Document:

Exhibit 10.1

 

Execution Copy

 

STOCK PURCHASE AGREEMENT

 

by and among

 

NAVTEQ B.V.

 

NAVTEQ CORPORATION

 

PICTURE MAP INTERNATIONAL CO., LTD.

 

and

 

ALL SHAREHOLDERS

of

PICTURE MAP INTERNATIONAL CO., LTD.

 

 

dated as of

 

July 8, 2005

 

 

TABLE
OF CONTENTS

 

	
  Sections

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  1.

  	
  Definitions

  	
   

  
	
  2.

  	
  Purchase of Purchased
  Shares

  	
   

  
	
   

  	
  2.1

  	
  Purchase and Sale of Purchased Shares

  	
   

  
	
   

  	
  2.2

  	
  Purchase Price

  	
   

  
	
   

  	
  2.3

  	
  Remittance of
  Purchase Price

  	
   

  
	
  3.

  	
  Closing

  	
   

  
	
   

  	
  3.1

  	
  Place of Closing

  	
   

  
	
   

  	
  3.2

  	
  Effectiveness of the Closing

  	
   

  
	
   

  	
  3.3

  	
  Documents

  	
   

  
	
  4.

  	
  Purchase of NAVTEQ Stock

  	
   

  
	
   

  	
  4.1

  	
  Issuance

  	
   

  
	
   

  	
  4.2

  	
  Purchase

  	
   

  
	
   

  	
  4.3

  	
  Registration

  	
   

  
	
   

  	
  4.4

  	
  Restrictions on Transfer;
  Legends

  	
   

  
	
  5.

  	
  Post-Closing
  Adjustment of the Purchase Price

  	
   

  
	
   

  	
  5.1

  	
  Closing Balance Sheet

  	
   

  
	
   

  	
  5.2

  	
  Resolution of Disputes

  	
   

  
	
   

  	
  5.3

  	
  Purchase Price
  Adjustment

  	
   

  
	
  6.

  	
  Escrow

  	
   

  
	
   

  	
  6.1

  	
  Escrow Agreement

  	
   

  
	
   

  	
  6.2

  	
  Escrow Amount

  	
   

  
	
  7.

  	
  Representations
  and Warranties of Sellers

  	
   

  
	
   

  	
  7.1

  	
  Organization,
  Authority and Qualification of Sellers

  	
   

  
	
   

  	
  7.2

  	
  Ownership of the
  Purchased Shares

  	
   

  
	
   

  	
  7.3

  	
  No Conflict

  	
   

  
	
   

  	
  7.4

  	
  Consents and Approvals

  	
   

  
	
   

  	
  7.5

  	
  Brokers

  	
   

  
	
   

  	
  7.6

  	
  Full Disclosure

  	
   

  
	
  8.

  	
  Representations
  and Warranties of the Company

  	
   

  
	
   

  	
  8.1

  	
  Organization,
  Authority and Qualification of the Company

  	
   

  
	
   

  	
  8.2

  	
  Capital Stock of the
  Company

  	
   

  
					

 

i

 

	
   

  	
  8.3

  	
  Subsidiaries

  	
   

  
	
   

  	
  8.4

  	
  Corporate
  Books and Records

  	
   

  
	
   

  	
  8.5

  	
  No Conflict

  	
   

  
	
   

  	
  8.6

  	
  Consents
  and Approvals

  	
   

  
	
   

  	
  8.7

  	
  Financial
  Statements and Books and Records

  	
   

  
	
   

  	
  8.8

  	
  No Undisclosed
  Liabilities

  	
   

  
	
   

  	
  8.9

  	
  Accounts
  Receivable

  	
   

  
	
   

  	
  8.10

  	
  Permits

  	
   

  
	
   

  	
  8.11

  	
  Conduct
  in the Ordinary Course of Business; Absence of Certain Changes, Events and
  Conditions

  	
   

  
	
   

  	
  8.12

  	
  Customers,
  Distributors and Suppliers

  	
   

  
	
   

  	
  8.13

  	
  Related
  Party Transactions

  	
   

  
	
   

  	
  8.14

  	
  Litigation

  	
   

  
	
   

  	
  8.15

  	
  Compliance with
  Laws

  	
   

  
	
   

  	
  8.16

  	
  Material
  Contracts

  	
   

  
	
   

  	
  8.17

  	
  Intellectual Property

  	
   

  
	
   

  	
  8.18

  	
  Real Property

  	
   

  
	
   

  	
  8.19

  	
  Tangible
  Personal Property

  	
   

  
	
   

  	
  8.20

  	
  Inventories

  	
   

  
	
   

  	
  8.21

  	
  Assets

  	
   

  
	
   

  	
  8.22

  	
  Employee Benefit
  Matters

  	
   

  
	
   

  	
  8.23

  	
  Labor Matters

  	
   

  
	
   

  	
  8.24

  	
  Taxes

  	
   

  
	
   

  	
  8.25

  	
  Insurance

  	
   

  
	
   

  	
  8.26

  	
  Environment

  	
   

  
	
   

  	
  8.27

  	
  Product Liability and Product Warranty

  	
   

  
	
   

  	
  8.28

  	
  Brokers

  	
   

  
	
   

  	
  8.29

  	
  Full
  Disclosure

  	
   

  
	
  9.

  	
  Representations
  and Warranties of Purchaser and NAVTEQ

  	
   

  
	
   

  	
  9.1

  	
  Organization

  	
   

  
	
   

  	
  9.2

  	
  Authority

  	
   

  
	
   

  	
  9.3

  	
  NVT
  Stock

  	
   

  
	
   

  	
  9.4

  	
  No
  Conflict

  	
   

  
	
   

  	
  9.5

  	
  Brokers

  	
   

  

 

ii

 

	
   

  	
  9.6

  	
  Investigation
  and Evaluation

  	
   

  
	
   

  	
  9.7

  	
  SEC Filings;
  Financial Statements

  	
   

  
	
  10.

  	
  Covenants of
  Sellers and the Company

  	
   

  
	
   

  	
  10.1

  	
  Conduct of Business

  	
   

  
	
   

  	
  10.2

  	
  Access

  	
   

  
	
   

  	
  10.3

  	
  Authorizations

  	
   

  
	
   

  	
  10.4

  	
  Conditions

  	
   

  
	
   

  	
  10.5

  	
  No
  Shop

  	
   

  
	
  11.

  	
  Covenants of
  Purchaser and NAVTEQ

  	
   

  
	
   

  	
  11.1

  	
  Conditions

  	
   

  
	
   

  	
  11.2

  	
  Foreign Investment Report

  	
   

  
	
   

  	
  11.3

  	
  Employees

  	
   

  
	
  12.

  	
  Conditions
  for the Benefit of Purchaser and NAVTEQ

  	
   

  
	
   

  	
  12.1

  	
  Representations and Warranties

  	
   

  
	
   

  	
  12.2

  	
  Fulfillment of Covenants

  	
   

  
	
   

  	
  12.3

  	
  Corporate Actions of Purchaser

  	
   

  
	
   

  	
  12.4

  	
  Third Party Authorizations

  	
   

  
	
   

  	
  12.5

  	
  Employment
  Agreement

  	
   

  
	
   

  	
  12.6

  	
  Payment Agency Agreement

  	
   

  
	
   

  	
  12.7

  	
  Escrow Agreement

  	
   

  
	
   

  	
  12.8

  	
  Subscription and Registration
  Rights Agreements

  	
   

  
	
   

  	
  12.9

  	
  Stock
  Options

  	
   

  
	
   

  	
  12.10

  	
  Assignment of Patents

  	
   

  
	
   

  	
  12.11

  	
  Proprietary Information and Inventions
  Agreement

  	
   

  
	
   

  	
  12.12

  	
  Resignation of Directors and Statutory
  Auditor

  	
   

  
	
   

  	
  12.13

  	
  Opinion of Counsel

  	
   

  
	
   

  	
  12.14

  	
  Purchaser’s Option

  	
   

  
	
  13.

