GOLDSTRIKE INC.
                                (the "Purchaser")

                                       and

                             GRAN TIERRA ENERGY INC.
                               (the "Corporation")

                                       and

                       The Parties set out in Schedule "A"
                          (collectively, the "Vendors")

--------------------------------------------------------------------------------

                            SHARE PURCHASE AGREEMENT

                                November 10, 2005

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                                                                  Execution Copy
<PAGE>

                                TABLE OF CONTENTS

                                    ARTICLE 1
                                 INTERPRETATION

Section 1.1    Defined Terms...................................................1
Section 1.2    Gender and Number...............................................8
Section 1.3    Headings, etc...................................................8
Section 1.4    Currency........................................................8
Section 1.5    Certain Phrases, etc............................................8
Section 1.6    Knowledge.......................................................9
Section 1.7    Accounting Terms................................................9
Section 1.8    Incorporation of Schedules......................................9

                                    ARTICLE 2
                       PURCHASED SHARES AND PURCHASE PRICE

Section 2.1    Purchase and Sale...............................................9
Section 2.2    Purchase Price..................................................9
Section 2.3    Partial Purchase...............................................10
Section 2.4    Payment of the Purchase Price..................................10
Section 2.5    Adjustment of Purchase Price...................................11
Section 2.6    Withholding Where Vendor is Non-Resident.......................12

                                    ARTICLE 3
                  REPRESENTATIONS AND WARRANTIES OF THE VENDORS

Section 3.1    Representations and Warranties of the Vendors..................13
Section 3.2    Representations and Warranties of the Corporation..............14

                                    ARTICLE 4
                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

Section 4.1    Representations and Warranties of the Purchaser................25

                                    ARTICLE 5
                      PRE-CLOSING COVENANTS OF THE PARTIES

Section 5.1    Conduct of Business Prior to Closing...........................40
Section 5.2    Access for Due Diligence.......................................42
Section 5.3    Actions to Satisfy Closing Conditions..........................43
Section 5.4    Transfer of the Purchased Shares...............................43
Section 5.5    Request for Consents...........................................44
Section 5.6    Filings and Authorizations.....................................44
Section 5.7    Notice of Untrue Representation or Warranty....................44
Section 5.8    Exclusive Dealing..............................................44

<PAGE>

                                    ARTICLE 6
                              CONDITIONS OF CLOSING

Section 6.1    Conditions for the Benefit of the Purchaser....................45
Section 6.2    Conditions for the Benefit of the Vendors and the Corporation..47
Section 6.3    Conditions Precedent...........................................49

                                    ARTICLE 7
                                     CLOSING

Section 7.1    Date, Time and Place of Closing................................49
Section 7.2    Closing Procedures.............................................49

                                    ARTICLE 8
                                   TERMINATION

Section 8.1    Termination by Purchaser.......................................49
Section 8.2    Termination by Vendors.........................................50
Section 8.3    Other Termination Rights.......................................50
Section 8.4    Effect of Termination..........................................50

                                    ARTICLE 9
                                 INDEMNIFICATION

Section 9.1    Indemnification in Favour of the Purchaser.....................51
Section 9.2    Indemnification in Favour of the Vendor........................52
Section 9.3    Time Limitations...............................................52
Section 9.4    Limitations on Amount..........................................52
Section 9.5    Procedure for Indemnification--Third Party Claims..............52
Section 9.6    Procedure for Indemnification--Other Claims....................54

                                   ARTICLE 10
                             POST-CLOSING COVENANTS

Section 10.1   Further Assurances.............................................54

                                   ARTICLE 11
                                  MISCELLANEOUS

Section 11.1   Notices........................................................55
Section 11.2   Brokers........................................................57
Section 11.3   Announcements..................................................57
Section 11.4   Third Party Beneficiaries......................................58
Section 11.5   Expenses.......................................................58
Section 11.6   Amendments.....................................................58
Section 11.7   Waiver.........................................................58
Section 11.8   Non-Merger.....................................................58
Section 11.9   Entire Agreement...............................................59
Section 11.10  Successors and Assigns.........................................59
Section 11.11  Severability...................................................59
Section 11.12  Tax Election...................................................60
Section 11.13  Governing Law..................................................60
Section 11.14  Counterparts...................................................60


                                      -2-
<PAGE>

                            SHARE PURCHASE AGREEMENT

      Share Purchase  Agreement  dated as of November 10, 2005 among  Goldstrike
Inc. (the  "Purchaser"),  Gran Tierra Energy Inc.  (the  "Corporation")  and the
Parties set out in Schedule "A" (the "Vendors"), pursuant to which the Purchaser
will  acquire  all issued and  outstanding  shares in the capital of Gran Tierra
Energy Inc. in exchange for common shares of Goldstrike and Exchangeable  Shares
(as defined herein).

      WHEREAS  the  Purchaser  and Gran  Tierra  have  agreed upon the terms and
conditions of a share purchase (the "Share  Purchase") and related  transactions
(collectively the  "Transactions"),  pursuant to which,  among other things, the
Purchaser will acquire all of the issued and  outstanding  share capital of Gran
Tierra, and Gran Tierra will become a wholly-owned  subsidiary of the Purchaser,
as contemplated in a term sheet dated August 22, 2005 (the "Term Sheet"); and

      WHEREAS simultaneously with the closing of the Transaction,  the Purchaser
intends to split-off its  wholly-owned  subsidiary,  Goldstrike  Leaseco Inc., a
Nevada  corporation  ("Leaseco"),  through  the  sale of all of the  outstanding
capital stock of Leaseco (the  "Split-off")  upon the terms and  conditions of a
split-off agreement by and among the Purchaser, Dr. Ken Cai and Dr. Yanyou Zheng
(collectively  "Buyer")  substantially  in the form of Exhibit B attached hereto
(the "Split-Off Agreement")

      NOW,  THEREFORE,  in  consideration  of the  premises  and other  good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties, intending to be legally bound, agree as follows:

                                   ARTICLE 1
                                 INTERPRETATION

Section 1.1 Defined Terms

      As used  in  this  Agreement,  the  following  terms  have  the  following
meanings:

      "Accounts Receivable" means all accounts receivable,  notes receivable and
      other debts due or accruing due to the Corporation.

      "Acquired  Properties"  means the oil and gas leasehold  working interests
      acquired by the Corporation in connection with the Argentine Acquisition.

      "Affiliate" has the meaning specified in Section 4.1(p)(iii).

      "Agreement"  means this share  purchase  agreement  and all  schedules and
      instruments  in  amendment  or  confirmation  of it;  and the  expressions
      "Article"  and  "Section"  followed  by a  number  mean  and  refer to the
      specified Article or Section of this Agreement.

<PAGE>

      "Ancillary  Agreements"  means  all  agreements,  certificates  and  other
      instruments delivered or given pursuant to this Agreement.

      "Argentine  Acquisition" means the transactions,  consummated on September
      1, 2005, pursuant to which the Corporation  acquired certain Argentine oil
      and gas working interests.

      "Assets" means all property and assets of the  Corporation of every nature
      and kind and wheresoever  situate  including (i) the Owned  Properties and
      the Buildings and Fixtures located thereon, (ii) all machinery, equipment,
      furniture,  accessories and supplies of all kinds,  (iii) all inventories,
      (iv) all Accounts  Receivable and the full benefit of all security for the
      Accounts Receivable, (v) all prepaid expenses, (vi) the leasehold interest
      of the Corporation in and to the Leased Properties, (vii) the Intellectual
      Property,  (viii) the  Contracts  and the  Leases,  and (ix) the Books and
      Records and the Corporate Records.

      "Authorization"  means,  with  respect to any Person,  any order,  permit,
      approval,  waiver,  licence or similar  authorization  of any Governmental
      Entity having jurisdiction over the Person.

      "Books and Records"  means all books of account,  tax  records,  sales and
      purchase  records,   customer  and  supplier  lists,   computer  software,
      formulae, business reports, plans and projections and all other documents,
      files, correspondence and other information of the Corporation (whether in
      written, printed, electronic or computer printout form).

      "Bridge Loan" means the loan by the Purchaser to the  Corporation  for the
      purpose of financing the Argentine Acquisition.

      "Bridge  Loan  Agreement"  means the bridge loan and control  share pledge
      agreement made September 1, 2005 between the Purchaser and the Corporation
      pursuant to which the Purchaser made the Bridge Loan.

      "Buildings  and  Fixtures"   means  all  plant,   buildings,   structures,
      erections,  improvements,  appurtenances  and  fixtures  (including  fixed
      machinery and fixed equipment) situate on any of the Subject Properties.

      "Business" means the business of the Corporation and any subsidiary of the
      Corporation,  being the exploration  for and development of  international
      oil and gas opportunities initially in Argentina.


                                      -2-
<PAGE>

      "Business Day" means any day of the year, other than a Saturday, Sunday or
      any day on which  banks are  required or  authorized  to close in Calgary,
      Alberta.

      "CallCo" means a corporation to be incorporated  under the laws of Alberta
      which will be wholly-owned, directly or indirectly, by Purchaser.

      "Claims" has the meaning specified in Section 2.5.

      "Closing"  means the  completion of the  transaction  of purchase and sale
      contemplated in this Agreement.

      "Closing  Date" means on or about  November 10, 2005 or such other date as
      the Purchaser and the Corporation may agree provided that the Closing Date
      shall not be later than December 31, 2005.

      "Consideration Shares" has the meaning specified in Section 2.2.

      "Code" means the Internal Revenue Code of 1986, as amended.

      "Collective  Agreements"  means  the  collective  agreements  binding  the
      Corporation and all related documents  including letters of understanding,
      letters of intent and other written  communications with bargaining agents
      for employees of the  Corporation,  which impose any obligations  upon the
      Corporation.

      "Consent" means the consent of a contracting  party to a change in control
      of the Corporation if required by the terms of any Contract.

      "Contracts"  means  all  agreements  to which the  Corporation  is a party
      including all contracts,  leases of personal  property and  commitments of
      any  nature,  written or oral,  including  (i)  unfilled  purchase  orders
      received by the Corporation,  (ii) forward  commitments by the Corporation
      for  supplies  or  materials  entered  into  the  Ordinary  Course,  (iii)
      restrictive   agreements  and  negative  covenant   agreements  which  the
      Corporation has with its employees, past or present, and (iv) the Material
      Contracts.

      "Corporation" means Gran Tierra Energy Inc. and its subsidiaries.

      "Corporate  Records"  means  the  corporate  records  of the  Corporation,
      including (i) all  constating  documents and by-laws,  (ii) all minutes of
      meetings  and   resolutions  of   shareholders   and  directors  (and  any
      committees),  and (iii) the share certificate books,  securities register,
      register of transfers and register of directors.

      "Damages" has the meaning specified in Section 9.1.


                                      -3-
<PAGE>

      "Employee   Benefit   Plan"  has  the   meaning   specified   in   Section
      4.1(bb)(i)(A).

      "Employee  Plans"  means  all  the  employee   benefit,   fringe  benefit,
      supplemental  unemployment  benefit,  bonus,  incentive,  profit  sharing,
      termination,  change of control, pension,  retirement, stock option, stock
      purchase,   stock  appreciation,   health,   welfare,   medical,   dental,
      disability, life insurance and similar plans, programmes,  arrangements or
      practices  relating  to the  current  or  former  employees,  officers  or
      directors  of the  Corporation  maintained,  sponsored  or  funded  by the
      Corporation,  whether  written  or oral,  funded or  unfunded,  insured or
      self-insured, registered or unregistered.

      "Environmental  Laws"  means  all  applicable  Laws  and  agreements  with
      Governmental  Entities and all other  statutory  requirements  relating to
      public health or the protection of the environment and all  Authorizations
      issued pursuant to such Laws, agreements or statutory requirements.

      "ERISA" has the meaning specified in Section 4.1(bb)(i)(B).

      "ERISA Affiliate" has the meaning specified in Section 4.1(bb)(i)(C).

      "Exchangeable  Shares" means the exchangeable  shares to be created in the
      capital  of  ExchangeCo,  having  substantially  the  rights,  privileges,
      restrictions and conditions set out in Schedule "D" annexed hereto.

      "Exchange Act" means the Securities Exchange Act of 1934.

      "ExchangeCo"  means a corporation to be  incorporated  by CallCo under the
      laws of Alberta which will be an  indirectly,  wholly-owned  subsidiary of
      the Purchaser and which will issue the Exchangeable Shares.

      "from" has the meaning specified in Section 1.5.

      "GAAP" means, at any time, accounting principles generally accepted in the
      United States as established by the Financial  Accounting  Standards Board
      at the relevant time applied on a consistent basis.

      "Goldstrike  Shares"  means shares of common  stock,  $0.001 par value per
      share of the Purchaser.

      "Governmental  Entity" means any (i) multinational,  federal,  provincial,
      state,  municipal,  local  or other  governmental  or  public  department,
      central bank, court, commission, board, bureau, agency or instrumentality,
      domestic or  foreign,  (ii) any  subdivision  or  authority  of any of the
      foregoing,  or (iii) any quasi-governmental or private body exercising any
      regulatory,  expropriation or taxing authority under or for the account of
      any of the above.


                                      -4-
<PAGE>

      "including" has the meaning specified in Section 1.5.

      "includes" has the meaning specified in Section 1.5.

      "Indemnified Party" has the meaning specified in Section 9.5(1).

      "Indemnifying Party" has the meaning specified in Section 9.5(1).

      "Intellectual  Property" means (i) any trade marks, trade names,  business
      names, brand names, service marks,  computer software,  computer programs,
      pharmaceutical  treatments or drug  therapies,  copyrights,  including any
      author  or  moral  rights,  designs,   inventions,   patents,  franchises,
      formulae,  processes,  know-how, technology and related goodwill, (ii) any
      applications,   registrations,  issued  patents,  continuations  in  part,
      divisional  applications or analogous  rights or licence rights  therefor,
      and (iii) other intellectual, industrial or proprietary property, owned or
      used by the Corporation.

      "Interim Balance Sheet Date" means June 30, 2005.

      "Interim  Financial  Statements"  means the unaudited balance sheet of the
      Corporation  as at the  Interim  Balance  Sheet Date and the  accompanying
      unaudited  statement  of  income  of  the  Corporation  and  the  Acquired
      Properties  for the  six-month  period then ended and all notes in respect
      thereof. The Interim Financial Statements shall be audited, in the case of
      the Corporation, and unaudited, in the case of the Acquired Properties.

      "Interim  Period"  means the period  between the close of business on this
      date and the Closing.

      "Issued Shares" has the meaning specified in Section 2.2.

      "Laws" means any and all applicable  laws  including all statutes,  codes,
      ordinances,  decrees, rules,  regulations,  municipal by-laws, judicial or
      arbitral or  administrative  or ministerial or  departmental or regulatory
      judgments, orders, decisions, rulings or awards, and general principles of
      common  and civil law and  equity,  binding  on or  affecting  the  Person
      referred to in the context in which the word is used.

      "Leaseco" has the meaning specified in the introduction to this Agreement.

      "Leased  Properties"  means the lands and premises listed and described in
      Schedule  3.2(r)  attached  hereto by reference to their proper  municipal
      address and legal description.

      "Leases" means the leases of the Leased  Properties  described in Schedule
      3.2(r) attached hereto.


                                      -5-
<PAGE>

      "Legal Proceeding" has the meaning specified in Section 3.2(gg).

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

      "Loss" has the meaning specified in Section 2.5.

      "Material Authorizations" has the meaning specified in Section 3.2(l).

      "Material Contracts" has the meaning specified in Section 3.2(s).

      "Option Plan" has the meaning specified in Section 3.2(ee).

      "Ordinary Course" means, with respect to an action taken by a Person, that
      such action is  consistent  with the past  practices  of the Person and is
      taken in the ordinary  course of the normal  day-to-day  operations of the
      Person.

      "Owned  Properties"  means  any  land  and  premises  owned,   legally  or
      beneficially, by the Corporation.

      "Parties"  means the Vendors,  the Purchaser and Gran Tierra and any other
      Person who may become a party to this Agreement.

      "Permitted  Liens" means (i) Liens for taxes,  assessments or governmental
      charges or levies on property not yet due and delinquent,  (ii) easements,
      encroachments  and  other  minor  imperfections  of  title  which  do not,
      individually or in the aggregate,  materially detract from the value of or
      impair  the use or  marketability  of any real  property,  (iii)  Liens in
      favour of the Purchaser  incurred in  connection  with the Bridge Loan and
      (iv) Liens  listed and  described  in Schedule  "C" but only to the extent
      such Liens conform to their description in Schedule "C".

      "Person"  means  a  natural   person,   partnership,   limited   liability
      partnership,  corporation,  joint  stock  company,  trust,  unincorporated
      association,  joint venture or other entity or  Governmental  Entity,  and
      pronouns have a similarly extended meaning.

      "PPO"  means  the  private  placement  offering  of  units  of  securities
      conducted by the Purchaser in August and  September of 2005,  the proceeds
      of  which  were  utilized  to fund  the  Bridge  Loan  and  the  Argentine
      Acquisition.

      "Proceeding" has the meaning specified in Section 9.5(2).


                                      -6-
<PAGE>

      "Public Statement" has the meaning specified in Section 11.3.

      "Purchase Price" has the meaning specified in Section 2.2.

      "Purchased Shares" has the meaning specified in Section 2.1.

      "Purchaser" means Goldstrike Inc., and its subsidiaries.

      "Purchaser  Financial  Statements"  has the meaning  specified  in Section
      4.1(q).

      "Purchaser's  Indemnified  Persons"  has the meaning  specified in Section
      9.1.

      "Purchaser  Interim  Balance  Sheet" has the meaning  specified in Section
      4.1(q).

      "Purchaser  Interim  Balance  Sheet  Date" has the  meaning  specified  in
      Section 4.1(q).

      "Purchaser Liabilities" has the meaning specified in Section 2.5.

      "Purchaser  Material Adverse Effect" has the meaning  specified in Section
      4.1(p)(i).

      "Purchaser Reports" has the meaning specified in Section 4.1(o).

      "Required  Consents"  means those Consents and  Authorizations  listed and
      described in Schedule 6.1(c) attached hereto.

      "SEC" means the United States Securities and Exchange Commission.

      "Securities Act" means Securities Act of 1933, as amended.

      "Split-off"  has  the  meaning  specified  in  the  introduction  to  this
      Agreement.

      "Subject Properties" means the Owned Properties and the Leased Properties.

      "Subsidiary"  has the meaning  specified in the Business  Corporations Act
      (Alberta) as amended.

      "Taxes" has the meaning specified in Section 4.1(t)(i)(A).

      "Tax Returns" has the meaning specified in Section 4.1(t)(i)(B).

      "Term  Sheet"  has  the  meaning  specified  in the  introduction  to this
      Agreement.

      "the aggregate of" has the meaning specified in Section 1.5.

      "the sum of" has the meaning specified in Section 1.5.


