Filed by sedaredgar.com - AMG Oil Ltd. - Exhibit 4.1






 

 

 

 

SECURITIES EXCHANGE AGREEMENT

 

 

AMONG 

AMG OIL LTD. 

AND 

ADIRA ENERGY CORP. 

AND 

THE PRINCIPAL SHAREHOLDERS OF ADIRA ENERGY CORP.

 

 

 

August 4, 2009

 

 


 




TABLE OF CONTENTS 

	ARTICLE
      1 DEFINITIONS AND INTERPRETATION 	1
      
	  	  
	     DEFINITIONS
      	1
      
	     INTERPRETATION
      	8
      
	     SCHEDULES
      	9
      
	  	  
	ARTICLE
      2 SECURITIES EXCHANGE 	9
      
	  	  
	     PURCHASE
      AND SALE 	9
      
	     MINORITY
      SHAREHOLDERS SHARE EXCHANGE AGREEMENTS 	9
      
	     PRIVATE
      PLACEMENT 	9
      
	     ADIRA
      STOCK OPTIONS 	10
      
	     ADIRA
      WARRANTS 	10
      
	     CLOSING
      	10
      
	     ESCROW
      AGREEMENTS 	10
      
	     RESTRICTIONS
      UNDER THE U.S. SECURITIES ACT 	11
      
	     AUTHORIZATION
      BY ADIRA SHAREHOLDERS 	12
      
	  	  
	ARTICLE
      3 REPRESENTATIONS AND WARRANTIES OF AMG 	12
      
	  	  
	     REPRESENTATIONS
      AND WARRANTIES OF AMG 	12
      
	           Incorporation,
      Organization and Authority of AMG 	12
      
	           Subsidiaries
      	13
      
	           Necessary
      Proceedings 	13
      
	           Valid
      and Binding Obligations 	13
      
	           Share
      Capital of AMG 	13
      
	           Rights
      to Acquire Securities 	13
      
	           Title
      to AMG Assets 	13
      
	           Reporting
      Issuer 	14
      
	           Cease
      Trading 	14
      
	           Financial
      Statements 	14
      
	           Auditor
      	14
      
	           Business
      of AMG 	14
      
	           Material
      Change 	15
      
	           Liabilities
      of AMG 	15
      
	           Indebtedness
      	15
      
	           Guarantees
      	15
      
	           Tax
      Matters 	15
      
	           Absence
      of Other Agreements 	15
      
	           Good
      Standing of Agreements 	16
      
	           AMG
      Corporate Records 	16
      
	           No
      Breach Caused by this Agreement 	16
      
	           Public
      Disclosure 	17
      
	           Litigation
      	17
      
	           Intellectual
      Property 	17
      
	           Dividends
      	17
      
	           No
      Brokers 	17
      
	           Approvals
      	17
      
	           Compliance
      with Laws 	18
      
	           Shareholders’
      Agreements, etc 	18
      
	           No
      Bankruptcy 	18
      
	           Transfer
      Agent and Registrar 	18
      
	           No
      Bankruptcy 	18
      
	           Obligations
      to Related Parties 	18
      






- ii - 

	           Omissions and Misrepresentations 	18
      
	     SURVIVAL 	18 
	  	  
	ARTICLE 4 REPRESENTATIONS AND
      WARRANTIES OF ADIRA 	19 
	  	  
	     REPRESENTATIONS AND
      WARRANTIES OF ADIRA 	19 
	           Incorporation, Organization and Authority of Adira
      	19
      
	           Subsidiaries 	19 
	           Necessary Proceedings 	19
      
	           Valid and Binding Obligation 	19 
	           Share Capital of Adira 	20
      
	           Rights to Acquire Securities 	20 
	           Title to Adira Assets 	20
      
	           Financial Statements 	20 
	           Auditors 	21
      
	           Business of Adira 	21 
	           Liabilities of Adira 	21
      
	           Indebtedness 	21 
	           Guarantees 	21
      
	           Tax Matters 	22 
	           Absence of Other Agreements 	22
      
	           Good Standing of Agreements 	22 
	           Adira Corporate Records 	22
      
	           No Breach Caused by this Agreement 	23 
	           Litigation 	23
      
	           No Brokers 	23 
	           Intellectual Property 	23
      
	           Environmental Matters 	24 
	           Dividends 	24
      
	           Approvals 	24 
	           Compliance with Laws 	24
      
	           Knowledge of Adira 	25 
	           Shareholders’ Agreements, etc 	25
      
	           No Bankruptcy 	25 
	           Obligations to Related Parties 	25
      
	           Omissions and Misrepresentations 	25 
	     SURVIVAL 	25
  
	  	  
	ARTICLE 5
      REPRESENTATIONS AND WARRANTIES OF EACH OF THE ADIRA SHAREHOLDERS
      	26
      
	  	  
	     REPRESENTATIONS AND WARRANTIES OF ADIRA SHAREHOLDERS
    	26
  
	           Ownership of Adira Shares 	26 
	           Capacity and Authority of the Adira Shareholders
      	26
      
	           Necessary Proceedings 	26 
	           Valid and Binding Obligation 	26
      
	           Company Assets 	27 
	           Not a U.S. Person 	27
      
	           No Offer in the United States 	27 
	           Sophisticated Purchaser 	27
      
	           Acquisition for Investment 	27 
	     SURVIVAL 	28
  
	  	  
	ARTICLE 6 COVENANTS
      OF ADIRA AND THE ADIRA SHAREHOLDERS 	28
      
	  	  
	     COVENANTS OF ADIRA 	28
  
	           Necessary Consents 	28 
	           Private Placement 	28
      
	           Audited Financial Statements 	28







- iii - 

	     COVENANTS OF THE ADIRA SHAREHOLDERS 	29
  
	     ACCESS TO RECORDS
      	29 
	  	  
	ARTICLE 7 	29 
	  	  
	COVENANTS OF AMG 	29 
	  	  
	        Necessary
      Consents 	30 
	       
      Directors 	30
      
	        Management
    	31 
	     ACCESS TO RECORDS 	31
  
	  	  
	ARTICLE 8 CONDITIONS
      PRECEDENT 	31
      
	  	  
	     MUTUAL CONDITIONS PRECEDENT 	31
  
	     CONDITIONS FOR THE
      BENEFIT OF AMG 	31 
	     CONDITIONS FOR THE BENEFIT OF ADIRA 	32
  
	  	  
	ARTICLE 9 CLOSING
      	34
      
	  	  
	     TIME
      OF CLOSING 	34
  
	     CLOSING DELIVERIES
      OF AMG 	34 
	     CLOSING DELIVERIES OF ADIRA AND THE ADIRA SHAREHOLDERS
    	35
  
	  	  
	ARTICLE 10
      STANDSTILL 	36
      
	  	  
	     STANDSTILL 	36
  
	  	  
	ARTICLE 11
      CONFIDENTIAL INFORMATION 	38
      
	  	  
	     DEFINITIONS 	38
  
	  	  
	ARTICLE 12
      TERMINATION 	40
      
	  	  
	     TERMINATION RIGHTS 	40
  
	     EFFECT OF
      TERMINATION 	41 
	  	  
	ARTICLE 13 INDEMNIFICATION
	41 
	  	  
	     INDEMNIFICATION BY
      AMG 	41 
	     INDEMNIFICATION BY ADIRA 	41
  
	     LIMITATION ON
      INDEMNIFICATION 	41 
	     PROCEDURE FOR INDEMNIFICATION 	42
  
	  	  
	ARTICLE 14
      GENERAL 	43
      
	  	  
	     PUBLIC ANNOUNCEMENT 	43
  
	     EXPENSES 	43 
	     INDEPENDENT LEGAL ADVICE 	43
  
	     ENTIRE AGREEMENT
    	43 
	     FURTHER ASSURANCES 	43
  
	     SEVERABILITY 	43 
	     APPLICABLE LAW 	44
  
	     ATTORNMENT 	44 
	     SUCCESSORS AND ASSIGNS 	44
  
	     TIME OF ESSENCE
    	44 
	     NOTICES 	44
  
	     WAIVER 	45 
	     AMENDMENTS 	45
  
	     REMEDIES CUMULATIVE
      	46 
	     COUNTERPARTS 	47
  






EXECUTION COPY 

SECURITIES EXCHANGE AGREEMENT 

THIS AGREEMENT is dated as of the 4th day of August,
2009 

AMONG: 


  
    AMG OIL LTD., a corporation continued under the
      laws of Canada 

    (“AMG”) 

  



AND: 


  
    ADIRA ENERGY CORP., a corporation incorporated under
      the laws of the Province of Ontario 

    (“Adira”) 

  



AND: 


  
    EACH OF THE PRINCIPAL SHAREHOLDERS OF ADIRA as
      set out in Schedule A attached hereto 

  



(the “Adira Shareholders”) 

WHEREAS: 

(A)                    AMG
is a corporation continued under the Canada Business Corporation Act
whose shares are publicly traded in the United States of America on the OTC
Bulletin Board; 

(B)                    AMG
and Adira intend to effect a business combination pursuant to which AMG will
acquire all of the issued and outstanding shares of Adira and will continue to
operate the business of Adira as a wholly-owned subsidiary of AMG following
closing of the acquisition; 

(C)                   
Adira and AMG intend to effect the acquisition of Adira by AMG by way of a
securities exchange; and 

(D)                    The
Adira Shareholders wish to exchange their shares of Adira for common shares of
AMG on the terms and subject to the conditions of this agreement; 

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

ARTICLE 1


DEFINITIONS AND INTERPRETATION


Definitions


	1.1 	
      In this Agreement, the following terms have the meanings
      ascribed thereto as follows:







- 2 -


	 	(a) 	
      “Acquisition” means the acquisition by AMG of all
      of the Adira Shares;

	 	 	 
	 	(b) 	
      “Adira Assets” means the property and assets of
      Adira and each Adira Subsidiary as a going concern, of every kind and
      description and wheresoever situated, including the Petroleum
    License;

	 	 	 
	 	(c) 	
      “Adira Audited Financial Statements” means audited
      Adira Financial Statements accompanied by the report of the Adira
      Auditor;

	 	 	 
	 	(d) 	
      “Adira Auditor” means DeVisser Gray LLP;

	 	 	 
	 	(e) 	
      “Adira Financial Statements” means Adira’s
      financial statements for the period from inception to April 30, 2009
      prepared in accordance with Canadian GAAP with a reconciliation to U.S.
      GAAP in accordance with the requirements of SEC Form 20-F;

	 	 	 
	 	(f) 	
      “Adira Minority Shareholders” means those
      shareholders of Adira, other than the Adira Shareholders, as set forth in
      the minute book of Adira;

	 	 	 
	 	(g) 	
      “Adira Minority Shares” means those shares of
      Adira held by the Adira Minority Shareholders, as set forth in the minute
      book of Adira;

	 	 	 
	 	(h) 	
      “Adira Private Placement Subscribers” means the
      subscribers to the Private Placement;

	 	 	 
	 	(i) 	
      “Adira Private Placement Warrant” means a share
      purchase warrant of Adira comprising a portion of each Adira Unit, each of
      which will entitle the holder to purchase one common share of Adira at a
      price of US$0.50 per share for a period of 24 months following
    Closing;

	 	 	 
	 	(j) 	
      “Adira Share Split” means the sub-division of the
      Adira Shares into an aggregate of 31,200,000 common shares of
  Adira;

	 	 	 
	 	(k) 	
      “Adira Shareholders” means the principal
      shareholders of Adira who are party to this Agreement, each of whom is
      identified as a principal shareholder of Adira on Schedule A;

	 	 	 
	 	(l) 	
      “Adira Shares” means the common shares in the
      capital of Adira representing 22,500,000 common shares of Adira as of the
      date of this Agreement;

	 	 	 
	 	(m) 	
      “Adira Stock Option Holder” means each holder of
      Adira Stock Options, as set forth in Schedule A hereto;

	 	 	 
	 	(n) 	
      “Adira Stock Option Plan” means the stock option
      plan of Adira;

	 	 	 
	 	(o) 	
      “Adira Stock Options” means the options to
      purchase common shares of Adira pursuant to the Adira Stock Option
      Plan;

	 	 	 
	 	(p) 	
      “Adira Subsidiary” means each of Adira Energy
      Israel Ltd. and Adira Energy Israel Services Ltd., companies incorporated
      pursuant to the laws of Israel;

	 	 	 
	 	(q) 	
      “Adira Unit” means a unit comprised of one common
      share of Adira and one-half of one Adira Private Placement Warrant to be
      issued to the Private Placement Subscribers;







- 3 -


	 	(r) 	
      “Adira Warrant” means each common share purchase
      warrant of Adira held by each Adira Warrant Holder, as set forth in
      Schedule A;

	 	 	 
	 	(s) 	
      “Adira Warrant Holder” means each holder of
      warrants to acquire common shares of Adira, as set forth in Schedule
    A;

	 	 	 
	 	(t) 	
      “Affiliate” has the meaning specified in the
      Securities Act;

	 	 	 
	 	(u) 	
      “Agreement” means this securities exchange
      agreement, as the same may be amended, supplemented or otherwise modified
      from time to time in accordance with the terms hereof;

	 	 	 
	 	(v) 	
      “AMG Financial Statements” means the audited
      financial statements of AMG for the years ended September 30, 2008 and
      2007 and the interim financial statements of AMG for the six months ended
      March 31, 2009, all prepared in accordance with U.S. GAAP;

	 	 	 
	 	(w) 	
      “AMG Meeting Matters” means the approval by the
      shareholders of AMG of the Consolidation, the Name Change, the Increase to
      the AMG Directors, the appointment of new directors, the AMG Stock Option
      Plan and the grant of the AMG Stock Options;

	 	 	 
	 	(x) 	
      “AMG Meeting” means a meeting of the shareholders
      of AMG to be held following Closing to, among other things, approve the
      AMG Meeting Matters;

	 	 	 
	 	(y) 	
      “AMG Original Stock Option Plan” means the 2000
      non-qualifying stock stock option plan of AMG, as amended;

	 	 	 
	 	(z) 	
      “AMG Private Placement Warrant” means a share
      purchase warrant of AMG comprising a portion of each AMG Unit, each of
      which will entitle the holder to purchase one common share of AMG at a
      price of US$0.50 per share for a period of 24 months following closing of
      the Private Placement, provided that the expiry date will be accelerated,
      if the closing price of shares of AMG resulting from the Acquisition for
      any period of 20 consecutive trading days exceeds US$1.00 per share (the
      “Acceleration Price”), to a period that is 30 days after the
      acceleration event. In the event that AMG becomes and is at the time of
      computation listed on a stock exchange in Canada, the Acceleration Price
      will be computed in Canadian dollars based on US$1.00 per share multiplied
      by the exchange rate of Canadian dollars per U.S. dollar on the Closing
      Date;

	 	 	 
	 	(aa) 	
      “AMG Shares” means the common shares with no par
      value in the capital of AMG to be issued to the Adira Shareholders in
      exchange for their Adira Shares in accordance with Section 2.1 of this
      Agreement;

	 	 	 
	 	(bb) 	
      “AMG Stock Option Plan” means a stock option plan
      of AMG to be adopted by AMG concurrent with or following closing that will
      allow for the issuance of incentive stock options to purchase up to a
      maximum of 10% of the issued and outstanding common shares of AMG
      post-closing, as calculated on a rolling basis;