  	
  Conditions
  for the Benefit of Sellers

  	
   

  
	
   

  	
  13.1

  	
  Representations and Warranties

  	
   

  
	
   

  	
  13.2

  	
  Fulfillment of Covenants

  	
   

  
	
   

  	
  13.3

  	
  Foreign
  Investment Report

  	
   

  
	
   

  	
  13.4

  	
  Sellers’ Option

  	
   

  
	
  14.

  	
  Indemnification by Sellers

  	
   

  
	
   

  	
  14.1

  	
  Indemnification by Certain Sellers

  	
   

  

 

iii

 

	
   

  	
  14.2

  	
  Reimbursement

  	
   

  
	
   

  	
  14.3

  	
  Basket and Cap

  	
   

  
	
   

  	
  14.4

  	
  Indemnification by Other Sellers

  	
   

  
	
   

  	
  14.5

  	
  Claim
  for Indemnification

  	
   

  
	
  15.

  	
  Indemnification by Purchaser

  	
   

  
	
   

  	
  15.1

  	
  Indemnification

  	
   

  
	
   

  	
  15.2

  	
  Reimbursement

  	
   

  
	
   

  	
  15.3

  	
  Claim for Indemnification

  	
   

  
	
   

  	
  15.4

  	
  Basket
  and Cap

  	
   

  
	
  16.

  	
  Survival
  of Representations, Warranties, Covenants and Indemnification Obligations

  	
   

  
	
   

  	
  16.1

  	
  General

  	
   

  
	
   

  	
  16.2

  	
  Survival
  of Tax Liabilities

  	
   

  
	
  17.

  	
  Appointment of
  Representative

  	
   

  
	
   

  	
  17.1

  	
  Appointment

  	
   

  
	
   

  	
  17.2

  	
  Authority

  	
   

  
	
  18.

  	
  Miscellaneous

  	
   

  
	
   

  	
  18.1

  	
  Commission

  	
   

  
	
   

  	
  18.2

  	
  Election of Remedies

  	
   

  
	
   

  	
  18.3

  	
  Expenses

  	
   

  
	
   

  	
  18.4

  	
  Further
  Assurances

  	
   

  
	
   

  	
  18.5

  	
  Entire
  Agreement

  	
   

  
	
   

  	
  18.6

  	
  Incorporation by Reference

  	
   

  
	
   

  	
  18.7

  	
  Modifications

  	
   

  
	
   

  	
  18.8

  	
  Waiver

  	
   

  
	
   

  	
  18.9

  	
  Assignment

  	
   

  
	
   

  	
  18.10

  	
  Severability

  	
   

  
	
   

  	
  18.11

  	
  Governing
  Law

  	
   

  
	
   

  	
  18.12

  	
  Arbitration

  	
   

  
	
   

  	
  18.13

  	
  Notices

  	
   

  
	
   

  	
  18.14

  	
  Counterparts

  	
   

  
	
   

  	
  18.15

  	
  Captions

  	
   

  
	
   

  	
  18.16

  	
  Number and Gender

  	
   

  
	
   

  	
  18.17

  	
  Confidentiality

  	
   

  

 

1

 

	
   

  	
  18.18

  	
  Language

  	
   

  

 

	
  Exhibits

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit 2.2

  	
   

  	
  Payment Agency
  Agreement

  	
   

  
	
  Exhibit 4.1

  	
   

  	
  Subscription and
  Registration Rights Agreement

  	
   

  
	
  Exhibit 6.1

  	
   

  	
  Escrow Agreement

  	
   

  
	
  Exhibit 12.10

  	
   

  	
  Patents Assignment Agreement

  	
   

  
	
  Exhibit 12.11

  	
   

  	
  Proprietary Information
  and Inventions Agreement

  	
   

  
	
  Exhibit 12.12

  	
   

  	
  Resignation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule C

  	
   

  	
  Share
  Ownership

  	
   

  
	
  Schedule C-1

  	
   

  	
  Purchase
  Price Allocation

  	
   

  
	
  Schedule 1.34

  	
   

  	
  Key
  Employees

  	
   

  
	
  Schedule 4.1

  	
   

  	
  Delivery Details

  	
   

  
	
  Schedule 8.2

  	
   

  	
  Options

  	
   

  
	
  Schedule 8.6

  	
   

  	
  Consents and Approvals

  	
   

  
	
  Schedule 8.7

  	
   

  	
  Financial Statements

  	
   

  
	
  Schedule 8.9

  	
   

  	
  Accounts
  Receivable

  	
   

  
	
  Schedule 8.10

  	
   

  	
  Permits

  	
   

  
	
  Schedule 8.11

  	
   

  	
  Absence
  of Certain Changes

  	
   

  
	
  Schedule 8.12

  	
   

  	
  Customers,
  Distributors and Suppliers

  	
   

  
	
  Schedule 8.13

  	
   

  	
  Related
  Party Transactions

  	
   

  
	
  Schedule 8.14

  	
   

  	
  Litigation

  	
   

  
	
  Schedule 8.16(a)

  	
   

  	
  Material
  Contracts

  	
   

  
	
  Schedule 8.17(a)

  	
   

  	
  Intellectual
  Property

  	
   

  
	
  Schedule 8.18

  	
   

  	
  Real Property

  	
   

  
	
  Schedule 8.19

  	
   

  	
  Tangible
  Personal Property

  	
   

  
	
  Schedule 8.21(a)

  	
   

  	
  Encumbrances

  	
   

  
	
  Schedule 8.25

  	
   

  	
  Insurance

  	
   

  
	
  Schedule 8.27

  	
   

  	
  Product Liability and Product Warranty

  	
   

  
	
  Schedule 12.10

  	
   

  	
  Assignment of Patents

  	
   

  

 

iv

 

STOCK PURCHASE AGREEMENT

 

This Stock Purchase Agreement (this “Agreement”) is
entered into as of July 8, 2005, by and among:

 

(a)                                  NAVTEQ
B.V., a corporation organized and existing under the laws of the Netherlands (“Purchaser”);

 

(b)                                 NAVTEQ
Corporation, a corporation organized and existing under the laws of the State
of Delaware, U.S.A. (“NAVTEQ”);

 

(c)                                  Picture
Map International Co., Ltd., a corporation organized and existing under the
laws of the Republic of Korea (the “Company”); and

 

(d)                                 all
of the shareholders of the Company, which are identified in Schedule C of
this Agreement (collectively, “Sellers,” and individually, “Seller”).

 

RECITALS

 

A.                                   The
Company is engaged in the Business.

 

B.                                     As
of the date hereof, the Company has total authorized capital of ten million
(10,000,000) shares of stock with a par value of five hundred Korean won (KW500)
per share, and total issued and outstanding capital of two million three hundred
ninety-nine thousand one hundred sixty (2,399,160) shares of common stock with
a par value of five hundred Korean won (KW500) per share and one hundred
fifty-three thousand eight hundred sixty (153,860) shares of preferred stock
with a par value of five hundred Korean won (KW500) per share.

 

C.                                     As
of the date hereof, Sellers own the number of shares of common and preferred
stock of the Company set forth in Schedule C, which constitute all of the
issued and outstanding shares of stock of the Company, including any and all
outstanding options related thereto (the “Purchased Shares”).

 

D.                                    Sellers
wish to sell to Purchaser, and Purchaser wishes to purchase from Sellers, the
Purchased Shares, upon the terms and subject to the conditions set forth
herein.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the mutual promises and covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Definitions

 

As used in this
Agreement, the following terms shall have the following meanings, unless the
context clearly requires otherwise:

 

1

 

1.1                                 The
terms defined hereinabove shall have the meaning set forth therein.

 

1.2                                 “Action”
shall mean any claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.

 

1.3                                 “Ancillary
Agreements” shall mean the Subscription and Registration Rights Agreement,
Escrow Agreement, Payment Agency Agreement, Patents Assignment Agreement and
Employment Agreement.

 

1.4                                 “Assets”
shall have the meaning set forth in Section 8.21(a).

 

1.5                                 “Audited
Financial Statements” shall mean the financial statements of the Company,
consisting of audited balance sheets and statements of income and cash flow of
the Company, audited by independent public accountants, in accordance with generally
accepted auditing standards in Korea, for its fiscal years ended as of December 31,
2002, December 31, 2003 and December 31, 2004.

