, shareholders, agents, members and partners of any of them
(collectively, the “Vendor Indemnified Persons” or the “Purchaser Indemnified Persons”, as applicable) from and
against all Claims which may be made or brought against any of the Indemnified
Persons and any Losses  which they may suffer or incur,
directly or indirectly, as a result of, arising out of, or in connection with
any breach of any covenant on the part of the Indemnifying Party under this Agreement
or any inaccuracy or incorrectness of any representation or warranty of the
Indemnifying Party contained in this Agreement, or other document or
certificate



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furnished by the
Indemnifying Party pursuant to this Agreement including with respect to any Tax
matters.


(b)                                 In
addition to and without limiting its obligations to indemnify Vendor and the
other Vendor Indemnified Persons from and after the Closing, Purchaser
covenants and agrees with Vendor to indemnify, defend, save and hold harmless
Vendor Indemnified Persons referred to above from and against any and all
Losses of any kind which may be brought against or suffered by them or any one
or more of them or which any one or more of them may sustain, pay or incur, in
each case which are caused by, arise from, are incurred in connection with or
relate in any way directly or indirectly to:


(i)                                     any
past, present or future Environmental Matters or past, present or future
Environmental Liabilities, but excluding any Environmental Matters or
Environmental Liabilities or Losses or Claims which may be made or brought
against any of Vendor Indemnified Persons, or which they may suffer or incur,
directly or indirectly, as a result of, arising out of or in connection with
any breach of any covenant hereunder on the part of Vendor Indemnified Parties
relating to Environmental Matters or Environmental Liabilities or any
inaccuracy or incorrectness of any representation or warranty of Vendor
relating to Environmental Matters contained in Section 4.13, or other document
or certificate furnished by Vendor pursuant to this Agreement (Environmental
Matters and Environmental Liabilities in respect of which Vendor and the other
Vendor Indemnified Persons are indemnified pursuant to this Section 10.1(b) are
referred to as the “Indemnified Environmental
Matters” and the “Indemnified
Environmental Liabilities”, respectively) and Purchaser hereby
assumes all Losses, covenants and Liabilities in respect of any such
Indemnified Environmental Matters and Indemnified Environmental Liabilities,
regardless of whether such Indemnified Environmental Matters or Indemnified
Environmental Liabilities are attributable to, occurred, arose or accrued at,
prior to or subsequent to the Closing Date.


Purchaser shall have no rights to recovery, indemnification or
contribution against Vendor Indemnified Persons for Indemnified Environmental
Liabilities or Indemnified Environmental Matters referred to in this
Section 10.1(b) under this Agreement, under Applicable Laws, in equity or
otherwise, and all rights and remedies which Purchaser may have at or under
Applicable Law (including any past, present or future Environmental Law) or in
equity, including any right of contribution or reimbursement, against Vendor
Indemnified Parties with respect to any such Indemnified Environmental
Liabilities or Indemnified Environmental Matters are expressly waived.


Purchaser does hereby release, acquit and forever discharge Vendor
Indemnified Persons from any and all Losses, including all claims for
contribution and indemnity under Applicable Laws or in equity, which may be
asserted now or in the future (or both) and that in any way relate to or arise
out of Indemnified Environmental Liabilities or Indemnified Environmental
Matters referred to in this Section 10.1(b), regardless of whether those
Indemnified Environmental Matters or Indemnified Environmental Liabilities are
attributable to, occurred, arose or accrued at, prior to or subsequent to the
Closing Date; and Purchaser covenants not to make any Claim or other demand, or
institute any action or other proceeding against Vendor Indemnified Persons for
indemnity and 



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contribution for any of those Indemnified Environmental Liabilities or
Indemnified Environmental Matters or against a Person other than a Vendor Indemnified
Person where a Claim for contribution or indemnity may be brought against a
Vendor Indemnified Person; and


(ii)                                  all
Claims by a Person who is not Vendor or a Related Party to the Vendor to the
extent that those Claims directly or indirectly relate to the Purchased Shares,
the Corporation, any Subsidiary, the Assets or the Business, except for any
Claims which are the subject of indemnification provided by Vendor as set out
in Section 10.1(a) or Article 11.


(c)                                  Any
obligation of indemnification pursuant to this Article 10 or pursuant to
Article 11, shall be subject to:


(i)                                     other
than with respect to any Tax matter (the survival of which is addressed in
Section 6.2(a)(ii)), the limitations set forth in Article 6 respecting the
survival of the representations, warranties and covenants of the Parties and
other matters including the limitations in Section 6.2(b) and
Section 6.2(c), all of which limitations shall, to the extent applicable,
apply to any Claims under this indemnity;


(ii)                                  the
restrictions in Section 6.4;


(iii)                               other
than as provided in Article 11, the requirement that the Indemnifying Party
shall, in respect of any Claim made by any third Person, to the extent
reasonably possible, be afforded an opportunity at its sole expense to resist,
defend and compromise that Claim;


(iv)                              the
limitation that, for Claims made in connection with any inaccuracy or
incorrectness of any representation or warranty contained herein or breach of
any covenant contained herein, subject to Section 10.3(f), the Indemnifying
Party shall not be required to pay any such amount until the aggregate amount
is finally adjudicated or agreed as being payable by that Indemnified Party
and, if applicable, that final amount exceeds the thresholds set out in Article
6 and then subject to the limits set forth in Article 6; and


(v)                                 the
limitation that, for any Claim in respect of which Purchaser is the Indemnified
Party, if such Claim is considered a Distribution and by virtue thereof the
amount of that Distribution was deducted in determining the Purchase Price,
then the amount of that Distribution shall also be deducted from that Claim
before determining the amount of that Claim which may be subject to
indemnification under this Agreement.