                                      -7-
<PAGE>

      "the total of" has the meaning specified in Section 1.5.

      "to" has the meaning specified in Section 1.5.

      "Transactions"  has the  meaning  specified  in the  introduction  to this
      Agreement.

      "Trustee"  means  Olympia  Trust  Company or such  other  person as may be
      acceptable to the parties hereto.

      "until" has the meaning specified in Section 1.5.

      "Value of one Goldstrike Share" means $0.80.

      "Vendors"  means the parties set out in Schedule "A"  attached  hereto and
      "Vendor" means any one of such parties.

      "Vendor's Indemnified Persons" has the meaning specified in Section 9.2.

      "Voting  Exchange and Support  Agreement" means an agreement to be made by
      the Purchaser, the Corporation and the Trustee,  substantially in the form
      and  content of  Schedule  "F" annexed  hereto,  with such  changes as the
      parties may agree.

      "Year-End  Financial  Statements"  has the  meaning  specified  in Section
      3.2(z).

Section 1.2 Gender and Number

      Any  reference  in this  Agreement  or any  Ancillary  Agreement to gender
includes all genders and words  importing the singular number only shall include
the plural and vice versa.

Section 1.3 Headings, etc.

      The provision of a Table of Contents,  the division of this Agreement into
Articles and Sections and the insertion of headings are for convenient reference
only and are not to affect its interpretation.

Section 1.4 Currency

      All  references in this  Agreement or any Ancillary  Agreement to dollars,
unless otherwise specifically indicated, are expressed in U.S. currency.

Section 1.5 Certain Phrases, etc.

      In  this  Agreement  and  any  Ancillary   Agreement  (i)  (y)  the  words
"including" and "includes" mean  "including (or includes)  without  limitation",
and (z) the phrase "the aggregate of", "the total of", "the sum of", or a phrase
of similar meaning means "the aggregate (or total or sum), without  duplication,
of", and (ii) in the  computation  of periods of time from a specified date to a
later specified date, unless otherwise  expressly stated,  the word "from" means
"from  and  including"  and  the  words  "to"  and  "until"  each  mean  "to but
excluding".


                                      -8-
<PAGE>

Section 1.6 Knowledge

      Where any  representation  or warranty  contained in this Agreement or any
Ancillary  Agreement is expressly qualified by reference to the knowledge of the
Corporation,  it shall be deemed to refer to the  knowledge  of the  responsible
officers  of the  Corporation  having made due  enquiry as  necessary  as to the
matters that are the subject of the representations and warranties.

Section 1.7 Accounting Terms

      All accounting terms not  specifically  defined in this Agreement shall be
interpreted in accordance with GAAP.

Section 1.8 Incorporation of Schedules

      The schedules  attached to this Agreement  shall, for all purposes of this
Agreement, form an integral part of it.

                                   ARTICLE 2
                       PURCHASED SHARES AND PURCHASE PRICE

Section 2.1 Purchase and Sale

      Subject to the terms and conditions of this Agreement,  each Vendor agrees
to sell,  assign and  transfer  to the  Purchaser  and the  Purchaser  agrees to
purchase  on the  Closing  Date,  all (but not less than all) of that  number of
common  shares in the capital of the  Corporation  as is set out  opposite  that
Vendor's  name in Schedule "A" attached  hereto  (collectively,  the  "Purchased
Shares").

Section 2.2 Purchase Price

      The purchase price (the "Purchase  Price") payable by the Purchaser to the
Vendors for each Purchased  Share shall be payable at Closing at the election of
each Vendor as follows:

            (a)   the   issuance   of   1.5873016    Goldstrike    Shares   (the
                  "Consideration Shares"); or

            (b)   the issuance of 1.5873016  Exchangeable  Shares (together with
                  the Consideration Shares the "Issued Shares").


                                      -9-
<PAGE>

      The  Purchase  Price  shall  be paid to the  Vendors  in the  amounts  set
opposite their respective names on Schedule "A" attached hereto.

Section 2.3 Partial Purchase

      The  Purchaser  shall not be  obligated to complete the purchase of any of
the  Purchased  Shares unless the purchase of not less than 90% of the Purchased
Shares is completed  simultaneously  and the Purchaser or its Subsidiary has the
right to acquire all remaining Purchased Shares under the Business  Corporations
Act (Alberta).

Section 2.4 Payment of the Purchase Price

      (a)   At the Closing,  the Purchaser  shall pay the Purchase  Price before
            any  adjustments to the Vendors  according to the amounts set out on
            Schedule "A" attached hereto provided that Exchangeable Shares shall
            be issued to those Vendors who have elected to receive  Exchangeable
            Shares and Consideration Shares shall be issued to those Vendors who
            have elected to receive  Goldstrike Shares and where no election has
            been made,  shareholders  resident in Canada shall be deemed to have
            elected to receive Exchangeable Shares and shareholders  resident in
            a jurisdiction  other than Canada shall be deemed to have elected to
            receive Goldstrike Shares;

      (b)   The Vendors  agree that the Issued  Shares  shall be  legended  with
            restrictions on resale as set forth in accordance with the following
            legend:

            "THE  SECURITIES   EVIDENCED  BY  THIS  CERTIFICATE  HAVE  NOT  BEEN
            REGISTERED  UNDER  THE  SECURITIES  ACT OF  1933,  AS  AMENDED  (THE
            "SECURITIES ACT") OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES
            LAWS (THE "STATE  ACTS"),  HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
            NOT BE SOLD, PLEDGED,  HYPOTHECATED OR OTHERWISE  TRANSFERRED IN THE
            UNITED STATES EXCEPT PURSUANT TO A REGISTRATION  STATEMENT UNDER THE
            SECURITIES ACT AND QUALIFICATION  UNDER THE STATE ACTS OR EXEMPTIONS
            FROM SUCH REGISTRATION OR QUALIFICATION  REQUIREMENTS (INCLUDING, IN
            THE CASE OF THE SECURITIES  ACT, THE EXEMPTIONS  AFFORDED BY SECTION
            4(1)  OF  THE  SECURITIES  ACT  AND  RULE  144  THEREUNDER).   AS  A
            PRECONDITION  TO ANY SUCH TRANSFER,  THE ISSUER OF THESE  SECURITIES
            SHALL BE  FURNISHED  WITH AN OPINION  OF  COUNSEL  OPINING AS TO THE
            AVAILABILITY OF EXEMPTIONS FROM SUCH  REGISTRATION AND QUALIFICATION
            AND/OR SUCH OTHER EVIDENCE AS MAY BE  SATISFACTORY  THERETO THAT ANY
            SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES LAWS."


                                      -10-
<PAGE>

      and each of the Vendors  hereby  undertakes  to trade in the Issued Shares
      only in  compliance  with  the  foregoing  legend  and the  various  dates
      specified  therein  except in the  circumstance  of a  Goldstrike  Control
      Transaction as defined in Schedule "D" of this Agreement.

Section 2.5 Adjustment of Purchase Price

(1)   In the event that,  during the period commencing from the Closing Date and
      ending on the second anniversary of the Closing Date:

      (a)   the Purchaser  incurs any Loss with respect to, in connection  with,
            or arising from any Purchaser  Liabilities,  then promptly following
            the  filing  by the  Purchaser  with  the  Securities  and  Exchange
            Commission  (the "SEC") of a quarterly  report  relating to the most
            recent completed quarter for which such determination has been made,
            the Purchaser shall issue to the Vendors and/or their designees such
            number of Goldstrike Shares and Exchangeable  Shares as would result
            from dividing (x) the whole dollar amount  representing such Loss by
            (y) the Value of one  Goldstike  Share.  The limit on the  aggregate
            number  of  Issued  Shares  issuable  under  this  section  shall be
            2,000,000 shares;

      (b)   the Purchaser  incurs any Loss with respect to, in connection  with,
            or arising from any Corporation Liabilities, then promptly following
            the  filing  by the  Purchaser  with the SEC of a  quarterly  report
            relating  to the most  recently  completed  quarter  for which  such
            determination  has  been  made,  the  Purchaser  shall  issue to the
            shareholders  of the  Purchaser  other  than  shareholders  who  are
            Vendors or shareholders who acquired Goldstrike Shares from Vendors,
            such number of  Goldstrike  Shares as would result from dividing (q)
            the whole dollar amount  representing  such Loss by (r) the Value of
            one Goldstike Share. The limit on the aggregate number of Goldstrike
            Shares issuable under this section shall be 1,500,000  shares. In no
            event will shares be issued to holders of Exchangeable Shares.

      As used in this section:

      (a)   "Loss"  shall  mean  any  and  all  costs  and  expenses,  including
            reasonable  attorneys'  fees, court costs,  reasonable  accountants'
            fees, and damages and losses, net of any insurance proceeds actually
            received by the party suffering the Loss with respect thereto;

      (b)   "Claims" shall include,  but are not limited to, any claim,  notice,
            suit, action,  investigation,  other proceedings  (whether actual or
            threatened);


                                      -11-
<PAGE>

      (c)   "Purchaser   Liabilities"   shall  mean  all  Claims   against   and
            liabilities, obligations or indebtedness of any nature whatsoever of
            Leasco,  whenever accruing,  and the Purchaser accruing on or before
            the Closing Date  (whether  primary,  secondary,  direct,  indirect,
            liquidated,  unliquidated  or  contingent,  matured  or  unmatured),
            including (i) any breach by the Purchaser or its subsidiaries of any
            of their  respective  representations  or  warranties  set  forth in
            Article 4 herein,  (ii) any  litigation  threatened,  pending or for
            which a basis exists that has resulted or may result in the entry of
            judgment  in damages  or  otherwise  against  the  Purchaser  or its
            subsidiary;  (iii)  any  and  all  outstanding  debts  owed  by  the
            Purchaser or its  subsidiary;  (iv) any and all internal or employee
            related  disputes,   arbitrations  or   administrative   proceedings
            threatened, pending or otherwise outstanding, (v) any and all liens,
            foreclosures, settlements, or other threatened, pending or otherwise
            outstanding financial, legal or similar obligations of the Purchaser
            or its  subsidiaries,  as such  Liabilities  are  determined  by the
            Purchaser's  independent auditors,  on a quarterly basis,  including
            all Liabilities for any taxes incurred by the Purchaser attributable
            to the  Split-Off,  and  (vi)  all fees  and  expenses  incurred  in
            connection  with  effecting  the  adjustments  contemplated  by this
            section.

      (d)   "Corporation   Liabilities"   shall  mean  all  Claims  against  and
            liabilities,  obligations  or  indebtedness  of  any  nature  of the
            Corporation accruing on or before the Closing Date (whether primary,
            secondary, direct, indirect, liquidated, unliquidated or contingent,
            matured or unmatured), arising from any breach by the Corporation or
            its  subsidiaries  of any of  their  respective  representations  or
            warranties set forth in Article 3 herein.

      The Goldstrike  Shares and Exchangeable  Shares issued pursuant to Section
      2.5(1)(a)  shall be issued to each  Vendor  in the same  proportion  as to
      Goldstrike  Shares  and  Exchangeable  Shares  originally  issued  to such
      Vendor.

Section 2.6 Withholding Where Vendor is Non-Resident

      Where a Vendor is a non-resident person for purposes of Section 116 of the
Income Tax Act (Canada),  if (i) a certificate pursuant to Section 116(2) of the
Income Tax Act  (Canada)  with a  certificate  limit not less than the  Purchase
Price or (ii) a  certificate  pursuant  to Section  116(4) of the Income Tax Act
(Canada)  is not  delivered  to the  Purchaser  at or before  the  Closing,  the
Purchaser  shall be  entitled  to  withhold  from such  Vendor 25% of the Issued
Shares set  opposite  the  Vendor's  name on  Schedule  "A" until such time as a
certificate  is  delivered  or  such  Vendor  delivers  sufficient  cash  to the
Purchaser to enable the Purchaser to pay the applicable withholding amount.


                                      -12-
<PAGE>

                                   ARTICLE 3
                  REPRESENTATIONS AND WARRANTIES OF THE VENDORS

Section 3.1 Representations and Warranties of the Vendors

      The Vendors  hereby  severally  and not jointly  represent  and warrant as
follows to the  Purchaser  and  acknowledge  and confirm  that the  Purchaser is
relying upon the  representations and warranties in connection with the purchase
by the Purchaser of the Purchased Shares:

      (a)   Incorporation and Qualification. Where a vendor is a body corporate,
            such Vendor is a  corporation  incorporated,  organized and existing
            under  the  laws  of its  jurisdiction  of  formation  and  has  the
            corporate power to perform its obligations  under this Agreement and
            each of the Ancillary Agreements to which it is a party;

      (b)   Execution  and  Binding  Obligation.  This  Agreement  has been duly
            executed and delivered by such Vendor and constitutes a legal, valid
            and binding  obligations  of such Vendor,  enforceable  against such
            Person in accordance  with its terms subject only to any  limitation
            under  applicable  laws  relating  to  (i)  bankruptcy,  winding-up,
            insolvency,  arrangement  and  other  laws  of  general  application
            affecting  the  enforcement  of  creditors'  rights,  and  (ii)  the
            discretion  that a court may  exercise in the  granting of equitable
            remedies such as specific performance and injunction;

      (c)   No Other  Agreements to Purchase.  Except for the Purchaser's  right
            under this  Agreement,  no Person has any written or oral agreement,
            option  or  warrant  or any  right  or  privilege  (whether  by Law,
            pre-emptive  or  contractual)  capable  of  becoming  such  for  the
            purchase or  acquisition  from such  Vendor of any of the  Purchased
            Shares;

      (d)   Title to Purchased Shares.  Such Vendor owns the Purchased Shares as
            disclosed  in Schedule  "A" attached  hereto as the  registered  and
            beneficial  owner (except as set out on Schedule "A" attached hereto
            where such Vendor has beneficial title only) with a good title, free
            and clear of all Liens other than those restrictions on transfer, if
            any,  contained in the articles of the Corporation.  Upon completion
            of the transaction  contemplated  by this  Agreement,  the Purchaser
            will have good and valid  title to the  Purchased  Shares,  free and
            clear of all Liens other than (i) those restrictions on transfer, if
            any,  contained in the articles of the  Corporation,  and (ii) Liens
            granted by the Purchaser;

      (e)   Residence   of  the  Vendor.   The  Vendor  is  a  resident  of  the
            jurisdiction  set out in Schedule A within the meaning of the Income
            Tax Act (Canada).


                                      -13-
<PAGE>

Section 3.2 Representations and Warranties of the Corporation

      The Corporation hereby represents and warrants as follows to the Purchaser
and   acknowledges   and  confirms  that  the  Purchaser  is  relying  upon  the
representations  and warranties in connection with the purchase by the Purchaser
of the Purchased Shares.

Corporate Matters

      (a)   Incorporation  and  Qualification.  The Corporation is a corporation
            incorporated,  organized and existing  under the laws of Alberta and
            has the  corporate  power to  perform  its  obligations  under  this
            Agreement  and  each of the  Ancillary  Agreements  to which it is a
            party.  The  Corporation  has the corporate power to own and operate
            its property, carry on its business and perform its obligation under
            each of the Ancillary Agreements and is duly qualified,  licensed or
            registered  to carry on  business  in the  jurisdictions  listed  in
            Schedule  3.2(a)  attached  hereto.  The  jurisdictions   listed  in
            Schedule 3.2(a) attached hereto include all  jurisdictions  in which
            the nature of the Assets or the  Business  makes such  qualification
            necessary  or where  the  Corporation  owns or leases  any  material
            Assets or conducts any material business;

      (b)   Validity of Agreement.  The execution,  delivery and  performance by
            the  Corporation  of  this  Agreement  and  each  of  the  Ancillary
            Agreements:

            (i)   have been duly authorized by all necessary corporate action on
                  the part of the Corporation;

            (ii)  do not (or would not with the giving of  notice,  the lapse of
                  time or the happening of any other event or condition)  result
                  in a breach or a violation of, or conflict  with, or allow any
                  other Person to exercise any rights under, any of the terms or
                  provisions  of its  constating  documents  or  by-laws  or any
                  contracts or instruments to which it is a party or pursuant to
                  which  any  of  its  assets  or  property  may  be  materially
                  adversely affected;

            (iii) will not  result in a breach of, or cause the  termination  or
                  revocation of, any  Authorization  held by the  Corporation or
                  necessary  to the  ownership  of the  Purchased  Shares or the
                  operation  of the  Business;  and (iv) will not  result in the
                  violation of any Law;

      (c)   Required Authorizations.  There is no requirement to make any filing
            with,  give any  notice  to, or obtain  any  Authorization  of,  any
            Governmental  Entity as a condition to the lawful  completion of the
            transactions contemplated by this Agreement, except for the filings,
            notifications  and  Authorizations   described  in  Schedule  3.2(c)
            attached  hereto  or  that  relate  solely  to the  identity  of the
            Purchaser or the nature of the business carried on by the Purchaser;


                                      -14-
<PAGE>

      (d)   Execution  and Binding  Obligation.  This  Agreement and each of the
            Ancillary  Agreements to which the  Corporation is a party have been
            duly executed and delivered by the Corporation and constitute legal,
            valid and binding obligations of the Corporation enforceable against
            it in  accordance  with their  respective  terms subject only to any
            limitation   under  applicable  laws  relating  to  (i)  bankruptcy,
            winding-up,  insolvency,  arrangement  and  other  laws  of  general
            application affecting the enforcement of creditors' rights, and (ii)
            the  discretion  that  a  court  may  exercise  in the  granting  of
            equitable remedies such as specific performance and injunction;

      (e)   Authorized  and  Issued  Capital.  The  authorized  capital  of  the
            Corporation consists of an unlimited number of preference shares and
            an unlimited number of common shares,  of which (i) at this date, no
            preference shares and 12,600,000 common shares without giving effect
            to the common  shares held as  collateral as security for the Bridge
            Loan have been duly  issued  and are  outstanding  as fully paid and
            non-assessable common shares and no options to acquire common shares
            of the Corporation  have been issued;  and (ii) at the Closing Date,
            no preference shares and 12,600,000 common shares (and no more), and
            without  giving  effect to the common  shares held as  collateral as
            security  for the Bridge Loan) shall have been duly issued and shall
            be  outstanding  as  fully  paid  and  non-assessable  and no  other
            securities  shall be outstanding.  All of the Purchased  Shares have
            been  issued  in  compliance  with all  applicable  Laws  including,
            without limitation, applicable securities laws;

      (f)   No Other  Agreements to Purchase.  To the  Corporation's  knowledge,
            except for the Purchaser's right under this Agreement, no Person has
            any  written  or oral  agreement,  option or warrant or any right or
            privilege  (whether by Law,  pre-emptive or contractual)  capable of
            becoming  such for (i) the purchase or  acquisition  from any of the
            Vendors  of any of the  Purchased  Shares,  or  (ii)  the  purchase,
            subscription, allotment or issuance of any of the unissued shares or
            other securities of the Corporation.