 

1.6                                 “Business”
shall mean the business of licensing and distributing digital geographic maps
of Korea, navigation software applications, and related hardware and
middle-ware, and providing related products and services, and all other businesses
which have been conducted by the Company on or prior to the date hereof.

 

1.7                                 “Certain
Sellers” shall mean Yong Won Lee, Jong Seok Baek, Sa Min Kim and Sang Ho Yoon.

 

1.8                                 “Closing”
shall mean the consummation of the transaction under Section 2.

 

1.9                                 “Closing
Balance Sheet” shall mean the balance sheet (including the related notes and
schedules thereto) of the Company, to be prepared in accordance with Korean GAAP pursuant to Section 5.1
and to be dated as of the Closing Date.

 

1.10                           “Closing
Date” shall mean July 8, 2005, or
such other date as may be agreed in writing by Purchaser and the Sellers’ Representative.

 

1.11                           “Closing
Payment” shall have the meaning set forth in Section 2.2.

 

1.12                           “Company
Net Debt” shall mean the Company’s total Debt outstanding less cash and
equivalents as determined in accordance with Korean GAAP.

 

1.13                           “Company
Working Capital” shall mean the Company’s current assets less current
liabilities as determined in accordance with Korean GAAP.

 

1.14                           “Debt”
shall mean all indebtedness of the Company for any borrowed money.

 

1.15                           “Deferred
Payment” shall mean US$500,000.

 

1.16                           “Dispute
Notice” shall have the meaning set forth in Section 5.2(a).

 

1.17                           “Employee
Plan” shall mean all bonus, stock option, stock purchase, restricted stock,
incentive, deferred compensation, medical or life insurance, supplemental
retirement, 

 

2

 

severance or other benefit plans, programs or
arrangements, all employment rules or regulations, employee handbook, and
all employment, termination, severance or other contracts, agreements or
commitments to which the Company is a party or otherwise obligated, with
respect to which the Company has any obligation or which are maintained,
contributed to or sponsored by the Company for the benefit of any current or
former employee, officer or director of the Company; provided, however, that the Employee Plan does not include any
arrangement that has been terminated and completely wound up prior to the date
of this Agreement and for which the Company has no present or potential
liability.

 

1.18                           “Employment
Agreement” shall have the meaning set forth in Section 12.5.

 

1.19                           “Encumbrance”
shall mean any security interest, pledge, mortgage, lien (including without
limitation environmental and tax liens), option, charge, encumbrance, claim,
preferential arrangement or restriction of any kind, including without
limitation any restriction on the use, voting, transfer, receipt of income or
other exercise of any attributes of ownership.

 

1.20                           “Environmental
Law” shall mean any Law relating to industrial hygiene, occupational safety
conditions, environmental conditions, land use, water and air quality and
Hazardous Materials.

 

1.21                           “Escrow
Agent” shall have the meaning set forth in Section 6.1.

 

1.22                           “Escrow
Agreement” shall have the meaning set forth in Section 6.1.

 

1.23                           “Escrow
Amount” shall have the meaning set
forth in Section 6.1.

 

1.24                           “Exchange
Act” shall mean the United States Securities and Exchange Act of 1934, as
amended.

 

1.25                           “Excess Net Debt” shall have the meaning set forth in Section 5.3(a).

 

1.26                           “Financial
Statements” shall mean the Audited Financial Statements and the Interim
Financial Statements.

 

1.27                           “Governmental
Authority” shall mean any Korean national, provincial or local or any foreign
government, governmental, regulatory or administrative authority, agency or
commission or any court, tribunal, or judicial or arbitral body.

 

1.28                           “Governmental
Order” shall mean any order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with any Governmental Authority.

 

1.29                           “Hazardous
Materials” shall mean any substance listed, defined, designated or otherwise
classified as hazardous, toxic, radioactive or dangerous, or otherwise
regulated, under any Environmental Law, whether by type or by quantity,
including any substance containing any such substance as a component.

 

1.30                           “Indebtedness”
shall mean, with respect to any Person; (a) all indebtedness of such
Person, whether or not contingent, for borrowed money; (b) all obligations
of such Person for the deferred purchase price of property or services; (c) all
obligations of such 

 

3

 

Person evidenced by notes, bonds, debentures
or other similar instruments; (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property); (e) all obligations of such Person
as lessee under leases that have been or should be, in accordance with Korean
GAAP, recorded as capital leases; (f) all obligations, contingent or otherwise,
of such Person under acceptance, letter of credit or similar facilities; (g) all
obligations of such Person to purchase, redeem, retire or otherwise acquire for
value any capital stock of such Person or any warrants, rights or options to
acquire such capital stock, valued, in the case of redeemable preferred stock,
at the greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends; (h) all Indebtedness of others referred to
in clauses (a) through (f) above guaranteed directly or indirectly in
any manner by such Person, or in effect guaranteed directly or indirectly by
such Person through an agreement (i) to pay or purchase such Indebtedness
or to advance or supply funds for the payment or purchase of such Indebtedness;
(ii) to purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of enabling the debtor to
make payment of such Indebtedness or to assure the holder of such Indebtedness
against loss; (iii) to supply funds to or in any other manner invest in
the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are
rendered); or (iv) otherwise to assure a creditor against loss, and all
Indebtedness referred to in clauses (a) through (f) above secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Encumbrance on property (including without
limitation accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness.

 

1.31                           “Independent
Accountants” shall have the meaning set forth in Section 5.2(b).

 

1.32                           “Intellectual
Property” shall mean (a) inventions, whether or not patentable, whether or
not reduced to practice, and whether or not yet made the subject of a pending
patent application or applications; (b) ideas and conceptions of
potentially patentable subject matter, including without limitation any patent
disclosures, whether or not reduced to practice and whether or not yet made the
subject of a pending patent application or applications; (c) national and
multinational statutory invention registrations, patents, patent registrations
and patent applications (including all reissues, divisions, continuations,
continuations-in-part, extensions and reexaminations) and all rights therein
provided by international treaties or conventions and all improvements to the
inventions disclosed in each such registration, patent or application; (d) trademarks,
service marks, trade dress, logos, trade names and corporate names, whether or
not registered, including all common law rights, and registrations and
applications for registration thereof, including without limitation all marks
registered in the Korean Intellectual Property Office and in the trademark
offices of other nations throughout the world, and all rights therein provided
by international treaties or conventions; (e) copyrights (registered or
otherwise) and registrations and applications for registration thereof, and all
rights therein provided by international treaties or conventions; (f) computer
software, including without limitation source code, operating systems and
specifications, data, data bases, files, documentation and other materials
related thereto, data and documentation; (g) trade secrets and
confidential, technical and business information (including ideas, formulas, processes,
compositions, inventions, and conceptions of inventions whether patentable or 

 

4

 

unpatentable and whether or not reduced to
practice); (h) whether or not confidential, technology (including know-how),
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, plans, proposals, technical
data, copyrightable works, financial, marketing and business data, pricing and
cost information, business and marketing plans and customer and supplier lists
and information; (i) copies and tangible embodiments of all the foregoing,
in whatever form or medium; (j) all rights to obtain and rights to apply for
patents, and to register trademarks and copyrights; and (k) all rights to sue
or recover and retain damages and costs and attorneys’ fees for present and
past infringement of any of the foregoing.

 

1.33                           “Interim
Financial Statements” shall mean the unaudited balance sheet and statement of
income of the Company for the period beginning with January 1, 2005, and
ending with the last day of the second calendar
month preceding the Closing.

 

1.34                           “Key
Employees” shall mean the employees of the Company listed in Schedule 1.34.

 

1.35                           “Knowledge,”
when used with respect to the Company, means the actual or constructive knowledge,
after due inquiry, of all
directors, auditors, officers and employees of the Company (except for the
employees below the level of assistant manager).

 

1.36                           “Korea”
shall mean the Republic of Korea.

 

1.37                           “Korean
GAAP” shall mean generally accepted accounting principles and practices as in
effect from time to time in Korea.

 

1.38                           “Law” shall
mean any national, provincial, local or foreign statute, law, ordinance,
regulation, rule, code, order, other requirement or rule of law.