10.2                        Procedures
Relating to Indemnification Between Vendor and Purchaser


Following the discovery of any facts or conditions
which could reasonably be expected to give rise to a Claim for which
indemnification is provided under this Agreement, the Indemnified Party shall,
as promptly as reasonably possible thereafter, provide written notice to the
Indemnifying Party, setting forth the specific facts and circumstances, in
reasonable detail, relating to that Claim and the amount of that Claim (or a
reasonable, good-faith estimate thereof if the actual amount is not known or
not capable of reasonable calculation) (“Indemnification
Notice”); provided, however, that failure to give that 



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Indemnification Notice on a timely basis shall not
affect the indemnification provided hereunder except to the extent the Indemnifying
Party shall have been actually and materially prejudiced as a result of that
failure.  Notwithstanding the foregoing:


(a)                                  a
Purchaser Indemnified Person shall not be entitled to make a Claim against
Vendor under Section 10.1 unless and until:


(i)                                     Purchaser
shall have provided Vendor written notice of default; and


(ii)                                  Vendor
shall have failed to cure that default within 60 days after Vendor’s
receipt of Purchaser’s notice; and


(b)                                 a
Vendor Indemnified Person shall not be entitled to make a Claim against
Purchaser under Section 10.1 unless and until:


(i)                                     Vendor
shall have provided Purchaser written notice of default; and


(ii)                                  Purchaser
shall have failed to cure that default within 60 days after Purchaser’s
receipt of Vendor’s notice.


10.3                        Indemnification
Procedures for Third Party Claims


(a)                                  In
the case of Claims made by a third party with respect to which indemnification
is sought hereunder, the Indemnified Party shall give prompt written notice,
and in any event within 10 days after it receives notice of that Claim, to
the Indemnifying Party of any such Claim made on it stating the nature and
basis for that Claim.  A failure to give
that notice within that period shall not preclude the Indemnified Party from
obtaining that indemnification but its right to indemnification shall be
reduced to the extent that any such delay materially prejudiced the defense of
the Claim or materially increased the amount of liability or cost of defense.


(b)                                 The
Indemnifying Party shall have the right, by notice to the Indemnified Party
given not later than 30 days after its receipt of the notice described in
Section 10.3(a), to assume the control of the defence, compromise or
settlement of that Claim so long as (i) the Claim involves only money damages
and does not seek an injunction or other equitable relief, (ii) the
Indemnifying Party conducts the defense of the Claim in good faith and (iii)
provided that such assumption shall, by its terms, be without cost to the
Indemnified Party.  If the Indemnifying
Party assumes the control of the defence, compromise or settlement of such
Claim, as against the Indemnified Party, it will be conclusively established
for the purposes of this Agreement that those Claims are within the scope of
the indemnification set out in Article 10 and the Indemnifying Party shall be
responsible for reimbursing the Indemnified Party for all prior reasonable
legal fees and expenses on a solicitor and client basis in connection
therewith.  The Indemnifying Party shall
thereafter keep each Indemnified Party reasonably informed with respect to the
status of that Claim.


(c)                                  On
the assumption of control of any Claim by the Indemnifying Party pursuant to
Section 10.3(b), the Indemnifying Party shall diligently proceed with the
defence, compromise or settlement of that Claim at its sole expense, including,
if necessary, employment of counsel satisfactory to the Indemnified Party
(acting reasonably) and, in connection therewith, the Indemnified Party shall
cooperate fully, but at the expense of 



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the Indemnifying Party
with respect to any out-of-pocket expenses incurred, to make available to the
Indemnifying Party all pertinent information and witnesses under the
Indemnified Party’s control and take such other steps as in the opinion of
counsel for the Indemnifying Party are reasonably necessary to enable the
Indemnifying Party to conduct that defence. 
The Indemnifying Party shall not settle that Claim unless that
settlement includes, as an unconditional term thereof, the giving by the
claimant or the plaintiff of a full and complete release of the Indemnified
Party from any and all liability with respect to that Claim.  As long as the Indemnifying Party is
contesting any such Claim in good faith and on a timely basis, the Indemnified
Party shall not pay or settle any such Claim without the consent of the
Indemnifying Party, acting reasonably. 
Notwithstanding the assumption by the Indemnifying Party of the defence
of that Claim as provided in this Section 10.3(c), the Indemnified Party
shall also have the right to participate in the negotiation, settlement or
defence of any Claim at its own expense; provided, however, that if the
defendants in any such Claim shall include both an Indemnified Party and the
Indemnifying Party and such Indemnified Party shall have reasonably concluded
that counsel selected by the Indemnifying Party has a conflict of interest
because of the availability of different or additional defences to that
Indemnified Party, that Indemnified Party shall have the right to select
separate counsel to participate in the defence of that Claim on its behalf, at
the expense of the Indemnifying Party; and provided further that the
Indemnifying Party shall not be obligated to pay the expenses of more than one
separate counsel for all Indemnified Parties.


(d)                                 If
the Indemnifying Party shall fail to notify the Indemnified Party of its desire
to assume the defence of any Claim within the period of time prescribed above
in Section 10.3(b), or shall notify the Indemnified Party that it will not
assume the defense of any such Claim, then the Indemnified Party may assume the
defense of any such Claim, in which event it may do so in such manner as it may
deem appropriate, and the Indemnifying Party shall be bound by any
determination made in that Claim or any settlement thereof effected by the
Indemnified Party; provided that any such determination or settlement shall not
affect the right of the Indemnifying Party to dispute the Indemnified Party’s
claim for indemnification.  The
Indemnifying Party shall be permitted to join in the defense of that Claim and
to employ counsel at its own expense.


