EXHIBIT 4(D)


AMALGAMATION AGREEMENT















 


AMALGAMATION AGREEMENT


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


BETWEEN:


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


OF THE
FIRST PART


AND


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


OF THE
SECOND PART


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


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


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


ARTICLE 1

DEFINITIONS


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


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


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


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


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


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















 


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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



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


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


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


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


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


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


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


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


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


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


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


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


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



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


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


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


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


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


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


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


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


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


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



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


 


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


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


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


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


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


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


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


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


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


1.2                                 The
following Exhibit forms part of this Agreement:


Exhibit 1 - Articles of Amalgamation


ARTICLE 2

INTERPRETATION


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


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


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


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



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


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


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


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


ARTICLE 3


CHALLENGER’S CLOSING CONDITIONS


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


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


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


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


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


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



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


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


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


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


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


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


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


ARTICLE 4

GLOBAL’S CLOSING CONDITIONS


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


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



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


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


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


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


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


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


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


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


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



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


 


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


ARTICLE 5


MUTUAL CLOSING CONDITIONS


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


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


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


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


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


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


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


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



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


 


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


ARTICLE 6

CHALLENGER’S REPRESENTATIONS AND WARRANTIES


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


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


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


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



 10
 






 



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


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


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


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


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


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



 11
 






 



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


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


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


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


(m)                               Challenger’s
has no Employee Obligations;


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


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


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


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



 12
 






 



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


 


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


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


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


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


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


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


(u)                                 To
the knowledge of Challenger:


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


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


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



 13
 






 



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


 


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


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


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


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


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


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


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


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


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


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



 14
 






 



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


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


ARTICLE 7

GLOBAL’S REPRESENTATIONS AND WARRANTIES


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


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


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


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



 15
 






 



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


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


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


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


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


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


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


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


(l)                                     Global
does not have Employee Obligations.



 16














 


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


(n)                                 Global
will post to SEDAR a true and complete copy of the Information Circular
relating to the Global Meeting and Global has posted to SEDAR true and complete
copies of; (i) Global’s Information Circular relating to Global’s 2003
annual meeting of Shareholders and (ii) all prospectus or other offering
documents used by Global in the offering of its securities or filed with
securities authorities since December 31, 2004. As of their respective
dates, such documents (including all exhibits and schedules thereto and
documents incorporated by reference therein) (i) did not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and (ii) complied
in all material respects with Applicable Laws. The audited financial statements
and unaudited interim financial statements of Global publicly issued by Global,
posted to SEDAR were prepared in accordance with generally accepted accounting
principles in Canada (except (i) as otherwise indicated in such financial
statements and the notes thereto or, in the case of audited statements, in the
related report of Global’s independent accountants, or (ii) in the case of
unaudited interim financial statements), and fairly present the financial
position, results of operations and changes in financial position of Global as
of the dates thereof and for the periods indicated therein (subject, in the
case of any unaudited interim financial statements, to normal year-end audit
adjustments).


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


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


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



 17
 






 



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


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


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


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


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


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


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


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


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


ARTICLE 8

CHALLENGER’S COVENANTS


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


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



 18
 






 



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


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


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


(d)                                 Challenger
shall:


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


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


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


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



 19
 






 



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


 


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


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


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


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


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


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


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



 20
 






 



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


 


ARTICLE 9

GLOBAL’S COVENANTS


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


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


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


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


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



 21
 






 



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


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


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


(g)                                 Global
will:


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


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


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


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


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


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


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



 22
 






 



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


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


ARTICLE 10

MUTUAL COVENANTS


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


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


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


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


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


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


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


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



 23
 






 



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


 


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


ARTICLE 11

AMALGAMATION


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


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


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


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


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


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


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


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


ARTICLE 12

AMALCO


12.1                                                                           Certain
provisions applicable to Amalco:


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


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


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


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


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



 24
 






 



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


 


12.2                                                                           Amalco
Directors


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


	
  Name

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
  Greg Noval

  	
   

  	
  P.O. Box 447

  Turner Valley, Alberta T0L 2A0

  
	
   

  	
   

  	
   

  
	
  Neil MacKenzie

  	
   

  	
  1577 – 73rd Street SW

  Calgary, Alberta T3H 3X1

  
	
   

  	
   

  	
   

  
	
  Jim Brown

  	
   

  	
  PMB 339 109B, 5095 Napilihau Street,

  Lahaina, Hawaii 96761

  
	