 

1.39                           “Leased
Real Property” shall mean the Real Property leased by the Company, as described in Schedule 8.18.

 

1.40                           “Liabilities”
shall mean any and all debts, liabilities and obligations of any nature,
whether accrued or fixed, absolute or contingent, matured or unmatured, known
or unknown, liquidated or unliquidated, or determined or determinable,
including without limitation those arising under any Law, Action or
Governmental Order and those arising under any contract, agreement,
arrangement, commitment or undertaking.

 

1.41                           “Licensed
Intellectual Property” shall mean all Intellectual Property licensed or
sublicensed to the Company from a third party.

 

1.42                           “Losses” shall have the meaning set forth in Section 14.1.

 

1.43                           “Material
Adverse Effect” shall mean any circumstance, change in, or effect on the
Business or the Company that, individually or in the aggregate with any other
circumstances, changes in, or effects on, the Business or the Company: (a) is
materially adverse to the Business, Assets, Liabilities, results of operations or the condition (financial or
otherwise) of the Company; or (b) would materially adversely affect the ability of Purchaser or the Company
to operate or conduct the Business in the manner in which it is currently
operated or conducted by Sellers or the Company.

 

5

 

1.44                           “Material
Contracts” shall mean the contracts and agreements (including without
limitation oral and informal arrangements) of the Company described in Section 8.16(a) or
listed in Schedule 8.16(a), and all agreements relating to Intellectual
Property set forth in Schedule 8.17(a).

 

1.45                           “NVT
Stock” shall have the meaning set forth in Section 4.1.

 

1.46                           “Ordinary
Course of Business” shall mean the ordinary course of business of the Company
consistent with past custom and practice.

 

1.47                           “Owned
Intellectual Property” shall mean all Intellectual Property in and to which the
Company holds, or has a right to hold, right, title and interest.

 

1.48                           “Patents Assignment Agreement” shall have
the meaning set forth in Section 12.10.

 

1.49                           “Payment
Agent” shall have the meaning set forth in Section 2.2.

 

1.50                           “Party”
shall mean any of the parties hereto, and “Parties” shall mean all of the
parties hereto.

 

1.51                           “Payment
Agency Agreement” shall have the
meaning set forth in Section 2.2.

 

1.52                           “Permits”
shall mean all governmental licenses, approvals, registrations, permits,
certificates and other authorizations, and applications therefor.

 

1.53                           “Person”
shall mean any individual, partnership, firm, corporation, association, trust,
unincorporated organization or other entity, including without limitation any Governmental
Authority.

 

1.54                           “Purchased
Shares” shall have the meaning set forth in the Recital.

 

1.55                           “Real
Property” shall mean the real property owned or leased by the Company.

 

1.56                           “Registration
Statement” shall have the meaning set forth in Section 4.3.

 

1.57                           “Securities
Act” shall have the meaning set forth in Section 4.3.

 

1.58                           “Securities
and Exchange Commission” or “SEC” shall have the meaning set forth in Section 4.3.

 

1.59                           “Sellers’ Representative” shall have the meaning
set forth in Section 17.1.

 

1.60                           “Subscription
and Registration Rights Agreement” shall have the meaning set forth in Section 4.1.

 

1.61                           “Tangible
Personal Property” shall have the meaning set forth in Section 8.19.

 

1.62                           “Tax” shall
mean any and all taxes, fees, levies, duties, tariffs, imposts, assessments, and
other charges of any kind (together with any and all interest, penalties, 

 

6

 

additions to tax and additional amounts
imposed with respect thereto) imposed by any Tax Authority.

 

1.63                           “Tax
Authority” shall mean the tax authority of Korea and any other applicable tax
authority.

 

1.64                           “U.S.
GAAP” shall mean generally accepted accounting principles and practices as in
effect from time to time in the United States.

 

1.65                           “Working
Capital Shortfall” shall have the meaning
set forth in Section 5.3(a).

 

2.                                       Purchase of
Purchased Shares

 

2.1                                 Purchase and Sale
of Purchased Shares. At the Closing and on the
terms and subject to the conditions set forth in this Agreement, Sellers shall sell
and deliver to Purchaser, and Purchaser shall purchase from Sellers and pay therefor,
the Purchased Shares, free and clear of any and all Encumbrances and in suitable
form for transfer to Purchaser.

 

2.2                                 Purchase
Price.  The aggregate purchase price for the
Purchased Shares shall be twenty-eight
million five hundred thousand U.S. dollars (US$28,500,000) (the “Purchase Price”), divided into (i) the Purchase Price minus the Deferred Payment (the “Closing
Payment”), to be paid at the Closing, and (ii) the Deferred Payment
(without any interest thereon), less any amount paid or payable pursuant to a bona fide claim from the
Deferred Payment pursuant to Section 14.5, to be paid to Mr. Yong Won Lee on the two (2) year
anniversary of the Closing Date.  All such payments shall be payable in immediately available funds
by wire transfer.  The
Closing Payment shall be paid in accordance with the payment agency agreement to be entered into among Sellers, Purchaser and ABN AMRO N.V.
Seoul Branch, as payment
agent (the “Payment Agent”) at or prior to the Closing in the form
attached hereto as Exhibit 2.2 (the “Payment Agency Agreement”).  The Purchase Price shall be subject to
the adjustment provided for under Section 5.  The Purchase Price shall be allocated among
the Sellers as set forth in Schedule C-1.

 

2.3                                 Remittance
of Purchase Price.  On the Closing Date, the Closing Payment shall be delivered to the Payment Agent, in accordance with the
Payment Agency Agreement,
pursuant to which the Payment Agent shall accept payment of the Closing
Payment on behalf of
Sellers and shall remit the Closing Payment in the following manner:

 

(a)                                                          As
soon as practicable after the Closing Date, the Payment Agent shall cause (i) fifteen percent (15%) of the
Purchase Price to be remitted to NAVTEQ directly and (ii) fifty-five percent
(55%) of the Purchase Price to be remitted to NAVTEQ through Korea Investment Securities Co., Ltd.,
in both cases in immediately available funds
by wire transfer in accordance with the Payment Agency Agreement to fulfill the
obligations of Sellers as set forth in Section 4.2; and

 

(b)                                                         Immediately
upon receipt of such remittance by NAVTEQ, the Payment Agent shall
release the remaining amount of
the Purchase Price (less applicable fees) to Sellers in cash in the amounts set forth in Schedule C-1 of the Payment Agency Agreement.

 

7

 

(c)                                                          Any
costs and expenses incurred by the Payment Agent and Korea Investment Securities Co., Ltd. in connection with the
transactions contemplated by this Agreement shall be shared equally by
Purchaser, on the one hand, and Sellers, on the other hand.

 

3.                                       Closing

 

3.1                                 Place
of Closing.  The Closing shall be
effected at the offices of Kim, Choi & Lim, 80-6, Susong-dong,
Chongro-ku, Seoul, Korea, or such other place as may be agreed in writing by Purchaser and the Sellers’ Representative, on the Closing Date.

 

3.2                                 Effectiveness of the Closing.  The
Closing will be effective as of the close of business on the Closing Date, provided that all of the transactions
contemplated by Sections 2, 3 and 4 have been consummated.  If the
transactions contemplated by Sections 2, 3 and 4 have not been consummated
within ten (10) business days after the date set forth as the Closing
Date, the Parties shall terminate this Agreement and unwind all transactions
undertaken pursuant to this Agreement so as to leave the Parties in the same
position that they had been in immediately before the Closing Date.

 

3.3                                 Documents.  On the
Closing Date, Sellers shall deliver to Purchaser the original
stock certificates representing the Purchased Shares, in suitable form
for transfer, and the Parties
shall exchange and deliver the certificates,
opinions and other documents required under this Agreement, together with such
other documents as Purchaser’s counsel and Sellers’ counsel shall deem
necessary to effect the Closing.