(e)                                  The
final determination of any Claim pursuant to this Section 10.3, including
all related costs and expenses, will be binding and conclusive on the Parties
as to the validity or invalidity, as the case may be, of that Claim against the
Indemnifying Party.


(f)                                    Amounts
payable by the Indemnifying Party to the Indemnified Party in respect of any
Claims for which the Indemnified Party is entitled to indemnification hereunder
shall be payable by the Indemnifying Party as incurred by the Indemnified
Party.


10.4                        Holding of
Indemnities


Vendor and Purchaser shall hold the indemnities
contained in Section 10.1 in trust on behalf of Vendor Indemnified Persons
or Purchaser Indemnified Persons, as applicable, and may enforce those
indemnities on its and their respective behalf. 
In furtherance of the foregoing the term “Indemnified Party” as used herein shall mean or include, as
applicable, any Vendor Indemnified Person or Purchaser Indemnified Person that
the Indemnified Party may represent in the circumstances.



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10.5                        Claims Net
of Insurance and Taxes


(a)                                  The
amount of any and all Claims under this Article 10 and elsewhere under this
Agreement shall be determined net of any amounts recovered by the Indemnified
Party under insurance policies, indemnities or other reimbursement arrangements
with respect to those Claims.  Each Party
hereby waives, or will procure the waiver of, any subrogation rights that its
insurer may have with respect to any indemnifiable Claims.


(b)                                 In
determining the amount of any Claim for which either Party is entitled to
indemnification under this Article 10, the gross amount thereof shall be
reduced by any Tax Benefit actually utilized by that Party (or which such Party
has the option to actually utilize) in the year of the indemnity payment or
earlier in connection with that Claim to the extent that Tax Benefit results
directly from the incurrence of that Claim. 
If an indemnification payment hereunder results in incremental Tax being
payable by the Indemnified Party, the amount of the applicable Claim shall be
equal to:


(i)                                     the
gross amount of that Claim minus the net present value of the Tax Benefit
realized by that Indemnified Party as determined above;


(ii)                                  divided
by:


(iii)                               one
minus the Tax Rate;


provided, however, that no additional indemnification payment for any
applicable incremental Tax shall be payable until final settlement of that Tax
liability with the relevant Tax authority, and only on receipt by the
Indemnifying Party of a copy of an official communication issued by the
relevant Tax authority which evidences that final settlement of the Tax
liability and, in those circumstances, the Indemnifying Party will also pay to
the Indemnified Party interest, at Vendor’s Interest Rate, on the
indemnification amount payable from the date the obligation to make that
indemnification payment arose until the date on which that indemnification
payment is made.


For purposes of this
Section 10.5, “Tax Benefit”
means, as to a Party, the Tax Rate multiplied by the amount of any income tax
deduction or allowance arising from any Claim that entitles the Indemnified
Party to indemnity under this Agreement. If a change in Applicable Law replaces
or otherwise supplements the federal or provincial income tax on corporations
with another method of taxation, the Parties agree to negotiate in good faith a
new definition of Tax Benefit; and “Tax Rate”
means the rate of Tax eligible under the Applicable Laws to a relevant Person
for any relevant period of time.


10.6                        Mitigation


Each Party shall take all reasonable steps and use all
commercially reasonable efforts to mitigate any and all Claims.


10.7                        Adjustment
to Purchase Price


Any indemnity payment under this Agreement shall be
treated as an adjustment to the Purchase Price.



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10.8                        Subrogation


Each Party shall assign to the other Party and
subrogate the other Party to all its rights and remedies against any Person
(other than, with respect to rights and remedies of Vendor and Purchaser, those
against its Related Parties) in respect of any payment made by the other Party
in respect of any indemnification or liability assumed by the other Party
pursuant to this Agreement or as a result of this Agreement (including legal
fees and other costs of litigation). 
Each Party shall provide all reasonable cooperation of assistance
required by the other Party in making and prosecuting any Claim for recovery
against that Person to the extent that payment is made by the other Party.  Neither Party shall knowingly take any action
to impair any such right or remedy of the other Party to recover any such
payment.


ARTICLE
11

TAX MATTERS


11.1                        Liabilities
for Taxes


(a)                                  Vendor
shall be liable for and shall pay and shall indemnify, defend and save and hold
harmless Purchaser, the Corporation and the Subsidiaries from and against:


(i)                                     all
income Taxes of the Corporation and each Corporate Subsidiary in excess of
amounts paid by the Corporation or Subsidiary as the case may be on account of
such Taxes on or before the Balance Sheet Date:


(A)                              for
taxation years of the Corporation and each Corporate Subsidiary ending on or
before the Closing Date; or


(B)                                attributable
to income earned or realized by the Partnership Subsidiaries (and any former
direct or indirect subsidiaries of the Corporation that are or were
partnerships) for fiscal years of such partnerships ending on or before the
Closing Date;


for the avoidance of
doubt, Vendor shall be liable for and shall pay any Taxes described in this
Section 11.1(a)(i) without regard to any payments of such Taxes made by the
Corporation or any Subsidiary after the Balance Sheet Date;


(ii)                                  all
other Taxes of the Corporation and its Subsidiaries in excess of amounts paid
by the Corporation or Subsidiary as the case may be on account of such Taxes on
the Balance Sheet Date attributable to periods ending on or before the Balance
Sheet Date (whether or not such periods coincide with a taxation year or, in
the case of a Partnership Subsidiary, a fiscal year) or attributable to any act
or failure to act after the Balance Sheet Date 
and on or before the Closing Date by Vendor, the Corporation or any of
its Subsidiaries that is outside the Ordinary Course of Business, including,
for the avoidance of doubt, any restructuring or reorganization or the failure
to properly report any such transaction;


(iii)                               all
Taxes imposed on or payable by third parties with respect to which the
Corporation or any of its Subsidiaries has an obligation to indemnify such
third party pursuant to a transaction consummated on or prior to the Closing;


(iv)                              all
Taxes of Vendor or any Affiliate thereof (other than the Corporation or any of
its Subsidiaries) for any taxable period; and



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(v)                                 all
Taxes of the Corporation or any of its Subsidiaries attributable to the section
338 election contemplated by Section 11.4.


in all such cases including any associated expenses.