	 	 	 
	 	(cc) 	
      “AMG Stock Options” shall have the meaning set
      forth in Section 2.4 of this Agreement;







- 4 -


	 	(dd) 	
      “AMG Unit” means a unit comprised of one common
      share of AMG and one-half of one AMG Private Placement Warrant to be
      issued on Closing to the holders of the Adira Units;

	 	 	 
	 	(ee) 	
      “AMG Warrants” shall have the meaning set forth in
      Section 2.5 of this Agreement;

	 	 	 
	 	(ff) 	
      “AMG Voting Trust Shareholder” means Robert
      Pollock;

	 	 	 
	 	(gg) 	
      “Ancillary Agreements” means all agreements,
      certificates and other instruments delivered or given pursuant to this
      Agreement, including, without limitation, the Escrow Agreements;

	 	 	 
	 	(hh) 	
      “Business Day” means any day, other than a
      Saturday, Sunday or statutory holiday in Vancouver, British
    Columbia;

	 	 	 
	 	(ii) 	
      “Canadian GAAP” means generally accepted
      accounting principles in Canada as in effect from time to time,
      consistently applied;

	 	 	 
	 	(jj) 	
      “Claims” means any suit, action, dispute, civil or
      criminal litigation, claim, arbitration or legal, administrative or other
      proceeding or governmental investigation, including appeals and
      applications for review;

	 	 	 
	 	(kk) 	
      “Closing Date” means the date of Closing as
      determined in accordance with Section 2.3 of this Agreement;

	 	 	 
	 	(ll) 	
      “Closing” means the completion of the transactions
      contemplated herein;

	 	 	 
	 	(mm) 	
      “Consolidation” means the proposed consolidation
      of AMG Shares on the basis of one new common share for each two existing
      common shares;

	 	 	 
	 	(nn) 	
      “Disclosure Schedule” means the schedule
      exceptions to the representations and warranties of AMG, Adira or the
      Adira Shareholders, as the case may be, attached as Schedule B to
      this Agreement;

	 	 	 
	 	(oo) 	
      “Environmental Law” means any applicable federal,
      provincial, state, local or foreign law (including common law), statute,
      code, rule, regulation, ordinance, or other legal requirement, guidelines,
      criteria or standards relating to the protection of occupational health or
      safety or the environment, including natural resources and the protection
      thereof and other similar guidelines, criteria and standards of
      Governmental Entities;

	 	 	 
	 	(pp) 	
      “Environmental Permits” means all permits,
      authorizations, consents and approvals required by Environmental Laws for
      the continued operation of the respective businesses of each Party and
      each of its Subsidiaries as currently conducted or as proposed to be
      conducted;

	 	 	 
	 	(qq) 	
      “Environmental Reports” means all environmental
      and health and safety assessments, audits and investigations relating to
      any party or any of its Subsidiaries or any real property currently or
      formerly owned, operated, controlled, managed or leased by any Party or
      any of its Subsidiaries;







- 5 -


	 	(rr) 	
      “Escrow Agent” means the escrow agent appointed by
      AMG and Adira on closing to act as escrow agent pursuant to the Escrow
      Agreements;

	 	 	 
	 	(ss) 	
      “Escrow Agreements” means the escrow agreements to
      be entered into among AMG, each of the Adira Shareholders and the Escrow
      Agent on Closing containing the material terms set forth in Section 2.7 of
      this Agreement;

	 	 	 
	 	(tt) 	
      “Exchange Ratio” means a ratio of one AMG Share
      for each Adira Share, as such Adira Shares are outstanding following the
      Share Split;

	 	 	 
	 	(uu) 	
      “Governmental Entity” means any government,
      parliament, legislature, regulatory authority, governmental department,
      agency, commission, board, tribunal, crown corporation, court or other
      law, rule or regulation-making entity having jurisdiction or exercising
      executive, legislative, judicial, regulatory or administrative powers on
      behalf of any federation or nation, or any province, territory, state or
      other subdivision thereof or any municipality, district or other
      subdivision thereof;

	 	 	 
	 	(vv) 	
      “Governmental Order” means any order, writ,
      ruling, judgment, injunction, decree, stipulation, determination, award,
      directive or citation entered by or with any Governmental
Entity;

	 	 	 
	 	(ww) 	
      “Hazardous Substances” means any substance,
      material or waste that is regulated by, or forms the basis of liability,
      now or hereafter, under any applicable Environmental Laws;

	 	 	 
	 	(xx) 	
      “Increase to the AMG Directors” means the increase
      to the number of AMG directors at the AMG Meeting to seven
    directors;

	 	 	 
	 	(yy) 	
      “Intellectual Property” means all (i) trademarks,
      service marks, trade names and other indications of origin of “Adira
      Energy Corp.” including all goodwill associated with all of the foregoing,
      and all applications, registrations and renewals in connection with all of
      the foregoing, in any jurisdiction; (ii) inventions, discoveries and ideas
      (whether patentable or unpatentable and whether or not reduced to
      practice), and all patents, applications for patents; (iii) trade secrets,
      know-how, confidential information, and other proprietary rights and
      information; (iv) copyrights and works of authorship, whether
      copyrightable or not, and all applications, registrations and renewals in
      connection therewith, in any jurisdiction; (v) Internet domain names; (vi)
      computer technology, equipment, devices, systems, hardware, software and
      databases; and (vii) other similar intellectual property or proprietary
      rights;

	 	 	 
	 	(zz) 	
      “Introduction Fee” means a fee of 240,000 common
      shares of AMG Oil that will be issued upon Closing to ABR International,
      Inc.;

	 	 	 
	 	(aaa) 	
      “Laws” means all statutes, codes, ordinance,
      regulations, statutory rules, published policies, published guidelines and
      terms and conditions of any grant of approval, permission, authority or
      license of any Governmental Entity, and the term “applicable” with respect
      to such Laws, and in the context that refers to one or more Persons, means
      that such Laws apply to such Person or Persons or its or their business,
      undertaking, property or securities and emanate from a Governmental Entity
      having jurisdiction over the Person or Persons or its or their business,
      undertaking, property or securities (all references herein to a specific
      statute being deemed to include all applicable rules, regulations,
      rulings, orders and forms made or promulgated under such statute and
      the







- 6 -


	 		
      published policies and published guidelines of the
      Governmental Entity administering such statute);

	 	 	 
	 	(bbb) 	
      “Lien” means any mortgage, charge, pledge,
      hypothecation, security interest, assignment, lien (statutory or
      otherwise), charge, title retention agreement or arrangement, restrictive
      covenant or other encumbrance of any nature or any other arrangement or
      condition, which, in substance, secures payment, or performance of an
      obligation;

	 	 	 
	 	(ccc) 	
      “Material Adverse Effect” means, when used in
      connection with AMG or Adira, as applicable, any event, condition or
      change which individually or in the aggregate constitutes, or could
      reasonably be expected to have, a material adverse effect on their
      respective business assets, liabilities, condition (financial or
      otherwise) or results of operations taken as a whole on a consolidated
      basis; provided, however, that the determination of whether a material
      adverse effect has occurred shall be made ignoring any event, change, fact
      or effect resulting from: (i) any change in Canadian GAAP with respect to
      Adira or US GAAP with respect to AMG or any change in any Laws or
      interpretation thereof; (ii) any generally applicable change or
      development in economic, regulatory, business or financial market
      conditions; (iii) any acts of terrorism or war; (iv) the execution or
      announcement of this Agreement; (v) in respect of AMG, any breach of this
      Agreement by Adira or any Adira Shareholder; and (vi) in respect of Adira,
      any breach of this Agreement by AMG, provided, however, that with respect
      to paragraphs (i), (ii) and (iii), such matter does not have a
      disproportionate effect on AMG or Adira, as applicable, relative to other
      comparable companies or entities operating in the industry in which the
      party operates;

	 	 	 
	 	(ddd) 	
      “Material Contracts” means all contracts or other
      obligations or rights (and all amendments, modifications and supplements
      thereto to which any Party or any of its Subsidiaries is a party affecting
      the obligations of any party thereunder) to which a Party or its
      Subsidiaries is a party or by which any of their respective properties or
      assets are bound that are material to the business, properties or assets
      of a Party or its Subsidiaries taken as a whole;

	 	 	 
	 	(eee) 	
      “material fact” has the meaning ascribed thereto
      in the Securities Act;

	 	 	 
	 	(fff) 	
      “Minority Shareholder Share Exchange Agreements”
      means share exchange agreements to be entered into between AMG and each of
      the Adira Minority Shareholders pursuant to which AMG will agree to
      acquire the Adira Minority Shares held by the Adira Minority Shareholder
      concurrent with the closing of the Acquisition;

	 	 	 
	 	(ggg) 	
      “misrepresentation” has the meaning ascribed
      thereto in the Securities Act;

	 	 	 
	 	(hhh) 	
      “Name Change” means the name change of AMG to
      “Adira Energy Corp.” or such other name approved by the board of directors
      of AMG following closing;

	 	 	 
	 	(iii) 	
      “Party” means a party to this Agreement and
      “Parties” means all parties to this Agreement;

	 	 	 
	 	(jjj) 	
      “Permits” means in respect of a party, all
      permits, licenses, variances, exemptions, orders and approvals of all
      Governmental Entities necessary for the lawful conduct of the respective
      businesses of the Party or any of its
Subsidiaries;







- 7 -


	 	(kkk) 	
      “Person” means and includes an individual, firm,
      sole proprietorship, partnership, joint venture, venture capital or hedge
      fund, association, unincorporated association, unincorporated syndicate,
      unincorporated organization, estate, group, trust, body corporate
      (including a limited liability company and an unlimited liability
      company), a trustee, executor, administrator or other legal
      representative, Governmental Entity, syndicate or other entity, whether or
      not having legal status;

	 	 	 
	 	(lll) 	
      “Petroleum License” means petroleum license No.
      356/ EYTAN (125,700 dunams) granted by the State of Israel, as more
      particularly described in Schedule C to this Agreement;

	 	 	 
	 	(mmm) 	
      “Private Placement Agent’s Warrants” means the
      share purchase warrants of Adira to be issued by Adira to an agent in
      connection with the Private Placement which will entitle the agent to
      purchase a number of common shares of Adira equal to 7% of the number of
      Adira Units issued in the Private Placement to investors introduced by the
      agent at a price of US$0.25 per share for a period of 24 months following
      closing of the Private Placement;

	 	 	 
	 	(nnn) 	
      “Private Placement Subscriber” means a subscriber
      for Adira Units in the Private Placement;

	 	 	 
	 	(ooo) 	
      “Private Placement” means the a private placement
      of at least 8,000,000 Adira Units at a price of US$0.25 per Adira Unit, or
      such lesser number of Adira Units as approved by Adira, to be undertaken
      by Adira and completed prior to Closing;

	 	 	 
	 	(ppp) 	
      “Regulatory Approvals” means those sanctions,
      rulings, consents, orders, exemptions, permits and other approvals
      (including the lapse, without objection, of a prescribed time under a
      statute or regulation that permits a transaction to be implemented if a
      prescribed time lapses following the giving of notice without an objection
      being made) of any applicable Governmental Entity;

	 	 	 
	 	(qqq) 	
      “Securities Act” means the Securities Act
      (British Columbia) and all Blanket Rulings, Policy Statements, Orders,
      Rules and Notices of the British Columbia Securities Commission;

	 	 	 
	 	(rrr) 	
      “Share Split” means the subdivision of the
      outstanding Adira Shares such that there are 31,200,000 common shares of
      Adira issued and outstanding prior to Closing, exclusive of any common
      shares of Adira that may be issued as part of the Private
  Placement;

	 	 	 
	 	(sss) 	
      “Subscription Agreements” means the subscription
      agreements to be entered into between Adira and the Private Placement
      Subscribers in connection with the Private Placement;

	 	 	 
	 	(ttt) 	
      “Subsidiary” means, with respect to a specified
      body corporate, a body corporate of which more than 50% of the outstanding
      shares ordinarily entitled to elect a majority of the directors thereof,
      whether or not shares of any other class or classes shall or might be
      entitled to vote upon the happening of any event or contingency, are at
      the time owned, directly or indirectly, by such specified body corporate,
      and includes a body corporate in like relation to a
  subsidiary;







- 8 -


	 	(uuu) 	
      “Tax Returns” means all returns, declarations,
      reports, information returns and statements filed or required to be filed
      with any taxing authority relating to Taxes;

	 	 	 
	 	(vvv) 	
      “Taxes” means all present and future taxes,
      levies, imposts, duties, deductions, withholdings, assessments, fees or
      other charges imposed by any Governmental Entity in the nature of a tax,
      including any interest, additions to tax and penalties applicable
      thereto;

	 	 	 
	 	(www) 	
      “U.S. Exchange Act” means the United States
      Securities Exchange Act of 1934, as amended;

	 	 	 
	 	(xxx) 	
      “U.S. GAAP” means generally accepted accounting
      principles in Canada as in effect from time to time, consistently
      applied;

	 	 	 
	 	(yyy) 	
      “U.S. Securities Act” shall mean the United States
      Securities Act of 1933, as amended; and

	 	 	 
	 	(zzz) 	
      “Voting Trust Agreements” shall mean the voting
      trust agreements to be delivered on closing by the AMG Voting Trust
      Shareholder whereby the AMG Voting Trust Shareholder will have agreed to
      vote in favour of the AGM Meeting Matters at the AMG Meeting to be held
      following Closing.



Interpretation


	1.2 	
       
	
      For the purposes of this Agreement, except as otherwise
      expressly provided:

	 	 	 
		(a) 	
      a reference to an Article is to an Article of this
      Agreement, and the symbol § followed by a number or some combination of
      numbers and letters refers to the section, subsection, paragraph,
      subparagraph, clause or subclause of this Agreement so
  designated;

	 	 	 
		(b) 	
      the captions, § numbers and Article numbers appearing in
      this Agreement are inserted for convenience of reference only and shall in
      no way define, limit, construe or describe the scope or intent of this
      Agreement nor in any way affect this Agreement;

	 	 	 
		(c) 	
      the word “including”, when following any general
      statement or term, is not to be construed as limiting the general
      statement or term to the specific items or matters set forth or to similar
      items or matters, but rather as permitting the general statement or term
      to refer to all other items or matters that could reasonably fall within
      its broadest possible scope;

	 	 	 
		(d) 	
      if any date on which any action is required to be taken
      hereunder by any of the parties is not a Business Day, such action shall
      be required to be taken on the next succeeding day which is a Business
      Day;

	 	 	 
		(e) 	
      a reference to a statute includes all regulations made
      thereunder, all amendments to the statute or regulation in force from time
      to time, and every statute or regulation that supplements or supersedes
      such statute or regulation;

	 	 	 
		(f) 	
      words importing the masculine gender include the feminine
      or neuter, words in the singular include the plural, a word importing a
      corporate entity includes an individual, and vice
versa;







- 9 -


	 	(g) 	
      all dollars amounts, unless otherwise specified, are in
      Canadian dollars; and

	 	 	 
	 	(h) 	
      where any matter is stated to be “to the knowledge” or
      “to the best of the knowledge” of Adira or words to like effect in this
      Agreement, it shall mean the actual knowledge of any of the senior
      officers of Adira after due inquiry. Where any matter is stated to be “to
      the knowledge” or “to the best of the knowledge” of AMG or words to like
      effect in this Agreement, it shall mean the actual knowledge of any of the
      senior officers of AMG after due inquiry.