 

4.                                       Purchase
of NAVTEQ Stock

 

4.1                                 Issuance.  Each Seller shall execute and deliver a
subscription and registration rights agreement (the “Subscription and
Registration Rights Agreement”) to NAVTEQ in the form attached hereto as Exhibit 4.1
under which NAVTEQ shall issue and sell to Sellers, and Sellers shall subscribe
for and purchase 545,069 newly-issued shares of common stock of NAVTEQ (the “NVT
Stock”), which was calculated by taking seventy percent (70%) of each Seller’s
portion of the Purchase Price divided by $36.60 (the average closing price of
NAVTEQ common stock as quoted on
the New York Stock Exchange for the twenty
(20) consecutive trading
days immediately prior to the Closing Date) and rounding down to the nearest
whole share.  Sellers shall execute and
deliver such Subscription and Registration Rights Agreement at or prior to the Closing.  NAVTEQ shall deliver (i) the
portion of the NVT Stock corresponding to the Escrow Amount to the Escrow Agent
according to the Escrow Agreement, and (ii) all other NVT Stock to the
address shown in Schedule 4.1.

 

4.2                                 Purchase.  As soon as practicable after the Closing
Date, Sellers shall, or shall cause the Payment Agent to, pay to NAVTEQ an amount equal to seventy percent (70%) of
the Purchase Price, which shall be used to purchase the NVT Stock in accordance
with the Subscription and Registration Rights Agreement; provided, however, that the NVT Stock
shall not include any fractional shares and any portion of the Purchase Price
that would have been used for the purchase of any such fractional share shall
be immediately returned by wire transfer to the Sellers’ Representative’s account set forth in Schedule C-1
of the Payment Agency Agreement.

 

8

 

4.3                                 Registration.  NAVTEQ shall use commercially reasonable efforts to register the NVT
Stock with the United States Securities and Exchange Commission (“SEC”) pursuant
to the United States Securities
Act of 1933, as amended (the “Securities Act”). 
The purpose of such registration is to permit the resale of the NVT Stock
in the United States by the Sellers without restrictions imposed on the sale of
“restricted securities” under the Securities Act.  The registration will be effected by the
filing of a registration statement (the “Registration Statement”) with the SEC as soon as commercially
practicable after August 6, 2005. 
The rights and obligations of NAVTEQ and Sellers with
respect to such registration shall be governed by the Subscription and
Registration Rights Agreement.

 

4.4                                 Restrictions
on Transfer; Legends.  Until the
Registration Statement has been declared effective by the SEC pursuant to the
Securities Act, Sellers may not offer to sell, sell, contract to sell, pledge
or otherwise transfer or dispose of, directly or indirectly, the NVT Stock
other than pursuant to an available exemption from the registration
requirements of the Securities Act. 
Share certificates representing shares of NVT Stock issued to the
Sellers will contain customary legends restricting the transfer of the NVT
Stock and NAVTEQ will notify its transfer agent of such restrictions.  Notwithstanding any registration of the NVT
Stock for resale by the Sellers pursuant to the Securities Act or the
availability of any exemption from the registration requirements of the
Securities Act that would otherwise permit sale of the NVT Stock by the
Sellers, the Key Employees of the Company, as a condition precedent to the
Closing, undertake and agree not to offer to sell, sell, contract to sell,
pledge or otherwise transfer or dispose of, directly or indirectly, the NVT
Stock held by such Key Employees until November 1,
2006; provided, however, that if the Registration Statement has been declared
effective by the SEC and remains effective or an exemption from the
registration requirements of the Securities Act is available, each Key Employee
shall be entitled to sell up to thirty-five percent (35%) of the NVT Stock
received by such Key Employee pursuant to this Agreement.

 

5.                                       Post-Closing Adjustment
of the Purchase Price

 

The Purchase Price shall be
subject to adjustment after the Closing as specified in this Section 5:

 

5.1                                 Closing
Balance Sheet.  As promptly as
practicable after the Closing, but in any event within thirty (30) calendar
days following the Closing Date, Sellers shall
deliver to Purchaser the Closing
Balance Sheet in accordance with Korean GAAP applied on a basis consistent with the
preparation of the Audited Financial
Statements.  The Closing Balance Sheet
will include a determination of the Company Net Debt and the Company Working Capital as of the
close of business on the Closing Date. 
Sellers will make the work papers
and back-up materials used in preparing the Closing Balance Sheet available to Purchaser’s accountants and other
representatives at reasonable times and upon reasonable notice during (i) the
review by Purchaser of the Closing
Balance Sheet and (ii) the resolution by Purchaser and Sellers’ Representative of any objections to the
Closing Balance Sheet.

 

5.2                                 Resolution
of Disputes.

 

(a)                                  Within
thirty (30) calendar days after Purchaser’s
receipt of the Closing Balance Sheet, if Purchaser disputes any
matter in the Closing Balance Sheet, Purchaser
may so notify Sellers by
delivery of a detailed statement describing such 

 

9

 

objections in
writing (the “Dispute Notice”).  If Purchaser does not give a Dispute Notice within thirty (30) calendar days after Purchaser’s receipt of the Closing
Balance Sheet, the Closing Balance Sheet shall become final.

 

(b)                                 If
Purchaser gives a Dispute Notice, the Purchaser and Sellers’ Representative shall
negotiate in good faith to attempt to resolve the matters specified in the
Dispute Notice.  Any matter in the
Dispute Notice which is not resolved within thirty (30) calendar days after Sellers’ receipt of the Dispute Notice
shall be submitted to one of the “Big Four” international accounting firms to
be mutually agreed upon by Sellers and
Purchaser (the “Independent Accountants”) to resolve any remaining objections.  The
Independent Accountants will resolve any such objections and determine, in
accordance with Korean GAAP applied on a basis consistent with the preparation
of the Audited Financial
Statements, the amounts to be included in the Closing Balance Sheet.  Each Party
shall furnish, at its own cost and expense, to the Independent
Accountants such documents and information as the Independent Accountants may
request.  Each Party may also furnish to
the Independent Accountants such other information as it deems relevant with
appropriate copies or notification being given to the other Parties.  The fees and expenses of the Independent
Accountants shall be shared equally by Sellers and Purchaser.  The Independent Accountants shall promptly
render their determination on the disputed matters in writing.  Such determination shall be final and binding upon the Parties, and the Closing
Balance Sheet, as modified by the determination of the Independent Accountants,
shall be final for all purposes of this Agreement.

 

5.3                                 Purchase Price
Adjustment.

 

(a)                                  Within
ten (10) business days after the date on which the Closing Balance Sheet
is finally determined pursuant to Section 5.2, if the Company Net Debt reflected on the Closing Balance Sheet exceeds
zero U.S. dollars (US$0) (the amount of such excess, the “Excess Net Debt”) or the
Company Working Capital reflected on the Closing Balance Sheet is less than
zero U.S. dollars (US$0) (the amount of such shortfall, the “Working Capital
Shortfall”), then Sellers will pay to Purchaser an aggregate amount equal to
the amount of the Excess Net Debt plus the Working Capital Shortfall.

 

(b)                                 In
the event any payment due pursuant to this Section 5.3 is not timely made
within such ten (10) business day period, then such payment shall accrue
interest at a rate equal to the maximum rate as permitted by law until the date
such payment is made.

 

(c)                                  Any
payment made pursuant to this Section 5.3 will be the exclusive remedy for
any adjustment required to be made
pursuant to this Section 5.3.

 

6.                                       Escrow

 

6.1                                 Escrow
Agreement.  At or prior to the Closing, Mr. Yong
Won Lee, NAVTEQ and Purchaser shall enter into an escrow agreement in the
form attached hereto as Exhibit 6.1 (the “Escrow Agreement”) with LaSalle
Bank National Association (the “Escrow Agent”) under
which fifteen percent (15%) of the Purchase Price (the “Escrow Amount”) 

 

10

 

shall be deposited with the Escrow Agent to be held in escrow and shall include
the following terms and conditions:

 

(a)                                                          fifty
percent (50%) of the Escrow Amount, less any amount paid pursuant to Section 14,
shall be released to Mr. Yong Won Lee on the two (2) year anniversary
of the Closing Date; and

 

(b)                                                         all
remaining Escrow Amount (less any amounts paid pursuant to Section 14 or
being held under the terms of the Escrow Agreement) shall be released to Mr. Yong Won Lee on the four (4) year
anniversary of the Closing Date.