(b)                                 After
Closing and subject to the terms of this Article 11, Vendor shall be liable for
and shall pay and shall indemnify and save and hold harmless Purchaser, the
Corporation and the Subsidiaries from and against all Taxes of the Corporation
and each Subsidiary attributable to or which arise as a result of any
Distributions made after the Balance Sheet Date and on or before the Closing
Date.


(c)                                  Vendor
shall be entitled to any refund of (or credit for) Taxes allocable to any
period with respect to which Vendor is liable for Taxes in accordance with the
foregoing Sections 11.1(a) and 11.1(b). 
Such refund or credit shall be net of any costs related thereto and
shall include any refund or credit which arises as a result of a carryback of a
loss or other Tax benefit from a Tax period beginning after the Closing Date
(in the case of income Taxes) or the Balance Sheet Date (in the case of
non-income Taxes).


(d)                                 All
stock transfer, real estate transfer, sales, use, documentary, stamp, and all
conveyance fees, recording charges and other similar Taxes (including interest,
penalties and additions to any such Taxes) (“Transfer
Taxes”) incurred in connection with the transactions contemplated by
this Agreement shall be paid 50% by Purchaser and 50% by Vendor.  Purchaser shall file all necessary Tax
Returns and other documentation with respect to such Transfer Taxes, and Vendor
shall cooperate with Purchaser with respect thereto and, if required by
Applicable Law, shall execute any and all Tax Returns related thereto.


11.2                        Tax
Returns


(a)                                  Vendor
shall cause to be prepared and filed on a timely basis all Tax Returns (if any)
for the Corporation and the Subsidiaries for any taxation year which ends on or
before the Closing Date and for which Tax Returns have not been filed as of
that date. The Corporation and the Subsidiaries shall not claim or renounce
amounts in respect of the Tax Pools prior to Closing except to reduce income
for Tax purposes of the Corporation and the Subsidiaries for their taxation
years ending either on the Balance Sheet Date or during the Lock Box
Period.  Purchaser shall have an
opportunity to review and comment on those Tax Returns, acting reasonably, at
least 7 Business Days before the filing of those Tax Returns and Vendor shall
reasonably consider and address any comments of the Purchaser in that
regard.  Vendor and Purchaser hereby
agree that, at the request of Purchaser, an election pursuant to Subsection
256(9) of the Tax Act shall be made with respect to the Purchase.


(b)                                 Purchaser
shall prepare or cause to be prepared and filed on a timely basis all Tax
Returns for the Corporation and the Subsidiaries for any taxation year which
ends after the Closing Date and for which Tax Returns have not been filed as of
the Closing Date.  Vendor shall have an
opportunity to review and comment on any of those Tax Returns to the extent
they relate to any period before the Closing Date, and to approve them, acting
reasonably, at least 15 days before the filing of those Tax Returns.


(c)                                  Purchaser
shall pay or shall cause the Corporation or any of the Subsidiaries to pay and
remit any Taxes due in respect of the Tax Returns referred to in
Section 11.2(a).  Vendor



 69
 








shall reimburse Purchaser
for any Taxes for which Vendor is liable pursuant to Section 11.1(a), but
which are payable with Tax Returns to be filed pursuant to
Section 11.2(a), on the written request of Purchaser, setting forth in
detail the computation of the amount owed by Vendor, but in no event earlier
than ten days before the due date for the filing of any applicable Tax Returns.


(d)                                 Before
Closing Vendor shall, and after Closing Purchaser shall, cause the Corporation
and the Subsidiaries to cooperate fully with each other and make available to
each other in a timely fashion such data and other information as may
reasonably be required for the preparation of any of those Tax Returns referred
to in this Section 11.2 and shall preserve that data and other information
until the expiration of any applicable limitation period under any Applicable
Laws with respect to Taxes.


(e)                                  Purchaser
shall grant to Vendor access at all reasonable times to all of the information,
books and records relating to the Corporation and each Corporate Subsidiary
within the possession of Purchaser, its Affiliates, the Corporation and each
Corporate Subsidiary (including without limitation work papers and
correspondence with taxing authorities), and shall afford Vendor (or their designees)
the right (at Vendor’s expense) to take extracts therefrom and to make copies
thereof, to the extent reasonably necessary to permit Vendor (or their
designees) to prepare Vendor’s United States Tax Returns, to conduct
negotiations with Tax authorities, and to implement the provisions of, or to
investigate or defend any claims among the Parties arising under, Article 9, in
each case, with respect to taxable periods ending on or before December 31,
2007.


(f)                                    Any
Tax Return for a period ending on or before the Closing Date to be prepared
pursuant to the provisions of this Section 11.2 shall be prepared in a
manner consistent with practices followed in prior years with respect to
similar Tax Returns of the Corporation and the Subsidiaries (including the
Corporation’s practice in respect of the method used to claim any interest
expense in respect of the Debenture) unless otherwise required by Applicable
Law or change in fact.