   

  	
   

  	
   

  
	
  Joe Chatoor

  	
   

  	
  18 Goodwood Ridge, Goodwood Park,

  Trinidad & Tobago

  
	
   

  	
   

  	
   

  
	
  Mike Hibberd

  	
   

  	
  24226 Aspen Drive

  Calgary, Alberta T3R 1A4

  



 


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


12.3                                                                           Certificates


On the Effective Date:


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


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


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


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


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



 25
 






 



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


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


ARTICLE 13

ARTICLES OF AMALGAMATION


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


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


ARTICLE 14

EFFECT OF THE AMALGAMATION


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


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


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


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


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


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


14.2                                                                           On
the Effective Date:


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


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



 26
 






 



ARTICLE 15

TERMINATION


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


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


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


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


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


ARTICLE 16

ADDITIONAL AGREEMENTS


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


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


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


ARTICLE 17

AMENDMENT


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



 27














 


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


ARTICLE 18

COSTS


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


ARTICLE 19

DISCLOSURE


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


ARTICLE 20

MISCELLANEOUS


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


if to Challenger:


Challenger Energy Corp.


3300, 400 – 3rd Avenue S.W.


Calgary, Alberta


T2P 4H2


Telecopier No.:     (403) 503-8811


Attention:              Neil Mackenzie



 28
 






 



with a copy to:


Burnet, Duckworth &
Palmer LLP


Suite 1400, 350 – 7th Avenue S.W.


Calgary, Alberta


T2P 3N9


Telecopier No.:     (403) 260-0337


Attention:              J.G. (Jeff) Lawson


if to Global:


Global Express Energy
Inc.


306, 908 – 17th Avenue SW


Calgary, Alberta


T2T 0A5


Telecopier No.:     (403) 234-9978


Attention:              John Mackay


with a copy to:


McCarthy Tetrault LLP


3300, 421 – 7th Avenue S.W.


Calgary, Alberta


T2P 4K9


Telecopier No.:     (403) 260-3501


Attention:              David Phillips


20.2                         Time
shall be of the essence in this Agreement.


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

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


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


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


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


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



 29
 






 



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


 


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


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


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


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


IN WITNESS WHEREOF
the parties hereto have executed this Agreement.


 


	
  

  	
  GLOBAL EXPRESS ENERGY INC.

  
	
   

  	
   

  
	
   

  	
  Per:

  	
   /s/ John Mackay

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CHALLENGER ENERGY CORP.

  
	
   

  	
   

  
	
   

  	
  Per:

  	
   /s/ Neil Mackenzie

  




 30














 


EXHIBIT 1

ARTICLES OF AMALGAMATION

















 


 




	
  

  	
  Industry Canada

  	
  Industrie Canada

  	
   

  	
  FORMULE 9

  
	
   

  	
   

  	
   

  	
   

  	
  STATUTS DE
  FUSION

  
	
   

  	
  Canada Business

  	
  Loi canadienne sur les

  	
   

  	
  (ARTICLE 185)

  
	
   

  	
  Corporations Act

  	
  sociétés par actions

  	
   

  	
   

  





 


FORM 9




ARTICLES OF AMALGAMATION

(SECTION 185)





	
  1 – Name of the Amalgamated Corporation 

  	
  Dénomination sociale de la
  société issue de la fusion

  
	
   

  	
   

  
	
  CHALLENGER ENERGY CORP.

  
	
  2
  – The province or territory in Canada where the registered office

  is to be situated

  	
  La
  province ou ie territoire au Canada où se situera le siége social

  
	
  Alberta

  
	
  3 – The classes and any
  maximum number of shares that the corporation is authorized to issue

  	
  Catégories et tout
  nombre maximal d’actions que la société est authorisée à émettre

  
	
  See Schedule “A”
  attached hereto.

  
	
  4 – Restrictions, if
  any, on share transfers

  	
  Restrictions sur le
  transfert des actions, s’il y a lieu

  
	
  None

  
	
  5 – Number (or minimum
  and maximum number) of directors

  	
  Nombre (ou nombre
  minimal et maximal) d’administrateurs

  
	
  Not less than three (3)
  directors and not more than eleven (11) directors.

  
	
  6 – Restrictions, if
  any, on business the corporation may carry on

  	
  Limites imposées á l’activité
  commerciale de la société, s’il y a lieu

  
	
  None

  
	
  7 – Other provisions,
  if any

  	
  Autres dispositions, s’il
  y a lieu

  
	
  See Schedule “B”
  attached hereto.