 

(c)                                                          any
costs and expenses incurred by the Escrow Agent in connection with the
transactions contemplated by this Agreement shall be borne fifty percent (50%) by the Purchaser and fifty percent (50%) by Mr. Yong Won Lee.

 

6.2                                 Escrow
Amount.  Mr. Yong Won Lee shall
fund the Escrow Amount on the Closing Date or as soon as practicable thereafter
with the NVT Stock.

 

7.                                       Representations
and Warranties of Sellers

 

As of the date of
this Agreement, each Seller severally represents and warrants to, and agrees
with, Purchaser and NAVTEQ as follows:

 

7.1                                 Organization,
Authority and Qualification of Sellers. 
Each of the Sellers has all necessary power and authority to enter into this Agreement and the Ancillary Agreements to which he or it
will become a party, to carry out his or its obligations hereunder and thereunder and to consummate the transactions contemplated
hereby and thereby.  This Agreement and the Ancillary Agreements to which such Seller will become a party have been
or will be duly executed and
delivered by such Seller, and
(assuming due authorization, execution and delivery by Purchaser and NAVTEQ or such other parties thereto) this
Agreement and the Ancillary Agreements,
when executed and delivered, will constitute legal, valid and binding
obligations of such Seller enforceable against such Seller in accordance with their terms.

 

7.2                                 Ownership
of the Purchased Shares.  Schedule C
accurately and correctly sets out the Purchased Shares owned by each Seller.  All of the Purchased Shares are owned by
Sellers and are free and clear of any Encumbrances.  The Purchased Shares represent the entire
interest of Sellers in the Company, and Sellers have no other interest in the
Company, contingent or otherwise.

 

7.3                                 No
Conflict.  The
execution, delivery and performance of this Agreement by such Seller does not
and will not (a) violate, conflict with or result in the breach of any
provision of the articles of incorporation (or similar organizational
documents), if any, of such Seller; (b) conflict with or violate (or cause
an event which could have a Material Adverse Effect as a result of) any Law or
Governmental Order applicable to such Seller; or (c) conflict with, result
in any breach of, constitute a default (or event which with the giving of
notice or lapse of time, or both, would become a default) under, require any
consent under, or give to others any rights of termination, amendment,
acceleration, suspension, revocation or cancellation of, or result in the
creation of any Encumbrance on any of the Purchased 

 

11

 

Shares pursuant to, any note, bond, mortgage
or indenture, contract, agreement, lease, sublease, license, sublicense, Permit,
franchise or other instrument or arrangement to which such Seller is a party or
by which any of the Purchased Shares is bound or affected.

 

7.4                                 Consents
and Approvals.  The execution, delivery and performance
of this Agreement by such Seller do not and will not require any consent,
approval or authorization of, filing with or notification to any Governmental
Authority, creditor or other Person.

 

7.5                                 Brokers.  No broker or finder is entitled to any
brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of such Seller.

 

7.6                                 Full
Disclosure.  No Seller is aware of any facts
pertaining to the Company or the Business which materially adversely affect the
Company or the Business or which are reasonably
likely in the future to result in a Material Adverse Effect on the
Company or the Business and which have not been disclosed in this Agreement,
the Schedules hereto or the Financial Statements or otherwise disclosed to
Purchaser in writing.

 

8.                                       Representations
and Warranties of the Company

 

As of the date of
this Agreement, the Company represents and warrants to, and agrees with,
Purchaser and NAVTEQ that:

 

8.1                                 Organization,
Authority and Qualification of the Company.  The Company is a corporation duly organized,
validly existing and in good standing under the laws of Korea and has all
necessary power and authority to own, operate or lease the Assets now owned,
operated or leased by it and to carry on the Business as it has been and is
currently conducted and to execute, deliver and perform this Agreement and the
Ancillary Agreements to which it will become a party.  All corporate actions taken by the Company
have been duly authorized, and the Company has not taken any action that in any
material respect conflicts with,
constitutes a default under or results in a violation of any provision of its articles
of incorporation.  A true and correct
copy of the articles of incorporation of the Company, as in effect on the date
hereof, has been delivered by the Company
to Purchaser.

 

8.2                                 Capital
Stock of the Company.  The Purchased Shares have been duly
authorized, are validly issued, fully paid, and nonassessable, and constitute
all of the issued and outstanding shares of stock of the Company.  None of the Purchased Shares was issued in
violation of any preemptive rights.  Schedule 8.2
lists all options that have been issued by the Company.  All such options have been exercised, and all
corresponding shares of stock of the Company have been issued.  Except for such options, there are no
options, warrants, convertible securities or other rights, agreements,
arrangements or commitments of any character relating to the capital stock of
the Company or obligating Sellers or the Company to issue or sell any shares of
capital stock of, or any other interest in, the Company.  There are no outstanding contractual
obligations of the Company to repurchase, redeem or otherwise acquire any of
the Purchased Shares or to provide funds to, or make any investment (in the
form of a loan, capital contribution or otherwise) in, any other Person.

 

8.3                                 Subsidiaries.  The Company has no subsidiaries, proprietary
interests or investments in securities, other than those held from time to time
as short-term investments 

 

12

 

for the utilization of idle cash, and does
not control, through stock ownership or otherwise, any corporation,
partnership, joint venture or other business entity.

 

8.4                                 Corporate
Books and Records.  The minute books
of the Company contain accurate records of all meetings and accurately reflect
all other actions taken or subsequently ratified by the stockholders, boards of
directors and all committees of the boards of directors of the Company in all material respects.  Complete and accurate copies of all such
minute books and of the stock register of the Company have been provided by the Company to Purchaser.

 

8.5                                 No
Conflict.  The execution, delivery
and performance of this Agreement by the Company does not and will not (a) violate,
conflict with or result in the breach of any provision of the articles of incorporation
(or similar organizational documents) of the Company; (b) conflict with or
violate (or cause an event which could have a Material Adverse Effect as a
result of) any Law or Governmental Order applicable to the Assets, Business or the Company; or (c) conflict with,
result in any breach of, constitute a default (or event which with the giving
of notice or lapse of time, or both, would become a default) under, require any
consent under, or give to others any rights of termination, amendment,
acceleration, suspension, revocation or cancellation of, or result in the
creation of any Encumbrance on any of the Purchased Shares or on any of the Assets
pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease,
sublease, license, sublicense, Permit, franchise or other instrument or
arrangement to which the Company is a party or by which any of the Purchased Shares
or any of such Assets is bound or affected.

 

8.6                                 Consents
and Approvals.  The execution, delivery and performance
of this Agreement by the Company do not and will not require any consent,
approval, authorization, filing or notification to any Governmental Authority,
creditor or other Person, except as
provided in Schedule 8.6, all of which have been acquired or made, as the
case may be.

 

8.7                                 Financial Statements
and Books and Records.

 

(a)                                                          True
and complete copies of the Audited Financial Statements and the Interim
Financial Statements have been delivered by the Company to Purchaser and are attached as Schedule 8.7.  The Audited Financial Statements and the
Interim Financial Statements (i) were prepared in accordance with the
books of account and other financial records of the Company; (ii) present
fairly the financial condition and results of operations of the Company as of
the respective dates thereof or for the respective periods covered thereby; (iii) have
been prepared in accordance with Korean GAAP applied on a basis consistent with
the past practices of the Company; and (iv) include all adjustments that
are necessary for a fair presentation of the consolidated financial condition
of the Company and the results of the operations of the Company as of the
respective dates thereof or for the respective periods covered thereby; provided, however, that the Interim
Financial Statements are subject to normal recurring year-end adjustments and
the absence of notes.

 

(b)                                                         The
books of account and other financial records of the Company (i) reflect
all items of income and expense and all Assets and Liabilities required to be
reflected therein in accordance with Korean GAAP applied on a basis consistent
with the past practices of the Company; (ii) are complete and correct, and
do not contain or 

 

13

 

reflect any material inaccuracies or discrepancies; and (iii) have
been maintained in accordance with good accounting practices in all material respects.