(g)                                 Purchaser
shall not and shall not allow the Corporation or any Subsidiary to amend,
refile or otherwise modify or grant an extension of any statute of limitations
with respect to any Tax Return for the Corporation or the Subsidiaries for any
taxation year ending on or before the Closing Date and shall not request an
audit or assessment of any such Tax Return, in each case without prior written
consent of Vendor which shall not be unreasonably withheld.  Vendor shall not file an amended Tax Return
for the Corporation or the Subsidiaries for any taxable period ending on or
before the Closing Date and shall not request an audit or assessment of any
such Tax Return in each case without written consent of Purchaser which shall
not be unreasonably withheld.


11.3                        Confidentiality
of Tax Information


Unless otherwise required by Applicable Laws, stock
exchange regulations or legal proceedings, each Party shall, and shall cause
its Representatives to, keep confidential any non-public Tax information,
records, and documents disclosed by the other Party, or to which that Party has
received or been granted access, pursuant to this Article 11 and will not use
that Tax information for any purpose other than making the determinations and
taking such other actions contemplated by this Article 11.



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11.4                        Section
338 Election


(a)                                  If
Vendor desires Purchaser to make an election under section 338(g) of the Code (“section 338 election”) with
respect to the Purchase of the Purchased Shares and the deemed purchase of the
shares of any eligible Subsidiary, Vendor shall, no later than the
Closing Date, prepare and deliver to Purchaser for signature all relevant forms
necessary to make such election. 
Purchaser agrees only to execute any such section 338 election and to
forward such election by mail (within 10 Business Days after the receipt
thereof by Purchaser) to Vendor for filing with the appropriate Government
Authority.  Compliance with the
requirements to ensure the validity of the section 338 election shall be the
sole responsibility of Vendor and Purchaser shall not be responsible for the
proper completion or filing of the section 338 election.  Vendor shall be solely responsible for the
payment of any late filing penalty relating to the filing of such section 338
election.  Accordingly, Purchaser shall
not be responsible or liable for any Taxes, interest, penalties, damages or
expenses resulting from the failure by Vendor to properly complete any required
forms or to properly file such forms.


(b)                                 Provided
that Purchaser makes a section 338 election, the Purchase Price shall be
allocated among the Assets in a manner required by Section 338 of the
Code.  Within 60 days of the Closing
Date, Vendor will provide to Purchaser copies of IRS Form 8883 and any required
exhibits thereto (the “Asset Acquisition
Statement”) with Vendor’s proposed allocation of the Purchase Price
(together with any assumable Liabilities). 
Within 15 days after the receipt of that Asset Acquisition Statement,
Purchaser will propose to Vendor any changes in that Asset Acquisition
Statement.  If no such changes are
proposed in writing to Vendor, Purchaser shall be deemed to have agreed to, and
accepted the Asset Acquisition Statement. 
Purchaser and Vendor will endeavour in good faith to resolve any
differences with respect to the Asset Acquisition Statement within 15 days
after Vendor’s receipt of written notice of objection from Purchaser.  Should the Parties fail to reach an agreement
as required under this Section 11.4(b) the Parties further agree to
engage, as a shared expense, the Accounting Firm to resolve the issue.


11.5                        Tax Claims


(a)                                  Each
Party shall promptly notify the other Party in writing on receipt by that Party
or any of its respective Affiliates (including for Purchaser the Corporation
and the Subsidiaries) or Representatives of notice of any pending or threatened
federal, provincial, state, local or foreign Tax audits, examinations, claims
or assessments (a “Tax Audit”)
relating to Taxes of the Corporation or any of its Subsidiaries (any such Tax
Audit, examination, claim or assessment for which Purchaser is entitled to
seek, or is seeking or intends to seek, indemnification pursuant to the
applicable part of Section 11.1, a “Tax Claim”).


(b)                                 Purchaser
shall represent the interests of the Corporation and the Subsidiaries in and
with respect to any Tax Claim relating to taxation years ending after the
Closing Date and employ counsel of its own choice for that purpose.  Vendor shall control the conduct of any Tax
Claim relating to any Tax period ending on or before the Closing Date. Purchaser
shall have the right to participate in any such Tax Claim and Vendor shall not
settle or compromise any such Tax Claim without the prior written consent of
Purchaser, which shall not be unreasonably withheld.



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11.6                        Assistance
and Cooperation


After the Closing, Vendor and Purchaser shall (and shall
cause their respective Affiliates to):


(a)                                  cooperate
in a timely manner in preparing for any audits of, or disputes with taxing
authorities regarding, any Tax Returns of the Corporation and the Subsidiaries;


(b)                                 make
available to the other Party and, in coordination with the other Party, to any
taxing authority in a timely manner as reasonably requested all information,
records, and documents relating to Taxes of the Corporation and the
Subsidiaries or their Assets or properties or the Business;


(c)                                  provide
timely notice to the other in writing of any pending or threatened Tax audits
or assessment of the Corporation or the Subsidiaries for taxation years or
other periods for which the other may have a liability under this Article 11;


(d)                                 within
30 days of the receipt of a written request therefor, furnish the other with
copies of all correspondence received from any taxing authority in connection
with any Tax audit or information request with respect to any such taxation
year or other periods of the Corporation or any of the Subsidiaries;


(e)                                  timely
sign and deliver such certificates or forms as may be necessary or appropriate
to establish an exemption from (or otherwise reduce), or file Tax Returns or
other reports with respect to, Taxes described in Section 11.1;


(f)                                    timely
provide to the other powers of attorney or similar authorizations necessary to
carry out the purposes of this Article 11; and


(g)                                 use
reasonable efforts to properly retain and maintain accounting and Tax records
and information, in a timely manner consistent with taxing authority
guidelines, to the extent those records and information relate to the
Corporation and the Subsidiaries or any of the Assets and other properties of
the Business until the expiration of the applicable period outlined in Section
6.2(a)(ii), and promptly notify the other prior to destruction of any of those
Tax records or that information and provide the other Party a reasonable
opportunity to make and retain copies of any of those Tax records or that
information.