Schedules


	1.3 	
       
	
      The following schedules attached hereto form part of this
      Agreement:

	 	 	 
		(a) 	
      Schedule A – List of Adira Shareholders, Adira Stock
      Option Holders and Adira Warrant Holders;

	 	 	 
		(b) 	
      Schedule B – Disclosure Schedule; and

	 	 	 
		(c) 	
      Schedule C – Description of Petroleum
  License.



ARTICLE 2


SECURITIES EXCHANGE


Purchase and Sale


2.1                   
Subject to the terms and conditions hereof and based upon the mutual
representations, warranties, terms and conditions herein contained, each of the
Adira Shareholders agrees to assign, sell and transfer to AMG on the Closing
Date all its right, title and interest in and to its respective Adira Shares and
AMG agrees to purchase all of the Adira Shares from the Adira Shareholders in
exchange for the issuance of the AMG Shares to the Adira Shareholders on the
basis of the Exchange Ratio, each in accordance with and as set out in the List
of Adira Shareholders attached as Schedule A hereto.

Minority Shareholders Share Exchange Agreements 

2.2                    This
Agreement is executed concurrently with the Minority Shareholders’ Share
Exchange Agreements and each Party acknowledges that the completion of the
Acquisition will be subject to and contingent upon the concurrent completion by
AMG of the acquisition of the Adira Minority Shares from the Adira Minority
Shareholders on the terms and conditions of the Minority Shareholders’ Share
Exchange Agreements. 

Private Placement


2.3                   
The obligations of each Party to complete the Acquisition will be subject to the
completion of the Private Placement by Adira prior to the Acquisition. On
closing of the Acquisition, the Adira Units will be exchanged for AMG Units on a
one-for-one basis. Each Subscription Agreement will include the agreement of the
Private Placement Subscriber to the exchange of their Adira Units for AMG Units
on Closing without any further action on the part of the Private Placement
Subscriber. Further, the Private Placement Agent Warrants will be exchanged on
Closing for share purchase warrants of AMG which will entitle the agent to
purchase a number of common shares of AMG equal to 7% of the number of Adira
Units issued in the Private Placement at a price of US$0.25 per share for a
period of 24 months 




- 10 -


following closing of the Private Placement. The number of Adira
Private Placement Subscribers will be such that the total number of shareholders
of Adira immediately prior to the completion of the Acquisition will be such
that AMG may rely on the exemption from the takeover bid requirements set forth
in Section 4.2 of MI 62-104 and OSC Rule 62-504.

Adira Stock Options


2.4                    The
obligations of each Party to complete the Acquisition will be subject to each
Adira Stock Option Holder agreeing to exchange their Adira Stock Options for
options to purchase an equivalent number of common shares of AMG at the
equivalent stock option exercise price and for the same term as the Adira Stock
Options (the “AMG Stock Options”), which options will be granted by AMG
pursuant to the AMG Stock Option Plan on Closing and which options will not be
exercisable until such time as the AMG Stock Option Plan shall have been
approved by the shareholders of AMG. Each party shall use its best efforts to
secure the agreement of each Adira Stock Option Holder as contemplated herein.
AMG hereby consents to the adoption of the Adira Stock Option Plan and the grant
of options to purchase up to 3,334,000 common shares of Adira at a price of
US$0.25 per share in accordance with the Adira Stock Option Plan during the
period between execution of this Agreement and Closing.

Adira Warrants


2.5                   
The obligations of each Party to complete the Acquisition will be subject to
each Adira Warrant Holder agreeing to exchange their Adira Warrants, as set
forth in Schedule A hereto, for warrants to purchase an equivalent number of
common shares of AMG at the equivalent exercise price and for the same term as
the Adira Warrants (the “AMG Warrants”), which warrants will be issued by
AMG on Closing. Each party shall use its best efforts to secure the agreement of
each Adira Warrant Holder as contemplated herein.

Closing


2.6                   
The Closing will take place on a date (the “Closing Date”) no later than
five business days after the satisfaction of the later of the following
conditions precedent to closing to occur, provided that in no event will the
Closing Date be later than September 30, 2009 and subject to the satisfaction or
waiver of the conditions precedent to closing set forth in Article 8 of this
Agreement: 

	 	(a) 	
      Adira will have delivered to AMG the Adira Audited
      Financial Statements and AMG will have confirmed to Adira the
      acceptability of the Adira Audited Financial Statements; and

	 	 	 
	 	(b) 	
      Adira will have delivered to AMG notice that it has
      received executed Subscription Agreements that will enable Adira to
      complete the Private Placement prior to Closing.



AMG will review and advise on the acceptability of the Adira
Audited Financial Statements no later than 2 business days following delivery by
Adira to AMG of the Adira Audited Financial Statements. 

Escrow Agreements


2.7                    The
AMG Shares issued to the Adira Shareholders on Closing will be delivered into
escrow and held in accordance with the terms and conditions of the Escrow
Agreements following Closing. Each Adira Shareholder agrees to execute and
deliver on Closing an Escrow Agreement with respect to the AMG Shares to be
issued to them on Closing. Under the Escrow Agreements, the AMG Shares shall be
released to the Adira Shareholders as follows:




- 11 -


	 	(a) 	
      12.5% will be released on the completion of the
      Acquisition;

	 	 	 
	 	(b) 	
      12.5% will be released on the date which is six months
      following the completion of the Acquisition;

	 	 	 
	 	(c) 	
      25% will be released on the date which is twelve months
      following the completion of the Acquisition; and

	 	 	 
	 	(d) 	
      the remaining escrowed securities will be released on the
      date which is 18 months following the completion of the
  Acquisition.



In addition and notwithstanding the above release schedule, the
AMG Shares will be released to the Adira Shareholders upon the occurrence of a
“change of control”, as defined as follows: 

“Change of Control” means, and
is effective upon: (i) the acquisition by any person or groups of persons acting
jointly or in concert, directly or indirectly, in a single transaction or a
series of related transactions, of voting securities of AMG giving such person
beneficial ownership, voting control or direction over more than 50.1% of the
aggregate voting rights attached to AMG’s voting securities; (ii) the
acquisition by any person (other than AMG or any of its subsidiaries) or one or
more members of a group of persons acting jointly or in concert (other than a
group consisting solely of two or more of AMG and any of its subsidiaries),
directly or indirectly, in a single transaction or a series of related
transactions, of all or substantially all of the assets of AMG and its
subsidiaries, taken as a whole; or (iii) the completion of a merger,
amalgamation, arrangement or similar transaction which results in holders of the
voting rights attached to the Common Shares prior to the completion of the
transaction holding less than 50.1% of the voting securities of the resulting
entity (as measured by voting power and not by number of securities) after the
completion of the transaction. 

The parties agree to negotiate in good faith the form of Escrow
Agreements to be executed and delivered on Closing, which Escrow Agreements will
include the material terms set forth in this Section 2.7. 

Restrictions under the U.S. Securities Act


2.8                   
Each of the Adira Shareholders acknowledges and agrees that the AMG Shares will
be offered and sold to the Adira Shareholder without such offer and sale being
registered under the U.S. Securities Act and will be issued to each Adira
Shareholder in an offshore transaction outside of the United States in
accordance with a safe harbour from the registration requirements of the U.S.
Securities Act provided by Rule 903 of Regulation S of the U.S. Securities Act
based on the representations and warranties of the Adira Shareholder in this
Agreement. As such, each Adira Shareholder acknowledges that the AMG Shares may
not be offered, resold, pledged or otherwise transferred except through an
exemption from registration under the U.S. Securities Act or pursuant to an
effective registration statement under the U.S. Securities Act and in accordance
with all applicable state securities laws and the laws of any other
jurisdiction. Each Adira Shareholder agrees to resell the AMG Shares only in
accordance with the provisions of Regulation S of the U.S. Securities Act,
pursuant to registration under the U.S. Securities Act, or pursuant to an
available exemption from registration pursuant to the U.S. Securities Act. Each
Adira Shareholder agrees that AMG may refuse to register any transfer of the AMG
Shares not made in accordance with the provisions of Regulation S of the U.S.
Securities Act, pursuant to registration under the U.S. Securities Act, pursuant
to an available exemption from registration. Each Adira Shareholder agrees that
AMG may require the opinion of legal counsel reasonably acceptable to 




- 12 -


AMG in the event of any offer, sale, pledge or transfer of any
of the AMG Shares by the Adira Shareholder pursuant to an exemption from
registration under the U.S. Securities Act. Each Adira Shareholder acknowledges
that AMG has not obligation to register the resale of any of the AMG Shares by
the Adira Shareholder pursuant to the U.S. Securities Act. Each of the Adira
Shareholders acknowledges and agrees that AMG is a “shell company” as defined
under the U.S. Securities Act and, as a consequence, the Adira Shareholders will
not be entitled to resell any of the AMG Shares issued to them on Closing in the
United States within the period of one year following the date that AMG files
“Form 10 Information”, as defined in Rule 144 under the U.S. Securities Act,
with the United States Securities and Exchange Commission. 

Authorization by Adira Shareholders


2.9                    Each
Adira Shareholder by execution of this Agreement hereby irrevocably authorizes
Adira: 

	 	(a) 	
      to act as its representative at the Closing and to
      execute in its name and on its behalf all closing receipts and documents
      required;

	 	 	 
	 	(b) 	
      to complete or correct any errors or omissions in or to
      make non-material amendments, modifications or supplements to any form or
      document, including this Agreement, provided by the Adira
    Shareholder;

	 	 	 
	 	(c) 	
      to receive on its behalf certificates representing the
      AMG Shares under this Agreement;

	 	 	 
	 	(d) 	
      to approve any opinions, certificates or other documents
      addressed to the Adira Shareholder;

	 	 	 
	 	(e) 	
      to waive, in whole or in part, any representations,
      warranties, covenants or conditions for the benefit of the Adira
      Shareholder and contained in this Agreement; and

	 	 	 
	 	(f) 	
      to exercise any rights of termination contained in this
      Agreement or any of the Ancillary Agreements to which it is a
  party.



ARTICLE 3


REPRESENTATIONS AND WARRANTIES OF AMG

Representations and Warranties of AMG


3.1                    AMG
hereby represents and warrants to Adira and each of the Adira Shareholders as
follows and acknowledges that Adira and each of the Adira Shareholders are
relying on such representations and warranties in connection with the
transactions contemplated hereby: 

Incorporation, Organization and
Authority of AMG

	 	(a) 	
      AMG is a corporation duly continued and validly
      subsisting and in good standing under the Canada Business Corporations
      Act, and has all the requisite corporate capacity and authority to
      enter into this Agreement and to perform its obligations hereunder and to
      carry on its business and to own, lease and operate its
  assets.







- 13 -

Subsidiaries 

	 	(b) 	
      AMG does not own or have any interest in any
      Subsidiaries.



Necessary Proceedings


	 	(c) 	
      All necessary and required corporate measures,
      proceedings and actions of the directors and shareholders of AMG have been
      taken to authorize and enable AMG to enter into and deliver this Agreement
      and the Ancillary Agreements to which AMG is a party and to perform its
      obligations hereunder and thereunder, to issue the AMG Shares to the Adira
      Shareholders on Closing and to issue the AMG Units to the Adira Private
      Placement Subscribers concurrent with Closing.



Valid and Binding Obligations


	 	(d) 	
      This Agreement and each of the Ancillary Agreements to
      which AMG is a party have been duly executed and delivered by AMG and
      constitute, or when duly executed and delivered will constitute, valid and
      binding obligations of AMG, enforceable against it in accordance with
      their respective terms subject only to:

	 	 	 	 
	 		(i) 	
      any limitation under applicable Laws relating to
      bankruptcy, insolvency, moratorium, reorganization and other similar laws
      relating to or affecting the enforcement of creditors’ rights generally;
      and

	 	 	 	 
	 		(ii) 	
      the fact that equitable remedies, including the remedies
      of specific performance and injunction, may only be granted in the
      discretion of a court.



Share Capital of AMG 

	 	(e) 	
      The authorized share capital of AMG consists of
      100,000,000 common shares without par value, of which 23,200,000 common
      shares are issued and outstanding as of the date of this
  Agreement.



Rights to Acquire Securities


	 	(f) 	
      No Persons, other than as set out in the AMG Financial
      Statements or pursuant to the terms hereof, have any agreement or option
      or any right or privilege (whether by law, pre-emptive or contractual)
      capable of becoming an agreement or option for the purchase, subscription
      or issuance of any shares or other securities of AMG or securities
      convertible into, exchangeable for, or which carry the right to purchase
      common shares or other securities of AMG.



Title to AMG Assets 

	 	(g) 	
      AMG has good and marketable title to all assets of AMG
      disclosed in the AMG Financial Statements free and clear of any actual,
      pending or, to the knowledge or belief of AMG, threatened claims, Liens or
      set-offs whatsoever, including without limitation any action, proceeding
      or investigation affecting title to such assets, at law or in equity,
      before any court, administrative agency or Governmental
  Entity.







- 14 -


Exchange Act
Reports


	 	(h) 	
      AMG’s common shares are registered under Section 12(g) of
      the Exchange Act and AMG has completed all filings with the SEC in
      accordance with its reporting obligations under the Exchange Act for the
      past twelve months. AMG has delivered or made available to the Vendor
      complete and accurate copies of (a) AMG’s annual report on Form 20-F for
      the year ended September 30, 2008; and (b) AMG’s reports on Form 6-K filed
      subsequent to the filing of the annual report on Form 20-F for the year
      ended September 30, 2008 (together, the “AMG SEC Filings”). As of
      their respective dates, or as subsequently amended before the date hereof,
      to AMG’s knowledge, each of AMG’s SEC Filings (i) did not contain any
      untrue statement of a material fact or omit to state a material fact
      required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not misleading
      and (ii) complied as to form in all material respects with the applicable
      rules and regulations of the SEC.



                   Reporting
Issuer


	 	(i) 	
      AMG is a reporting issuer under the Securities Act and
      AMG’s name does not appear on a list of defaulting reporting issuers
      maintained by the British Columbia Securities Commission. AMG is in
      compliance and up to date with all filings under applicable corporate and
      securities rules and regulations.



                   Cease
Trading


	 	(j) 	
      No order ceasing or suspending trading in securities of
      AMG or prohibiting the sale of securities by AMG or AMG Shareholders is
      currently in effect and to AMG’s knowledge, no proceedings for this
      purpose have been instituted, are pending, contemplated or
    threatened.



Financial
Statements


	 	(k) 	
      The AMG Financial Statements have been prepared in
      accordance with U.S. GAAP and present fairly the assets, liabilities
      (whether accrued, absolute, contingent or otherwise) and financial
      condition of AMG as of the respective dates thereof and the results of
      operations and cash flows of AMG for the respective financial periods
      covered thereby.



Auditor


	 	(l) 	
      The auditor of AMG is a “participating audit firm” with
      the Canadian Public Accountability Board within the meaning of NI 52-108 –
      “Auditor Oversight”.



Business of AMG


	 	(m) 	
      AMG has conducted and is conducting its business in all
      material respects in full compliance with all applicable Laws, rules and
      regulations of each jurisdiction in which the business is carried on and
      hold all necessary licenses, permits, approvals, consents, certificates,
      registrations and authorizations, whether governmental, regulatory or
      otherwise, to enable the business to be carried on as it is currently
      conducted and the property and assets to be owned, leased and operated,
      and the same are validly existing and in good standing and none of such
      licenses, permits, approvals, consents, certificates, registrations and
      authorizations contains any burdensome term, provision, condition
  or







- 15 -


limitation, save and except in any
case which would not have a Materially Adverse Effect. 