 

8.8                                 No
Undisclosed Liabilities. 
There are no Liabilities of the Company, other than the Liabilities
reflected or reserved against on the Financial Statements and Liabilities that
have arisen after the date of the Interim Balance Sheet in the Ordinary Course
of Business.  Reserves are reflected on
the Financial Statements against all Liabilities of the Company in amounts that
have been established on a basis consistent with the past practices of the
Company and in accordance with Korean GAAP applied consistently during the
periods indicated.  Other than as
reflected on the Financial Statements, there are no contracts, agreements,
transactions or obligations between Sellers and the Company.  The
Company has paid all dividends or other distributions that are or may become
payable with respect to the shares of preferred stock of the Company for the
periods preceding the Closing Date.

 

8.9                                 Accounts
Receivable.  Except to the extent, if
any, reserved for on the Financial Statements or set forth in Schedule 8.9,
all accounts receivable reflected on the Financial Statements and all accounts
receivable existing on the Closing Date have arisen from the sale of goods or services
in the Ordinary Course of Business and, except for those accounts receivable that have been collected, constitute
only valid, undisputed claims of the Company which are not subject to valid
claims of set-off or other defenses or counterclaims other than normal cash
discounts accrued or returns in the Ordinary Course of Business.  Except as set forth in Schedule 8.9, all
accounts receivable reflected on the Financial Statements or arising from the
date thereof until the Closing (subject to the reserve for bad debts, if any,
reflected on the Financial Statements), unless already collected, are or will
be as of the Closing Date good and collectible, without resort to litigation or
extraordinary collection activity, within ninety (90) days after the Closing
Date.

 

8.10                           Permits.  Schedule 8.10 describes all material Permits from Governmental Authorities
necessary to conduct the Business, all of which have been secured and are valid
and in full force and effect.  None of
such Permits shall be invalidated or become voidable as a result of the
consummation of the transactions contemplated hereby.  No consent, approval or notice is necessary
in connection with the consummation of the transactions contemplated hereby in
order to maintain in full force and effect all of such Permits.  The Company is in material compliance with
the terms and conditions of all such Permits. 
Except as specified on Schedule 8.10, all such Permits are
renewable in the Ordinary Course of Business.

 

8.11                           Conduct in the
Ordinary Course of Business;
Absence of Certain Changes, Events and Conditions.  Since January 1, 2005, the Business has
been conducted in the Ordinary Course of
Business.  As amplification and
not limitation of the foregoing, since January 1, 2005, except as
disclosed in Schedule 8.11:

 

(a)                                                          the
Company has not made any loan to, guaranteed any Indebtedness of or otherwise
incurred any Indebtedness on behalf of any Person;

 

(b)                                                         the
Company has not been served notice of any failure to pay any creditor any
amount owed to such creditor when due;

 

14

 

(c)                                                          the
Company has not redeemed any of the capital stock or declared, made or paid any
dividends or distributions (whether in cash, securities or other property) to
the holders of capital stock of the Company or otherwise;

 

(d)                                                         the
Company has not issued or sold any capital stock, notes, bonds or other
securities of the Company, or any
option, warrant or other right to acquire the same, or any other interest in
the Company;

 

(e)                                                          the
Company has not failed to maintain the Assets in accordance with good business
practice and in good operating condition and repair;

 

(f)                                                            the
Company has not incurred any Indebtedness in excess of 25 million Korean won (KW25,000,000)
individually or 150 million Korean won (KW150,000,000) in the aggregate;

 

(g)                                                         the
Company has not suffered any Material Adverse Effect;

 

(h)                                                         the
Company has not agreed, whether in writing or otherwise, to take any of the
actions specified in this Section 8.11 or make any commitment with respect to any of the actions specified in
this Section 8.11, except as expressly contemplated by this Agreement;

 

(i)                                                             the
Company has not made any increase in the compensation or benefits payable or to
become payable to any employee of the Company;

 

(j)                                                             the
Company has not made any sale, transfer or disposal or purchase of properties
or assets with a value in excess of 25 million Korean won (KW25,000,000); or

 

(k)                                                          the
Company has not made any payment or distribution of any funds or assets of the
Company to any Seller or any other affiliate other than payments for goods and
services (including employment) by the Company to Seller or an affiliate based
on arms-length transactions.

 

8.12                           Customers,
Distributors and Suppliers.  Schedule 8.12
contains a true and complete list of all customers, distributors,
representatives and agents of the Company and a description of their
relationships with the Company.  Schedule 8.12
contains a true and complete list of all Persons who provided goods or services
to the Company in the twelve (12) month period ended as of the date of this Agreement
to which the Company paid or is committed to pay 25 million Korean won (KW25,000,000)
(or its equivalent in another currency) or more since the beginning of such
period.  The Company’s relations with the
foregoing Persons are good and, except as described in Schedule 8.12,
there are no disputes between the Company and any of such Persons pending or,
to the best Knowledge of the Company, threatened.  All contracts with the foregoing Persons are
in full force and effect in accordance with their terms, and there are no defaults
or assertions of default thereunder.  Since
January 1, 2005, the Company has not received any notice from any
customer, supplier or distributor that such customer, supplier or distributor,
as the case may be, intends to 

 

15

 

discontinue or substantially curtail
purchasing from, selling to or distributing for the Company’s Business.

 

8.13                           Related Party Transactions.  Except as set forth in Schedule 8.13 or
as contemplated by this Agreement, no officer, shareholder, partner, or
director of any Seller or the Company has any interest in any of the Assets or
is a party to any agreement, commitment or lease with the Company or affecting
the Business or the Assets.

 

8.14                           Litigation.
 Except as set forth in Schedule 8.14,
there are no Actions by or against the Company (or by or against Sellers and
relating to the Business or the Company), or affecting any of the Assets,
pending before any Governmental Authority (or, to the Knowledge of the Company,
threatened to be brought by or before any Governmental Authority).  Neither
the Company nor the Assets are subject to any Governmental Order
(or, to the Knowledge of the Company, are there any such
Governmental Orders threatened to be imposed by any Governmental Authority)
which has or has had a Material Adverse Effect.

 

8.15                           Compliance
with Laws.  The Company has conducted
the Business in accordance with all Laws and Governmental Orders applicable to
the Company, use of any of the Assets or conduct of the Business in all material respects, and the
Company is not in violation of any such Law or Governmental Order in any material respect.  The Company has not received notice of any
violation of any Laws or Governmental Orders which has not been cured.

 

8.16                           Material
Contracts.

 

(a)                                                          Schedule 8.16(a) lists
each of the Material Contracts, including without limitation the following:

 

(i)                                     each
contract and agreement for the purchase or sale of technologies, materials or
personal property with any supplier or for the furnishing of services to the
Company, or otherwise related to the Business under the terms of which the
Company: (A) is likely to pay or otherwise give consideration of more than
25 million Korean won (KW25,000,000)
in the aggregate during the calendar year ended December 31, 2005; (B) is
likely to pay or otherwise give consideration of more than 25 million Korean
won (KW25,000,000) in the aggregate over the remaining term of such contract; (C) cannot
cancel such
contract or agreement without penalty or further payment and without
more than thirty (30) days’ notice; or (D) resulting in payment to and
from the Company of more than 25 million Korean won (KW25,000,000) during the year ended December 31, 2004;

 

(ii)                                  all
franchise, broker, distributor, dealer, manufacturer’s representative, agency,
sales promotion, market research, marketing consulting and advertising
contracts and agreements to which the Company is a party;

 

(iii)                               all
management contracts and contracts with independent contractors or consultants
(or similar arrangements) to which the Company is 

 

16

 

a party and which are not
cancelable without penalty or further payment and without more than thirty (30)
days’ notice;

 

(iv)                              all
contracts and agreements relating to Indebtedness of the Company;

 

(v)                                 all
contracts and agreements with any Governmental Authority to which the Company
is a party;

 

(vi)                              all
contracts and agreements that limit or purport to limit the ability of the
Company to compete in any line of business or with any Person or in any
geographic area or during any period of time;

 

(vii)                           all
contracts and agreements between or among the Company and Sellers or any of Sellers’
affiliates;

 

(viii)                        all
contracts and agreements providing for benefits under any Employee Plan;

 

(ix)                                all
leases and subleases pertaining to each parcel of the Leased Real Property,
including (A) the street address of each parcel of Leased Real Property, (B) the
identity of the lessor, lessee and current occupant (if different from lessee)
of each such parcel of Leased Real Property, (C) the term (referencing
applicable renewal periods) and rental payment terms of the leases (and any
subleases) pertaining to each such parcel of Leased Real Property, and (D) the
current use of each such parcel of Leased Real Property; and

 

(x)                                   all
other contracts and agreements whether or not made in the Ordinary Course Of
Business, which are material to the Company, or the conduct of the Business or
the absence of which would have a Material Adverse Effect.