11.7                        Coordination
with Other Provisions


If any provision of this
Article 11 conflicts with or is duplicative of any provision of Articles 6 or
10, the provisions of this Article 11 shall govern.



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11.8                        Miscellaneous


For Tax purposes,
the Parties agree to treat all payments made pursuant to any indemnification
obligation under this Agreement (including, without limitation, pursuant to
this Article 11) as adjustments to the Purchase Price unless otherwise required
by Applicable Law.


ARTICLE
12

TERMINATION AND CLOSING


12.1                        Termination


This Agreement may be terminated at any time before
Closing:


(a)                                  by
mutual written consent of Vendor and Purchaser;


(b)                                 by
Purchaser, subject to Section 6.1, if any of Purchaser’s Conditions shall
have not been fulfilled within 21 days after the date of this Agreement (except
for Sections 7.3 and 7.4 which shall have been fulfilled by the Outside Date
and except for those conditions which by their terms are not capable of being
satisfied until the Closing Time) or shall have become incapable of fulfillment
other than as a result of Purchaser’s breach of this Agreement, and shall not
have been waived by Purchaser;


(c)                                  by
Vendor, if any of Vendor’s Conditions shall have not been fulfilled within 21
days after the date of this Agreement (except for Sections 8.3 and 8.4, which
shall have been fulfilled by the Outside Date and except for those conditions
which by their terms are not capable of being satisfied until the Closing Time)
or shall have become incapable of fulfillment other than as a result of Vendor’s
breach of this Agreement, and shall not have been waived by Vendor and


(d)                                 by
either Vendor or Purchaser, if the Closing does not occur on or before the
Outside Date; provided that the right to terminate this Agreement under this Section
12.1(d) shall not be available to a Party whose failure to fulfill any
obligation under this Agreement, except as provided in Section 9.15, has caused
or resulted in the failure of the Closing to occur on or before the Outside
Date.


12.2                        Regarding
Termination by Purchaser


Any termination of this Agreement by Purchaser
pursuant to Section 12.1 shall be without prejudice to any Claims that
Purchaser may have arising hereunder out of any incorrect or inaccurate
representations or warranties of Vendor in this Agreement or any breach by
Vendor of any of its covenants in this Agreement, which shall not be subject to
the limitations set forth in Article 6.


12.3                        Regarding
Termination by Vendor


Any termination of this Agreement by Vendor pursuant
to Section 12.1 shall be without prejudice to any Claims that Vendor may
have arising out of any incorrect or inaccurate representations or warranties
of Purchaser in this Agreement or any breach by Purchaser of any of its
covenants, but subject always to the limitations set forth in Article 6 and, if
applicable, Section 12.4(b).



 73
 








12.4                        Deposit


(a)                                  At
or before the Closing Time or at such time as this Agreement is terminated
before Closing, as applicable, Vendor and Purchaser shall provide notice to the
Escrow Agent which notice shall direct the Escrow Agent as to the payment of
the Deposit.


(b)                                 Notwithstanding
anything to the contrary herein contained, if the Closing does not occur
because any representations or warranties made by Purchaser are incorrect or
inaccurate or because Purchaser failed to perform any of its obligations or
covenants under this Agreement, the full amount of the Deposit together with
all accrued interest (less any applicable withholding Taxes) shall become the
property of, shall be paid by the Escrow Agent to and may be retained by,
Vendor as liquidated damages (and not as a penalty) to compensate Vendor for
the expenses incurred and opportunities foregone as a result of the failure of
the Purchase  to close.  To the extent the Deposit is paid to Vendor
in the circumstances described in this Section 12.4(b), Vendor shall
retain the Deposit, plus any interest thereon (less applicable withholding
Taxes), as genuine pre-estimate by Vendor and Purchaser of Vendor’s liquidated
damages, not as a penalty, and as Vendor’s sole and exclusive remedy hereunder
against Purchaser for any and all breaches hereof prior to the Closing or in
connection with the termination of the Purchase contemplated under this
Agreement and all other matters contemplated hereby and all other documents,
understandings and arrangements related hereto..


(c)                                  If
the Closing does not occur for any reason other than a default by Purchaser in
the performance of its obligations or covenants under this Agreement or any
representations or warranties made by Purchaser being incorrect or inaccurate,
the full amount of the Deposit together with all accrued interest (less any
applicable withholding Taxes) shall be immediately returned to Purchaser.


12.5                        Notice of
Termination


In the event of termination by Vendor or Purchaser
pursuant to this Article 12, written notice thereof shall forthwith be given to
the other Party and the transactions contemplated by this Agreement (including
the Parties’ obligation to consummate the Purchase) shall be terminated without
further action by either Party.  If the
transactions contemplated by this Agreement are terminated as provided herein:


(a)                                  Purchaser
shall return to Vendor all documents and copies and other materials received
from or on behalf of Vendor relating to the transactions contemplated hereby,
whether so obtained before or after the execution hereof; and


(b)                                 all
confidential information received by Purchaser with respect to the Business,
the Assets and the Purchased Shares shall be treated in accordance with the
terms and conditions of the Confidentiality Agreement, which shall remain in
full force and effect notwithstanding the termination of the transactions
contemplated by this Agreement.


12.6                        Effect of
Termination


Subject to section 12.4(b), (i) each Party’s right of
termination under this Article 12 is in addition to any other rights it may
have under this Agreement or otherwise, and the exercise of a right of
termination will not be an election of remedies, (ii) nothing in this Article
12 shall limit or affect any other rights or causes of action either Purchaser
or Vendor may have with respect to the representations, warranties, covenants
and indemnities in its favour contained in this Agreement and (iii) nothing in
this



 74
 








Article 12 
shall be deemed to release either Party from any liability for any
breach by that Party of the terms and provisions of this Agreement or to impair
the right of either Party to compel specific performance by the other Party of
its obligations under this Agreement.