      (g)   Dividends and  Distributions.  The Corporation has not,  directly or
            indirectly,  declared or paid any  dividends or declared or made any
            other  distribution  on any of its  shares of any class and has not,
            directly or indirectly,  redeemed,  purchased or otherwise  acquired
            any of its shares of any class or agreed to do so;


                                      -15-
<PAGE>

      (h)   Corporate  Records.  The Corporate Records are complete and accurate
            in all material respects and all necessary corporate proceedings and
            actions  reflected in the Corporate  Records have been  conducted or
            taken in compliance  with all applicable  Laws and with the articles
            and by-laws of the  Corporation.  Without limiting the generality of
            the foregoing  (i) the minute books contain all material  minutes of
            all  meetings  of  the   directors  and   shareholders   held  since
            incorporation  and all such meetings were properly  called and held,
            (ii) the minute books contain all material resolutions passed by the
            directors and  shareholders  (and  committees,  if any) and all such
            resolutions were properly passed, (iii) the share certificate books,
            register of shareholders  and register of transfers are complete and
            accurate,  all transfers  have been properly  completed and approved
            and any tax  payable  by the  Corporation  in  connection  with  the
            transfer of any  securities has been paid, and (iv) the registers of
            directors  and officers are complete and accurate and all former and
            present  directors and officers were properly  elected or appointed,
            as the case may be. The Corporation is not currently  subject to, or
            affected by, any unanimous shareholders agreement;

General Matters Relating to the Business

      (i)   Conduct of Business  in  Ordinary  Course.  Except as  disclosed  in
            Schedule  3.2(i)  attached  hereto,  since the Interim Balance Sheet
            Date,  the  Business  has been  carried on in the  Ordinary  Course.
            Without limiting the generality of the foregoing,  since the Interim
            Balance Sheet Date the Corporation has not:

            (i)   sold, transferred or otherwise disposed of any Assets;

            (ii)  made any capital  expenditure  or  commitment  therefor  which
                  individually or in the aggregate exceeded $100,000,  except in
                  connection with the Argentine Acquisition;

            (iii) discharged  any secured or unsecured  obligation  or liability
                  (whether  accrued,  absolute,  contingent or otherwise)  which
                  individually or in the aggregate exceeded $100,000;

            (iv)  increased its indebtedness for borrowed money or made any loan
                  or advance, or assumed,  guaranteed or otherwise became liable
                  with respect to the  liabilities  or  obligation of any Person
                  other than indebtedness incurred pursuant to the Bridge Loan;

            (v)   made any  bonus or  profit  sharing  distribution  or  similar
                  payment of any kind  except as may be required by the terms of
                  a Material Contract or Collective Agreement;


                                      -16-
<PAGE>

            (vi)  removed any auditor or director or  terminated  any officer or
                  other senior employee;

            (vii) written off as  uncollectible  any Accounts  Receivable  which
                  individually   or  in  the   aggregate   is  material  to  the
                  Corporation or is in excess of $100,000;

            (viii) granted any general increase in the rate of wages,  salaries,
                  bonuses  or  other   remuneration  of  any  employees  of  the
                  Corporation  except  as may be  required  by  the  terms  of a
                  Material Contract or Collective Agreement;

            (ix)  suffered  any  extraordinary  loss,  whether or not covered by
                  insurance;

            (x)   suffered   any   material   shortage  or  any   cessation   or
                  interruption  of  inventory  shipments,  supplies  or ordinary
                  services;

            (xi)  cancelled or waived any material claims or rights;

            (xii) compromised  or settled any  litigation,  proceeding  or other
                  governmental  action  relating to the Assets,  the Business or
                  the Corporation;

            (xiii) cancelled or reduced any of its insurance coverage;

            (xiv) authorized,  agreed or otherwise committed,  whether or not in
                  writing, to do any of the foregoing;

            In addition,  since the Interim  Balance Sheet Date the  Corporation
            has not (i) except in connection with the transactions  contemplated
            by this  Agreement,  made, and has not agreed to make, any change in
            any method of  accounting or auditing  practice,  or (ii) amended or
            approved  any  amendment  to its  constating  documents,  by-laws or
            capital structure.

      (j)   No Material  Adverse  Change.  Since the Interim Balance Sheet Date,
            there  has not been any  material  adverse  change  in the  affairs,
            prospects,  operations or condition of the Corporation, any material
            assets or the Business and to the best  knowledge of the  Management
            Shareholders no event has occurred or circumstance  exists which may
            result in such a material adverse change;

      (k)   Compliance  with Laws. The  Corporation is conducting and has always
            conducted the Business and any past business in compliance  with all
            applicable  Laws other  than acts of  non-compliance  which,  in the
            aggregate, are not material;


                                      -17-
<PAGE>

      (l)   Authorizations.  The Corporation owns, holds,  possesses or lawfully
            uses in the operation of the Business, all Authorizations which are,
            in any manner, necessary for it to conduct the Business as presently
            or  previously  conducted or for the ownership and use of the Assets
            in compliance with all applicable Laws,  except where the failure to
            so hold, possess or lawfully use any Authorization  would not have a
            material adverse effect on its business. All Authorizations material
            to the  Corporation  or the Business  are listed in Schedule  3.2(l)
            attached  hereto  (the  "Material  Authorizations").  Each  Material
            Authorization  is  valid,  subsisting  and  in  good  standing,  the
            Corporation   is  not  in   default   or  breach  of  any   Material
            Authorization   and,  to  the  knowledge  of  the  Corporation,   no
            proceeding  is pending or threatened to revoke or limit any Material
            Authorization.  All Material  Authorizations  are renewable by their
            terms or in the ordinary course of business without the need for the
            Corporation to comply with any special rules or procedures, agree to
            any  materially  different  terms or  conditions  or pay any amounts
            other than routine filing fees.

Matters Relating to the Assets

      (m)   Sufficiency of Assets.  The Business is the only business  operation
            carried on by the  Corporation and the Assets include all rights and
            property  necessary to the conduct of the Business after the Closing
            substantially  in the same manner as it was  conducted  prior to the
            Closing.

      (n)   Title to the Assets.  The Corporation  owns (with good title) all of
            the  properties  and Assets  (whether  real,  personal  or mixed and
            whether  tangible  or  intangible)  reflected  as being owned by the
            Corporation  in its financial  Books and Records,  and has legal and
            beneficial  ownership  of such  owned  Assets  free and clear of all
            Liens except for Permitted Liens;

      (o)   No  Options,  etc.  No Person  has any  written  or oral  agreement,
            option,  understanding  or  commitment,  or any  right or  privilege
            capable of becoming such for the purchase or other  acquisition from
            the Corporation of any of the Assets and other than Permitted Liens;

      (p)   Condition of Tangible  Assets.  The buildings,  plants,  structures,
            equipment and other tangible  personal  property of the  Corporation
            (including  the  Buildings  and  Fixtures)  are  in  good  operating
            condition  and  repair  having  regard  to their use and age and are
            adequate and suitable for the uses to which they are presently being
            put. None of such buildings, plants, structures,  equipment or other
            property are in need of  maintenance  or repairs except for ordinary
            routine  maintenance  and repairs that are not material in nature or
            cost;


                                      -18-
<PAGE>

      (q)   Owned  Property.  The  Corporation  does not currently  have and has
            never had any Owned Properties.

      (r)   Leases. The Corporation is not a party to, or under any agreement to
            become a party to, any lease with  respect  to real  property  other
            than  the  Leases,  copies  of  which  have  been  provided  to  the
            Purchaser. Each Lease is in good standing,  creates a good and valid
            leasehold estate in the Leased Properties  thereby demised and is in
            full force and effect  without  amendment,  except as  disclosed  in
            Schedule 3.2(r) attached hereto.  With respect to each Lease (i) the
            Lease  (or a notice  in  respect  of the  Lease)  has been  properly
            registered in the  appropriate  land registry office if so required,
            (ii) all rents and additional rents have been paid, (iii) no waiver,
            indulgence  or  postponement  of the lessee's  obligations  has been
            granted  by the  lessor,  (iv)  there  exists no event of default or
            event,  occurrence,  condition or act (including the purchase of the
            Purchased  Shares)  which,  with the giving of notice,  the lapse of
            time or the happening of any other event or condition,  would become
            a  default  under  the  Lease,  and  (v)  to  the  knowledge  of the
            Corporation,  all of the  covenants  to be  performed  by any  party
            (other  than the  Corporation)  under  the  Lease  have  been  fully
            performed.  Each of the Leased  Properties  is adequate and suitable
            for the  purposes  for  which  it is  presently  being  used and the
            Corporation  has adequate  rights of ingress and egress into each of
            the Leased  Properties  for the  operation  of the  Business  in the
            Ordinary Course.  Schedule 3.2(r) attached hereto contains a list of
            all of  the  Leases  setting  out,  in  respect  of  each  Lease,  a
            description of the leased premises (by municipal  address and proper
            legal description), the term of the Lease, the rental payments under
            the Lease  (specifying  any  breakdown  of base rent and  additional
            rents),  any  rights  of  renewal  and  the  term  thereof,  and any
            restrictions on assignment or change of control of the Corporation;

      (s)   Material  Contracts.  Except for the Contracts described in Schedule
            3.2(s) attached hereto (collectively,  the "Material Contracts") and
            the Leases, the Corporation is not a party to or bound by:

            (i)   any distributor,  sales, advertising, agency or manufacturer's
                  representative Contract;

            (ii)  any  continuing   Contract  for  the  purchase  of  materials,
                  supplies,  equipment or services  involving in the case of any
                  such  Contract  more  than  $100,000  over  the  life  of  the
                  Contract;


                                      -19-
<PAGE>

            (iii) any  Contract  that expires or may be renewed at the option of
                  any Person  other than the  Corporation  so as to expire  more
                  than one year after the date of this Agreement;

            (iv)  any trust indenture, mortgage, promissory note, loan agreement
                  or other  Contract for the  borrowing  of money,  any currency
                  exchange,  commodities  or other  hedging  arrangement  or any
                  leasing  transaction of the type required to be capitalized in
                  accordance with GAAP;

            (v)   any Contract for capital expenditures in excess of $100,000 in
                  the aggregate;

            (vi)  any confidentiality, secrecy or non-disclosure Contract or any
                  Contract  limiting the freedom of the Corporation to engage in
                  any line of business,  compete with any other Person,  operate
                  its assets at maximum production capacity or otherwise conduct
                  its business  other than such  agreements  entered into in the
                  Ordinary Course;

            (vii) any Contract  pursuant to which the Corporation is a lessor of
                  any machinery,  equipment,  motor vehicles,  office furniture,
                  fixtures or other personal property;

            (viii) any Contract with any Person with whom the Corporation or the
                  Vendors do not deal at arm's length  within the meaning of the
                  Income Tax Act (Canada); or

            (ix)  any   agreement  of   guarantee,   support,   indemnification,
                  assumption or endorsement  of, or any similar  commitment with
                  respect to, the  obligations,  liabilities  (whether  accrued,
                  absolute,  contingent  or otherwise)  or  indebtedness  of any
                  other Person;

      (t)   No Breach of Material  Contracts.  The Corporation has performed all
            of the obligations required to be performed by it and is entitled to
            all  benefits  under,  and is not  alleged  to be in  default of any
            Material  Contract.  Each of the Material Contracts is in full force
            and effect and there exists no default or event of default or event,
            occurrence,   condition  or  act  (including  the  purchase  of  the
            Purchased  Shares)  which,  with the giving of notice,  the lapse of
            time or the happening of any other event or condition,  would become
            a default or event of default  under any  Material  Contract.  True,
            correct and  complete  copies of all  Material  Contracts  have been
            delivered to the Purchaser or made available to its counsel;

      (u)   No Breach of Other Contracts.  Except for certain acts of default or
            breach which,  in the aggregate,  are not material,  the Corporation
            has not violated or breached,  in any material  respect,  any of the
            terms  or  conditions  of any  Contract  (other  than  the  Material
            Contracts),  and to the Corporation's knowledge,  except for certain
            failures to perform which, in the aggregate,  are not material,  all
            the  covenants to be  performed by any other party to such  Contract
            have been fully performed, in all material respects;


                                      -20-
<PAGE>

      (v)   Accounts  Receivable.  All Accounts  Receivable are bona fide,  and,
            subject  to  an  allowance  for  doubtful  accounts  that  has  been
            reflected on the books of the  Corporation  in accordance  with GAAP
            and consistent  with past practice,  collectible  without set-off or
            counterclaim;

      (w)   Intellectual  Property.  Attached as Schedule 3.2(w) attached hereto
            is a complete and accurate list of all Intellectual  Property (other
            than  commercially   available   software)  owned  or  used  by  the
            Corporation in carrying on the Business.

      (x)   Subsidiaries.  Other than Gran  Tierra  Energy  Argentina  S.A.  and
            Petroleros  Canadienses  de Ecuador  S.A.,  the  Corporation  has no
            subsidiaries  and  holds no  shares  or other  ownership,  equity or
            proprietary interests in any other Person;

Financial Matters

      (y)   Books and Records.  All accounting  and financial  Books and Records
            have been fully,  properly and accurately  kept and completed in all
            material  respects.  The  Books  and  Records  and  other  data  and
            information  are  not  recorded,  stored,  maintained,  operated  or
            otherwise  wholly  or  partly  dependent  upon or held by any  means
            (including  any  electronic,  mechanical  or  photographic  process,
            whether  computerized  or  not)  which  are  not  available  to  the
            Corporation in the Ordinary Course;

      (z)   Financial  Statements.   The  audited  statements  of  the  Acquired
            Properties for the fiscal years ended December 31, 2003 and December
            31,  2004  provided  to  the  Purchaser  (the  "Year-End   Financial
            Statements")  and the Interim  Financial  Statements of the Acquired
            Properties and the Corporation have been prepared in accordance with
            GAAP  applied on a basis  consistent  with those of previous  fiscal
            years and each presents fairly:

            (i)   the   assets,   liabilities,   (whether   accrued,   absolute,
                  contingent  or  otherwise)  and  financial   position  of  the
                  Acquired  Properties and the  Corporation as of the respective
                  dates of the relevant statements; and


                                      -21-
<PAGE>

            (ii)  the  income  derived  from  the  Acquired  Properties  and the
                  Corporation   during  the  periods  covered  by  the  Year-End
                  Financial Statements and the Interim Financial Statements;

            True,   correct  and  complete  copies  of  the  Year-End  Financial
            Statements  and the Interim  Financial  Statements  for the Acquired
            Properties and the Corporation are attached as Schedule "B".

      (aa)  No  Liabilities.  Except  as  disclosed  in  this  Agreement  and as
            incurred  in  connection  with the  Bridge  Loan  and the  Argentine
            Acquisition   (including   Schedule   3.2(aa)  attached  hereto)  or
            reflected or reserved  against in the balance  sheet forming part of
            the Interim Financial Statements, the Corporation has no liabilities
            or obligations of any nature (whether absolute,  accrued, contingent
            or  otherwise)  except  for  current  liabilities  incurred  in  the
            Ordinary Course since the Interim Balance Sheet Date;

      (bb)  Bank  Accounts and Powers of  Attorney.  Schedule  3.2(bb)  attached
            hereto is a correct and  complete  list showing (i) the name of each
            bank in which the Corporation has an account or safe deposit box and
            the names of all  Persons  authorized  to draw on the  account or to
            have  access to the safety  deposit  box,  and (ii) the names of all
            Persons holding powers of attorney from the Corporation.

Particular Matters Relating to the Business

      (cc)  Environmental  Matters.  Except  as set  forth in  Schedule  3.2(cc)
            attached hereto:

            (i)   none of the real properties  (including,  without  limitation,
                  the Subject Properties)  currently or, to the knowledge of the
                  Corporation, formerly owned, leased or used by the Corporation
                  or over which the Corporation has or had charge, management or
                  control  (i)  has  ever  been  used by any  Person  as a waste
                  disposal site or as a licensed landfill,  or (ii) has ever had
                  asbestos,  asbestos-containing  materials,  PCBs,  radioactive
                  substances or  aboveground  or  underground  storage  systems,
                  active or abandoned, located on, at or under them; and

            (ii)  the  Corporation  has not been  required  by any  Governmental
                  Entity  to  (i)  alter  any  of the  Subject  Properties  in a
                  material way in order to be in compliance  with  Environmental
                  Laws,   or   (ii)   perform   any    environmental    closure,
                  decommissioning,  rehabilitation, restoration or post-remedial
                  investigations,  on,  about,  or in  connection  with any real
                  property;


                                      -22-
<PAGE>

      (dd)  Employees. Except as set forth in Schedule 3.2(dd) attached hereto:

            (i)   the Corporation is in compliance in all material respects with
                  all Laws respecting employment and employment practices, terms
                  and conditions of  employment,  pay equity and wages and hours
                  of work;

            (ii)  the  Corporation  has not  and is not  engaged  in any  unfair
                  labour  practice  and no  unfair  labour  practice  complaint,
                  grievance or arbitration proceeding is pending or, to the best
                  of the knowledge of the  Corporation,  threatened  against the
                  Corporation;

            (iii) no  collective   bargaining   agreement  is  currently   being
                  negotiated by the Corporation with respect to any employees of
                  the Corporation and no collective  agreements are in force. No
                  union representation  question exists respecting the employees
                  of the Corporation.  There is no labour strike,  dispute, work
                  slowdown or work stoppage pending or involving or, to the best
                  of the knowledge of the  Management  Shareholders,  threatened
                  against the Corporation; and

            (iv)  all amounts due or accrued due for all salary, wages, bonuses,
                  commissions,  vacation  with pay,  pension  benefits  or other
                  employee benefits are reflected in the Books and Records;

            Schedule  3.2(dd)  attached  hereto  contains a correct and complete
            list of each employee, director, independent contractor,  consultant
            and agent of the  Corporation,  whether  actively  at work or not in
            each case whose  annual  income or  commission  exceeds  $75,000.00,
            their salaries,  wage rates,  commissions and consulting fees, bonus
            arrangements,  benefits,  positions,  ages,  status as  full-time or
            part-time  employees  and  length of  service.  No  employee  of the
            Corporation  has any  agreement  as to length of notice or severance
            payment required to terminate his or her employment, other than such
            as  results by Law from the  employment  of an  employee  without an
            agreement as to notice or severance.

      (ee)  Employee Plans.