Material Change 

	 	(n) 	
      There are no material facts which exist, and there has
      been no material change in the capital, business, assets, liabilities,
      obligations (absolute, accrued, contingent or otherwise), operations,
      condition (financial or otherwise), results of operations, financial
      position, affairs or prospects of AMG since the date of the AMG Financial
      Statements, which have not been disclosed in the manner required by the
      Securities Act.



Liabilities of
AMG


	 	(o) 	
      There are no known liabilities (whether accrued,
      absolute, contingent or otherwise) of AMG of any kind whatsoever, and, to
      the best of the knowledge of AMG, there is no basis for assertion against
      AMG of any liabilities of any kind, other than:

	 	 	 	 
	 		(i) 	
      liabilities disclosed or reflected in or provided for in
      the AMG Financial Statements; or

	 	 	 	 
	 		(ii) 	
      liabilities incurred since the date of the AMG Financial
      Statements which were incurred in the ordinary course of the routine daily
      affairs of AMG’s business and which, in the aggregate, are not materially
      adverse to its business.



Indebtedness


	 	(p) 	
      Except as disclosed in the AMG Financial Statements and
      liabilities incurred in the ordinary course of business following the date
      of such AMG Financial Statements, AMG has no bonds, debentures, mortgages,
      promissory notes or other indebtedness, and nor is under any obligation to
      create or issue any bonds, debentures, mortgages, promissory notes or
      other indebtedness.



Guarantees


	 	(q) 	
      AMG is not a party to, or bound by, any agreement of
      guarantee, indemnification, assumption or endorsement or any like
      commitment of the obligations, liabilities (contingent or otherwise) or
      indebtedness of any other Person.



Tax Matters


	 	(r) 	
      AMG is not in arrears or in default in respect of the
      filing of any required federal, provincial or municipal tax or other tax
      return; and (i) all taxes, filing fees and other assessments due and
      payable or collectible from AMG shall have been paid or collected prior to
      the Closing Date, (ii) no claim for additional taxes, filing fees or other
      amounts and assessments due and payable or collectible from AMG has been
      made which has not been collected, and (iii) to the best of the knowledge
      of AMG, no such return contains any misstatement or conceals any statement
      that should have been included therein.



Absence of Other Agreements


	 	(s) 	
      Other than as disclosed in the Disclosure Schedule,
      AMG:







- 16 -


	 	(i) 	
      is not a party to any material contract;

	 	 	 
	 	(ii) 	
      is not bound by any outstanding contract or commitment
      except those entered into in the ordinary course of business nor in
      default under any material contract by which it is bound or under which it
      is entitled to benefits and advantages, save and except in any case which
      would not have a Material Adverse Effect on AMG.



Good Standing of
Agreements


	 	(t) 	
      AMG is not in default or breach of any of its obligations
      under any one or more contracts, agreements (written or oral),
      commitments, indentures or other instruments to which it is a party or by
      which it is bound save and except in any case which would not have a
      Material Adverse Effect on AMG and there exists no state of facts which,
      to the best of the knowledge of AMG, after notice or lapse of time or
      both, would constitute such a default or breach. All such contracts,
      agreements, commitments, indentures and other instruments have been duly
      authorized, executed and delivered and are now in good standing and in
      full force and effect without amendment thereto, AMG is entitled to all
      benefits thereunder and, to the best of the knowledge of AMG, the other
      parties to such contracts, agreements, commitments, indentures and other
      instruments are not in default or breach of any of their obligations
      thereunder save and except in any case which would not have a Material
      Adverse Effect on AMG.



AMG Corporate
Records


	 	(u) 	
      The corporate records and minute books of AMG contain
      substantially complete and accurate minutes of all meetings of the
      directors and shareholders of AMG held since its incorporation, all such
      meetings having been duly called and held, and signed copies of all
      resolutions duly passed or confirmed by the directors or shareholders of
      AMG other than at a meeting. The share certificate books, register of
      security holders, register of transfers and register of directors and any
      similar corporate records of AMG are complete and accurate. All eligible
      security transfer tax or similar tax payable in connection with the
      transfer of any securities of AMG has been paid.



No Breach Caused by this
Agreement


	 	(v) 	
      The execution, delivery and performance by AMG of its
      obligations under this Agreement and any Ancillary Documents and the
      consummation of the transactions contemplated hereby do not and will not
      (i) contravene, conflict with or result in a violation or breach of any
      provision of any applicable Laws or any license, approval, consent or
      authorization held by AMG, (ii) require any notice or consent or other
      action by any Person under, contravene, conflict with, violate, breach or
      constitute a default or an event that, with or without notice or lapse of
      time or both, would constitute a default, under, or cause or permit the
      termination, cancellation, acceleration or other change of any right or
      obligation or the loss of any benefit to which AMG is entitled under, or
      give rise to any rights of first refusal or trigger any change in control
      provisions or any restriction under, any provision of any Material
      Contract or other instrument binding upon AMG or affecting any of its
      assets or (iii) result in the creation or imposition of any Lien on any
      asset of AMG, with such exceptions, in the case of each of clauses (ii)
      and (iii), as do not have or would not have, or be reasonably expected to
      have, individually or in the aggregate, a Material Adverse Effect on
      AMG.







- 17 -


Public Disclosure


	 	(w) 	
      None of the materials filed by, or on behalf of, AMG with
      the applicable securities regulators contained a misrepresentation or
      omitted to state a material fact as at the date of such filing, which has
      not been corrected.



Litigation


	 	(x) 	
      To the best of the knowledge of AMG, there are no claims,
      demands, disputes, actions, suits, proceedings or investigations pending
      or threatened against or, directly or indirectly, affecting AMG (including
      without limitation, restraining or preventing AMG from issuing AMG Shares
      in accordance with this Agreement), at law or in equity or before or by
      any federal, provincial, municipal or other local court or Governmental
      Entity, domestic or foreign, nor is AMG subject to any presently effective
      adverse order, writ, injunction or decree of any such
  body.



Intellectual
Property


	 	(y) 	
      (i)          
      AMG now owns or has the valid rights to use all of the Intellectual
      Property that is material to the conduct of the business of AMG as
      currently conducted or as currently proposed to be conducted (and had all
      rights necessary to carry out its former activities at such time such
      activities were being conducted) and AMG has a valid and enforceable right
      to use all third party Intellectual Property used or held for use in the
      business of AMG.

	 	 	 
	 		
      (ii)         
      To AMG’s knowledge, the conduct of the business of AMG as currently
      conducted does not infringe or otherwise impair or conflict with
      (collectively, “Infringe”) any Intellectual Property rights of any
      third party or any confidentiality obligation owed to a third party, and
      the Intellectual Property of AMG and its Subsidiaries which is material to
      the conduct of the business of AMG as currently conducted or as currently
      proposed to be conducted is not, to AMG’s knowledge, being Infringed by
      any third party.



Dividends


	 	(z) 	
      AMG has not, directly or indirectly, declared or paid any
      dividend or declared or made any other distribution on any of its shares
      or securities or, directly or indirectly, redeemed, purchased or otherwise
      acquired any of its shares or securities or agreed to do any of the
      foregoing.



No Brokers


	 	(aa) 	
      Other than with respect to the Introduction Fee, AMG has
      not entered into any agreement which would entitle any Person to any valid
      claim against AMG, any Adira Shareholder or Adira or their Subsidiaries
      for a broker’s commission, finder’s fee or any like payment in respect of
      any matters contemplated by this Agreement.



Approvals


	 	(bb) 	
      No approval of, registration, declaration or filing by
      AMG with any Governmental Entity is necessary to authorize the execution
      and delivery of this Agreement, or any and all
of







- 18 -


the documents and instruments to be
delivered under this Agreement, by AMG or the consummation by AMG of the
transactions contemplated herein, other than compliance with any applicable
Laws. 

Compliance with
Laws


	 	(cc) 	
      AMG is not in violation of any federal, provincial,
      municipal or other law, regulation or order of any Government Entity,
      domestic or foreign, save and except in any case which would not have a
      Material Adverse Effect on AMG.



Shareholders’ Agreements,
etc.


	 	(dd) 	
      To the knowledge of AMG, there are no shareholders’
      agreements, pooling agreements, voting trusts or other similar agreements
      with respect to the ownership or voting of any of AMG
  Shares.



No Bankruptcy


	 	(ee) 	
      No proceedings have been taken, are pending or authorized
      by AMG or by any other person in respect of the bankruptcy, insolvency,
      liquidation or winding up of AMG.



Transfer Agent and
Registrar


	 	(ff) 	
      Computershare Investors Services Inc. at its offices in
      Vancouver, British Columbia, has been duly appointed as the transfer agent
      and registrar for all of the outstanding AMG
Shares.



No Bankruptcy


	 	(gg) 	
      No proceedings have been taken, are pending or authorized
      by AMG or by any other person in respect of the bankruptcy, insolvency,
      liquidation or winding up of AMG.



Obligations to Related
Parties


	 	(hh) 	
      Except as set forth in the AMG Financial Statements, (i)
      there are no obligations of AMG or indebtedness or other amounts owing to
      any of the officers, directors, shareholders or employees of AMG, and (ii)
      no officer, director or material shareholder of AMG, or any member of
      their immediate families, is, directly or indirectly, interested in any
      material contract with AMG.



Omissions and
Misrepresentations


	 	(ii) 	
      None of the foregoing representations, warranties and
      statements of fact contains any untrue statement of material fact or omits
      to state any material fact necessary to make any such statement, warranty
      or representation not misleading to Adira in seeking full information as
      to AMG and its properties, business and affairs.



Survival


3.2                    The
representations and warranties of AMG contained in this Agreement will survive
the Closing and continue in full force and effect for a period of 12 months
after the Closing Date, provided 




- 19 -


that any claim that is based upon an intentional
misrepresentation or fraud by AMG may be brought at any time. 

ARTICLE 4


REPRESENTATIONS AND WARRANTIES OF ADIRA

Representations and Warranties of Adira


4.1                    Adira
hereby represents and warrants to AMG as follows and acknowledge that AMG is
relying on such representations and warranties in connection with the
transactions contemplated hereby: 

Incorporation, Organization and
Authority of Adira

	 	(a) 	
      Adira is a corporation duly incorporated and validly
      subsisting and in good standing under the laws of the Province of Ontario,
      and has all the requisite corporate capacity and authority to enter into
      this Agreement and to perform its obligations hereunder and to carry on
      its business and to own, lease and operate Adira
Assets.



Subsidiaries


	 	(b) 	
      Each Subsidiary of Adira is duly incorporated and validly
      subsisting under the laws of the jurisdiction set opposite its name
      below:





	Name of
      Subsidiary 	Jurisdiction of Incorporation 
	Adira Energy
      Israel Ltd. 	Israel 
	Adira Energy Israel Services Ltd. 	Israel 



Adira owns all of the issued and
outstanding securities thereof and no Person has any right to acquire any
securities thereof. 

Necessary
Proceedings


	 	(c) 	
      All necessary or required corporate measures, proceedings
      and actions of the directors and shareholders of Adira have been taken
      to:

	 	 	 	 
	 		(i) 	
      authorize and enable Adira to enter into and deliver this
      Agreement and the Ancillary Agreements to which Adira is a party and to
      perform its obligations hereunder and thereunder, and

	 	 	 	 
	 		(ii) 	
      authorize the transfer of Adira Shares by the Adira
      Shareholders to AMG as contemplated by this
Agreement.



Valid and Binding
Obligation


	 	(d) 	
      This Agreement and each of the Ancillary Agreements to
      which Adira is a party have been duly executed and delivered by Adira and
      constitute, or when duly executed and







- 20 -


delivered will constitute, a legal,
valid and binding obligation of Adira, enforceable against it in accordance with
their respective terms subject only to: 

	 	(i) 	
      any limitation under applicable Laws relating to
      bankruptcy, insolvency, moratorium, reorganization and other similar laws
      relating to or affecting the enforcement of creditors’ rights generally;
      and

	 	 	 
	 	(ii) 	
      the fact that equitable remedies, including the remedies
      of specific performance and injunction, may only be granted in the
      discretion of a court.



Share Capital of
Adira


	 	(e) 	
      The authorized share capital of Adira consists of an
      unlimited number of common shares without par value of which 22,500,000
      common shares are issued and outstanding as of the date of this Agreement
      and prior to the completion of the Share Split. The issued and outstanding
      Adira Shares are beneficially owned and registered in the names of the
      Adira Shareholders as set out in the minute book of
  Adira.



Rights to Acquire
Securities


	 	(f) 	
      Other than as set forth in Schedule A with respect to the
      Adira Stock Option Holders and the Adira Warrant Holders, no persons have
      any agreement or option or any right or privilege (whether by law,
      pre-emptive or contractual) capable of becoming an agreement or option for
      the purchase, subscription or issuance from treasury of any shares or
      other securities of Adira or securities convertible into, exchangeable
      for, or which carry the right to purchase shares or other securities of
      Adira, other than with respect to the Adira Private Placement Subscribers
      under the Private Placement. Schedule A sets forth the name of each holder
      of options to purchase common shares of Adira, together with the number of
      common shares of Adira subject to option, the option exercise price and
      the expiry date of the options.



Title to Adira
Assets


	 	(g) 	
      Other than as set forth in Schedule B, Adira or each
      Subsidiary has good and marketable title to the Adira Assets free and
      clear of any actual, pending or, to the knowledge or belief of Adira,
      threatened claims, Liens or set-offs whatsoever, including without
      limitation any action, proceeding or investigation affecting title to
      Adira Assets, at law or in equity, before any court, administrative agency
      or Governmental Entity.



Financial
Statements


	 	(h) 	
      The Adira Financial Statements have been prepared in
      accordance with Canadian GAAP, and will include a reconciliation to U.S.
      GAAP in accordance with the requirements of SEC Form 20-F, and present
      fairly the assets, liabilities (whether accrued, absolute, contingent or
      otherwise) and financial condition of Adira and its Subsidiaries as of the
      respective dates thereof and the consolidated sales, income and results of
      operations of Adira and its Subsidiaries for the respective financial
      periods covered thereby.







- 21 -


Auditors


	 	(i) 	
      The Adira Auditors who will complete the audit of the
      Adira Financial Statements will be a “participating audit firm” with the
      Canadian Public Accountability Board within the meaning of NI 52-108 –
      “Auditor Oversight” and will be registered with the Public Company
      Accounting Oversight Board in the United States.



Business of Adira


	 	(j) 	
      Other than as set forth in Schedule B, Adira and its
      Subsidiaries have conducted and are conducting their business in all
      material respects in full compliance with all applicable Laws, rules and
      regulations of each jurisdiction in which the business is carried on and
      hold all necessary licenses, permits, approvals, consents, certificates,
      registrations and authorizations, whether governmental, regulatory or
      otherwise, to enable the business to be carried on as it is currently
      conducted and the property and assets to be owned, leased and operated,
      and the same are validly existing and in good standing and none of such
      licenses, permits, approvals, consents, certificates, registrations and
      authorizations contains any burdensome term, provision, condition or
      limitation, save and except in any case which would not have a Materially
      Adverse Effect.