  
	
  8 – The amalgamation
  has been approved pursuant to that section or subsection of the Act which is
  indicated as follows:

  	
  La fusion a été
  approuvée en accord avec l’article ou le paragraphe de la Loi indiqué
  ci-après.

  
	
   

  	
   

  x  183

  o  184(1)

  o  184(2)

  
			



 


	
  9 – Name of
  the amalgamating corporations

  Dénomination sociale des sociétés fusionnantes

  	
   

  	
  Corporation

  No.

  N’ de la

  société

  	
   

  	
  Signature

  	
   

  	
  Date

  	
   

  	
  Title

  Titre

  	
   

  	
  Tel. No.

  N’ de tél.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Global Express
  Energy Inc.

  	
   

  	
  206916777

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Challenger
  Energy Corp.

  	
   

  	
  626967-2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


FOR DEPARTMENTAL USE ONLY - [ILLEGIBLE]


 


 


 


IC 3190 (2003/06)





 










 



SCHEDULE “A”


The authorized capital of
the Corporation shall consist of an unlimited number of Common Shares, First
Preferred Shares and Second Preferred Shares, which classes of shares, shall
have attached thereto the rights, privileges, restrictions and conditions as
set forth below:


Common Shares


1. Voting Rights


The holders of Common
Shares shall be entitled to notice of, to attend and to one vote per share held
at any meeting of the shareholders of the Corporation (other than meetings of a
class or series of shares of the Corporation other than the Common Shares as
such).


2. Dividends


The holders of Common Shares shall be entitled to
receive dividends as and when declared by the Board of Directors of the
Corporation on the Common Shares as a class, subject to prior satisfaction of
all preferential
rights to dividends attached to all shares of other classes of shares of the
Corporation ranking in priority to the Common Shares in respect of dividends
and the Board of Directors shall be entitled to declare dividends in favour of
the holders of other classes of shares at different times or at the same time but in different
amounts as dividends declared in favour of the holders of the Common Shares or
in favour of
the holders of the Common Shares at different times or at the same time but in
different amounts as dividends declared in favour of the holders of the other
classes of shares.


3. Liquidation


The holders of Common Shares shall be entitled in the
event of any liquidation, dissolution or winding-up of the Corporation,
whether voluntary or involuntary, or any other distribution of the assets of
the Corporation among its shareholders for the purpose of winding-up its
affairs, and subject to prior satisfaction of all preferential rights to return
of capital on dissolution attached to all shares of other classes of shares of
the Corporation ranking in priority to the Common Shares in respect of return
of capital on dissolution, to
share rateably, together with the Non-Voting Common Shares and with the holders of shares of any other class of shares of
the Corporation ranking equally with the Common Shares in respect of return of
capital, in such assets of the Corporation as are available for distribution.


First Preferred Shares


1.             The
First Preferred Shares may at any time or from time to time be issued in one or
more series. Before any shares of a particular series are issued, the Directors
of the Corporation shall, by resolution, fix the number of shares that will
form such series and shall, subject to the limitations set out herein, by
resolution fix the designation, rights, privileges, restrictions and conditions
to be attached to the First Preferred Shares of such series, including, but
without in any way limiting or restricting the generality of the foregoing, the
rate, amount or method of calculation of dividends thereon, the time and place
of payment of dividends, the consideration for and the terms and conditions of
any purchase for cancellation, retraction or redemption thereof, conversion or
exchange rights (if any), and whether into or for securities of the Corporation
or otherwise, the voting rights attached thereto (if any), the terms and
conditions of any share purchase or retirement plan or sinking fund, and
restrictions on the payment of dividends on any shares other than First
Preferred Shares or payment in respect of capital on any shares in the capital
of the Corporation or creation or issue of debt or equity securities; the whole
subject to filing with the Director (as defined in the Canada
Business Corporations Act or
successor legislation thereto) of Articles


 

















 


of Amendment setting forth a description of such series
including the designation, rights, privileges, restrictions and
conditions attached to the shares of such series.


2.             Notwithstanding paragraph 1, the Directors of the
Corporation may at any time or from time to time change the rights, privileges,
restrictions and conditions attached to unissued shares of any series of First
Preferred Shares, subject to filing with the Director (as defined in the Canada Business Corporations Act) of Articles of Amendment
setting forth the changes in rights, privileges, restrictions and conditions
attached to the shares of such series.