            The  Corporation  does not currently  have an Employee Plan and will
            not, as of the Closing Date,  have  implemented an Employee Plan (it
            being   understood   that  in  connection   with  the   transactions
            contemplated  hereby the Purchaser shall establish an employee stock
            option plan (the "Option  Plan") for the benefit of the employees of
            the Corporation);


                                      -23-
<PAGE>

      (ff)  Insurance.  Schedule  3.2(ff)  attached  hereto  contains  insurance
            policies  which are  maintained by the  Corporation  setting out, in
            respect of each policy,  a  description  of the type of policy,  the
            name of insurer,  the coverage  allowance,  the expiration date, the
            annual  premium and any pending  claims.  The  Corporation is not in
            default  with  respect  to any of the  provisions  contained  in the
            insurance policies,  the payment of any premiums under any insurance
            policy and has not failed to give any notice or to present any claim
            under any insurance  policy in a due and timely  fashion.  There has
            not been any  material  adverse  change in the  relationship  of the
            Corporation with its insurers,  the availability of coverage,  or in
            the premiums payable pursuant to the policies;

      (gg)  Litigation. There are no actions, suits or proceedings, at law or in
            equity,  by  any  Person   (including,   without   limitation,   the
            Corporation),   nor  any   arbitration,   administrative   or  other
            proceeding  (collectively  "Legal  Proceedings") by or before (or to
            the  knowledge  of  the  Corporation  any   investigation   by)  any
            Governmental   Entity   pending,   or,  to  the   knowledge  of  the
            Corporation,   threatened   against  or  adversely   affecting   the
            Corporation,  the  Business or any of the material  Assets,  and the
            Corporation  has no  knowledge  of a valid  basis for any such Legal
            Proceedings by or against the  Corporation.  The  Corporation is not
            subject to any judgment,  order or decree  entered in any lawsuit or
            proceeding nor has the Corporation  settled any claim prior to being
            prosecuted in respect of it.

      (hh)  Taxes.  The Corporation has filed or caused to be filed,  within the
            times and in the manner prescribed by Law, all federal,  provincial,
            local and foreign tax returns and tax reports  which are required to
            be filed by or with  respect  to the  Corporation.  The  information
            contained in such  returns and reports is correct and complete  and,
            to the  knowledge  of the  Corporation,  such  returns  and  reports
            reflect  accurately all liability for taxes of the  Corporation  for
            the periods  covered  thereby.  All federal,  provincial,  local and
            foreign income, profits,  franchise,  sales, use, occupancy,  excise
            and other taxes and assessments  (including  interest and penalties)
            that are or may become payable by or due from the  Corporation  have
            been fully paid or fully  disclosed  and fully  provided  for in the
            Books and Records and the Interim Financial Statements. There are no
            claims,  actions,  suits or proceedings (or, to the knowledge of the
            Corporation,  any investigation) pending, or to the knowledge of the
            Corporation,  threatened  against the  Corporation  or the  Acquired
            Properties  relating to taxes and the Corporation  knows of no valid
            basis for any such claim, action, suit, proceeding, investigation or
            discussion.  The  Corporation has withheld from each payment made by
            it the  amount  of all taxes and  other  deductions  required  to be
            withheld  therefrom  and has paid the same to the  proper  taxing or
            other authority within the time prescribed under any applicable Law.
            The  Corporation  is a  registrant  for  purposes of the tax imposed
            under Part IX of the Excise Tax Act (Canada).


                                      -24-
<PAGE>

      (ii)  Full Disclosure.  Neither this Agreement nor any Ancillary Agreement
            to which the Vendors or the  Corporation is a party (i) contains any
            untrue statement of a material fact in respect of any of the Vendors
            or the  Corporation,  or (ii) omits any statement of a material fact
            necessary in order to make the  statements  in the  Agreement or any
            Ancillary  Agreement  in respect of the  Vendors or the  Corporation
            contained herein or therein,  in light of the circumstances in which
            they were made, not misleading.

                                   ARTICLE 4
                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

Section 4.1 Representations and Warranties of the Purchaser

      The  Purchaser  represents  and  warrants  as follows to the  Vendors  and
acknowledges  and confirms that the Vendors are relying on such  representations
and  warranties  in  connection  with the sale by the  Vendors of the  Purchased
Shares:

      (a)   Incorporation  and  Corporate  Power.  Each  of  Purchaser,  CallCo,
            LeaseCo  and  ExchangeCo  is a  corporation  incorporated,  in  good
            standing  and  existing  under  the  Laws  of  its  jurisdiction  of
            incorporation  and has the  corporate  power to own and  operate its
            property and carry on its  business and has  authority to enter into
            and perform its  obligations  under this  Agreement  and each of the
            Ancillary Documents to which it is a party.

      (b)   Qualification.  Each of  Purchaser,  CallCo and  ExchangeCo  is duly
            qualified,  licensed  or  registered  to carry on  business  in each
            jurisdiction  in which the nature of its business or assets requires
            it to be qualified, licensed or registered.

      (c)   Validity of Agreement.  The execution,  delivery and  performance by
            each of Purchaser,  CallCo and ExchangeCo of this Agreement and each
            of the Ancillary Documents to which it is a party:

            (i)   have  been  duly  authorized,  or  will  by  Closing  be  duly
                  authorized,  by all necessary  corporate action on the part of
                  each of Purchaser, CallCo and ExchangeCo;

            (ii)  do not (or would not with the giving of  notice,  the lapse of
                  time or the happening of any other event or condition)  result
                  in a breach or a violation of, or conflict  with, or allow any
                  other  Person to exercise any rights under any of the terms or
                  provisions  of its  constating  documents  or  by-laws  or any
                  material contract; and


                                      -25-
<PAGE>

            (iii) will not result in the violation of any Law.

      (d)   Execution  and Binding  Obligation.  This  Agreement and each of the
            Ancillary  Documents  to which the  Purchaser,  CallCo,  Leaseco  or
            ExchangeCo  is a party has been duly  executed and  delivered by the
            Purchaser,  CallCo, Leaseco and ExchangeCo,  as the case may be, and
            constitute  legal,  valid and binding  obligations of the Purchaser,
            CallCo,  Leaseco  and  ExchangeCo,  as the case may be,  enforceable
            against  it in  accordance  with  their  terms  subject  only to any
            limitation   under  applicable  Laws  relating  to  (i)  bankruptcy,
            winding-up,  insolvency,   reorganization,   arrangement  and  other
            similar Laws of general  application  affecting the  enforcement  of
            creditors' rights, and (ii) the discretion that a court may exercise
            in the granting of equitable  remedies such as specific  performance
            and injunction and general equitable principals.

      (e)   Required Authorizations.  None of the Purchaser,  CallCo, Leaseco or
            ExchangeCo is required to make any filing with,  give any notice to,
            or obtain any Authorization of, any Governmental Entity or Person as
            a  condition  to  the  lawful  completion  of all  the  transactions
            contemplated  in this Agreement and each of the Ancillary  Documents
            to which the  Purchaser,  CallCo,  Leaseco or ExchangeCo is a party,
            except for the filings,  notifications and Authorizations  described
            in Schedule 6.1(c) attached hereto.

      (f)   No Material Adverse Change. On or prior to the date hereof there has
            not been any material  adverse  change in the  affairs,  operations,
            business,  assets or  condition  of the  business of the  Purchaser,
            except  as  disclosed  in  the  Purchaser  Reports  (as  hereinafter
            defined) or the Confidential  Information Memorandum attached hereto
            as Schedule "E".

      (g)   Compliance  with Laws.  The Purchaser is  conducting  and has always
            conducted its business and any past business in compliance  with all
            applicable  Laws other  than acts of  non-compliance  which,  in the
            aggregate,   would  not  have  a  material  adverse  effect  on  the
            Purchaser's business.

      (h)   Authorizations.  Purchaser owns, holds,  possesses or lawfully uses,
            in the  operation  of its  business,  all  Authorizations  which are
            necessary for it to conduct such business, as presently conducted or
            for the  ownership  and use of its  assets  in  compliance  with all
            applicable  Laws,  except  where the failure to so hold,  possess or
            lawfully  use any  Authorization  would not have a material  adverse
            effect on its business on the Purchaser's business.


                                      -26-
<PAGE>

      (i)   Material   Contracts.   The  Purchaser  has  performed  all  of  the
            obligations  required to be  performed  by it and is entitled to all
            benefits under,  and is not in material  default or alleged to be in
            material  default in respect of, any material  contract  relating to
            the  assets  of  Purchaser  to which  it is a party or  beneficially
            entitled,  bound  under or  subject  to or by which it is  otherwise
            bound;  all such Purchaser  material  contracts are in good standing
            and in full force and effect; and no event,  condition or occurrence
            exists  which,  after  notice  or  lapse  of  time  or  both,  would
            constitute a material  default  under any of the  foregoing or which
            would  detrimentally  affect the  entitlement  of  Purchaser  to the
            benefit of such material contracts.

      (j)   Purchaser  Shares.  The  Consideration  Shares  to be  issued at the
            Closing and the Goldstrike  Shares to be issued from time to time on
            exchange  of the  Exchangeable  Shares will be duly  authorized  and
            validly  issued by Purchaser on their  respective  dates of issuance
            and will be fully paid and non-assessable securities.

      (k)   Authorized  and  Issued  Capital.  The  authorized  capital  of  the
            Purchaser  consists of (1)  75,000,000  shares of common stock,  par
            value $0.001 per share, of which  23,507,089 (and no more) have been
            duly  issued and are  outstanding  as fully paid and  non-assessable
            common  shares,  6,470,933  warrants to acquire common shares of the
            Purchaser  have been issued and no options to acquire  common shares
            of the  Purchaser  have been  issued;  (ii) one share,  par value of
            $0.001,  designated as Special Voting Stock,  which is not currently
            outstanding and (iii) 5,000,000 shares of preferred stock, par value
            $0.001  per  share,   none  of  which  is  issued  and  outstanding.
            Immediately  prior to the Closing,  and after  giving  effect to the
            transactions  contemplated by the Split-Off Agreement, the Purchaser
            will have issued and outstanding  21,941,871  shares of common stock
            and 6,470,933 warrants;

      (l)   Corporate  Records.  The corporate records of each of the Purchaser,
            CallCo and  ExchangeCo  are complete and accurate and all  corporate
            proceedings and actions  reflected in the corporate  records of each
            of the Purchaser, CallCo and ExchangeCo have been conducted or taken
            in  compliance  with all  applicable  Laws and with the articles and
            by-laws of each of the  Purchaser,  CallCo and  ExchangeCo.  Without
            limiting the  generality of the  foregoing,  (i) the minute books of
            each of the Purchaser,  CallCo and ExchangeCo  contain  complete and
            accurate  minutes of all meetings of the directors and  shareholders
            held since  incorporation and all such meetings were properly called
            and held,  (ii) the minute  books of each of  Purchaser,  CallCo and
            ExchangeCo  contain  all  resolutions  passed by the  directors  and
            shareholders (and committees,  if any) and all such resolutions were
            properly  passed,  (iii) the share  certificate  books,  register of
            shareholders  and register of transfers  are complete and  accurate,
            all transfers have been properly  completed and approved and any tax
            payable in connection  with the transfer of any  securities has been
            paid,  and (iv) the registers of directors and officers are complete
            and accurate and all former and present  directors and officers were
            properly  elected  or  appointed,  as  the  case  may  be.  Each  of
            Purchaser,  CallCo  and  ExchangeCo  has never been  subject  to, or
            affected by, any unanimous shareholders agreement.


                                      -27-
<PAGE>

      (m)   Subsidiaries. Other then Callco, Exchangco and Leasco, the Purchaser
            does not have any Subsidiaries.

      (n)   Authorization and Issuance.  The Exchangeable  Shares and Goldstrike
            Shares to be issued  pursuant  to this  Agreement  shall be  validly
            authorized and upon the Closing Date shall be validly issued,  fully
            paid and non-assessable.

      (o)   Exchange Act Reports.  The Purchaser has furnished or made available
            to the  Corporation  complete  and  accurate  copies,  as amended or
            supplemented, of its (a) Annual Report on Form 10-KSB for the fiscal
            year ended  December  31,  2004,  as filed with the SEC, and (b) all
            other reports  filed by the Purchaser  under Section 13 or 15 of the
            Exchange Act with the SEC since the Purchase  became  subject to the
            reporting   provisions   of  the  Exchange  Act  (such  reports  are
            collectively  referred to herein as the  "Purchaser  Reports").  The
            Purchaser  Reports  constitute  all of the documents  required to be
            filed by the  Purchaser  under  Section 13 or 15 of the Exchange Act
            with the SEC  through  the  date of this  Agreement.  The  Purchaser
            Reports  complied in all material  respects with the requirements of
            the  Exchange  Act and the rules  and  regulations  thereunder  when
            filed. As of their respective  dates, the Purchaser  Reports 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.

      (p)   Compliance with Laws. Each of the Purchaser and its Subsidiaries:

            (i)   has conducted the operations of their respective businesses in
                  compliance  with all applicable Law, except for any violations
                  or defaults that,  individually or in the aggregate,  have not
                  had and would not  reasonably  be expected to have a Purchaser
                  Material  Adverse  Effect.  For  purposes  of this  Agreement,
                  "Purchaser  Material  Adverse Effect" means a material adverse
                  effect  on  the  assets,  business,  condition  (financial  or
                  otherwise),  results of operations or future  prospects of the
                  Purchaser and its subsidiaries, taken as a whole;


                                      -28-
<PAGE>

            (ii)  has complied  with all federal and state  securities  laws and
                  regulations,  including  being current in all of its reporting
                  obligations  under such federal and state  securities laws and
                  regulations;

            (iii) has not,  and the past and  present  officers,  directors  and
                  affiliates  (an  "Affiliate"),  as defined in Rule 12b-2 under
                  the Exchange Act, of the Purchaser  have not, been the subject
                  of, nor does any officer or director of the Purchaser have any
                  reason  to  believe  that  Purchaser  or any of its  officers,
                  directors or  Affiliates  will be the subject of, any civil or
                  criminal  proceeding or  investigation by any federal or state
                  agency alleging a violation of securities laws;

            (iv)  has not been  the  subject  of any  voluntary  or  involuntary
                  bankruptcy proceeding, nor has it been a party to any material
                  litigation;

            (v)   any  agreement  under which the  consequences  of a default or
                  termination  would  reasonably be expected to have a Purchaser
                  Material Adverse Effect;

            (vi)  has not,  and the past and  present  officers,  directors  and
                  Affiliates have not, been the subject of, nor does any officer
                  or director of the  Purchaser  have any reason to believe that
                  the Purchaser or any of its officers,  directors or affiliates
                  will be the subject of, any civil,  criminal or administrative
                  investigation  or  proceeding  brought by any federal or state
                  agency having regulatory authority over such entity or person;

            (vii) does not and will not on the  Closing,  have any  liabilities,
                  contingent  or  otherwise,  including but not limited to notes
                  payable  and  accounts  payable,  and  is not a  party  to any
                  executory agreements; and

            (viii) is not a "blank  check  company"  as such term is  defined by
                  Rule 419 of the Securities Act.


                                      -29-
<PAGE>

      (q)   Financial  Statements.  The Purchaser has provided or made available
            to the Corporation the unaudited and consolidated balance sheet (the
            "Purchaser  Interim  Balance  Sheet")  as of and for the six  months
            ended June 30, 2005 (the "Purchaser Interim Balance Sheet Date") and
            related statements of operations and cash flows  (collectively,  the
            "Purchaser  Interim  Financial  Statements.  The  audited  financial
            statements  and  unaudited  interim  financial   statements  of  the
            Purchaser  included  in the  Purchaser  Reports  and  the  Purchaser
            Interim Financial Statements (collectively, the "Purchaser Financial
            Statements")  (i) complied as to form in all material  respects with
            applicable   accounting   requirements  and,  as  appropriate,   the
            published rules and regulations of the SEC with respect thereto when
            filed,  (ii) were  prepared  in  accordance  with GAAP  applied on a
            consistent  basis  throughout the periods covered thereby (except as
            may be indicated therein or in the notes thereto, and in the case of
            quarterly  financial  statements,  as permitted by Form 10-QSB under
            the Exchange Act), (iii) fairly present the  consolidated  financial
            condition,  results of operations and cash flows of the Purchaser as
            of the  respective  dates  thereof and for the  periods  referred to
            therein,  and (iv) are consistent  with the books and records of the
            Purchaser.

      (r)   Litigation.  Except as disclosed in the Purchaser Reports, there are
            no Legal Proceedings, by any Person (including,  without limitation,
            the  Purchaser),  nor any Legal  Proceeding  by or before (or to the
            best of the  knowledge of the Purchaser  any  investigation  by) any
            Governmental Entity pending, or, to the best of the knowledge of the
            Purchaser,  threatened against or adversely  affecting the Purchaser
            which,  if  determined  adversely  to  the  Purchaser,  could  have,
            individually  or in the  aggregate,  a  Purchaser  Material  Adverse
            Effect  or  which in any  manner  challenges  or  seeks to  prevent,
            enjoin,  alter  or  delay  the  transactions  contemplated  by  this
            Agreement,  and the  Purchaser  knows of no valid basis for any such
            action, suit, proceeding, arbitration or investigation by or against
            the Purchaser.  The Purchaser is not subject to any judgment,  order
            or decree entered in any lawsuit or proceeding nor has the Purchaser
            settled  any claim prior to being  prosecuted  in respect of it. The
            Purchaser  is  not  the  plaintiff  or   complainant  in  any  Legal
            Proceeding.

      (s)   Undisclosed Liabilities.  None of the Purchaser and its subsidiaries
            has any liability  (whether  known or unknown,  whether  absolute or
            contingent, whether liquidated or unliquidated and whether due or to
            become  due),  except  for (a)  liabilities  shown on the  Purchaser
            Interim Balance Sheet,  (b) liabilities  which have arisen since the
            Purchaser  Interim Balance Sheet Date in the Ordinary Course and (c)
            contractual  and other  liabilities  incurred in the Ordinary Course
            which are not required by GAAP to be reflected on a balance sheet.


                                      -30-
<PAGE>

      (t)   Tax Matters.

            (i)   For purposes of this Agreement, the following terms shall have
                  the following meanings:

                  (A)   "Taxes" means all taxes, charges,  fees, levies or other
                        similar  assessments or liabilities,  including  without
                        limitation income, gross receipts, ad valorem,  premium,
                        value-added,  excise, real property,  personal property,
                        sales,   use,   transfer,    withholding,    employment,
                        unemployment   insurance,   social  security,   business
                        license, business organization,  environmental,  workers
                        compensation, payroll, profits, license, lease, service,
                        service  use,  severance,  stamp,  occupation,  windfall
                        profits,  customs,  duties,  franchise  and other  taxes
                        imposed  by the  United  States of America or any state,
                        local or foreign  government,  or any agency thereof, or
                        other political  subdivision of the United States or any
                        such  government,  and any interest,  fines,  penalties,
                        assessments   or  additions  to  tax   resulting   from,
                        attributable  to or incurred in connection  with any tax
                        or any contest or dispute thereof.

                  (B)   "Tax Returns" means all reports, returns,  declarations,
                        statements or other information  required to be supplied
                        to a taxing authority in connection with Taxes.