Liabilities of
Adira


	 	(k) 	
      Other than as set forth in Schedule B, there are no known
      liabilities (whether accrued, absolute, contingent or otherwise) of Adira
      or a Subsidiary of any kind whatsoever, and, to the best of the knowledge
      of Adira, there is no basis for assertion against Adira or a Subsidiary of
      any liabilities of any kind, other than:

	 	 	 	 
	 		(i) 	
      liabilities disclosed or reflected in or provided for in
      the Adira Financial Statements; or

	 	 	 	 
	 		(ii) 	
      liabilities incurred since the date of the Adira
      Financial Statements which were incurred in the ordinary course of the
      routine daily affairs of Adira’s business or, in the aggregate, are not,
      individually or in the aggregate, materially adverse to the
    business.



Indebtedness


	 	(l) 	
      Except as disclosed in the Adira Financial Statements,
      neither Adira nor a Subsidiary has any bonds, debentures, mortgages,
      promissory notes or other indebtedness, and nor is under any obligation to
      create or issue any bonds, debentures, mortgages, promissory notes or
      other indebtedness.



Guarantees


	 	(m) 	
      Neither Adira nor a Subsidiary is a party to, or bound
      by, any agreement of guarantee, indemnification, assumption or endorsement
      or any like commitment of the obligations, liabilities (contingent or
      otherwise) or indebtedness of any other
Person.







- 22 -


Tax Matters


	 	(n) 	
      Other than as set forth in Schedule B, neither Adira nor
      any Subsidiary is in arrears or in default in respect of the filing of any
      required federal, provincial or municipal tax or other tax return; and (i)
      all taxes, filing fees and other assessments due and payable or
      collectible from Adira or any Subsidiary shall have been paid or collected
      prior to the Closing Date, (ii) no claim for additional taxes, filing fees
      or other amounts and assessments due and payable or collectible from Adira
      or any Subsidiary has been made or threatened which has not been
      collected, and (iii) to the best of the knowledge of Adira, no such return
      contains any misstatement or conceals any statement that should have been
      included therein.



Absence of Other
Agreements


	 	(o) 	
      Other than as set forth in Schedule B hereto, neither
      Adira nor any Subsidiary of Adira:

	 	 	 	 
	 		(i) 	
      is a party to any material contract; or

	 	 	 	 
	 		(ii) 	
      is bound by any outstanding contract or commitment except
      those entered into in the ordinary course of business or is in default
      under any material contract by which it is bound or under which it is
      entitled to benefits and advantages, save and except in any case which
      would not have a Material Adverse Effect on Adira.



Good Standing of
Agreements


	 	(p) 	
      Other than as set forth in Schedule B, neither Adira nor
      a Subsidiary is in default or breach of any of its obligations under any
      one or more contracts, agreements (written or oral), commitments,
      indentures or other instruments to which it is a party or by which it is
      bound save and except in any case which would not have a Material Adverse
      Effect on Adira and there exists no state of facts which, to the best of
      the knowledge of Adira, after notice or lapse of time or both, would
      constitute such a default or breach. All such contracts, agreements,
      commitments, indentures and other instruments have been duly authorized,
      executed and delivered and are now in good standing and in full force and
      effect without amendment thereto; Adira or the applicable Subsidiary is
      entitled to all benefits thereunder; and, to the best of the knowledge of
      Adira, the other parties to such contracts, agreements, commitments,
      indentures and other instruments are not in default or breach of any of
      their obligations thereunder save and except in any case which would not
      have a Material Adverse Effect on Adira.



Adira Corporate
Records


	 	(q) 	
      The corporate records and minute books of Adira contain
      substantially complete and accurate minutes of all meetings of the
      directors and shareholders thereof held since its incorporation, all such
      meetings having been duly called and held, and signed copies of all
      resolutions and by-laws duly passed or confirmed by the directors or
      shareholders thereof other than at a meeting. The share certificate books,
      register of security holders, register of transfers and register of
      directors and any similar corporate records of Adira and each Subsidiary
      are complete and accurate. All eligible security transfer tax or similar
      tax payable in connection with the transfer of any securities of Adira and
      each Subsidiary has been paid.







- 23 -


No Breach Caused by this
Agreement


	 	(r) 	
      The execution, delivery and performance by Adira of its
      obligations under this Agreement and the Ancillary Documents and the
      consummation of the transactions contemplated hereby do not and will not
      (i) contravene, conflict with or result in a violation or breach of any
      provision of any applicable Laws or any license, approval, consent or
      authorization held by Adira, (ii) require any notice or consent or other
      action by any Person under, contravene, conflict with, violate, breach or
      constitute a default or an event that, with or without notice or lapse of
      time or both, would constitute a default, under, or cause or permit the
      termination, cancellation, acceleration or other change of any right or
      obligation or the loss of any benefit to which Adira is entitled under, or
      give rise to any rights of first refusal or trigger any change in control
      provisions or any restriction under, any provision of any Material
      Contract or other instrument binding upon Adira or affecting any of its
      assets or (iii) result in the creation or imposition of any Lien on any
      asset of Adira, with such exceptions, in the case of each of clauses (ii)
      and (iii), as do not have or would not have, or be reasonably expected to
      have, individually or in the aggregate, a Material Adverse Effect on
      Adira.



Litigation


	 	(s) 	
      To the best of the knowledge of Adira, there are no
      claims, demands, disputes, actions, suits, proceedings or investigations
      pending or threatened against or directly or indirectly affecting Adira or
      any Subsidiary, at law or in equity or before or by any federal,
      provincial, municipal or other governmental court, department or
      Governmental Entity, domestic or foreign, nor is Adira or a Subsidiary
      subject to any presently effective adverse order, writ, injunction or
      decree of any such body.



No Brokers


	 	(t) 	
      Except with respect to the Introduction Fee, neither
      Adira nor any Adira Subsidiary has entered into any agreement which would
      entitle any Person to any valid claim against AMG or Adira or any Adira
      Subsidiary for a broker’s commission, finder’s fee or any like payment in
      respect of any matters contemplated by this
Agreement.



Intellectual
Property


	 	(u) 	
      (i)         
       Adira or any Adira Subsidiary now own or have the valid rights to
      use all of the Intellectual Property that is material to the conduct of
      the business of Adira as currently conducted or as currently proposed to
      be conducted (and had all rights necessary to carry out its former
      activities at such time such activities were being conducted) and Adira or
      any Adira Subsidiary has a valid and enforceable right to use all third
      party Intellectual Property used or held for use in the business of
      Adira.

	 	 	 
	 		
      (ii)        
       To Adira’s knowledge, the conduct of the business of Adira and its
      Subsidiaries as currently conducted does not infringe or otherwise impair
      or conflict with (collectively, “Infringe”) any Intellectual
      Property rights of any third party or any confidentiality obligation owed
      to a third party, and the Intellectual Property of Adira and its
      Subsidiaries which is material to the conduct of the business of Adira and
      its Subsidiaries as currently conducted or as currently proposed to be
      conducted is not, to Adira’s knowledge, being Infringed by any third
      party.







- 24 -


Environmental
Matters


	 	(v) 	
      (i)          
      To the best knowledge of Adira, Adira and each Adira Subsidiary carries on
      its business and operates and maintains the properties and assets used in
      its business in compliance with all applicable Environmental Law in all
      material respects and, to the knowledge of Adira, there are no facts at
      the date hereof that will give rise to a notice of non-compliance by Adira
      or any Adira Subsidiary with any applicable Environmental Law.

	 	 	
       

			
      (ii)          To
      the best knowledge of Adira, Adira and each Adira Subsidiary has all
      materialEnvironmental Permits required for it to operate its business and
      to own, use and operate the properties and assets used in such business,
      except in any case where the failure to hold an Environmental Permit would
      not have a Material Adverse Effect.

	 	 	
       

			
      (iii)         To
      the best knowledge of Adira, neither Adira nor any Adira Subsidiary has
      used any of the facilities or real property owned, leased, occupied or
      used by it (including any real property previously owned, leased, occupied
      or used by it) (for the purposes of this section, the “Real
      Property”), or permitted them to be used, to refine, treat, dispose,
      produce or process Hazardous Substances except in material compliance with
      all Environmental Law and Environmental Permits held by Adira or the Adira
      Subsidiary.

	 	 	
       

			
      (iv)         To
      the best knowledge of Adira, neither Adira nor any Adira Subsidiary has
      received written notice, nor does Adira have knowledge of any facts that
      could give rise to any notice, that Adira or such Adira Subsidiary is
      potentially responsible for any remedial or other corrective action or any
      work, repairs, construction or capital expenditures to be made under any
      Environmental Law with respect to its business or the Real
  Property.



Dividends


	 	(w) 	
      Adira has not, directly or indirectly, declared or paid
      any dividend or declared or made any other distribution on any of its
      shares or securities or, directly or indirectly, redeemed, purchased or
      otherwise acquired any of its shares or securities or agreed to do any of
      the foregoing.



Approvals


	 	(x) 	
      No approval of, registration, declaration or filing with
      any federal, provincial or local court or Governmental Entity is necessary
      to authorize the execution and delivery of this Agreement, or any and all
      of the documents and instruments to be detailed under this Agreement by
      Adira or the consummation by Adira of the transactions contemplated
      herein, other than compliance with any applicable
Laws.



Compliance with
Laws


	 	(y) 	
      Neither Adira nor any Adira Subsidiary is in violation of
      any federal, provincial, municipal or other law, regulation or order of
      any Government Entity, domestic or foreign, save and except in any case
      which would not have a Material Adverse Effect on Adira or such
      Subsidiary.







- 25 -


Knowledge of
Adira


	 	(z) 	
      Adira does not have any information or knowledge of any
      material facts relating to the business of Adira or any Adira Subsidiary
      that, if known to AMG, might reasonably be expected to deter AMG from
      completing the purchase and sale contemplated herein, or the consummation
      by AMG of the other transactions contemplated
herein.



Shareholders’ Agreements,
etc.


	 	(aa) 	
      Other than as set forth in Schedule B, there are no
      shareholders’ agreements, pooling agreements, voting trusts or other
      similar agreements with respect to the ownership or voting of any of the
      Adira Shares.



No Bankruptcy


	 	(bb) 	
      No proceedings have been taken, are pending or authorized
      by Adira or a Subsidiary or by any other person in respect of the
      bankruptcy, insolvency, liquidation or winding up of Adira or any Adira
      Subsidiary.



Obligations to Related
Parties


	 	(cc) 	
      Except as set forth in the Adira Financial Statements,
      there are no obligations of Adira or its Subsidiaries or indebtedness or
      other amounts owing to any of the officers, directors, shareholders or
      employees of Adira or its Subsidiaries. Except as disclosed in the
      Disclosure Schedule, no officer, director or material shareholder of Adira
      or its Subsidiaries, or any member of their immediate families, is,
      directly or indirectly, interested in any material contract with Adira or
      any of its Subsidiaries.



Omissions and
Misrepresentations


	 	(dd) 	
      None of the foregoing representations, warranties and
      statements of fact contains any untrue statement of material fact or omits
      to state any material fact necessary to make any such statement, warranty
      or representation not misleading to AMG in seeking full information as to
      Adira, its Subsidiaries and their properties, business and
  affairs.



Survival


4.2                    The
representations and warranties of Adira contained in this Agreement will survive
the Closing and continue in full force and effect for a period of 12 months
after the Closing Date, provided that any claim that is based upon an
intentional misrepresentation or fraud by Adira may be brought at any time. 




- 26 -


ARTICLE 5


REPRESENTATIONS AND WARRANTIES OF
EACH OF THE ADIRA
SHAREHOLDERS 


Representations and Warranties of Adira Shareholders


5.1                    Each
Adira Shareholder hereby severally represents and warrants to AMG as follows and
acknowledges that AMG is relying on such representations and warranties in
connection with the transactions contemplated hereby: 

Ownership of Adira
Shares


	 	(a) 	
      The Adira Shareholder is the registered legal and
      beneficial holder of the number of Adira Shares as set beside his name in
      List of Adira Shareholders attached as Schedule A hereto as of the
      date of this Agreement with good and marketable title thereto, free and
      clear of all Liens.



No Other
Agreements


	 	(b) 	
      No Person (other than AMG) has any agreement, option or
      right, present or future, contingent, absolute or capable of becoming an
      agreement, option or right, or which with the passage of time or the
      occurrence of any event could become an agreement, option or right, to
      require the Adira Shareholder to, sell, transfer, assign or otherwise
      dispose of any of the Adira Shares owned by the Adira
  Shareholder.



Capacity and Authority of the
Adira Shareholders


	 	(c) 	
      The Adira Shareholder has good right, full power and
      absolute authority to assign, sell and transfer its respective Adira
      Shares to AMG in accordance with the terms of this Agreement, free of all
      Liens.



Necessary
Proceedings


	 	(d) 	
      All necessary or required measures, proceedings and
      actions of the Adira Shareholder have been taken to authorize and enable
      it to enter into and deliver this Agreement and to perform its obligations
      hereunder.



Valid and Binding
Obligation


	 	(e) 	
      This Agreement has been duly executed and delivered by
      the Adira Shareholder and constitutes a legal, valid and binding
      obligation of the Adira Shareholder, enforceable against it in accordance
      with their respective terms subject only to:

	 	 	 	 
	 		(i) 	
      any limitation under applicable Laws relating to
      bankruptcy, insolvency, moratorium, reorganization and other similar laws
      relating to or affecting the enforcement of creditors’ rights generally;
      and

	 	 	 	 
	 		(ii) 	
      the fact that equitable remedies, including the remedies
      of specific performance and injunction, may only be granted in the
      discretion of a court.







- 27 -


Company Assets


	 	(f) 	
      The Adira Shareholder does not own or have any right or
      interest in or to any of the Adira Assets, other than its rights it may
      have as a shareholder of Adira.



No Shareholder
Loans


	 	(g) 	
      Other than as disclosed in Schedule B, there are no
      shareholder loans or other liabilities or indebtedness owed by Adira to
      the Adira Shareholder, except as set forth in the Adira Financial
      Statements.



No Related Party
Agreements


	 	(h) 	
      Other than as disclosed in Schedule B, the Adira
      Shareholder is not party to any agreement with Adira, except as set forth
      in the Adira Financial Statements.



Not a U.S. Person


	 	
      (i) 
	
      The Adira Shareholder is not a “U.S. Person” as defined
      by Regulation S of the Securities Act, as set forth below, and is not
      acquiring the Adira Shares for the account or benefit of a U.S. Person. A
      “U.S. Person” is defined by Regulation S of the Act to be any person who
      is (a) any natural person resident in the United States; (b) any
      partnership or corporation organized or incorporated under the laws of the
      United States; (c) any estate of which any executor or administrator is a
      U.S. person; (d) any trust of which any trustee is a U.S. person; (e) any
      agency or branch of a foreign entity located in the United States; (f) any
      non-discretionary account or similar account (other than an estate or
      trust) held by a dealer or other fiduciary organized, incorporate, or (if
      an individual) resident in the United States; and (g) any partnership or
      corporation if (i) organized or incorporated under the laws of any foreign
      jurisdiction; and (ii) formed by a U.S. person principally for the purpose
      of investing in securities not registered under the Act, unless it is
      organized or incorporated, and owned, by accredited Subscribers as defined
      in Section 230.501(a) of the Act who are not natural persons, estates or
      trusts.