3.             The First Preferred Shares of each series shall rank on
a parity with the First Preferred Shares of every other series with respect to
accumulated dividends and return of capital. The First Preferred Shares shall
be entitled to a preference over the Second Preferred Shares and the Common
Shares and over any other shares of the Corporation ranking junior to the First
Preferred Shares with respect to priority in the payment of dividends and in
the distribution of assets in the event of the liquidation, dissolution or
winding-up of the Corporation, whether voluntary or involuntary, or any other
distribution of the assets of the Corporation among its shareholders for the
purpose of winding-up its affairs.   If
any cumulative dividends or amounts payable on a return of capital are not paid
in full, the First Preferred Shares of all series shall participate rateably in
respect of such dividends, including accumulations, if any, in accordance with
the sums that would be payable on such shares if all such dividends were
declared and paid in full, and in respect of any repayment of capital in
accordance with the sums that would be payable on such repayment of capital if
all sums so payable were paid in full; provided, however, that in the event of
there being insufficient assets to satisfy in full all such claims as
aforesaid, the claims of the holders of the First Preferred Shares with respect
to repayment of capital shall first be paid and satisfied and any assets
remaining thereafter shall be applied towards the payment in satisfaction of
claims in respect of dividends.   The
First Preferred Shares of any series may also be given such other preferences
not inconsistent with paragraphs 1 through 5 hereof over the Second Preferred
Shares and the Common Shares and any other shares ranking junior to the First
Preferred Shares as may be determined in the case of each such series of First
Preferred Shares.


4.             The rights, privileges, restrictions and conditions
attaching to the First Preferred Shares as a class may be added to, changed or
removed but only with the approval of the holders of the First Preferred Shares
given as herein specified.


5.             The rights, privileges, restrictions and conditions
attaching to the First Preferred Shares as a class as provided herein and as
may be provided from time to time may be repealed, altered, modified, amended
or amplified or otherwise varied only with the sanction of the holders of the
First Preferred Shares given in such manner as may then be required by law,
subject to a minimum requirement that such approval be given by resolution
passed by the affirmative vote of a least two-thirds of the votes cast at a
meeting of holders of First Preferred Shares duly called for such purpose and
held upon at least twenty- one (21) days’ notice at which a quorum is present
comprising at least two persons present, holding or representing by proxy at
least twenty (20%) per cent of the outstanding First Preferred Shares.   If any such quorum is not present within
half an hour after the time appointed for the meeting, then the meeting shall
be adjourned to a date being not less than fifteen (15) days later and at such
time and place as may be appointed by the chairman and at such meeting a quorum
will consist of that number of shareholders present in person or represented by
proxy, The formalities to be observed with respect to the giving of notice of
any such meeting or adjourned meeting and the conduct thereof shall be those
which may from time to time be prescribed in the by laws of the Corporation
with respect to meetings of shareholders. On every vote taken at every such
meeting or adjourned meeting each holder of a First Preferred Share shall be
entitled to one (1) vote in respect of each one ($1) dollar of stated value of
First Preferred Shares held.



 A-2
 






 



Second Preferred Shares


1.             The Second Preferred Shares may at any time or from time
to time be issued in one or more series. Before any shares of a particular
series are issued, the Directors of the Corporation shall, by resolution, fix
the number of shares that will form such series and shall, subject to the
limitations set out herein, by resolution fix the designation, rights,
privileges, restrictions and conditions to be attached to the Second Preferred
Shares of such series, including, but without in any way limiting or
restricting the generality of the foregoing, the rate, amount or method of
calculation of dividends thereon, the time and place of payment of dividends,
the consideration for and the terms and conditions of any purchase for
cancellation, retraction or redemption thereof, conversion or exchange rights
(if any), and whether into or for securities of the Corporation or otherwise,
the voting rights attached thereto (if any), the terms and conditions of any
share purchase or retirement plan or sinking fund, and restrictions on the
payment of dividends on any shares other than Second Preferred Shares or
payment in respect of capital on any shares in the capital of the Corporation
or creation or issue of debt or equity securities; the whole subject to filing
with the Director (as defined in the Canada Business
Corporations Act or successor legislation thereto) of Articles of
Amendment setting forth a description of such series including the designation,
rights, privileges, restrictions and conditions attached to the shares of such
series.