            (ii)  By the Closing the Purchaser  shall have filed all Tax Returns
                  that it was required to file, and all such Tax Returns will be
                  complete and accurate in all  material  respects.  Neither the
                  Purchaser nor any subsidiary is or has ever been a member of a
                  group  of  corporations  with  which  it has  filed  (or  been
                  required  to  file)  consolidated,  combined  or  unitary  Tax
                  Returns,  other than a group of which only the  Purchaser  and
                  the Subsidiaries are or were members.  The unpaid Taxes of the
                  Purchaser  and the  Subsidiaries  for tax periods  through the
                  Purchaser  Interim  Balance  Sheet  Date  do  not  exceed  the
                  accruals  and  reserves  for  Taxes  (excluding  accruals  and
                  reserves  for deferred  Taxes  established  to reflect  timing
                  differences  between  book and Tax  income)  set  forth on the
                  Purchaser Interim Balance Sheet. Neither the Purchaser nor any
                  subsidiary  has any actual or potential  liability for any Tax
                  obligation of any taxpayer  (including  without limitation any
                  affiliated  group  of  corporations  or  other  entities  that
                  included  the  Purchaser  or any  subsidiary  during  a  prior
                  period)  other than the Purchaser  and the  subsidiaries.  All
                  Taxes that the Purchaser or any  subsidiary is or was required
                  by law to  withhold  or  collect  have been duly  withheld  or
                  collected and, to the extent  required,  have been paid to the
                  proper Governmental Entity.


                                      -31-
<PAGE>

            (iii) Neither the Purchaser nor any subsidiary: (i) is a "consenting
                  corporation" within the meaning of Section 341(f) of the Code,
                  and none of the assets of the  Purchaser  or the  subsidiaries
                  are subject to an election  under Section  341(f) of the Code;
                  (ii)  has  been  a  United   States  real   property   holding
                  corporation  within the  meaning of Section  897(c)(2)  of the
                  Code  during  the  applicable   period  specified  in  Section
                  897(c)(l)(A)(ii) of the Code; (iii) has made any payments,  is
                  obligated to make any payments, or is a party to any agreement
                  that  could  obligate  it to make  any  payments  that  may be
                  treated as an "excess parachute payment" under Section 280G of
                  the Code;  (iv) has any actual or potential  liability for any
                  Taxes  of  any  person  (other  than  the  Purchaser  and  its
                  subsidiaries)  under Treasury  Regulation Section 1.1502 6 (or
                  any similar  provision of federal,  state,  local,  or foreign
                  law),  or  as a  transferee  or  successor,  by  contract,  or
                  otherwise;  or (v) is or has  been  required  to  make a basis
                  reduction pursuant to Treasury Regulation Section 1.1502-20(b)
                  or Treasury Regulation Section 1.337(d)-2(b).

            (iv)  None of the assets of the Purchaser or any subsidiary:  (i) is
                  property  that is required to be treated as being owned by any
                  other  person  pursuant to the  provisions  of former  Section
                  168(f)(8)  of the  Code;  (ii) is  "tax-exempt  use  property"
                  within the  meaning of  Section  168(h) of the Code;  or (iii)
                  directly or indirectly  secures any debt the interest on which
                  is tax exempt under Section 103(a) of the Code.

            (v)   Neither  the  Purchaser  nor any  subsidiary  has  undergone a
                  change in its method of accounting  resulting in an adjustment
                  to its taxable income pursuant to Section 481 of the Code.

            (vi)  No state or  federal  "net  operating  loss" of the  Purchaser
                  determined  as of the Closing Date is subject to limitation on
                  its use  pursuant  to  Section  382 of the Code or  comparable
                  provisions of state law as a result of any "ownership  change"
                  within the meaning of Section 382(g) of the Code or comparable
                  provisions  of any state law  occurring  prior to the  Closing
                  Date.

      (u)   Assets.  The Purchaser owns or leases all tangible assets  necessary
            for the conduct of its  businesses  as  presently  conducted  and as
            presently proposed to be conducted. Each such tangible asset is free
            from material defects, has been maintained in accordance with normal
            industry  practice,  is  in  good  operating  condition  and  repair
            (subject to normal wear and tear) and is suitable  for the  purposes
            for which it presently is used. No asset of the Purchaser  (tangible
            or intangible) is subject to any Lien.


                                      -32-
<PAGE>

      (v)   Owned Real Property. The Purchaser does not own any real property.

      (w)   Real  Property  Leases.  The  Purchaser  does  not  lease  any  real
            property.

      (x)   Contracts.

            (i)   Schedule 4.1(x) attached hereto lists the following agreements
                  (written or oral) to which the  Purchaser is a party as of the
                  date of this Agreement:

                  (A)   any agreement (or group of related  agreements)  for the
                        lease of personal property from or to third parties;

                  (B)   any agreement (or group of related  agreements)  for the
                        purchase or sale of products  or for the  furnishing  or
                        receipt of services (A) which calls for performance over
                        a period of more than one year,  (B) which involves more
                        than the sum of  $5,000,  or (C) in which the  Purchaser
                        has granted  manufacturing rights, "most favored nation"
                        pricing    provisions   or   exclusive    marketing   or
                        distribution   rights   relating  to  any   products  or
                        territory  or has agreed to purchase a minimum  quantity
                        of goods or services or has agreed to purchase  goods or
                        services exclusively from a certain party;

                  (C)   any  agreement   establishing  a  partnership  or  joint
                        venture;

                  (D)   any  agreement  (or group of related  agreements)  under
                        which it has created,  incurred,  assumed or  guaranteed
                        (or may create, incur, assume or guarantee) indebtedness
                        (including capitalized lease obligations) involving more
                        than  $5,000  or  under  which  it has  imposed  (or may
                        impose)  a  Lien  on  any of  its  assets,  tangible  or
                        intangible;

                  (E)   any    agreement    concerning     confidentiality    or
                        noncompetition;

                  (F)   any employment or consulting agreement;

                  (G)   any  agreement   involving  any  officer,   director  or
                        stockholder of the Purchaser or any Affiliate thereof;


                                      -33-
<PAGE>

                  (H)   any agreement under which the  consequences of a default
                        or  termination  would  reasonably be expected to have a
                        Purchaser Material Adverse Effect;

                  (I)   any agreement  which contains any  provisions  requiring
                        the  Purchaser  to  indemnify  any other  party  thereto
                        (excluding  indemnities  contained in agreements for the
                        purchase,  sale or license of products  entered  into in
                        the Ordinary Course); and

                  (J)   any other  agreement  (or group of  related  agreements)
                        either involving more than $5,000 or not entered into in
                        the Ordinary Course.

            (ii)  The  Purchaser   has  delivered  or  made   available  to  the
                  Corporation  a complete  and accurate  copy of each  agreement
                  listed in Schedule  4.1(x)  attached  hereto.  With respect to
                  each agreement so listed:  (i) the agreement is legal,  valid,
                  binding and enforceable and in full force and effect; (ii) the
                  agreement  will  continue  to be  legal,  valid,  binding  and
                  enforceable and in full force and effect immediately following
                  the Closing in accordance  with the terms thereof as in effect
                  immediately  prior  to the  Closing;  and  (iii)  neither  the
                  Purchaser  nor, to the knowledge of the  Purchaser,  any other
                  party,  is in breach or violation  of, or default  under,  any
                  such agreement,  and no event has occurred,  is pending or, to
                  the knowledge of the Purchaser,  is threatened,  which,  after
                  the giving of notice, with lapse of time, or otherwise,  would
                  constitute  a breach or  default by the  Purchaser  or, to the
                  knowledge  of  the  Purchaser,  any  other  party  under  such
                  contract.

      (y)   Accounts  Receivable.  All  accounts  receivable  of  the  Purchaser
            reflected  on  the  Purchaser   Interim   Balance  Sheet  are  valid
            receivables  subject to no setoffs or counterclaims  and are current
            and  collectible  (within  90 days  after the date on which it first
            became due and payable), net of the applicable reserve for bad debts
            on the Purchaser  Interim  Balance  Sheet.  All accounts  receivable
            reflected in the  financial or  accounting  records of the Purchaser
            that have arisen since the Purchaser  Interim Balance Sheet Date are
            valid  receivables  subject to no setoffs or  counterclaims  and are
            collectible  (within 90 days after the date on which it first became
            due and  payable),  net of a  reserve  for bad  debts  in an  amount
            proportionate to the reserve shown on the Purchaser  Interim Balance
            Sheet Date.

      (z)   Insurance.  Schedule  4.1(y)  attached  hereto lists each  insurance
            policy (including fire, theft, casualty, general liability,  workers
            compensation,   business   interruption,    environmental,   product
            liability  and  automobile  insurance  policies  and bond and surety
            arrangements)  to which the  Purchaser  is a party.  Such  insurance
            policies  are of the  type and in  amounts  customarily  carried  by
            organizations  conducting  businesses  or owning  assets  similar to
            those of the Purchaser. There is no material claim pending under any
            such  policy as to which  coverage  has been  questioned,  denied or
            disputed by the  underwriter  of such  policy.  All premiums due and
            payable under all such policies have been paid,  the Purchaser  will
            not be liable for retroactive premiums or similar payments,  and the
            Purchaser is otherwise in compliance  in all material  respects with
            the terms of such  policies.  The  Purchaser has no knowledge of any
            threatened termination of, or material premium increase with respect
            to,  any  such  policy.   Each  such  policy  will  continue  to  be
            enforceable and in full force and effect  immediately  following the
            Closing  in   accordance   with  the  terms  thereof  as  in  effect
            immediately prior to the Closing.


                                      -34-
<PAGE>

      (aa)  Employees. The Purchaser currently has no employees.

      (bb)  Employee Benefits.

            (i)   For purposes of this Agreement, the following terms shall have
                  the following meanings:

                  (A)   "Employee  Benefit  Plan"  means any  "employee  pension
                        benefit plan" (as defined in Section 3(2) of ERISA), any
                        "employee  welfare  benefit plan" (as defined in Section
                        3(1) of  ERISA),  and any other  written  or oral  plan,
                        agreement or  arrangement  involving  direct or indirect
                        compensation,  including  without  limitation  insurance
                        coverage,   severance  benefits,   disability  benefits,
                        deferred  compensation,  bonuses,  stock options,  stock
                        purchase,  phantom stock,  stock  appreciation  or other
                        forms  of  incentive   compensation  or  post-retirement
                        compensation.

                  (B)   "ERISA" means the Employee  Retirement  Income  Security
                        Act of 1974, as amended.

                  (C)   "ERISA  Affiliate"  means any entity which is, or at any
                        applicable time was, a member of (1) a controlled  group
                        of  corporations  (as  defined in Section  414(b) of the
                        Code),  (2) a group of trades or businesses under common
                        control (as defined in Section  414(c) of the Code),  or
                        (3)  an  affiliated  service  group  (as  defined  under
                        Section  414(m)  of the  Code or the  regulations  under
                        Section  414(o) of the Code),  any of which  includes or
                        included the Corporation or a subsidiary.


                                      -35-
<PAGE>

            (ii)  Schedule  4.1(aa)  attached  hereto  contains a  complete  and
                  accurate  list of all Employee  Benefit Plans  maintained,  or
                  contributed to, by the Purchaser,  any Subsidiary or any ERISA
                  Affiliate.  Complete and  accurate  copies of (i) all Employee
                  Benefit Plans which have been reduced to writing, (ii) written
                  summaries of all unwritten  Employee Benefit Plans,  (iii) all
                  related trust agreements, insurance contracts and summary plan
                  descriptions,  and (iv) all annual  reports  filed on IRS Form
                  5500,  5500C or 5500R  and (for  all  funded  plans)  all plan
                  financial  statements  for the last five  plan  years for each
                  Employee  Benefit Plan,  have been delivered or made available
                  to  the  Purchaser.   Each  Employee  Benefit  Plan  has  been
                  administered  in all material  respects in accordance with its
                  terms  and each of the  Purchaser,  the  subsidiaries  and the
                  ERISA  Affiliates  has  in  all  material   respects  met  its
                  obligations with respect to such Employee Benefit Plan and has
                  made all required contributions  thereto. The Purchaser,  each
                  subsidiary,  each ERISA  Affiliate and each  Employee  Benefit
                  Plan  are in  compliance  in all  material  respects  with the
                  currently applicable  provisions of ERISA and the Code and the
                  regulations  thereunder  (including without limitation Section
                  4980 B of the Code,  Subtitle  K,  Chapter 100 of the Code and
                  Sections  601  through  608 and Section 701 et seq. of ERISA).
                  All  filings  and  reports as to each  Employee  Benefit  Plan
                  required  to  have  been  submitted  to the  Internal  Revenue
                  Service or to the United States  Department of Labor have been
                  duly submitted.

            (iii) To  the  knowledge  of  the  Purchaser,  there  are  no  Legal
                  Proceedings  (except claims for benefits payable in the normal
                  operation of the Employee  Benefit Plans and proceedings  with
                  respect to qualified  domestic  relations  orders)  against or
                  involving any Employee Benefit Plan or asserting any rights or
                  claims to benefits under any Employee  Benefit Plan that could
                  give rise to any material liability.

            (iv)  All  the  Employee  Benefit  Plans  that  are  intended  to be
                  qualified  under  Section  401(a)  of the Code  have  received
                  determination letters from the Internal Revenue Service to the
                  effect that such Employee  Benefit Plans are qualified and the
                  plans and the trusts  related  thereto are exempt from federal
                  income taxes under Sections  401(a) and 501(a),  respectively,
                  of the Code, no such determination letter has been revoked and
                  revocation  has not  been  threatened,  and no  such  Employee
                  Benefit  Plan  has  been  amended  since  the date of its most
                  recent  determination  letter or  application  therefor in any
                  respect,  and no act or  omission  has  occurred,  that  would
                  adversely affect its qualification or materially  increase its
                  cost. Each Employee  Benefit Plan which is required to satisfy
                  Section  401(k)(3)  or Section  401(m)(2) of the Code has been
                  tested for compliance with, and satisfies the requirements of,
                  Section  401(k)(3) and Section  401(m)(2) of the Code for each
                  plan year ending prior to the Closing Date.


                                      -36-
<PAGE>

            (v)   Neither the Purchaser, any subsidiary, nor any ERISA Affiliate
                  has ever  maintained  an  Employee  Benefit  Plan  subject  to
                  Section 412 of the Code or Title IV of ERISA.

            (vi)  At no time has the  Purchaser,  any  subsidiary  or any  ERISA
                  Affiliate been  obligated to contribute to any  "multiemployer
                  plan" (as defined in Section 4001(a)(3) of ERISA).

            (vii) There are no unfunded  obligations  under any Employee Benefit
                  Plan providing benefits after termination of employment to any
                  employee  of  the  Purchaser  or  any  subsidiary  (or  to any
                  beneficiary of any such  employee),  including but not limited
                  to retiree  health  coverage  and deferred  compensation,  but
                  excluding  continuation  of  health  coverage  required  to be
                  continued under Section 4980B of the Code or other  applicable
                  law and insurance  conversion  privileges under state law. The
                  assets of each  Employee  Benefit  Plan  which is  funded  are
                  reported at their fair  market  value on the books and records
                  of such Employee Benefit Plan.

            (viii) No act or omission has occurred and no condition  exists with
                  respect  to  any  Employee  Benefit  Plan  maintained  by  the
                  Purchaser,  any  subsidiary or any ERISA  Affiliate that would
                  subject the Purchaser,  any subsidiary or any ERISA  Affiliate
                  to (i) any  material  fine,  penalty,  tax or liability of any
                  kind imposed  under ERISA or the Code or (ii) any  contractual
                  indemnification  or  contribution  obligation  protecting  any
                  fiduciary,  insurer or service  provider  with  respect to any
                  Employee Benefit Plan.

            (ix)  No  Employee  Benefit  Plan is funded by,  associated  with or
                  related to a "voluntary  employee's  beneficiary  association"
                  within the meaning of Section 501(c)(9) of the Code.

            (x)   Each  Employee   Benefit  Plan  is  amendable  and  terminable
                  unilaterally by the Purchaser at any time without liability to
                  the  Purchaser  as a result  thereof and no  Employee  Benefit
                  Plan,   plan   documentation   or   agreement,   summary  plan
                  description   or  other  written   communication   distributed
                  generally to employees by its terms  prohibits  the  Purchaser
                  from amending or terminating any such Employee Benefit Plan.


                                      -37-
<PAGE>

            (xi)  Schedule 4.1(aa) attached hereto discloses each: (i) agreement
                  with any stockholder, director, executive officer or other key
                  employee  of the  Purchaser  (A) the  benefits  of  which  are
                  contingent, or the terms of which are materially altered, upon
                  the occurrence of a transaction involving the Purchaser of the
                  nature  of  any  of  the  transactions  contemplated  by  this
                  Agreement,   (B)   providing   any  term  of   employment   or
                  compensation  guarantee or (C) providing severance benefits or
                  other  benefits  after the  termination  of employment of such
                  director,  executive officer or key employee;  (ii) agreement,
                  plan  or  arrangement  under  which  any  person  may  receive
                  payments  from the  Purchaser  that may be  subject to the tax
                  imposed  by  Section  4999  of the  Code  or  included  in the
                  determination  of  such  person's  "parachute  payment"  under
                  Section 280G of the Code; and (iii)  agreement or plan binding
                  the Purchaser,  including without  limitation any stock option
                  plan, stock  appreciation  right plan,  restricted stock plan,
                  stock  purchase  plan,  severance  benefit  plan  or  Employee
                  Benefit Plan,  any of the benefits of which will be increased,
                  or the vesting of the  benefits of which will be  accelerated,
                  by the occurrence of any of the  transactions  contemplated by
                  this  Agreement  or the value of any of the  benefits of which
                  will be  calculated  on the  basis of any of the  transactions
                  contemplated  by this  Agreement.  The accruals for  vacation,
                  sickness  and  disability  expenses are  accounted  for on the
                  Purchaser  Interim Balance Sheet and are adequate and properly
                  reflect the expenses  associated  therewith in accordance with
                  generally accepted accounting principles.

      (cc)  Environmental Matters.

            (i)   Each of the Purchaser and the  subsidiaries  has complied with
                  all applicable  Environmental  Laws,  except for violations of
                  Environmental  Laws that,  individually  or in the  aggregate,
                  have not had and would not  reasonably  be  expected to have a
                  Purchaser Material Adverse Effect.  There is no pending or, to
                  the knowledge of the Purchaser,  threatened  civil or criminal
                  litigation, written notice of violation, formal administrative
                  proceeding,  or investigation,  inquiry or information request
                  by any Governmental Entity,  relating to any Environmental Law
                  involving  the  Purchaser  or  any   subsidiary,   except  for
                  litigation,   notices  of  violations,  formal  administrative
                  proceedings  or   investigations,   inquiries  or  information
                  requests that, individually or in the aggregate,  have not had
                  and would  not  reasonably  be  expected  to have a  Purchaser
                  Material Adverse Effect.