ARTICLE
13

GENERAL


13.1                        Non-Waiver


No waiver of any condition or other provision, in
whole or in part, shall constitute a waiver of any other condition or provision
(whether or not similar) nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.


13.2                        Public
Notices


(a)                                  Vendor
and Purchaser agree to keep the terms of this Agreement confidential, except to
the extent required by Applicable Laws or for financial reporting purposes or
as otherwise provided herein and except that the Parties may disclose those
terms to their respective Representatives as necessary in connection with the
ordinary conduct of their respective businesses (so long as those Persons agree
to keep the terms of this Agreement confidential).


(b)                                 Neither
Party will make any press release or other public announcement respecting this
Agreement without the consent of the other Party not to be unreasonably
withheld or delayed, unless:


(i)                                     the
Party desiring to make the press release or other public announcement is advised
by its counsel that the release or announcement is required to comply with any
Applicable Law or the rules of any securities regulatory authority, listing
authority or stock exchange with which the disclosing Party or any Affiliate of
either Party is bound to comply; and


(ii)                                  that
press release or other public announcement does not disclose more information
regarding this Agreement or the subject matter hereof than is required to
comply with any Applicable Law or the rules of any securities regulatory authority,
listing authority or stock exchange with which disclosing Party or any
Affiliate of either Party is bound to comply.


(c)                                  Notwithstanding
the foregoing, nothing contained herein or in the Confidentiality Agreement
shall prevent a Party from furnishing any information to:


(i)                                     any
Government Authority if required by Applicable Law or the rules of a securities
regulatory authority, listing authority or stock exchange; or


(ii)                                  obtain
the Competition Act Approval or the Investment Canada Approval;


or from making an announcement regarding this Agreement to its
employees (including the Employees).


(d)                                 Purchaser
shall be entitled to use information respecting the Assets in drafts or final
copies of any prospectus, offering document or loan syndication materials in
which



 75
 








Purchaser proposes to
describe the Purchase to the extent that any such information is required to
comply with any Applicable Law or the rules of any securities regulatory
authority, listing authority or stock exchange with which Purchaser is bound to
comply or is reasonably required with respect to that loan syndication;
provided that Vendor is given draft copies of the prospectus, offering document
or those loan syndication materials and approves, in advance of the filing or
distribution of any of those documents or materials, acting reasonably, any
references to Vendor or the Purchase that may be provided therein.


(e)                                  A
Party which proposes to make any such disclosure as described in
Sections 13.2(b), (c) or (d) shall, to the extent reasonably possible,
provide the other Party (or, in the case of competitively sensitive
information, the other Party’s outside counsel) with a draft of the applicable
press release or other document containing the disclosure at least two Business
Days before its release, filing or delivery to enable the other Party to review
that draft and advise of any comments it may have with respect thereto.  The Party proposing to make the disclosures
will not unreasonably refuse to incorporate the requested changes of the other
Party to the applicable press release or other document except to the extent
its counsel advises that doing so will result in non compliance with Applicable
Law or the rules of the applicable listing authority or stock exchange.


13.3                        Assignment


Neither this Agreement nor any benefits, rights or
obligations under this Agreement shall be assignable by either Party, by
operation of Applicable Law or otherwise, without the prior express written
consent of the other Party which consent may be arbitrarily withheld.  Notwithstanding the foregoing prohibition on
assignment, Purchaser may assign all of its benefits, rights and obligations
under this Agreement to an Affiliate of Purchaser (but not if that assignment
would extend the time for, or render less certain, the completion of the
Purchase) provided that such assignment shall not release Purchaser from any of
its obligations under this Agreement and provided further that such Affiliate
enters into an agreement with Vendor satisfactory to Vendor, pursuant to which
that Affiliate expressly assumes all of Purchaser’s obligations under this
Agreement and, if that assignment occurs before the Closing, that Affiliate
covenants to remain an Affiliate of Purchaser until Closing.  Subject to the foregoing, this Agreement
shall inure to the benefit of, be enforceable by and be binding on the Parties
and the Vendor Guarantor and the Purchaser Guarantor and their respective
successors (including any successor by reason of amalgamation of any Party or
the Vendor Guarantor or the Purchaser Guarantor) and permitted assigns.


13.4                        Notices


Any notice or other writing required or permitted to
be given under this Agreement or for the purposes of this Agreement (in this
Section 13.4 referred to as a ”Notice”) shall
be in writing and shall be sufficiently given if delivered, or if transmitted
by facsimile to:


	
  (a)

  	
   

  	
  in the case of a Notice to Vendor or Vendor
  Guarantor:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c/o Pogo
  Producing Company

  
	
   

  	
   

  	
  2700, 5 Greenway
  Plaza

  
	
   

  	
   

  	
  Houston, TX  77046-0504

  
	
   

  	
   

  	
  Attention:

  	
  Michael J. Killelea, Senior Vice-President, General
  Counsel and

  
	
   

  	
   

  	
   

  	
  Corporate Secretary

  
	
   

  	
   

  	
  Fax:

  	
  (713) 297-4970

  




 76
 








 


	
  

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fraser Milner Casgrain LLP

  
	
   

  	
   

  	
  30th Floor

  
	
   

  	
   

  	
  Fifth Avenue Place

  
	
   

  	
   

  	
  237-4th Avenue S.W.