No Offer in the United
States


	 	(j) 	
      The Adira Shareholder was not in the United States at the
      time the offer to exchange the Adira Shares for AMG Shares was received or
      at the time this Agreement was executed.



Sophisticated
Purchaser


	 	(k) 	
      The Adira Shareholder has such knowledge, sophistication
      and experience in business and financial matters such that it is capable
      of evaluating the merits and risks of the investment in the AMG
    Shares.



Acquisition for
Investment


	 	(l) 	
      The AMG Shares to be issued to the Adira Shareholder will
      be acquired by the Adira Shareholder for investment for the Adira
      Shareholder’s own account, not as a nominee or agent, and not with a view
      to the resale or distribution.







- 28 -


Survival


5.2                   
The representations and warranties of the Adira Shareholder contained in this
Agreement will survive the Closing and continue in full force and effect for a
period of 12 months after the Closing Date, provided that representations and
warranties contained in Section 5.1(a), which will have no time limitation and
any claim that is based upon an intentional misrepresentation or fraud by the
Adira Shareholder may be brought at any time. 

ARTICLE 6


COVENANTS OF ADIRA AND THE ADIRA SHAREHOLDERS

Covenants of Adira


6.1                    Adira
covenants and agrees with AMG that until the Closing Date or termination of this
Agreement, except as otherwise contemplated in this Agreement or agreed to in
writing by AMG, Adira will: 

Necessary
Consents


(a)           to
use its commercially reasonable best efforts to obtain from its directors,
shareholders and all appropriate Governmental Entities such approvals or
consents as are required (if any) to complete the transactions contemplated
herein;

Private Placement


(b)           to
use its best efforts to complete the Private Placement; 

Audited Financial Statements


(c)           to
complete the preparation of the Audited Adira Financial Statements and deliver
to AMG the audited Adira Financial Statements forthwith upon completion; 

Conduct Business in Ordinary and
Normal Course


(d)           to
conduct its business in the ordinary and normal course thereof, including the
payment of all current liabilities and accounts in the ordinary and normal
course, and not negotiate or execute any new Material Contracts or terminate,
cancel or modify in any material respect any existing Material Contracts,
provided that (i) Adira may purchase drilling equipment in the amount of
US$325,000 for use in connection with the exploration of the Petroleum License,
and (ii) Adira may enter into the Subscription Agreements, an agency agreement
and other agreements reasonably required in connection with the Private
Placement; 

No Breach


(e)          
not to take any action which would constitute or cause a breach of any
representation, warranty, covenant or other obligation of Adira contained in
this Agreement; 

No Share Issuances 

(f)          
not to issue, authorize or propose the issuance of: 




- 29 -


	 	a. 	
      any shares of capital stock of any class;

	 	 	 
	 	b. 	
      any securities convertible into, rights, warrants or
      options to acquire, any such shares;

	 	 	 
	 	c. 	
      other convertible securities,



except (i) the issuance of common
shares upon the exercise of currently issued and outstanding stock options or
share purchase warrants as disclosed in the Adira Financial Statements, and (ii)
the issuance of the Adira Units and Private Placement Agent’s Warrants in
connection with the Private Placement; 

No Dividends


(g)         
 not to declare or pay any dividend on or distributed any shares of its
capital stock or redeem or repurchase any issued shares; and 

Preserve Business and Assets

(h)           to
preserve intact the Adira Assets and the business, operations and affairs of
Adira and carry on the businesses and the affairs of Adira; and 

Necessary Steps


(i)           to
take all actions, steps and proceedings that are necessary or desirable to
approve or authorize, or to validly and effectively undertake, the execution,
delivery and performance of this Agreement and the completion of the
transactions contemplated by this Agreement. 

Covenants of the Adira Shareholders


6.2                    Each
Adira Shareholder covenants and agree with AMG that until the Closing Date or
termination of this Agreement, except as otherwise contemplated in this
Agreement or agreed to in writing by AMG, it will vote its Adira Shares in
favour of and consent to resolutions of the shareholders of Adira as required to
enable Adira to perform and fulfill its obligations under this Agreement. 

Access to Records


6.3                    In
order to permit AMG to complete due diligence, Adira will permit AMG’s
professional representatives to have reasonable access to all books, accounts,
records and other data of Adira, including all corporate, accounting, tax and
business records and any electronic or computer accessed data and will provide
such data upon reasonable request. 

ARTICLE 7


COVENANTS OF AMG


7.1                   
AMG covenants and agrees with Adira and the Adira Shareholders that until the
Closing Date or termination of this Agreement, except as otherwise contemplated
in this Agreement or agreed to in writing by Adira, it will: 




- 30 -


Necessary
Consents


(b)         
 AMG shall use its commercially reasonable best efforts to obtain from its
directors, shareholders and all appropriate Governmental Entities such approvals
or consents as are required (if any) to complete the transactions contemplated
herein. 

Conduct Business in Ordinary and
Normal Course 

(c)           to
conduct its business in the ordinary and normal course thereof, including the
payment of all current liabilities and accounts in the ordinary and normal
course, and not negotiate or execute any new Material Contracts or terminate,
cancel or modify in any material respect any existing Material Contracts; 

No Breach


(d)          
not to take any action which would constitute or cause a breach of any
representation, warranty, covenant or other obligation of AMG contained in this
Agreement; 

Issuance of
Shares


	 	(e) 	 not to issue, authorize or propose the issuance
        of:

      
	 	 	 	 
	 		a. 	 any shares of capital stock of any class;

	 	 	 	 
	 		b. 	 any securities convertible into, rights, warrants or
        options to acquire, any such shares;

	 	 	 	 
	 		c. 	 other convertible securities,



except the issuance of common shares
upon the exercise of currently issued and outstanding stock options or share
purchase warrants as disclosed in the AMG Financial Statements; 

Dividends


(f)          
not to declare or pay any dividend on or distributed any shares of its capital
stock or redeem or repurchase any issued shares. 

Necessary Steps


(g)           to
take all actions, steps and proceedings that are necessary or desirable to
approve or authorize, or to validly and effectively undertake, the execution,
delivery and performance of this Agreement and the completion of the
transactions contemplated by this Agreement. 

Directors

(h)          
AMG shall take all required action to appoint new directors of AMG so that the
board of directors following Closing shall consist of Dennis Bennie (Chairman),
Alan Friedman, Ilan Diamond and Glen Perry, and these directors shall hold
office until the next meeting of the AMG shareholders or until their successors
are elected or appointed in accordance with the provisions of AMG’s Articles of
Continuance.




- 31 - 

Management 

(i)          
AMG shall take all required action to appoint the management of AMG as set forth
below or such other persons as Adira may direct: 

	 	Office 	Name 
	 	 	 
	 	Chief Executive Officer 	Ilan Diamond 
	 	 	 
	 	Chief Financial Officer 


	To be determined and
      
appointed by the board 
of directors of AMG 
following Closing
    
	 	 	 
	 	Vice-President, Corporate Development 	Alan Friedman 
	 	 	 
	 	Corporate Secretary 	Daniel Bloch



Access to Records 

7.2                   
In order to permit Adira to complete due diligence, AMG will permit Adira’s
professional representatives to have reasonable access to all books, accounts,
records and other data of Adira, including all corporate, accounting, tax and
business records and any electronic or computer accessed data and will provide
such data upon reasonable request. 

ARTICLE 8 

CONDITIONS PRECEDENT 

Mutual Conditions Precedent 

8.1                    The
transactions contemplated herein are subject to the following conditions to be
fulfilled or performed on or prior to the Closing Date, which conditions are for
the mutual benefit of both AMG and Adira and may be waived by AMG and Adira,
jointly, in writing: 

	 	(a) 	
      the Private Placement shall have completed;

	 	 	 
	 	(b) 	
      there shall not exist any prohibition or law against the
      completion of the Acquisition and there shall not be enacted, promulgated
      or applied any Governmental Order to enjoin, prohibit or impose any
      material limitations or conditions on the
Acquisition.



Conditions for the Benefit of AMG 

8.2                   
The transactions contemplated herein are subject to the following conditions to
be fulfilled or performed on or prior to the Closing Date, which conditions are
for the exclusive benefit of AMG and may be waived, in whole or in part, by AMG
in its sole discretion: 

	 	(a) 	
      Adira shall have performed, fulfilled or complied with,
      in all material respects, all of its obligations, covenants and agreements
      contained in this Agreement and in any Ancillary Agreement to be fulfilled
      or complied with by Adira at or prior to the Closing
  Date;







- 32 -


	 	(b) 	
      the representations and warranties of Adira and the Adira
      Shareholders contained herein shall be true and correct in all material
      respects as at the Closing Date with the same effect as if made on the
      Closing Date;

	 	 	 
	 	(c) 	
      all required approvals, consents and authorizations of
      third parties in respect of the transactions contemplated herein,
      including without limitation all necessary Regulatory Approvals, shall
      have been obtained on terms acceptable to AMG acting reasonably;

	 	 	 
	 	(d) 	
      all proceedings, including all necessary corporate
      proceedings, to be taken in connection with the transactions contemplated
      in this Agreement and any Ancillary Agreement shall be satisfactory in
      form and substance to AMG, acting reasonably, and AMG shall have received
      copies of all instruments and other evidence as it may reasonably request
      in order to establish the closing of such transactions and the taking of
      all necessary proceedings in connection therewith;

	 	 	 
	 	(e) 	
      no action or proceeding shall be pending or threatened by
      any Person (other than AMG) in any jurisdiction, to enjoin, restrict or
      prohibit any of the transactions contemplated by this Agreement or the
      right of Adira to conduct its business after the Closing Date on
      substantially the same basis as operated immediately prior to the date
      hereof and no action, suit or legal proceeding shall have been taken
      before or by any Governmental Entity or by any Person that would, if
      successful, have a Material Adverse Effect on Adira;

	 	 	 
	 	(f) 	
      since the date of this Agreement, there shall have been
      no Material Adverse Effect with respect to Adira, or any event, occurrence
      or development, including the commencement of any action, suit or other
      legal proceeding which would reasonably be expected to have a Material
      Adverse Effect on Adira;

	 	 	 
	 	(g) 	
      Adira will have delivered to AMG the Adira Audited
      Financial Statements, which audited statements will not contain any
      material differences from the unaudited Adira Financial
  Statements;

	 	 	 
	 	(h) 	
      AMG will have completed the acquisition of all of the
      Adira Minority Shares from the Adira Minority Shareholders pursuant to the
      Minority Shareholders’ Securities Exchange Agreements, provided that this
      acquisition may complete concurrently with the Acquisition;

	 	 	 
	 	(i) 	
      each Adira Stock Option Holder will have agreed to
      exchange their Adira Stock Options for options to purchase common shares
      of AMG pursuant to the AMG Stock Option Plan in the manner contemplated by
      Section 2.4 of this Agreement; and

	 	 	 
	 	(j) 	
      Adira and the Adira Shareholders will have completed the
      closing deliveries required by Section 9.3 of this
  Agreement.



Conditions for the Benefit of Adira


8.3                   
The transactions contemplated herein are subject to the following conditions to
be fulfilled or performed on or prior to the Closing Date, which conditions are
for the exclusive benefit of Adira and the Adira Shareholders and may be waived,
in whole or in part, by Adira and/or the Adira Shareholders in their sole
discretion: 




- 33 -


	 	(a) 	
      AMG shall have performed, fulfilled or complied with, in
      all material respects, all of its obligations, covenants and agreements
      contained in this Agreement and in any Ancillary Agreement to be fulfilled
      or complied with by AMG at or prior to the Closing Date;

	 	 	 
	 	(b) 	
      the representations and warranties of AMG contained
      herein shall be true and correct in all material respects as at the
      Closing Date with the same effect as if made on the Closing Date

	 	 	 
	 	(c) 	
      all required approvals, consents and authorizations of
      third parties in respect of the transactions contemplated herein,
      including without limitation all necessary Regulatory Approvals, shall
      have been obtained on terms acceptable to Adira acting
  reasonably;

	 	 	 
	 	(d) 	
      all proceedings, including all necessary corporate
      proceedings, to be taken in connection with the transactions contemplated
      in this Agreement and any Ancillary Agreement shall be satisfactory in
      form and substance to Adira, acting reasonably, and Adira shall have
      received copies of all instruments and other evidence as it may reasonably
      request in order to establish the closing of such transactions and the
      taking of all necessary proceedings in connection therewith;

	 	 	 
	 	(e) 	
      no action or proceeding shall be pending or threatened by
      any Person (other than Adira) in any jurisdiction, to enjoin, restrict or
      prohibit any of the transactions contemplated by this Agreement or the
      right of AMG to conduct its business after the Closing Date on
      substantially the same basis as operated immediately prior to the date
      hereof and no action, suit or legal proceeding shall have been taken
      before or by any Governmental Entity or by any Person that would, if
      successful, have a Material Adverse Effect on AMG;

	 	 	 
	 	(f) 	
      since the date of this Agreement, there shall have been
      no Material Adverse Effect with respect to AMG, or any event, occurrence
      or development, including the commencement of any action, suit or other
      legal proceeding which would reasonably be expected to have a Material
      Adverse Effect on AMG;

	 	 	 
	 	(g) 	
      AMG will have cash as of the Closing Date equal to not
      less than US$870,000;

	 	 	 
	 	(h) 	
      the liabilities of AMG as of the Closing Date will be
      comprised solely of liabilities incurred in the ordinary course of
      business of AMG since March 31, 2009, including costs attributable to the
      negotiation of this Agreement and the completion of the Acquisition, which
      liabilities will not exceed US$20,000;

	 	 	 
	 	(i) 	
      AMG will have terminated the AMG Original Stock Option
      Plan; and

	 	 	 
	 	(j) 	
      AMG will have completed the closing deliveries required
      by Section 9.2 of this Agreement.







- 34 -


ARTICLE 9

CLOSING 

Time of Closing


9.1                    The
Closing of the Acquisition will be completed at the offices of Aird & Berlis
LLP, Suite 1800, 181 Bay Street, Toronto, Ontario, M5J 2T9, at 4:00 p.m.
(Toronto time) on the Closing Date, or at such other time and place as may be
mutually agreed upon by the Parties hereto. 