                                      -38-
<PAGE>

            (ii)  Set forth in Schedule 4.1(bb) attached hereto is a list of all
                  documents  (whether  in hard  copy or  electronic  form)  that
                  contain any environmental  reports,  investigations and audits
                  relating to premises currently or previously owned or operated
                  by the Purchaser or a subsidiary  (whether  conducted by or on
                  behalf of the Purchaser or a subsidiary or a third party,  and
                  whether  done  at  the   initiative  of  the  Purchaser  or  a
                  subsidiary or directed by a Governmental Entity or other third
                  party)  which  were  issued or  conducted  during the past two
                  years and which the Purchaser has  possession of or access to.
                  A complete  and accurate  copy of each such  document has been
                  provided to the Purchaser.

            (iii) The  Purchaser  is not  aware  of any  material  environmental
                  liability  of any  solid or  hazardous  waste  transporter  or
                  treatment,  storage or disposal facility that has been used by
                  the Purchaser or any subsidiary.

      (dd)  Certain Business Relationships With Affiliates.  No Affiliate of the
            Purchaser  or of any  subsidiary  (a) owns any  property  or  right,
            tangible  or  intangible,  which  is  used  in the  business  of the
            Purchaser  or any  subsidiary,  (b) has any claim or cause of action
            against the Purchaser or any  subsidiary,  or (c) owes any money to,
            or is owed any money by, the Purchaser or any  subsidiary.  Schedule
            4.1(dd)  attached hereto  describes any  transactions  involving the
            receipt or payment  in excess of $5,000 in any fiscal  year  between
            the Purchaser or a subsidiary  and any Affiliate  thereof which have
            occurred or existed since the  beginning of the time period  covered
            by  the  Purchaser  Financial  Statements,   other  than  employment
            agreements.

      (ee)  Split-Off.   Prior  to  or  simultaneously  with  the  Closing,  the
            Purchaser  will have  discontinued  all of its  business  operations
            which  it  conducted  prior  to  the  Closing  by  consummating  the
            transactions  contemplated  by the  Split-Off  Agreement.  Upon  the
            closing of the transactions contemplated by the Split-Off Agreement,
            the  Purchaser  will have no  material  liabilities,  contingent  or
            otherwise in any way related to its pre-Closing business operations.

      (ff)  Interested Party Transactions.  Except for the Split-Off  Agreement,
            to  the  knowledge  of  the  Purchaser,  no  officer,   director  or
            stockholder  of Purchaser or any Affiliate or  "associate"  (as such
            term is  defined in Rule 405 under the  Securities  Act) of any such
            person has had,  either  directly or indirectly,  (a) an interest in
            any person that (i) furnishes or sells services or products that are
            furnished  or  sold  or are  proposed  to be  furnished  or  sold by
            Purchaser  or any  subsidiary  or (ii)  purchases  from or  sells or
            furnishes to Purchaser or any subsidiary  any goods or services,  or
            (b) a  beneficial  interest in any  contract or  agreement  to which
            Purchaser or any  subsidiary  is a party or by which it may be bound
            or affected.  Neither  Purchaser nor any  subsidiary has extended or
            maintained credit,  arranged for the extension of credit, or renewed
            an extension of credit, in the form of a personal loan to or for any
            director  or  executive  officer  (or  equivalent  thereof)  of  the
            Purchaser or any subsidiary.


                                      -39-
<PAGE>

      (gg)  Accountants. Moen and Company is and has been throughout the periods
            covered  by  such  financial  statements  (a)  a  registered  public
            accounting   firm  (as   defined   in   Section   2(a)(12)   of  the
            Sarbanes-Oxley  Act of  2002,  (b)  "independent"  with  respect  to
            Purchaser within the meaning of Regulation S-X and (c) in compliance
            with  subsections (g) through (l) of Section 10A of the Exchange Act
            and the  related  rules of the  Commission  and the  Public  Company
            Accounting  Oversight Board.  Schedule 4.1(gg) attached hereto lists
            all non-audit  services  performed by Moen and Company for Purchaser
            and/or any of subsidiary for the last two fiscal years.  None of the
            reports of Moen and Company on the financial statements of Purchaser
            for either of the past two fiscal years contained an adverse opinion
            or a disclaimer  of opinion,  or was  qualified  as to  uncertainty,
            audit scope, or accounting  principles.  During Purchaser's two most
            recent fiscal years and the subsequent  interim periods,  there were
            no  disagreements  with Moen and Company on any matter of accounting
            principles or practices, financial statement disclosure, or auditing
            scope or procedures.  None of the  reportable  events listed in Item
            304(a)(1)(iv)  of  Regulation  S-B occurred with respect to Moen and
            Company.

      (hh)  Full Disclosure.  Neither this Agreement nor any of the documents to
            be delivered by the  Purchaser  pursuant to this  Agreement  nor the
            Offering Memorandum of the Purchaser attached hereto as Schedule "E"
            contain  any  untrue  statements  of a  material  fact,  or  to  the
            Purchaser's  knowledge,  omit to state a material fact  necessary to
            make the  statements  contained  herein or  therein  in light of the
            circumstances under which they were made not misleading.

                                   ARTICLE 5
                      PRE-CLOSING COVENANTS OF THE PARTIES

Section 5.1 Conduct of Business Prior to Closing

      (a)   During the Interim Period, the Corporation will conduct the Business
            in the Ordinary Course.


                                      -40-
<PAGE>

      (b)   Without  limiting the  generality of this Section 5.1, and except in
            connection with the transactions  contemplated  hereby,  the Vendors
            will not permit the Corporation to:

            (i)   sell,  transfer  or  otherwise  dispose  of any of the  Assets
                  except  for  (i)   Assets   which  are   obsolete   and  which
                  individually  or in the aggregate do not exceed  $100,000,  or
                  (ii) inventory sold in the Ordinary Course;

            (ii)  make any capital  expenditure  or  commitment  therefor  which
                  individually  or in the aggregate  exceeds  $100,000 except as
                  may  be   required  in   connection   with   maintaining   the
                  Corporation's  interest  in the  Acquired  Properties  in good
                  standing;

            (iii) discharge  any secured or  unsecured  obligation  or liability
                  (whether  accrued,  absolute,  contingent or otherwise)  which
                  individually or in the aggregate  exceeds  $100,000 other than
                  obligations   incurred  in   connection   with  the  Argentine
                  Acquisition;

            (iv)  increase its  indebtedness for borrowed money or make any loan
                  or advance or assume,  guarantee  or otherwise  become  liable
                  with respect to the  liabilities  or  obligations of any other
                  Person   other  than   indebtedness   to  the   Purchaser   as
                  contemplated by the Bridge Loan Agreement;

            (v)   make any  bonus or  profit  sharing  distribution  or  similar
                  payment of any kind  except as may be required by the terms of
                  a Material Contract or Collective Agreement;

            (vi)  remove the auditor or any director or terminate any officer or
                  other senior employee;

            (vii) grant any  general  increase  in the rate of wages,  salaries,
                  bonuses or other  remuneration of any employees  except as may
                  be required by the terms of a Material  Contract or Collective
                  Agreement;

            (viii) cancel or waive any material claims or rights;

            (ix)  enter into any  compromise or  settlement  of any  litigation,
                  proceeding or  governmental  investigation  relating to all or
                  any   material   portion  of  Assets,   the  Business  or  the
                  Corporation;

            (x)   cancel or reduce any of its insurance coverage;

            (xi)  agree, whether or not in writing, to do any of the foregoing.


                                      -41-
<PAGE>

      (c)   Without limiting the generality of this Section 5.1, the Corporation
            will:

            (i)   maintain the Assets, where applicable, in good state of repair
                  and condition;

            (ii)  comply with all  Authorizations  and  contractual  obligations
                  under the Contracts,  except for legitimate  disputes  pursued
                  with the consent of the Purchaser;

            (iii) maintain  all Books and  Records  in the  usual,  regular  and
                  ordinary manner;

            (iv)  use its best efforts to preserve  intact the current  business
                  organization of the  Corporation,  keep available the services
                  of the present  employees  and agents of the  Corporation  and
                  maintain  good  relations  with,  and  the  goodwill  of,  the
                  suppliers, customers,  landlords, creditors,  distributors and
                  all  other  Persons  having  business  relationships  with the
                  Corporation;

            (v)   confer with the Purchaser concerning  operational matters of a
                  material nature;

            (vi)  use reasonable efforts consistent with past practice to retain
                  possession   and  control  of  its  Assets  and  preserve  the
                  confidentiality of any confidential or proprietary information
                  of the Business or the Corporation;

            (vii) conduct  the  Business  in such a manner  that on the  Closing
                  Date,  the   representations  and  warranties  of  the  Vendor
                  contained  in  this  Agreement  shall  be  true,  correct  and
                  complete as if such  representations  and warranties were made
                  on and as of such date;

            (viii) otherwise periodically report to the Purchaser concerning the
                  state of the Business and the Corporation; and

            (ix)  report to and confer with the  Purchaser  regarding  any other
                  matter in respect of which the  Purchaser has expressed to the
                  Vendors a particular concern.

Section 5.2 Access for Due Diligence

(1)   The  Corporation  and the Purchaser  shall (i) permit each other and their
      respective   employees,    agents,    counsel,    accountants   or   other
      representatives,   between  this  date  and  the  Closing,  without  undue
      interference to the ordinary  conduct of the Business,  to have reasonable
      access during normal business hours and upon reasonable  notice to (a) the
      premises of the other  party,  (b) the Assets and,  in  particular  to any
      information,  including  all Books and  Records  whether  retained  by the
      Vendors, the Corporation,  the Purchaser or otherwise,  (c) all Contracts,
      and (d) the senior personnel of the Corporation or the Purchaser, and (ii)
      furnish to the  Purchaser or the  Corporation  as the case may be or their
      respective   employees,    agents,    counsel,    accountants   or   other
      representatives  such financial and operating  data and other  information
      the Purchaser shall from time to time reasonably request.


                                      -42-
<PAGE>

(2)   No  investigations   made  by  or  on  behalf  of  the  Purchaser  or  the
      Corporation, whether under this Section 5.2 or any other provision of this
      Agreement or any  Ancillary  Agreement,  shall have the effect of waiving,
      diminishing  the scope of, or otherwise  affecting any  representation  or
      warranty made in this Agreement or any Ancillary Agreement.

(3)   The  Purchaser  shall afford the Vendors  reasonable  access during normal
      business hours and upon reasonable notice to the premises of the Purchaser
      and to all information of the Purchaser  necessary to allow the Vendors to
      conduct appropriate enquiries with respect to the proposed transaction.

Section 5.3 Actions to Satisfy Closing Conditions

(1)   Each of the Vendors and the Corporation shall take all such actions as are
      within their power to control and to use their best efforts to cause other
      actions to be taken which are not within their power to control,  so as to
      ensure  compliance  with all of the  conditions  set  forth in  Article  6
      including ensuring that during the Interim Period and at Closing, there is
      no breach of any of their respective representations and warranties.

(2)   The  Purchaser  shall  take all such  actions  as are  within its power to
      control  and to use its best  efforts to cause  other  actions to be taken
      which are not within its power to control, so as to ensure compliance with
      all of the  conditions  set forth in  Article 6  including  ensuring  that
      during the Interim Period and at Closing, there is no breach of any of its
      representations and warranties.

Section 5.4 Transfer of the Purchased Shares

      The Vendors shall take all necessary  steps and corporate  proceedings  to
permit good title to the Purchased Shares to be duly and validly transferred and
assigned  to the  Purchaser  at the  Closing,  free of all Liens  other than the
restrictions on transfer, if any, contained in the articles of the Corporation.


                                      -43-
<PAGE>

Section 5.5 Request for Consents

      The  Corporation  will use its  reasonable  efforts  to  obtain,  prior to
Closing, all Consents.  Such Consents shall be upon such terms as are acceptable
to the Purchaser,  acting reasonably. The Purchaser will co-operate in obtaining
such Consents.

Section 5.6 Filings and Authorizations

      Each of the Vendors,  the  Corporation  and the Purchaser,  as promptly as
practicable after the execution of this Agreement, will (i) make, or cause to be
made, all such filings and  submissions  under all Laws applicable to it, as may
be required for it to consummate  the purchase and sale of the Purchased  Shares
in accordance with the terms of this Agreement,  (ii) use all reasonable efforts
to obtain, or cause to be obtained, all Authorizations necessary or advisable to
be  obtained  by it in order to  consummate  such  transfer,  and  (iii) use all
reasonable  efforts to take, or cause to be taken, all other actions  necessary,
proper or  advisable  in order  for it to  fulfil  its  obligations  under  this
Agreement.  The Vendors, the Corporation and the Purchaser, as applicable,  will
coordinate and cooperate  with one another in exchanging  such  information  and
supplying such  assistance as may be reasonably  requested by each in connection
with the foregoing including, without limitation,  providing each other with all
notices and information  supplied or filed with any Governmental  Entity (except
for notices and  information  which the Vendors or the  Purchaser,  in each case
acting  reasonably,  considers  highly  confidential  and sensitive which may be
filed on a confidential basis), and all notices and correspondence received from
any Governmental Entity.

Section 5.7 Notice of Untrue Representation or Warranty

      The  Corporation  shall promptly  notify the Purchaser,  and the Purchaser
shall promptly notify the Corporation,  upon any representation or warranty made
by it contained in this Agreement or any Ancillary  Agreement becoming untrue or
incorrect  during the Interim  Period and for the  purposes of this  Section 5.7
each  representation  and warranty  shall be deemed to be given at and as of all
times during the Interim Period. Any such notification shall set out particulars
of the untrue or incorrect representation or warranty and details of any actions
being taken by the Corporation or the Purchaser,  as the case may be, to rectify
that state of affairs.

Section 5.8 Exclusive Dealing

      During the Interim Period,  the Vendors,  individually or as a group shall
not, directly or indirectly,  solicit,  initiate,  or encourage any inquiries or
proposals from,  discuss or negotiate with,  provide any non-public  information
to, or consider the merits of any inquiries or proposals from, any Person (other
than Purchaser) relating to any transaction  involving the sale of any shares of
the Vendors or the  Corporation or the sale of the Business or any of the Assets
(other than as permitted in this Agreement).


                                      -44-
<PAGE>

      The Parties hereto agree that they shall use reasonable commercial efforts
to complete the transactions contemplated herein and in the Ancillary Agreements
by November  10, 2005 but,  in the event that such  closing has not  occurred by
November 10, 2005,  they shall continue to work  exclusively  with each other to
satisfy all conditions and complete the transactions  contemplated  herein until
December 30, 2005.

                                   ARTICLE 6
                              CONDITIONS OF CLOSING

Section 6.1 Conditions for the Benefit of the Purchaser

      The purchase and sale of the Purchased  Shares is subject to the following
conditions to be fulfilled or performed prior to Closing,  which  conditions are
for the exclusive  benefit of the  Purchaser  and may be waived,  in whole or in
part, by the Purchaser in its sole discretion:

      (a)   Truth of Representations  and Warranties.  The  representations  and
            warranties  of the Vendors  contained  in this  Agreement  or in any
            Ancillary  Agreement shall have been true and correct as of the date
            of this Agreement and as of the Closing Date with the same force and
            effect as if such  representations  and  warranties had been made on
            and as of such  date.  The  representations  and  warranties  of the
            Corporation   contained  in  this  Agreement  or  in  any  Ancillary
            Agreement  shall  have been true and  correct as of the date of this
            Agreement  and as of the Closing Date with the same force and effect
            as if such  representations an warranties had been made on and as of
            such date and the  Corporation  shall have  executed and delivered a
            certificate to that effect.  The receipt of such certificate and the
            Closing shall not constitute a waiver by the Purchaser of any of the
            representations   and  warranties  of  the  Corporation   which  are
            contained in this Agreement or in any Ancillary Agreement.  Upon the
            delivery of such certificate,  the representations and warranties of
            the  Corporation  in  Article 3 shall be deemed to have been made on
            and as of the Closing Date with the same force and effect as if made
            on and as of such date;

      (b)   Performance of Covenants. The Corporation and the Vendors shall have
            fulfilled or complied with all covenants contained in this Agreement
            and in any  Ancillary  Agreement to be fulfilled or complied with by
            them at or prior to the Closing;

      (c)   Consents.  All Required  Consents  shall have been obtained on terms
            acceptable to the Purchaser acting reasonably;


                                      -45-
<PAGE>

      (d)   Deliveries. The Vendors delivering or causing to be delivered to the
            Purchaser the following in form and  substance  satisfactory  to the
            Purchaser:

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

            (ii)  certified  copies of (i) the charter  documents and by-laws of
                  the Corporation,  (ii) all resolutions of the shareholders and
                  the  board  of  directors  of the  Corporation  approving  the
                  entering into and completion of the  transaction  contemplated
                  by this  Agreement and the Ancillary  Agreements,  and (iii) a
                  list  of  the  officers  and  directors   authorized  to  sign
                  agreements together with their specimen signatures;

            (iii) a certificate  of status,  compliance,  good  standing,  where
                  applicable,   or  like   certificate   with   respect  to  the
                  Corporation   issued  by  each   jurisdiction   in  which  the
                  Corporation  carries  on its  business  as listed in  Schedule
                  3.2(a) attached hereto;

            (iv)  the  certificates  referred  to in Section  2.5 and in Section
                  6.1(a) and Section 6.1(b);

            (v)   an opinion of counsel to the Corporation  substantially in the
                  form set forth in Schedule 6.1(d)(v) attached hereto;

            (vi)  an employment  agreement duly executed by the Chief  Executive
                  Officer of the Corporation; and

            (vii) evidence that all necessary  steps and  proceedings as set out
                  in Schedule 6.1(d)(vii) attached hereto as approved by counsel
                  for the Purchaser to permit all of the Purchased  Shares to be
                  transferred  to the  Purchaser  or its  nominee(s)  have  been
                  taken.

      (e)   Proceedings.  All  actions  to  be  taken  in  connection  with  the
            transactions contemplated in this Agreement including completion and
            execution  of  all   Ancillary   Agreements   shall  be   reasonably
            satisfactory  in  form  and  substance  to  the  Purchaser,   acting
            reasonably,  and the  Purchaser  shall have  received  copies of all
            instruments and other evidence as it may reasonably request in order
            to establish the consummation of such transactions and the taking of
            all necessary actions in connection therewith; and


                                      -46-
<PAGE>

      (f)   Change in Law. Since this date, no Law,  proposed Law, any change in
            any Law, or the  interpretation or enforcement of any Law shall have
            been introduced,  enacted or announced  (including the introduction,
            enactment  or   announcement   of  any  Law   respecting   taxes  or
            environmental matters), the effect of which will be to prevent or to
            increase  materially  the cost to the Purchaser of the completion of
            the  transaction  contemplated in this Agreement or to prevent or to
            increase  materially  the cost to the  Corporation  of operating the
            Business after Closing on substantially  the same basis as currently
            operated.

      (g)   Closing. Closing shall have occurred on or before December 30, 2005.