  
	
   

  	
   

  	
  Calgary, Alberta, Canada

  
	
   

  	
   

  	
  Attention:

  	
  Miles F. Pittman

  
	
   

  	
   

  	
  Fax:

  	
  (403) 268-3100

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  in the case of a Notice to Purchaser or Purchaser
  Guarantor:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c/o Abu Dhabi National Energy Company PJSC

  
	
   

  	
   

  	
  P.O. Box 55224

  
	
   

  	
   

  	
  Abu Dhabi, United Arab Emirates

  
	
   

  	
   

  	
  Attention:

  	
  Francois Duquette, General Counsel

  
	
   

  	
   

  	
  Fax:

  	
  +971 2 642 2555

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Latham & Watkins LLP

  
	
   

  	
   

  	
  885 Third Avenue, Suite 1000

  
	
   

  	
   

  	
  New York, NY 10022

  
	
   

  	
   

  	
  Attention:

  	
  Edward Sonnenschein

  
	
   

  	
   

  	
   

  	
  Eric Schwartzman

  
	
   

  	
   

  	
  Fax:

  	
  (212) 751-4864

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and to

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Heenan Blaikie LLP

  
	
   

  	
   

  	
  12 Floor

  
	
   

  	
   

  	
  Fifth Avenue Place

  
	
   

  	
   

  	
  1st Street SW

  
	
   

  	
   

  	
  Calgary, Alberta, Canada

  
	
   

  	
   

  	
  Attention:

  	
  Lloyd Symons

  
	
   

  	
   

  	
  Fax:

  	
  (866) 224-5597

  
					



 


or at such other address or number as the Person to
whom that Notice is to be given shall have last notified the Person giving the
same in the manner provided in this Section 13.4.  Any Notice will be deemed to have been
validly and effectively given (i) if personally delivered, on the date of that
delivery if that date is a Business Day and that delivery was made before 4:00
p.m. (Calgary time), and otherwise on the next Business Day; or (ii) if
transmitted by facsimile or similar means of recorded communication on the
Business Day following the date of transmission if receipt of the transmission
has been confirmed back.


13.5                        Further
Assurances


Each Party and the Vendor Guarantor and the Purchaser
Guarantor shall use all commercially reasonable efforts to provide such further
documents or instruments required by any other Party, the



 77
 








Vendor Guarantor or the Purchaser Guarantor, as
applicable, as are reasonably necessary to carry out the provisions of this
Agreement, whether before or after the Closing.


13.6                        No
Recourse


Notwithstanding anything that may be expressed or
implied in this Agreement, except as provided in Section 13.3, each Party covenants, agrees and
acknowledges that no recourse under this Agreement shall be had against any
current or future shareholders (except to the extent a Party, Vendor Guarantor
or Purchaser Guarantor) or agents of either Party, Vendor Guarantor or
Purchaser Guarantor or any of their Affiliates (except to the extent a Party,
Vendor Guarantor or Purchaser Guarantor), or any current, former or future
director, officer, employee, shareholder (except to the extent a Party, Vendor
Guarantor or Purchaser Guarantor) or agent of any of the foregoing, whether by
any legal or equitable proceeding, or by virtue of any Applicable Law, it being
expressly agreed and acknowledged that no personal liability whatsoever shall
attach to, be imposed on or otherwise be incurred by any current or future
shareholder (except to the extent a Party, Vendor Guarantor or Purchaser
Guarantor) or agent of either Party, Vendor Guarantor or Purchaser Guarantor,
or any of its Affiliates, or any current or former or future director, officer,
employee, shareholder (except to the extent a Party, Vendor Guarantor or
Purchaser Guarantor) or agent of any of the foregoing, for any obligation of
the Parties, Vendor Guarantor or Purchaser Guarantor under this Agreement;
provided that all obligations of each Party and each of Vendor Guarantor and
Purchaser Guarantor shall be binding upon any successor of such Party, Vendor
Guarantor or Purchaser Guarantor, whether by agreement, amalgamation, liquidation,
operation of law or otherwise.


13.7                        Time of
the Essence


Time shall be of the essence of this Agreement.


13.8                        Amendment


This Agreement may not be amended, waived or modified
except by an express instrument in writing signed on behalf of each of the Parties,
provided that consent therefore may be withheld by either Party arbitrarily.


13.9                        Invalidity


In the event that any one or more provisions contained
in this Agreement or in any other instrument referred to herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement or any other such instrument.


13.10                 Counterparts


This Agreement may be executed by the Parties in separate
counterparts, each of which when so executed and delivered shall be an
original, and all such counterparts shall together constitute one and the same
instrument and a signed counterpart delivered by facsimile or other electronic
means shall be considered as valid as an original counterpart.


13.11                 Enforcement


The Parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms, or were otherwise breached.



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It is accordingly agreed that the Parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement.


13.12                 No Third-Party
Beneficiaries


This Agreement, other than as provided in
Sections 10.1, 13.3 and
13.6 and in the provisions of Article 10 relating to indemnification, is not
intended to confer on any Person other than the Parties any rights or remedies.


13.13                 Expenses


Each of the Parties shall pay their respective legal,
accounting, and other professional advisory and all other fees, costs and
expenses incurred in connection with the Purchase and the negotiation,
preparation, execution and delivery of this Agreement and all documents and
instruments executed pursuant to this Agreement and any other costs and
expenses incurred.



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IN WITNESS WHEREOF the Parties, the Corporation, the
Vendor Guarantor and the Purchaser Guarantor have duly executed this Agreement
as of the date and year above written.


	
  

  	
  POGO ALBERTA, ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NORTHROCK RESOURCES LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  POGO
  PRODUCING COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1325156 ALBERTA LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ABU DHABI NATIONAL ENERGY COMPANY PJSC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 



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