Closing Deliveries of AMG


9.2                    On
or before the Closing Date, AMG will deliver, or cause to be delivered the
following closing documents against delivery by Adira and the Adira Shareholders
of the closing documents specified in Section 9.3 of this Agreement: 

	 	(a) 	
      share certificates representing the AMG Shares in the
      names of the Adira Shareholders, each in accordance with the List of Adira
      Shareholders attached as Schedule B hereto;

	 	 	 	 
	 	(b) 	
      certified copies of resolutions of the directors of
      AMG:

	 	 	 	 
	 		(i) 	
      authorizing the entering into of this Agreement by AMG
      and the completion of the Acquisition,

	 	 	 	 
	 		(ii) 	
      approving the issuance of the AMG Shares to the Adira
      Shareholders and the delivery of share certificates representing the AMG
      Shares in the names of the Adira Shareholders;

	 	 	 	 
	 		(iii) 	
      approving the grant and issuance of the AMG Options to
      the Adira Option Holders and the delivery of option agreements in favour
      of the Adira Option Holders;

	 	 	 	 
	 		(iv) 	
      approving the issuance of the AMG Warrants to the Adira
      Warrant Holders and the delivery of warrant certificates representing the
      AMG Warrants in the names of the Adira Warrant Holders;

	 	 	 	 
	 		(v) 	
      approving the issuance of the AMG Units to the Private
      Placement Subscribers in exchange for their Adira Units and the delivery
      of certificates representing the AMG Units to the Private Placement
      Subscribers; and

	 	 	 	 
	 		(vi) 	
      approving the appointment of Alan Friedman, Ilan Diamond,
      Dennis Bennie and Glen Perry as directors of AMG; and

	 	 	 	 
	 		(vii) 	
      terminating the AMG Original Stock Option Plan;

	 	 	 	 
	 	(c) 	
      a legal opinion, in form and substance satisfactory to
      Adira, acting reasonably, from one or more solicitors as to the following
      matters, subject to such certificates and qualifications as may be
      reasonably required by the solicitor delivering the opinion:

	 	 	 	 
	 		(i) 	
      the validity of the incorporation and the good standing
      of AMG,

	 	 	 	 
	 		(ii) 	
      the authorized capital of
AMG,







- 35 - 

	 	(iii) 	
      the issuance of the AMG Shares to the Adira
      Shareholders,

	 	 	 
	 	(iv) 	
      the due authorization, execution and delivery of this
      Agreement by AMG,

	 	 	 
	 	(v) 	
      the valid and binding nature of this
  Agreement;




	 	(d) 	
      a certificate of AMG addressed to Adira and the Adira
      Shareholders and dated the Closing Date, signed on behalf of AMG by a
      senior executive officer of AMG, confirming that, to the best of their
      knowledge after reasonable inquiry, the conditions in Sections 8.3(a),
      (b), (c) and (d) have been satisfied;

	 	 	 
	 	(e) 	
      resignations of Michael Hart, Michael Murphy and John
      Campbell as directors of the Company;

	 	 	 
	 	(f) 	
      the resignation of Michael Hart as president and chief
      executive officer of the Company;

	 	 	 
	 	(g) 	
      the resignation of Michael Murphy as chief financial
      officer of the Company;

	 	 	 
	 	(h) 	
      the Voting Trust Agreement, executed by the AMG Voting
      Trust Shareholder;

	 	 	 
	 	(i) 	
      the Escrow Agreements, executed by AMG and the transfer
      agent;

	 	 	 
	 	(j) 	
      such other documents and instruments, other than those
      set out above, as may be reasonably requested by the solicitors advising
      Adira in order to complete the transactions set out in this
    Agreement.



Closing Deliveries of Adira and the Adira Shareholders


9.3                    On
or before the Closing Date, Adira and the Adira Shareholders will deliver, or
cause to be delivered the following closing documents against delivery by AMG of
the closing documents specified in Section 9.2 of this Agreement: 

	 	(a) 	
      the share certificates representing the Adira Shares held
      by each Adira Shareholder duly endorsed by transfer to AMG;

	 	 	 	 
	 	(b) 	
      certified copies of resolutions of the directors of
      Adira:

	 	 	 	 
	 		(i) 	
      authorizing the entering into of this Agreement by Adira,
      and

	 	 	 	 
	 		(ii) 	
      approving the transfer of the Adira Shares by the Adira
      Shareholders to AMG;

	 	 	 	 
	 		(iii) 	
      issuance of a certificate representing the Adira Shares
      in the name of AMG;

	 	 	 	 
	 	(c) 	
      a share certificate registered in the name of AMG
      representing all of the issued and outstanding shares of Adira;

	 	 	 	 
	 	(d) 	
      a certified copy of the securities register of Adira
      showing AMG as the registered owner of all of the outstanding shares of
      Adira;

	 	 	 	 
	 	(e) 	
      consents to act as director for each of the persons to be
      appointed as a director of AMG on Closing;







- 36 -


	 	(f) 	
      a legal opinion, in form and substance satisfactory to
      AMG, acting reasonably, from Canadian legal counsel to Adira as to the
      following matters, subject to such certificates and qualifications as may
      be reasonably required by the solicitor delivering the opinion:

	 	 	 	 
	 		(i) 	
      the validity of the incorporation and the good standing
      of Adira,

	 	 	 	 
	 		(ii) 	
      the authorized and issued capital of Adira,

	 	 	 	 
	 		(iii) 	
      the title to the shares of Adira,

	 	 	 	 
	 		(iv) 	
      the due authorization, execution and delivery of this
      Agreement by Adira, and

	 	 	 	 
	 		(v) 	
      the valid and binding nature of this Agreement;

	 	 	 	 
	 	(g) 	
      a legal opinion, in form and substance satisfactory to
      AMG, acting reasonably, from Israeli legal counsel to Adira as to the
      following matters, subject to such certificates and qualifications as may
      be reasonably required by the solicitor delivering the opinion:

	 	 	 	 
	 		(i) 	
      the validity of the incorporation and the good standing
      of each Adira Subsidiary,

	 	 	 	 
	 		(ii) 	
      the authorized and issued capital of each Adira
      Subsidiary,

	 	 	 	 
	 		(iii) 	
      the title to the shares of each Adira Subsidiary,
    and

	 	 	 	 
	 		(iv) 	
      the ownership by the Adira Subsidiary of the Petroleum
      License;

	 	 	 	 
	 	(h) 	
      a certificate of Adira addressed to AMG and dated the
      Closing Date, signed on behalf of Adira by a senior executive officer of
      Adira, confirming that, to the best of their knowledge after reasonable
      inquiry, that (i) the conditions in Sections 8.2(a), (b), (c)
and

	 	 	 	 
	 		(d) 	
      have been satisfied, and (ii) the Private Placement has
      been completed prior to

	 	 	 	 
	 		
      Closing;

	 	 	 	 
	 	(i) 	
      the Escrow Agreements executed by each Adira
      Shareholder,

	 	 	 	 
	 	(k) 	
      such other documents and instruments, other than those
      set out above, as may be reasonably requested by the solicitors advising
      AMG in order to complete the transactions set out in this
  Agreement.



ARTICLE 10 

STANDSTILL 

Standstill 

10.1                   During
the period commencing on the date of this Agreement and terminating upon the
earlier of: 

	 	(a) 	
      the Closing;

	 	 	 
	 	(b) 	
      September 30, 2009;







- 37 -


	 	(c) 	
      date upon which this Agreement is terminated as a result
      of non-fulfilment of the conditions precedent as per Article 8
    above;

	 	 	 
	 	(d) 	
      the date that any statute, rule, policy or regulation
      currently in existence or which shall have been proposed, enacted,
      promulgated or entered by any regulatory or administrative authority
      having jurisdiction, in the judgment of the parties (acting reasonably),
      makes the transactions set forth herein illegal or unduly delays the
      closing of the Acquisition;



AMG or Adira, as the case may be, will not, nor shall any of
its Representatives directly or indirectly, alone or jointly or in concert with
any other person (unless in any such case specifically approved by the board of
directors of the other parties as described below): 

	 	(a) 	
      acquire or agree to acquire, or make any proposal or make
      any offer to acquire, in any manner, either directly or indirectly, any
      assets or securities of the other parties or any subsidiary thereof,
      including, without limitation, commencing any “exempt offer” or
      “take-over-bid” (as such terms are defined in the Business Corporations
      Act (British Columbia)) or any “take-over bid” or “exempt take-over
      bid” (as such terms are defined in the Securities Act (British
      Columbia)) for any securities of the other parties (provided that the
      provisions hereof shall not be interpreted to prohibit the parties or
      their Affiliates from continuing to conduct business with the other
      parties in the ordinary course and consistent with past
  practice);

	 	 	 
	 	(b) 	
      solicit proxies from, or otherwise attempt to influence
      the conduct of, holders of securities of the other parties;

	 	 	 
	 	(c) 	
      form, join or in any way participate as a “control
      person” as such term is defined in the Securities Act (British
      Columbia) with respect to the equity of the other parties; or

	 	 	 
	 	(d) 	
      engage in any discussions or negotiations or enter into
      any agreement, commitment or understanding, or otherwise act jointly or in
      concert with any third party to propose or effect any business
      combination, equity or asset transaction of any nature or kind with
      respect to the other parties or its Affiliates, or to influence the
      conduct of the other parties, its Affiliates or its
  directors



Alternate Transactions 

10.2                  
During the period commencing on the date of this Agreement and terminating upon
the earlier of: 

	 	(a) 	
      the Closing;

	 	 	 
	 	(b) 	
      September 30, 2009;

	 	 	 
	 	(c) 	
      date upon which this Agreement is terminated as a result
      of non-fulfilment of the conditions precedent as per Article 8
    above;

	 	 	 
	 	(d) 	
      the date that any statute, rule, policy or regulation
      currently in existence or which shall have been proposed, enacted,
      promulgated or entered by any regulatory or administrative authority
      having jurisdiction, in the judgment of the parties (acting reasonably),
      makes the transactions set forth herein illegal or unduly delays the
      closing of the Acquisition;







- 38 -


AMG or Adira, as the case may be, will not provide any
information with respect to itself, or (directly or indirectly) solicit,
initiate, entertain or consider any offer, negotiation or expression of intent
or in any manner encourage, recommend or agree to any proposal or offer of any
other potential transaction or otherwise cooperate with, assist or participate
in, facilitate or encourage any effort or attempt with respect to: 

	 	(a) 	
      the sale or issuance of any treasury shares or securities
      convertible into treasury shares of the party or its subsidiaries other
      than as herein otherwise contemplated, pursuant to the exercise of
      presently outstanding stock options or share purchase warrants) without
      the prior written consent of the other parties;

	 	 	 
	 	(b) 	
      any sale, disposition or exchange of assets of the party
      or its subsidiaries outside the ordinary course of business without the
      prior written consent of the other parties; or

	 	 	 
	 	(c) 	
      entering into any material agreement or understanding
      outside the ordinary course of business of the party, without the prior
      written consent of the other parties;



provided, however, that nothing contained herewith shall
prohibit a party from completing the Acquisition or making another proposal to
the board of directors of the other parties relating to a business combination,
equity or asset transaction between the parties, so long as such proposal is
made with the consent of the other parties to any such proposal being made and,
provided however, that the foregoing shall not prevent the board of directors of
the parties from responding as required by law to any unsolicited submission or
proposal regarding any acquisition or disposition of assets, an unsolicited
take-over bid or proposal to amalgamate, merge or effect an arrangement or any
unsolicited acquisition proposal generally or make any disclosure required to
its shareholders with respect thereto which in the judgment of the board of
directors acting reasonably or upon the advice of counsel, is required under
applicable law. Each of the parties acknowledges that any such procedures will
not be contested by the other parties whether by way of judicial or regulatory
process or otherwise and provided further that nothing contained herein shall
prevent a party from engaging in discussions with financial institutions or
investment bankers concerning financing of the Acquisition between the parties,
subject to the confidentiality hereof. 

ARTICLE 11


CONFIDENTIAL INFORMATION


Definitions


	11.1 	
      In this Article 11, the following terms will have the
      meanings ascribed thereto as follows:




	 	(a) 	
      “Confidential Information” refers to any and all
      information acquired by or made available to a Disclosee or its
      Representatives by a Disclosing Party or its Representatives in the course
      of a Disclosee’s Review, which shall include, without limiting the
      generality of the foregoing, all information (written, oral or in
      electronic form) furnished by or on behalf of a Disclosing Party to, or
      otherwise obtained by, a Disclosee or its Representatives which is or
      would reasonably be considered to be confidential or proprietary in
      nature, including but not limited to all financial information, plans,
      legal opinions, names of shareholders, private investors, joint venture
      partners and limited partners and arrangements which information is or may
      be either applicable to or related in any way to the assets, business or
      affairs of a Disclosing Party, together with all analyses, compilations,
      notes, data, studies or other material or documents prepared by
  or







- 39 -


	 		
      on behalf of a Disclosee or its Representatives
      containing or based upon, in whole or in part, information acquired by a
      Disclosee or its Representatives during the course of its Review, and
      Confidential Information shall not include Non-proprietary
    Information;

	 	 	 
	 	(b) 	
      “Disclosee” means the party which receives
      Confidential Information;

	 	 	 
	 	(c) 	
      “Disclosing Party” means the party which furnishes
      Confidential Information;

	 	 	 
	 	(d) 	
      “Representatives” means the shareholders,
      directors, officers, employees, agents, Affiliates, lawyers, engineers
      (including independent engineers), accountants (including independent
      auditors), consultants, advisors and independent contractors (and any
      shareholders, directors, officers, employees, agents, Affiliates, lawyers,
      engineers, accountants, consultants, advisors and independent contractors
      thereof) of a party;

	 	 	 
	 	(e) 	
      “Review” means each parties review of the
      Confidential Information and the Non- proprietary Information relating to
      the other parties for the purposes hereof.



Confidentiality and Use of Confidential Information 

11.2                   The
Disclosee shall, in respect of Confidential Information provided to it by or on
behalf of the other party: 

	 	(a) 	
      ensure that the Confidential Information is kept in
      strict confidence and is not used for any purpose whatsoever other than
      for the purpose of conducting the Review and completion of the Acquisition
      and all documents related thereto;

	 	 	 
	 	(b) 	
      ensure that the Confidential Information or the fact that
      Confidential Information has been provided, is not disclosed to any person
      other than to its Representatives who have a need to know the same and the
      Disclosee shall be responsible for any breach hereof by any of its
      Representatives; in addition, the Disclosee shall, at its sole expense,
      take all reasonable measures (including but not limited to court
      proceedings) to restrain its Representatives from prohibited or
      unauthorized disclosure or use of the Confidential Information; if the
      Confidential Information is disclosed to any of its Representatives, such
      person shall be informed at the time of disclosure of its confidential
      nature and the terms of this agreement and shall agree to be bound by its
      terms; the Disclosee shall keep a list of all of its Representatives (but
      excluding its directors, officers and employees) to whom any Confidential
      Information has been delivered and shall provide the Disclosing Party with
      that list immediately upon request;

	 	 	 
	 	(c) 	
      not disclose the terms, conditions or existence of the
      terms hereof or any Confidential Information to any person other than in
      accordance with the terms hereof, except in the event that the Disclosee
      or its Representatives is required by law or applicable regulatory or
      stock exchange requirements to disclose the terms, conditions or existence
      of the terms hereof or any Confidential Information; prior to any such
      disclosure, however, the Disclosee or its Representatives shall
      immediately provide to the Disclosing Party written notice thereof so that
      the Disclosing Party may seek a protective order or other appropriate
      remedy or waive compliance by the Disclosee or its Representatives with
      the provisions of this clause; in the event that any court, administrative
      body or stock exchange requires such disclosure, or that the Disclosing
      Party waives compliance with any provisions of this clause, then the
      Disclosee or its Representatives will furnish only the terms, conditions
      or the existence hereof or that portion of the
  Confidential







- 40 -


	 		
      Information which is required to comply with the
      foregoing law or requirements (or over which a waiver is received) and,
      further, each shall exercise its best efforts to obtain reasonable
      assurances that confidential treatment will be accorded such furnished
      information;

	 	 	 
	 	(d) 	
      at the request of the Disclosing Party, promptly return
      all documents and material provided to the Disclosee or its
      Representatives, as well as all notes, summaries or copies of such
      material, or at a Disclosing Party’s direction certify in writing that all
      such documents or materials were destroyed, provided that the Disclosee
      shall have the option to destroy rather than to return any notes,
      notations or summaries of Confidential Information made by it or its
      Representatives which may contain information of a confidential nature to
      the Disclosee; and

	 	 	 
	 	(e) 	
      take all such action as is reasonably necessary to
      safeguard the Confidential Information from disclosure to any person other
      than as permitted herein.