Section 6.2 Conditions for the Benefit of the Vendors and the Corporation

      The purchase and sale of the Purchased  Shares is subject to the following
conditions to be fulfilled or performed prior to the Closing,  which  conditions
are for the  exclusive  benefit of the  Vendors and the  Corporation  and may be
waived,  in whole or in part, by the Vendors and the  Corporation  in their sole
discretion:

      (a)   Truth of Representations  and Warranties.  The  representations  and
            warranties of the Purchaser  contained in this  Agreement and in any
            Ancillary Agreement shall be true and correct as of the Closing Date
            with  the same  force  and  effect  as if such  representations  and
            warranties  had been made on and as of such  date and the  Purchaser
            shall have executed and delivered a certificate  of a senior officer
            to that  effect.  The  receipt of such  certificate  and the Closing
            shall not constitute a waiver of the  representations and warranties
            of the  Purchaser  which  are  contained  in this  Agreement  or any
            Ancillary  Agreement.  Upon  delivery  of  such  certificates,   the
            representations  and  warranties of the Purchaser in Article 4 shall
            be deemed to have been made on and as of the  Closing  Date with the
            same force and effect as if made on and as of such date;

      (b)   Performance  of  Covenants.  The Purchaser  shall have  fulfilled or
            complied with all covenants  contained in this  Agreement and in any
            Ancillary  Agreement to be  fulfilled  or complied  with by it at or
            prior to the  Closing  and the  Purchaser  shall have  executed  and
            delivered a  certificate  of a senior  officer to that  effect.  The
            receipt of such  certificate  and the Closing shall not constitute a
            waiver by the Vendors of the  covenants of the  Purchaser  which are
            contained in this Agreement or any Ancillary Agreement);


                                      -47-
<PAGE>

      (c)   Deliveries.  The Purchaser shall deliver or cause to be delivered to
            the Vendors the following in form and substance  satisfactory to the
            Vendors acting reasonably:

            (i)   certified  copies of (i) the constating  documents and by-laws
                  of the Purchaser, Callco and Exhangeco (ii) all resolutions of
                  the  board  of  directors  of  the  Purchaser,   Callco,   and
                  Exchangeco  approving the entering into and  completion of the
                  transactions  contemplated by this Agreement and the Ancillary
                  Agreements,  and (iii) a list of its  officers  and  directors
                  authorized to sign  agreements  together  with their  specimen
                  signatures;

            (ii)  the  certificates  referred  to in Section  6.2(a) and Section
                  6.2(b);

            (iii) an opinion of counsel to the  Purchaser in  substantially  the
                  form set forth in Schedule 6.2(c)(iii) attached hereto;

            (iv)  the Voting Exchange and Support Agreement;

            (v)   evidence  satisfactory  to the Vendors  that the  transactions
                  contemplated by the Split-Off Agreement have been completed;

            (vi)  resignations  of the  current  directors  and  officers of the
                  Purchaser;

            (vii) evidence  reasonably  satisfactory  to the  Vendors  as to the
                  capitalization  of  the  Purchaser  immediately  prior  to the
                  Closing;

            (viii) resolutions of the Purchaser expanding its Board of Directors
                  to seven members and  appointing  Jeffrey J. Scott,  Walter A.
                  Dawson,  Dana  Coffield,  James Hart,  Verne  Johnson and such
                  other  person as the  directors  determine as directors of the
                  Purchaser; and

            (ix)  evidence  reasonably   satisfactory  to  the  Vendors  of  the
                  adoption of a two million share Option Plan.

      (d)   Proceedings.  All  proceedings  to be taken in  connection  with the
            transactions  contemplated  in  this  Agreement  and  any  Ancillary
            Agreement shall be reasonably  satisfactory in form and substance to
            the Vendors, acting reasonably,  and the Vendors shall have received
            copies  of all the  instruments  and  other  evidence  as  they  may
            reasonably  request in order to establish the  consummation  of such
            transactions  and  the  taking  of  all  proceedings  in  connection
            therewith; and

      (e)   Closing. Closing shall have occurred on or before December 30, 2005.


                                      -48-
<PAGE>

Section 6.3 Conditions Precedent

      The purchase and sale of the Purchased  Shares is subject to the following
terms and conditions to be fulfilled prior to the Closing,  which conditions are
true conditions precedent:

      (a)   No  Legal  Proceeding.  No Legal  Proceeding  shall  be  pending  or
            threatened  by any Person  (other than the Vendor,  the Purchaser or
            the  Corporation)  in  any  jurisdiction,  to  enjoin,  restrict  or
            prohibit any of the  transactions  contemplated by this Agreement or
            the right of the  Corporation  to conduct the Business after Closing
            on substantially the same basis as heretofore operated.

                                    ARTICLE 7
                                     CLOSING

Section 7.1 Date, Time and Place of Closing

      The  completion of the  transaction of purchase and sale  contemplated  by
this Agreement  shall take place at the offices of Osler,  Hoskin & Harcourt LLP
in Calgary,  Alberta at 10:00 a.m. (Calgary time) on the Closing Date or at such
other place,  on such other date and at such other time as may be agreed upon in
writing between the Vendors and the Purchaser.

Section 7.2 Closing Procedures

      Subject to  satisfaction or waiver by the relevant Party of the conditions
of closing,  at the Closing,  the Vendors shall deliver actual possession of the
Purchased Shares to the Purchaser and upon such delivery the Purchaser shall pay
or satisfy the Purchase Price in accordance with this Agreement.

                                    ARTICLE 8
                                   TERMINATION

Section 8.1 Termination by Purchaser

      Subject to Section  5.3(2),  if any of the conditions set forth in Section
6.1 have not been  fulfilled or waived at or prior to Closing or any  obligation
or covenant of the Vendors or the  Corporation  to be  performed  at or prior to
Closing has not been  observed or  performed  by such time,  the  Purchaser  may
terminate this Agreement by notice in writing to the Vendors,  and in such event
the Purchaser shall be released from all  obligations  hereunder save and except
for its  obligations  under Section 11.2,  Section 11.3 and Section 11.5,  which
shall  survive.  The  Vendors  shall only be  released  from  their  obligations
hereunder if the condition or conditions  for the  non-performance  of which the
Purchaser has  terminated  this  Agreement are not  reasonably  capable of being
performed  or caused to be performed by the  Vendors.  If the  Purchaser  waives
compliance  with any of the  conditions,  obligations or covenants  contained in
this  Agreement,  the waiver will be without  prejudice  to any of its rights of
termination in the event of non-fulfilment, non-observance or non-performance of
any other condition, obligation, or covenant in whole or in part.


                                      -49-
<PAGE>

Section 8.2 Termination by Vendors

      Subject to Section  5.3(1),  if any of the conditions set forth in Section
6.2 have not been  fulfilled or waived at or prior to Closing or any  obligation
or covenant of the Purchaser to be performed at or prior to Closing has not been
observed or performed by such time, the Vendors or the Corporation may terminate
this  Agreement  by notice in  writing to the  Purchaser,  and in such event the
Vendors and the  Corporation  shall be released from all  obligations  hereunder
save and except for this  obligations  under the Section 11.2,  Section 11.3 and
Section 11.5 which shall survive.  The Purchaser shall only be released from its
obligations  hereunder if the condition or conditions for the non-performance of
which the Vendors or the  Corporation  have  terminated  this  Agreement are not
reasonably  capable  of  being  performed  or  caused  to be  performed  by  the
Purchaser.  If the Vendors or the Corporation  waives compliance with any of the
conditions,  obligations or covenants  contained in this  Agreement,  the waiver
will be without  prejudice to any of its rights of  termination  in the event of
non-fulfilment,  non-observance  or  non-performance  of  any  other  condition,
obligation or covenant in whole or in part.

Section 8.3 Other Termination Rights

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

      (a)   by mutual consent of the Vendors, the Corporation and the Purchaser;
            or

      (b)   if any of the conditions precedent set forth in Section 6.3 have not
            been fulfilled or waived at or prior to Closing;

      and, in such event,  each Party  shall be  released  from all  obligations
      under this Agreement,  save and except for its  obligations  under Section
      11.2, Section 11.3 and Section 11.5 which shall survive.

Section 8.4 Effect of Termination

      Each Party's right of  termination  under this Article 8 is in addition to
any other rights it may have under this Agreement or otherwise, and the exercise
of a right of  termination  will not be an  election  of  remedies.  Nothing  in
Article 8 shall limit or affect any other rights or causes of action  either the
Purchaser  or  the  Vendors  may  have  with  respect  to  the  representations,
warranties, covenants and indemnities in its favour contained in this Agreement.


                                      -50-
<PAGE>

                                   ARTICLE 9
                                INDEMNIFICATION

Section 9.1 Indemnification in Favour of the Purchaser

(1)   Subject to Section 9.5,  each Vendor shall  severally  indemnify  and save
      each of the Purchaser and the Purchaser's directors,  officers, agents and
      representatives  (collectively,  the "Purchaser's  Indemnified  Persons"),
      together with the Corporation and the Corporation's  directors,  officers,
      agents  and  representatives  harmless  of and from any  loss,  liability,
      claim,  damage or expense  (whether or not involving a third-party  claim)
      including legal expenses suffered by, imposed upon or asserted against any
      of the Purchaser's Indemnified Persons,  together with the Corporation and
      the Corporation's  directors,  officers,  agents and  representatives as a
      result of, in respect of,  connected  with, or arising out of,  under,  or
      pursuant to any and all debts,  obligations and other liabilities (whether
      absolute,  accrued,  contingent,  fixed or otherwise,  or whether known or
      unknown, or due or to become due or otherwise),  monetary damages,  fines,
      fees, penalties, interest obligations,  deficiencies,  losses and expenses
      (including without limitation amounts paid in settlement,  interest, court
      costs,   costs  of   investigators,   fees  and  expenses  of   attorneys,
      accountants,  financial advisors and other experts,  and other expenses of
      litigation) (collectively "Damages") incurred or suffered by the Purchaser
      or any Affiliate thereof  resulting from,  relating to or constituting any
      breach by such Vendor of the representations and warranties of such Vendor
      set out in Section 3.1 herein.

(2)   The  Corporation  shall  indemnify  and save the  Purchaser's  Indemnified
      Persons  harmless of and from any Damages  suffered  by,  imposed  upon or
      asserted  against any of the Purchaser's  Indemnified  Persons as a result
      of, in respect of,  connected  with,  or arising out of, under or pursuant
      to:

      (a)   any failure of the Corporation to perform or fulfill any covenant of
            the Corporation under this Agreement; or

      (b)   any breach or inaccuracy of any  representation or warranty given by
            the Corporation contained in this Agreement

      provided  that any claim  against the  Corporation  shall be limited to an
      obligation to deliver  additional  Goldstrike Shares as set out in Section
      9.4.


                                      -51-
<PAGE>

Section 9.2 Indemnification in Favour of the Vendor.

      The Purchaser shall  indemnify and save the Vendors and the  Corporation's
directors,  officers, employees, agents and representatives  (collectively,  the
"Vendors'  Indemnified  Persons")  harmless of and from any Damages suffered by,
imposed upon or asserted  against any of the Vendors'  Indemnified  Persons as a
result of, in respect of,  connected  with, or arising out of, under or pursuant
to:

      (a)   any failure of the  Purchaser  to perform or fulfil any  covenant of
            the Purchaser under this Agreement; or

      (b)   any breach or inaccuracy of any  representation or warranty given by
            the Purchaser contained in this Agreement.

provided that any claim against the Purchaser  shall be limited to an obligation
to deliver additional Goldstrike Shares as set out in Section 9.5.

Section 9.3 Time Limitations

      All  representations  and  warranties set out in this Agreement and in any
Ancillary  Agreement shall survive the Closing and,  notwithstanding the Closing
or any investigation made by or on behalf of the Purchaser or the Vendors, shall
continue  for a period of 24  months  after  the  Closing  Date and any claim in
respect thereof shall be made in writing during such time period.

Section 9.4 Limitations on Amount

(1)   The Corporation will have no liability (for  indemnification or otherwise)
      with respect to the matters  described in Section 9.2 other than to permit
      the  issuance  of the  additional  shares of the  Purchaser  as set out in
      Section 2.5(1)(b).

(2)   The Purchaser  will have no liability (for  indemnification  or otherwise)
      with  respect  to the  matters  described  in  Section  9.2 other than the
      covenant to issue additional shares set out in Section 2.5(1)(a).

Section 9.5 Procedure for Indemnification--Third Party Claims.

(1)   Promptly after receipt by an indemnified  party (an  "Indemnified  Party")
      under  Section 9.1 or Section 9.2 of a notice of the  commencement  of any
      proceeding  against it, the  Indemnified  Party will,  if a claim is to be
      made against an indemnifying party under such Section,  give notice to the
      Indemnifying  Party (an "Indemnifying  Party") of the commencement of such
      claim. The failure to notify the  Indemnifying  Party will not relieve the
      Indemnifying  Party of any liability  that it may have to any  Indemnified
      Party,  except to the extent that the Indemnifying Party demonstrates that
      the  defence  of such  action is  prejudiced  by the  Indemnified  Party's
      failure to give such notice.


                                      -52-
<PAGE>

(2)   If any  proceeding  referred  to in  Section  9.5(1) (a  "Proceeding")  is
      brought  against  an  Indemnified   Party  and  it  gives  notice  to  the
      Indemnifying Party of the commencement of the Proceeding, the Indemnifying
      Party will, unless the claim involves taxes, be entitled to participate in
      the Proceeding. Subject to the next following sentence, to the extent that
      the Indemnifying Party wishes to assume the defence of the Proceeding with
      counsel  satisfactory to the  Indemnified  Party, it may do so provided it
      reimburses the  Indemnified  Party for all of its  out-of-pocket  expenses
      arising prior to or in connection with such  assumption.  The Indemnifying
      Party may not assume  defence of the  Proceeding  if (i) the  Indemnifying
      Party  is  also a  party  to the  Proceeding  and  the  Indemnified  Party
      determines in good faith that joint representation would be inappropriate,
      or (ii) the Indemnifying  Party fails to provide  reasonable  assurance to
      the Indemnified  Party of its financial  capacity to defend the Proceeding
      and provide  indemnification with respect to the Proceeding.  After notice
      from the  Indemnifying  Party to the Indemnified  Party of its election to
      assume the defence of the Proceeding,  the Indemnifying Party will not, as
      long as it diligently  conducts such defence, be liable to the Indemnified
      Party under this  Section  9.5 for any fees of other  counsel or any other
      expenses  with  respect  to the  defence of the  Proceeding,  in each case
      subsequently  incurred by the  Indemnified  Party in  connection  with the
      defence of the Proceeding,  other than reasonable  costs of  investigation
      approved in advance by the Indemnifying  Party. If the Indemnifying  Party
      assumes the defence of a  Proceeding,  no compromise or settlement of such
      claims  may be made by the  Indemnifying  Party  without  the  Indemnified
      Party's  consent  unless  (i)  there is no  finding  or  admission  of any
      violation  of Laws or any  violation  of the  rights of any  Person and no
      effect on any other claims that may be made against the Indemnified Party,
      and (ii) the sole relief  provided is  monetary  damages  that are paid in
      full by the Indemnifying  Party, and (iii) the Indemnified Party will have
      no liability  with respect to any  compromise or settlement of such claims
      effected without its consent.  If notice is given to an Indemnifying Party
      of the commencement of any Proceeding and the Indemnifying Party does not,
      within  ten  days  after  receipt  of  such  notice,  give  notice  to the
      Indemnified Party of its election to assume the defence of the Proceeding,
      the  Indemnifying  Party  will be bound by any  determination  made in the
      Proceeding or any  compromise or  settlement  effected by the  Indemnified
      Party.

(3)   Notwithstanding the foregoing,  if an Indemnified Party determines in good
      faith  that  there  is a  reasonable  probability  that a  Proceeding  may
      adversely  affect it or its affiliates  other than as a result of monetary
      damages  for which it would be  entitled  to  indemnification  under  this
      Agreement, the Indemnified Party may, by notice to the Indemnifying Party,
      assume  the  exclusive  right  to  defend,   compromise,   or  settle  the
      Proceeding.  In such case, the Indemnifying Party will not be bound by any
      determination  of a Proceeding so defended or any compromise or settlement
      effected without its consent (which may not be unreasonably withheld).


                                      -53-
<PAGE>

(4)   Where the defence of a Proceeding is being  undertaken  and  controlled by
      the  Indemnifying  Party,  the  Indemnified  Party will use all reasonable
      efforts to make available to the Indemnifying  Party those employees whose
      assistance,  testimony or presence is necessary to assist the Indemnifying
      Party  in  evaluating  and  defending  any  such  claims.   However,   the
      Indemnifying  Party shall be responsible  for the expense  associated with
      any employees made available by the Indemnified  Party to the Indemnifying
      Party pursuant to this Section 9.5(4),  which expense shall be equal to an
      amount to be mutually  agreed upon per person per hour or per day for each
      day or portion  thereof that the employees are assisting the  Indemnifying
      Party  and  which  expenses  shall  not  exceed  the  actual  cost  to the
      Indemnified Party associated with the employees.

(5)   With respect to any Proceeding, the Indemnified Party shall make available
      to the  Indemnifying  Party or its  representatives  on a timely basis all
      documents,   records  and  other   materials  in  the  possession  of  the
      Indemnified  Party, at the expense of the Indemnifying  Party,  reasonably
      required by the Indemnifying Party for its use in defending any such claim
      and shall  otherwise  cooperate  on a timely  basis with the  Indemnifying
      Party in the defence of such claim.

(6)   With respect to any re-assessment for income, corporate, sales, excise, or
      other tax or other  liability  enforceable by Lien against the property of
      the Indemnified Party, the Indemnifying  Party's right to so contest shall
      only apply after  payment of the  re-assessment  or the  provision of such
      security as is  necessary  to avoid a Lien being placed on the property of
      the Indemnified Party.

Section 9.6 Procedure for Indemnification--Other Claims

      A claim for  indemnification  for any matter not  involving a  third-party
claim  may be  asserted  by notice to the  Party  from whom  indemnification  is
sought.

                                   ARTICLE 10
                             POST-CLOSING COVENANTS

Section 10.1 Further Assurances

      From time to time after the Closing Date, each Party shall, at the request
of any other Party, execute and deliver such additional  conveyances,  transfers
and other assurances as may be reasonably  required to effectively  transfer the
Purchased Shares to the Purchaser and carry out the intent of this Agreement and
any Ancillary  Agreement.  In addition,  the parties shall reasonably  cooperate
with each other in the  preparation  and filing of a Current  Report on Form 8-K
with the SEC reporting on the transactions contemplated by this Agreement within
the time periods specified by such Report.


                                      -54-
<PAGE>

                                   ARTICLE 11
                                 MISCELLANEOUS

Section 11.1 Notices

      Any notice, direction or other communication given under this Agreement or
any  Ancillary  Agreement  shall be in  writing  and given by  delivering  it or
sending  it by  facsimile  or  other  similar  form  of  recorded  communication
addressed:

      (a)   to the Purchaser at:

            Goldstrike Inc.
            1055 West Hastings Street, Suite 1980
            Vancouver, British Columbia
            Canada
            V6E 2E9

            Attention:  Dr. Yenyou Zhang

            Telephone:  (604) 688-8002
            Facsimile:  (604) 688-8030

with a copy to:

            Gottbetter & Partners, LLP
            488 Madison Avenue, 12th Floor
            New York, NY
            10022

            Attention:  Kenneth S. Goodwin, Esq.