2.             Notwithstanding paragraph 1, the Directors of the
Corporation may at any time or from time to time change the rights, privileges,
restrictions and conditions attached to unissued shares of any series of Second
Preferred Shares, subject to filing with the Director (as defined in the Canada Business Corporations Act) of Articles of Amendment
setting forth the changes in rights, privileges, restrictions and conditions
attached to the shares of such series.


3.             The Second Preferred Shares of each series shall rank on
a parity with the Second Preferred Shares of every other series with respect to
accumulated dividends and return of capital.  
The Second Preferred Shares shall be entitled to a preference over the
Common Shares and over any other shares of the Corporation ranking junior to
the Second Preferred Shares with respect to priority in the payment of
dividends and in the distribution of assets in the event of the liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
or any other distribution of the assets of the Corporation among its shareholders
for the purpose of winding-up its affairs. If any cumulative dividends or
amounts payable on a return of capital are not paid in full, the Second
Preferred Shares of all series shall participate rateably in respect of such
dividends, including accumulations, if any, in accordance with the sums that
would be payable on such shares if all such dividends were declared and paid in
full, and in respect of any repayment of capital in accordance with the sums
that would be payable on such repayment of capital if all sums so payable were
paid in full; provided, however, that in the event of there being insufficient
assets to satisfy in full all such claims as aforesaid, the claims of the
holders of the Second Preferred Shares with respect to repayment of capital shall
first be paid and satisfied and any assets remaining thereafter shall be
applied towards the payment in satisfaction of claims in respect of
dividends.   The Second Preferred Shares
of any series may also be given such other preferences not inconsistent with
paragraphs 1 through 5 hereof over the Common Shares, and any other shares
ranking junior to the Second Preferred Shares as may be determined in the case
of each such series of Second Preferred Shares.


4.             The rights, privileges, restrictions and conditions
attaching to the Second Preferred Shares as a class may be added to, changed or
removed but only with the approval of the holders of the Second Preferred
Shares given as herein specified.


5.             The rights, privileges, restrictions and conditions attaching
to the Second Preferred Shares as a class as provided herein and as may be
provided from time to time may be repealed, altered, modified, amended or
amplified or otherwise varied only with the sanction of the holders of the
Second Preferred



 A-3
 






 



Shares given in such a
manner as may then be required by law, subject to a minimum requirement that
such approval be given by resolution passed by the affirmative vote of at least
two-thirds of the votes cast at a meeting of holders of Second Preferred Shares
duly called for such purpose and held upon at least twenty one (21) days’
notice at which a quorum is present comprising at least two persons present,
holding or representing by proxy at least twenty (20%) per cent of the
outstanding Second Preferred Shares. If any such quorum is not present within
half an hour after the time appointed for the meeting, then the meeting shall
be adjourned to a date being not less than fifteen (15) days later and at such
time and place as may be appointed by the chairman and at such meeting a quorum
will consist of that number of shareholders present in person or represented by
proxy. The formalities to be observed with respect to the giving of notice of
any such meeting or adjourned meeting and the conduct thereof shall be those
which may from time to time be prescribed in the by-laws of the Corporation
with respect to meetings of shareholders. On every vote taken at every such
meeting or adjourned meeting each holder of a Second Preferred Share shall be
entitled to one (1) vote in respect of each one ($1) dollar of stated value of
Second Preferred Shares held.



 A-4














 


SCHEDULE “B”


(a)           The directors of the corporation may,
without authorization of the shareholders:


(i)            borrow
money on the credit of the Corporation;


(ii)           issue,
reissue, sell or pledge debt obligations of the Corporation;


(iii)          subject
to the Canada Business Corporations Act, give a
guarantee on behalf of the Corporation to secure performance of an obligation
of any person, and;




(iv)          mortgage,
hypothecate, pledge or otherwise create a security interest in all or any
property of the Corporation, owned or subsequently acquired, to secure any
obligation of the Corporation.






(a)           The
directors may, by resolution, delegate
the powers referred to in Subsection (a) hereof to a director, a committee of
directors or an officer.






(b)           The
directors may, between annual general meetings, appoint one or more additional
directors of the Corporation to serve until the next annual general
meeting, but the number of additional directors shall not at any time exceed
1/3 of the number of directors who held office at the expiration of the last
annual general meeting of the Corporation.




(c)           Meetings
of the shareholders may be held at any place within Canada that the directors
may determine.