Disclosee Acknowledgements and Covenants


	11.3 	
       
	
      The Disclosee acknowledges and agrees with the Disclosing
      Party that:

	 	 	 
		(a) 	
      the Confidential Information is provided to it to
      acquaint it with the Disclosing Party and its business and assets and the
      provision of the Confidential Information to other persons does not render
      such Confidential Information as non-proprietary information;

	 	 	 
		(b) 	
      the Confidential Information is not represented by the
      Disclosing Party to be full and complete;

	 	 	 
		(c) 	
      it will rely upon its own investigations, due diligence
      and analysis in evaluating and in satisfying itself as to all matters
      relating to the Disclosing Party and its business and assets;
and

	 	 	 
		(d) 	
      this Agreement shall not be construed as granting
      expressly or by implication during its term or thereafter any rights in
      favour of the Disclosee or its Representatives with respect to any
      Confidential Information.



ARTICLE 12 

TERMINATION 

Termination Rights 

12.1                   This
Agreement may, by notice in writing given prior to or on the Closing Date, be
terminated: 

	 	(a) 	
      by mutual consent of AMG and Adira;

	 	 	 
	 	(b) 	
      by either AMG or Adira if any of the conditions set forth
      herein for its benefit has not been fulfilled or waived at or prior to
      Closing Date; or

	 	 	 
	 	(c) 	
      by either AMG or Adira if the Acquisition is not
      consummated by September 30, 2009 or such other date as may be agreed to
      by AMG and Adira; and, in such event, each







- 41 -


Party shall be released from all obligations under this
Agreement, save and except for its obligations, if any, under Articles 11, 12
and 13, which shall survive. 

Effect of Termination


12.2                  
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. Nothing in Article
12 shall limit or affect any other rights or causes of action the Parties may
have with respect to the representations, warranties, covenants and indemnities
in its favour contained in this Agreement. If a Party waives compliance with any
of the conditions, obligations or covenants contained in this Agreement, the
waiver will be without prejudice to any of its rights of termination in the
event of non-fulfillment, non-observance or non-performance of any other
condition, obligation or covenant in whole or in part. 

12.3                  
If this Agreement is terminated pursuant to any provision of this Article 12,
all obligations of the Parties under this Agreement will terminate, except if
this Agreement is terminated by a Party because of a breach of this Agreement by
the another Party or because a condition for the benefit of the terminating
Party has not been satisfied because the other Party has failed to perform any
of its obligations or covenants under this Agreement which are reasonably
capable of being performed or caused to be performed by such Party, and the
terminating Party’s right to pursue all legal remedies will survive such
termination unimpaired. 

ARTICLE 13 

INDEMNIFICATION

Indemnification by AMG


13.1                   Subject
to §13.3 AMG hereby covenants and agrees with Adira and each Adira Shareholder
to indemnify and save harmless Adira or the Adira Shareholder from and against
any claims which may be made or brought against such Party or which it may
suffer or incur as a result of, or arising out of any non-fulfillment of any
covenant or agreement on the part of AMG under this Agreement or any Ancillary
Agreement to which AMG is a party or any incorrectness in or breach of any
representation or warranty of AMG contained in this Agreement or any Ancillary
Agreement to which AMG is a party. 

Indemnification by Adira


13.2                   Subject
to §13.3, Adira hereby covenants and agrees with AMG to indemnify and save
harmless AMG from and against any claims which may be made or brought against it
or which it may suffer or incur as a result of, or arising out of
non-fulfillment of any covenant or agreement on the part of Adira under this
Agreement or any Ancillary Agreement or any incorrectness in or breach of any
representation or warranty of Adira or the Adira Shareholders contained in this
Agreement or any Ancillary Agreement. 

Limitation on Indemnification


13.3                   The
indemnification obligations of each of the Parties pursuant to this Agreement
shall be subject to the following: 

	 	(a) 	
      the applicable limitations respecting the survival of the
      representations and warranties; and







- 42 -


	 	(b) 	
      an Indemnifying Party shall not be required to indemnify
      an Indemnified Party until the aggregate claims sustained by that
      Indemnified Party exceeds a value of $20,000, in which case, the
      Indemnifying Party shall be obligated to the Indemnified Party for all
      claims.



Procedure for Indemnification


13.4                  
The Party or other indemnified person making a claim for indemnification under
this Article is referred to as the “Indemnified Party “ and the Party providing
indemnification is referred to as the “Indemnifying Party” for the purposes of
this Article. The following provisions shall apply to any Claims for which an
Indemnifying Party may be obligated to indemnify an Indemnified Party pursuant
to this Agreement: 

	 	(a) 	
      upon receipt from a third party by the Indemnified Party
      of notice of a claim or the Indemnified Party becoming aware of a claim in
      respect of which the Indemnified Party proposes to demand indemnification
      from the Indemnifying Party, the Indemnified Party shall give notice to
      that effect to the Indemnifying Party with reasonable promptness, provided
      that failure to give such notice shall not relieve the Indemnifying Party
      from any liability it may have to the Indemnified Party except to the
      extent that the Indemnifying Party is prejudiced thereby;

	 	 	 
	 	(b) 	
      in the case of Claims arising from third parties, the
      Indemnifying Party shall have the right by notice to the Indemnified Party
      not later than 30 days after receipt of the notice described in §(a) above
      to assume the control of the defence, compromise or settlement of the
      claims, provided that such assumption shall, by its terms, be without
      costs to the Indemnified Party and the Indemnifying Party shall at the
      Indemnified Party’s request furnish it with reasonable security against
      any costs or other liabilities to which it may be or become exposed by
      reason of such defence, compromise or settlement;

	 	 	 
	 	(c) 	
      upon the assumption of control by the Indemnifying Party
      as aforesaid, the Indemnifying Party shall diligently proceed with the
      defence, compromise or settlement of the claims at its sole expense,
      including employment of counsel reasonably satisfactory to the Indemnified
      Party and, in connection therewith, the Indemnified Party shall co-operate
      fully, but at the expense of the Indemnifying Party, to make available to
      the Indemnifying Party all pertinent information and witnesses under the
      Indemnified Party’s control, make such assignments and take such other
      steps as in the opinion of counsel for the Indemnifying Party are
      necessary to enable the Indemnifying Party to conduct such defence;
      provided always that the Indemnified Party shall be entitled to reasonable
      security from the Indemnifying Party for any expense, costs or other
      liabilities to which it may be or may become exposed by reason of such
      co-operation;

	 	 	 
	 	(d) 	
      the final determination of any such claims arising from
      third parties, including all related costs and expenses, will be binding
      and conclusive upon the Parties as to the validity or invalidity, as the
      case may be, of such claims against the Indemnifying Party hereunder;
      and

	 	 	 
	 	(e) 	
      should the Indemnifying Party fail to give notice to the
      Indemnified Party as provided in §(b) above, the Indemnified Party shall
      be entitled to make such settlement of the claims as in its sole
      discretion may appear reasonably advisable, and such settlement or any
      other final determination of the claims shall be binding upon the
      Indemnifying Party.







- 43 -


ARTICLE 14

GENERAL 

Public Announcement


14.1                  
Immediately after the execution of this Agreement, Adira and AMG shall issue a
joint public announcement, announcing the entering into of this Agreement, which
announcement shall address all matters required by applicable Laws and shall be
in form and substance acceptable to each of them, acting in a commercially
reasonable manner. No Party shall issue any news release or public statements
inconsistent with such public announcement. 

Expenses


14.2                   Each
Party shall be responsible for its own legal and audit fees and other charges
incurred in connection with the preparation of this Agreement, all negotiations
between the Parties and the consummation of the transactions contemplated
hereby. 

Independent Legal Advice


14.3                   Each
of the Parties acknowledges that he has read, understands and agrees with all of
the provisions of this Agreement and acknowledges that he has had the
opportunity to obtain independent legal advice with respect thereto. 

Entire Agreement


14.4                   This
Agreement constitutes the entire agreement among the Parties hereto and
supersede all prior agreements, representations, warranties, statements,
promises, information, arrangements and understandings, whether oral or written,
express or implied, with respect to the subject matter hereof. None of the
Parties hereto shall be bound or charged with any oral or written agreements,
representations, warranties, statements, promises, information, arrangements or
understandings not specifically set forth in this Agreement or in the schedules,
documents and instruments to be delivered on the Closing Date pursuant to this
Agreement. The Parties hereto further acknowledge and agree that, in entering
into this Agreement and in delivering the schedules, documents and instruments
to be delivered on the Closing Date, they have not in any way relied, and will
not in any way rely, upon any oral or written agreements, representations,
warranties, statements, promises, information, arrangements or understandings,
express or implied, not specifically set forth in this Agreement or in such
schedules, documents or instruments. 

Further Assurances


14.5                  
Each of the Parties hereto will from time to time after the Closing Date at the
other’s request and expense and without further consideration, execute and
deliver such other instruments of transfer, conveyance and assignment and take
such further action as the other may reasonably require to give effect to any
matter provided for herein. 

Severability


14.6                  
In the event that any provision or part of this Agreement is determined by any
court or other judicial or administrative body to be illegal, null, void,
invalid or unenforceable, that provision shall be severed to the extent that it
is so declared and the other provisions of this Agreement shall continue in full
force and effect. 




- 44 - 

Applicable Law 

14.7                   This
Agreement shall be governed by and construed in accordance with the laws of the
Province of British Columbia and the federal laws of Canada applicable therein.


Attornment


14.8                   The
Parties hereby irrevocably and unconditionally consent to and submit to the
exclusive jurisdiction of the courts of the Province of British Columbia for any
actions, suits or proceedings arising out of or relating to this Agreement or
the matters contemplated hereby. The Parties hereby irrevocably and
unconditionally waive any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the matters contemplated hereby
in the courts of the Province of British Columbia and hereby further irrevocably
and unconditionally waive and agree not to plead or claim in any such applicable
courts, as the case may be, that any such action, suit or proceeding so brought
has been brought in an inconvenient forum. 

Successors and Assigns


14.9                   This
Agreement shall accrue to the benefit of and be binding upon each of the Parties
hereto and their respective heirs, executors, administrators and assigns,
provided that this Agreement shall not be assigned by any one of the Parties
without the prior written consent of the other Party. 

Time of Essence


14.10                  Time
shall be of the essence hereof.


Notices


14.11                   Any
notice required or permitted to be given hereunder shall be in writing and shall
be effectively given if (i) delivered personally, (ii) sent prepaid courier
service or mail, or (iii) sent prepaid by facsimile transmission or other
similar means of electronic communication (confirmed on the same or following
day by prepaid mail) addressed as follows:

	 	(a) 	
      in the case of notice to AMG:

	 	 	 
	 		
      AMG Oil Ltd.

	 		
      Suite 2901 – 1050 Burrard Street 
Vancouver, British
      Columbia 
V6Z 2S3;

	 	 	 
	 		
      With a copy to:

	 	 	 
	 		
      Lang Michener LLP

	 		
      1500 – 1055 West Georgia Street 
Vancouver, British
      Columbia 
V6E 4N7

	 	 	 
	 		
      Attention: Michael H. Taylor

	 	 	 
	 		
      Tel:      (604) 691-7410

      Fax:      (604)
893-2669







- 45 -


	 	(b) 	
      in the case of notice to Adira or to Adira
      Shareholders:

	 	 	 
	 		
      c/o ADIRA ENERGY CORP.

	 		
      Suite 901, 30 St. Claire Avenue West 
Toronto, Ontario
      
M4V 3A1

	 	 	 
	 		
      with a copy to:

	 	 	 
	 		
      Aird & Berlis LLP

	 		
      Suite 1800, 181 Bay Street 
Toronto, Ontario 
M5J
      2T9

	 	 	 
	 		
      Attention: Daniel N. Bloch

	 	 	 
	 		
      Tel:      (416) 865-4739
      
Fax:      (416)
863-1515



Any notice, designation, communication, request, demand or
other document given or sent or delivered as aforesaid shall: 

	 	(a) 	
      if delivered as aforesaid, be deemed to have been given,
      sent, delivered and received on the date of delivery;

	 	 	 
	 	(b) 	
      if sent by mail as aforesaid, be deemed to have been
      given, sent, delivered and received (but not actually received) on the
      fourth Business Day following the date of mailing, unless at any time
      between the date of mailing and the fourth Business Day thereafter there
      is a discontinuance or interruption of regular postal service, whether due
      to strike or lockout or work slowdown, affecting postal service at the
      point of dispatch or delivery or any intermediate point, in which case the
      same shall be deemed to have been given, sent, delivered and received in
      the ordinary course of the mail, allowing for such discontinuance or
      interruption of regular postal service; and

	 	 	 
	 	(c) 	
      if sent by facsimile machine, be deemed to have been
      given, sent, delivered and received on the date the sender receives the
      facsimile machine answer back confirming receipt by the
  recipient.



Waiver


14.12                 Any
Party hereto which is entitled to the benefits of this Agreement may, and has
the right to, unless otherwise provided, waive any term or condition hereof at
any time on or prior to the Closing Date, provided however that such waiver
shall be evidenced by written instrument duly executed on behalf of such Party.


Amendments


14.13                
No amendment, modification or supplement to this Agreement shall be effective
unless provided in writing and signed by all the Parties hereto and approved by
all necessary governmental regulatory authorities. 




- 46 -


Remedies Cumulative


14.14                 The
rights and remedies of the Parties under this Agreement are cumulative and in
addition to and not in substitution for any rights or remedies provided by law.
Any single or partial exercise by any Party hereto of any right or remedy for
default or breach of any term, covenant or condition of this Agreement does not
waive, alter, affect or prejudice any other right or remedy to which such Party
may be lawfully entitled for the same default or breach. 

[Remainder of page left intentionally blank.]





- 47 -


Counterparts


14.15                
This Agreement may be executed in several counterparts (by original or facsimile
signature), each of which when so executed shall be deemed to be an original and
each of such counterparts, if executed by each of the Parties, shall constitute
a valid and enforceable agreement among the Parties. 

IN WITNESS WHEREOF this agreement has been executed by
the Parties hereto as of the date first above written. 

	AMG OIL LTD. 	 
	 	 	 
	 	 	 
	Per: 	/s/ Michael Murphy 	 
	  	Authorized Signatory 	 
	 	 	 
	 	 	 
	Per: 		 
	  	Print Name and Title 	 
	 	 	 
	 	 	 
	 	 	 
	ADIRA ENERGY CORP. 	 
	 	 	 
	 	 	 
	Per: 	/s/ Alan Friedman 	 
	  	Authorized Signatory 	 
	 	 	 
	 	 	 
	Per: 		 
	  	Print Name and Title 	 


THE PRINCIPAL SHAREHOLDERS:



   

	/s/ Alan
      Friedman 	 	/s/ Dennis Bennie 
	ALAN FRIEDMAN 	 	DENNIS BENNIE 
	 	 	  
	 	 	  
	 	 	  
	/s/ Ilan
      Diamond 	 	  
	ILAN DIAMOND 	 	  



 




- 51 -


SCHEDULE C 

DESCRIPTION OF PETROLEUM LICENSE