            Telephone:  (212) 400-6900
            Facsimile:  (212) 400-6901


                                      -55-
<PAGE>

      And

            Stikeman Elliott LLP
            4300 Bankers Hall West
            888 - 3rd Street S.W.
            Calgary, Alberta T2P 5C5

            Attention:  Stuart M. Olley, Esq.

            Telephone:  (403) 266-9057
            Facsimile:  (403) 266-9034

      (b)   to the Corporation or the Vendors at:

            Gran Tierra Energy Inc.
            10 - 8th Avenue SW, Tenth Floor
            Calgary, Alberta
            Canada
            T2P 1G5

            Attention:  Dana Coffield

            Telephone:  (403) 537-7454
            Facsimile:  (403) 537-7440

with a copy to:

            Osler, Hoskin & Harcourt LLP
            Suite 2500, 450 - 1st Street S.W.
            Calgary, Alberta
            T2P 5H1

            Attention:  Don Boykiw, Esq.

            Telephone:  (403) 260-7000
            Facsimile:  (403) 260-7024


                                      -56-
<PAGE>

      And

            McGuireWoods LLP
            1345 Avenue of the Americas
            New York, NY 10105

            Attention:  Louis W. Zehil, Esq.

            Telephone:  (212) 548-2138
            Facsimile:  (212) 548-2175

Any such  communication  shall be deemed to have been  validly  and  effectively
given (i) if personally delivered,  on the date of such delivery if such date is
a Business Day and such delivery was made prior to 4:00 p.m.  (Calgary time) and
otherwise  on the next  Business  Day, or (ii) if  transmitted  by  facsimile or
similar means of recorded  communication  on the Business Day following the date
of transmission.  Any Party may change its address for service from time to time
by notice given in accordance with the foregoing and any subsequent notice shall
be sent to such Party at its changed address.

Section 11.2 Brokers

      The Vendors  shall  indemnify  and save  harmless  the  Purchaser  and the
Corporation from and against any and all claims, losses and costs whatsoever for
any  commission  or other  remuneration  payable or alleged to be payable to any
broker,  agent or other  intermediary  who purports to act or have acted for the
Vendors or the Corporation.  The Purchaser shall indemnify and save harmless the
Vendors from and against any and all claims, losses and costs whatsoever for any
commission or other remuneration payable or alleged to be payable to any broker,
agent or other  intermediary who purports to act or have acted for the Purchaser
other than Mr. Robert Anderson who shall be issued 250,000 Purchaser Shares as a
finder's fee.

Section 11.3 Announcements

      At all times prior to Closing,  any press  release or public  statement or
announcement (a "Public Statement") with respect to the transaction contemplated
in this  Agreement  shall be made only with the prior written  consent and joint
approval of the  Corporation and the Purchaser  unless such Public  Statement is
required by Law or by any stock  exchange,  in which case the Party  required to
make the Public  Statement  shall use its best efforts to obtain the approval of
the other Party as to the form,  nature and extent of the disclosure.  After the
Closing,  the  parties  acknowledge  that a  public  filing  on  Form 8K will be
required to be made by the Purchaser.


                                      -57-
<PAGE>

Section 11.4 Third Party Beneficiaries

      Except as  otherwise  provided in Section 9.1 and Section 9.2, the Vendors
and the  Purchaser  intend that this  Agreement  shall not benefit or create any
right or cause of action in, or on behalf of, any Person  other than the Parties
to this Agreement and no Person,  other than the Parties to this Agreement shall
be entitled to rely on the  provisions  of this  Agreement in any action,  suit,
proceeding, hearing or other forum.

Section 11.5 Expenses

      Except as otherwise  expressly  provided in this Agreement,  all costs and
expenses  (including the fees and  disbursements  of legal  counsel,  investment
advisers  and  accountants)  incurred in  connection  with this  Agreement,  the
Ancillary Agreements and the transactions  contemplated therein shall be paid by
the Party incurring such expenses.

Section 11.6 Amendments

      This Agreement may only be amended,  supplemented or otherwise modified by
written agreement signed by the Vendors, the Corporation and the Purchaser.

Section 11.7 Waiver

(1)   No waiver of any of the  provisions  of this  Agreement  or any  Ancillary
      Agreement  shall be deemed to  constitute a waiver of any other  provision
      (whether or not similar); nor shall such waiver be binding unless executed
      in writing by the Party to be bound by the waiver.

(2)   No failure on the part of the Vendors, the Corporation or the Purchaser to
      exercise,  and no delay in exercising any right under this Agreement shall
      operate  as a waiver  of such  right;  nor shall  any  single  or  partial
      exercise of any such right preclude any other or further  exercise of such
      right or the exercise of any other right.

Section 11.8 Non-Merger

      Except as otherwise  expressly provided in this Agreement,  the covenants,
representations  and warranties shall not merge on and shall survive the Closing
and,  notwithstanding  such Closing or any investigation made by or on behalf of
any Party, shall continue in full force and effect.  Closing shall not prejudice
any right of one Party  against any other  Party in respect of anything  done or
omitted  under  this  Agreement  or in  respect of any right to damages or other
remedies.


                                      -58-
<PAGE>

Section 11.9 Entire Agreement

      This  Agreement  together with the Ancillary  Agreements  constitutes  the
entire  agreement  between  the  Parties and  supersedes  all prior  agreements,
understandings,  negotiations and discussions,  whether oral or written,  of the
Parties.  There are no  representations,  warranties,  covenants,  conditions or
other  agreements,  express or  implied,  collateral,  statutory  or  otherwise,
between the Parties in  connection  with the  subject  matter of this  Agreement
except as specifically  set forth herein and therein and neither the Vendors nor
the Purchaser has relied or is relying on any other  information,  discussion or
understanding in entering into and completing the  transactions  contemplated in
this  Agreement  and the  Ancillary  Agreements.  If  there is any  conflict  or
inconsistency between the provisions of this Agreement and the provisions of any
Ancillary Agreement, the provisions of this Agreement shall govern.

Section 11.10 Successors and Assigns

(1)   This Agreement  shall become  effective when executed by the Vendors,  the
      Corporation  and the  Purchaser  and after that time shall be binding upon
      and enure to the benefit of such parties and their  respective  successors
      and permitted assigns.

(2)   Except as provided in this Section  11.10,  neither this Agreement nor any
      of the rights or obligations  under this Agreement  shall be assignable or
      transferable  by any Party without the prior written  consent of the other
      Party. The Purchaser shall be entitled,  upon giving notice to the Vendors
      at any time on or prior to the Closing Date,  to assign this  Agreement or
      any of the Purchaser's  rights and obligations under this Agreement to any
      affiliate  (as such term is defined  under the Business  Corporations  Act
      (Alberta)) of the Purchaser subject to the following three conditions:

      (a)   The assignee  shall  become  jointly and  severally  liable with the
            Purchaser,  as a principal and not as a surety,  with respect to all
            of  the  representations,  warranties,  covenants,  indemnities  and
            agreements of the Purchaser; and

      (b)   The assignee  shall execute an agreement  confirming  the assignment
            and  the  assumption  by  the  assignee  of all  obligations  of the
            Purchaser under this Agreement.

Section 11.11 Severability

      If any provision of this Agreement shall be determined by an arbitrator or
any court of competent  jurisdiction  to be illegal,  invalid or  unenforceable,
that provision shall be severed from this Agreement and the remaining provisions
shall continue in full force and effect.


                                      -59-
<PAGE>

Section 11.12 Tax Election

      The Parties agree that  ExchangeCo and the Vendors will, at the request of
each Vendor,  file (and the  Purchaser  agrees that it will cause  ExchangeCo to
file)  joint  elections  pursuant  to  subsection  85(1) of the  Income  Tax Act
(Canada) in prescribed form and within the prescribed  time, in the case of each
such election  specifying such elected amount as is designated by the Vendor. In
the case of each such election, ExchangeCo's sole responsibility will be to sign
the  election  form and provide the  required  information  with  respect to its
identity, and the Vendor will be solely responsible for completing the remaining
information and filing the form.

Section 11.13 Governing Law

(1)   This  Agreement  shall be  governed  by and  interpreted  and  enforced in
      accordance  with the laws of the  Province of Alberta and the federal laws
      of Canada applicable therein.

(2)   Each of the Parties  irrevocably  attorns and submits to the non-exclusive
      jurisdiction  of the  Court of Queens  Bench of  Alberta  and the  Vendors
      appoint Osler, Hoskin & Harcourt LLP attention Don Boykiw as agent for the
      service of any process with respect to any matter arising under or related
      to the Agreement or any Ancillary Agreement.

Section 11.14 Counterparts.

      This Agreement may be executed in any number of  counterparts by facsimile
or  otherwise  and all such  counterparts  taken  together  shall be  deemed  to
constitute one and the same instrument.

      IN  WITNESS   WHEREOF  the  Parties  have  executed  this  Share  Purchase
Agreement.

GOLDSTRIKE INC.


-------------------------------------
Name:
Position


                                      -60-
<PAGE>

GRAN TIERRA ENERGY INC.


-------------------------------------      -------------------------------------
Name:                                      Name:
Position                                   Position


-------------------------------------      -------------------------------------
Jeffrey J. Scott                           Walter A. Dawson


Perfco Investments Ltd.                    KristErin Resources Inc.


By:                                        By:
   ---------------------------------          ----------------------------------


-------------------------------------      -------------------------------------
Randall Pounds                             Rafael Orunesu


-------------------------------------      -------------------------------------
Dana Coffield                              Max Hsu Wei


-------------------------------------      -------------------------------------
James Robert Hart                          Mark Wayne


-------------------------------------      -------------------------------------
Gary R. Smith                              Verne G. Johnson


-------------------------------------      -------------------------------------
Neil MacKenzie                             Frank Elliott


-------------------------------------      -------------------------------------
Luc Chartrand


Adeco Exploration Company Ltd.             1053361 Alberta Ltd.


By:                                        By:
   ---------------------------------          ----------------------------------


                                      -61-
<PAGE>


-------------------------------------      -------------------------------------
John Taylor                                Edward J. Muchowski


-------------------------------------      -------------------------------------
Margaret A. Dawson                         Barry R. Balsillie


-------------------------------------      -------------------------------------
Reg Greenslade                             Dale Foster


-------------------------------------      -------------------------------------
William J. Scott                           Dennis Flanagan


The Roger Tang Family Trust                MH Financial Management Ltd.


By:                                        By:
   ---------------------------------          ----------------------------------


-------------------------------------      -------------------------------------
Josef Hocher                               Keith Bekker


NBN Clearing ITF Soderglen Ranches Ltd.    NBCN Clearing Inc. ITF Jamie Mackie


By:                                        By:
   ---------------------------------          ----------------------------------


-------------------------------------      -------------------------------------
David Roger Keith                          H. Alexander Rowlands


Interstellar Enterprises Limited           411209 Alberta Ltd.


By:                                        By:
   ---------------------------------          ----------------------------------


-------------------------------------      -------------------------------------
Robert D. Steele                           James Greenslade


                                      -62-
<PAGE>


-------------------------------------      -------------------------------------
Ernest Yin                                 Gordon E. Skulmoski


Aran Asset Management SA                   Roytor & Co. A/C M12078211


By:                                        By:
   ---------------------------------          ----------------------------------


Ahmed Hussain Al-Khalaf                    Argentiere Ltd.
International Projects Developments        c/o MSC
Co.


By:                                        By:
   ---------------------------------          ----------------------------------


-------------------------------------      -------------------------------------
Dan Wright                                 M.C. Coffield


                                      -63-
<PAGE>

                                  SCHEDULE "A"
                                     VENDORS

<PAGE>

                                  SCHEDULE "B"
          AUDITED FINANCIAL STATEMENTS AND INTERIM FINANCIAL STATEMENTS

<PAGE>

                                  SCHEDULE "C"
                                PERMITTED LIENS

(a)   Easements,  rights-of-way,  servitudes, restrictions and similar rights in
      real property or interests  therein  granted or reserved to other Persons,
      provided that such rights do not, in the Purchaser's  opinion,  reduce the
      value of the Asset so affected or materially interfere with its use in the
      operation of the Business;

(b)   Title defects or irregularities  which are of a minor nature and which, in
      the Purchaser's  reasonable  opinion, do not reduce the value of the Asset
      so affected or materially  interfere  with its use in the operation of the
      Business;

(c)   The reservations,  limitations, provisos and conditions, if any, expressed
      in any original  grant from the Crown of any real property or any interest
      therein or in any  comparable  grant in  jurisdictions  other than Canada,
      provided they do not, in the Purchaser's  reasonable  opinion,  reduce the
      value of the Asset so affected or materially interfere with its use in the
      operation of the Business;

(d)   Liens given to a public utility or any  Governmental  Entity when required
      by such utility or Governmental Entity in connection with the operation of
      the Business or the  ownership of the Assets,  provided  that the Liens do
      not, in the Purchaser's reasonable opinion,  reduce the value of the Asset
      so affected or materially  interfere  with its use in the operation of the
      Business;

(e)   Servicing agreements,  development agreements,  site plan agreements,  and
      other agreements including, without limitation, any obligations to deliver
      letters  of credit  and other  security  as  required,  with  Governmental
      Entities  pertaining  to the  use  or  development  of any of the  Assets,
      provided they are complied with and do not in the  Purchaser's  reasonable
      opinion, reduce the value of any Asset so affected or materially interfere
      with its use in the operation of the Business; and

(f)   Applicable  municipal  and  other  governmental  restrictions,   including
      municipal by-laws and regulations, affecting the use of land or the nature
      of  any  structures  which  may be  erected  on the  land,  provided  such
      restrictions  have  been  complied  with  and do not,  in the  Purchaser's
      reasonable  opinion,  reduce  the  value  of  the  Asset  so  affected  or
      materially interfere with its use in the operation of the Business.

(g)   Rights of first refusal with respect to any transfer of the  Corporation's
      interest in the Argentinean  assets  acquired  pursuant to the Argentinean
      Acqusition.

<PAGE>

                                  SCHEDULE "D"
                          EXCHANGEABLE SHARE PROVISIONS

<PAGE>

                                  SCHEDULE "E"
                               OFFERING MEMORANDUM

<PAGE>

                                  SCHEDULE "F"
                      VOTING EXCHANGE AND SUPPORT AGREEMENT

<PAGE>

                                 SCHEDULE 3.2(a)
          JURISDICTIONS IN WHICH CORPORATION CARRIES ON BUSINESS, ETC.

Alberta

Ecuador

Argentina

<PAGE>

                                 SCHEDULE 3.2(c)
                             REQUIRED AUTHORIZATIONS

<PAGE>

                                 SCHEDULE 3.2(i)
                           ORDINARY COURSE EXCEPTIONS

<PAGE>

                                 SCHEDULE 3.2(l)
                             MATERIAL AUTHORIZATIONS

<PAGE>

                                 SCHEDULE 3.2(q)
                                OWNED PROPERTIES

Nil

<PAGE>

                                 SCHEDULE 3.2(r)
                          LEASES AND LEASED PROPERTIES

o     Office  space at 610 - 8th Avenue S.W.  Calgary,  Alberta - month to month
      lease, 3-month cancellation, approximately $4,000 per month (inclusive).

o     temporary office space in Ecuador and Argentina

o     the  Corporation's  undivided  interest  in the  oil  and  gas  properties
      acquired pursuant to the Argentine Acquisition.

<PAGE>

                                 SCHEDULE 3.2(s)
                               MATERIAL CONTRACTS

o     Engagement letters with Osler, Hoskin & Harcourt LLP, McGuireWoods LLP and
      Deloitte & Touche LLP for the provision of professional services.

o     Employment  contracts with Dana  Coffield,  James Hart, Max Wei and Rafael
      Orunesu.

o     Escrow  Agreement  between Bank of New York,  Gran Tierra  Energy Inc. and
      Doug Won Corporation S.A. dated July, 2005.

o     Trust  Agreement  between  BBVA Banco  Frances  S.A.,  Gran Tierra  Energy
      Argentina  S.A.,  YPF S.A.,  Pluspetrol  S.A. and CGC S.A.  dated October,
      2005.

o     Assignment   Agreements   entered  into  with  respect  to  the  Argentine
      Acquisition

<PAGE>

                                 SCHEDULE 3.2(w)
                          INTELLECTUAL PROPERTY MATTERS

Nil

<PAGE>

                                SCHEDULE 3.2(aa)
                                   LIABILITIES

<PAGE>

                                SCHEDULE 3.2(bb)
                      BANK ACCOUNTS AND POWERS OF ATTORNEY

(i)   Bank Accounts

      o     CIBC Calgary - authorized signatories Dana Coffield,  James Hart and
            Jeffery Scott.

      o     HSBC Buenos Aires - authorized  signatories  Rafael Orunescu,  James
            Hart,  Pablo De  Rosso/Hugo  Martelli  of  Martelli  Abogados  (Gran
            Tierra's Argentinean legal counsel).

(ii)  Power of Attorney

      o     In compliance with operating  standards within  Argentina,  the bank
            signatories  listed  above for the HSBC  account  have been  granted
            limited and specific powers of attorney.

<PAGE>

                                SCHEDULE 3.2(cc)
                              ENVIRONMENTAL MATTERS

Nil

<PAGE>

                                SCHEDULE 3.2(dd)
                                EMPLOYEE MATTERS

      -     Dana Coffield

      -     James Hart

      -     Max Wei

      -     Rafael Orunescu

      -     Carmen Nuefeld

      -     Heather Campbell

<PAGE>

                                SCHEDULE 3.2(ff)
                                    INSURANCE

-     Directors  and Officers  Insurance - ACE INA, $10 million  limit,  premium
      $77,000 in accordance with term sheet dated November 1, 2005.

<PAGE>

                                SCHEDULE 3.2(gg)
                                   LITIGATION

Nil

<PAGE>

                                 SCHEDULE 4.1(x)
                                    CONTRACTS

<PAGE>

                                SCHEDULE 4.1(dd)
                   CERTAIN BUSINESS RELATIONS WITH AFFILIATES

<PAGE>

                                SCHEDULE 4.1(gg)
                                   ACCOUNTANTS

<PAGE>

                                 SCHEDULE 6.1(c)
                      REQUIRED CONSENTS AND AUTHORIZATIONS

None.

<PAGE>

                               SCHEDULE 6.1(d)(v)
                            FORM OF VENDOR'S OPINION

<PAGE>

                              SCHEDULE 6.1(d)(vii)
                         EVIDENCE OF TRANSFER OF SHARES

<PAGE>

                              SCHEDULE 6.2(c)(iii)
                           FORM OF PURCHASER'S OPINION