 

(b)                                                         Each
Material Contract is valid and binding on the respective parties thereto and is
in full force and effect, and the consummation of the transactions contemplated
by this Agreement does not and will not result in any Material Contract not
being valid, binding, or in full force or effect.  The Company is not in breach of, or default
under, any Material Contract.

 

(c)                                                          No
other party to any Material Contract is in breach thereof or default
thereunder.

 

(d)                                                         There
is no contract, agreement or other arrangement granting any Person any
preferential right to purchase any of the Assets, other than in the Ordinary
Course of Business.

 

8.17                           Intellectual Property.

 

(a)                                                          Schedule 8.17(a) sets
forth (i) a true and complete list and a brief description of all Owned
Intellectual Property, including a complete identification of 

 

17

 

each patent and patent application and each registration or application
for registration thereof, and further including its geographic database for
Korea and related software, including, without limitation, its 3D building
data; and (ii) a true and complete list and a brief description of all
Licensed Intellectual Property, including a description of any license or
sublicense thereof.  The rights of the
Company in or to such Owned Intellectual Property and Licensed Intellectual
Property do not conflict with or infringe on the rights of any other Person,
and neither Sellers nor the Company has received any claim or written notice
from any Person to such effect.

 

(b)                                                         Sellers
have delivered to Purchaser correct and complete copies of the registrations
for Owned Intellectual Property and licenses and sublicenses for Licensed
Intellectual Property, and any and all ancillary documents pertaining thereto
(including without limitation all amendments, consents and evidence of
commencement dates and expiration dates).

 

(c)                                                          The
Company owns all Owned Intellectual Property free and clear of any
Encumbrance.  The Company has the right,
pursuant to valid and enforceable licenses, to use the Licensed Intellectual
Property in the manner in which the Licensed Intellectual Property is currently
being used.  No Actions have been made or
asserted or are pending (and, to the Knowledge
of the Company, no Action has been
threatened) against the Company either (i) based upon or challenging or
seeking to deny or restrict the use by the Company of any of the Owned
Intellectual Property or the Licensed Intellectual Property; or (ii) alleging
that any Owned Intellectual Property or Licensed Intellectual Property is being
licensed, sublicensed or used in violation of patents, copyrights or trademarks or any other rights of any Person.  To the Knowledge of the Company,
no Person is using any patents, copyrights, trademarks, service marks, trade
names, trade secrets or similar property that are confusingly similar to the
Owned Intellectual Property or the Licensed Intellectual Property or that
infringe upon the Owned Intellectual Property or the Licensed Intellectual
Property or upon the rights of the Company. 
The consummation of the transactions contemplated by this Agreement will
not result in the termination or impairment of any of the Owned Intellectual
Property or Licensed Intellectual Property or any of the rights of the Company
in any of the Owned Intellectual Property or Licensed Intellectual Property.

 

(d)                                                         The
Owned Intellectual Property and the Licensed Intellectual Property described in
Schedule 8.17(a) constitute all of the Intellectual Property used or
held or intended to be used by the Company, and there are no other items of
Intellectual Property that are material to the Company.

 

(e)                                                          Sellers
are not aware of any reason that would prevent any pending applications to
register trademarks, service marks or copyrights or any pending patent
applications from being granted.

 

(f)                                                            To
the Knowledge of the Company, no product or service of
the Company infringes or otherwise violates the intellectual property rights of
any other Person, and no Actions have been made or asserted or are pending
(and, to the Knowledge of the Company, no Action has been
threatened) against the Company 

 

18

 

alleging that any product or service of the Company infringes or
violates the intellectual property rights of any other Person.

 

(g)                                                         The Company owns all right, title and interest
in and to, or has a perpetual right to use without limitation, its digital
geographic database of Korea (also known as urimaps) and its navigation
application software, in each case existing on the date hereof and including,
without limitation, any custom data or software created by the Company for its
customers.  The Company is not in breach
of any of its contracts in providing such database or software to its customers.

 

8.18                           Real
Property.  The Company does not own
any Real Property.  The
Company does not lease any Real Property except as specified on Schedule 8.18.  The Company has valid and outstanding
leasehold interests in all Real Property that it leases from others and the
improvements situated thereon, all of which are listed and identified on Schedule 8.18.  The Company’s use and occupation of such Real
Property and the improvements thereon comply in all material respects with the
Law, including zoning regulations and building codes.

 

8.19                           Tangible
Personal Property.  Schedule 8.19
lists each item of tangible personal property with a value (as determined in
accordance with Korean GAAP) over five
hundred thousand Korean won (KW500,000)
(the “Tangible Personal Property”) used in the Business or owned or leased by
the Company.  The Company has good and
marketable title to all Tangible Personal Property, free and clear of all Encumbrances
except as specifically listed in Schedule 8.19.  The Tangible Personal Property is in good
repair and operating condition, normal wear and tear and required maintenance
(which has heretofore been regularly performed) excepted.

 

8.20                           Inventories.  The inventories of the Company reflected on
the Audited Financial Statements and on the Interim Financial Statements are
stated at not more than the lower of cost or market, with adjustments for
obsolete or otherwise not readily marketable items.  All of the inventories of the Company are
usable or saleable in the Ordinary Course of Business and are fit for the
purpose for which they were intended except as set forth in the Financial
Statements.

 

8.21                           Assets.

 

(a)                                                          The
Company owns, leases or has the legal right to use all the properties and
assets, including without limitation the Owned Intellectual Property, the
Licensed Intellectual Property, the Leased Real Property and the Tangible
Personal Property, used or intended to be used in the conduct of the Business
or otherwise owned, leased or used by the Company and, with respect to contract
rights, is a party to and enjoys the right to the benefits of all contracts,
agreements and other arrangements used or intended to be used by the Company or
in or relating to the conduct of the Business (all such properties, assets and
contract rights being the “Assets”).  The
Company has good and marketable title to, or, in the case of leased or
subleased Assets, valid and subsisting leasehold interests in, all the Assets,
free and clear of all Encumbrances, except as disclosed in Schedule 8.21(a).

 

19

 

(b)                                                         The
Assets constitute all the properties, assets and rights forming a part of,
used, held or intended to be used in the
Business.  At all times since the date
of the Interim Financial Statements, the Company has caused the Assets to be
maintained in accordance with good business practice, and all the Assets are in
good operating condition and repair and are suitable for the continued conduct
of the Business.

 

(c)                                                          The
consummation of the transactions contemplated by this Agreement will not result
in the incurrence of any penalty or other adverse consequence with respect to
the Company’s respective interest in the Assets or the ownership or possession
of any documents, books, records, agreements and financial data of any sort
used by the Company in the conduct of the Business.

 

8.22                           Employee
Benefit Matters.  The Company has
made available prior to the date of this Agreement copies of all Employee
Plans.  No event has occurred and there exists no condition or set of circumstances
in connection with which the Company could be subject to any material Liability under the terms of
such Employee Plans or under the Law, except those Liabilities that have
accrued in the Ordinary Course of Business but are not due pursuant to the
terms of any Employee Plan.  Neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby, either alone or together with another event,
will (i) result in any material payment (including without limitation severance,
unemployment compensation or otherwise) becoming due under any Employee Plan; (ii) increase
the benefits otherwise payable under any Employee Plan; (iii) result in
the acceleration of the time of payment, vesting or funding of any material
benefits under any Employee Plan; or (iv) affect in any material respect any Employee Plan’s
current treatment under any Laws.

 

8.23                           Labor
Matters.  The Company
is not a party to any collective bargaining agreement or other labor union
contract applicable to persons employed by the Company, and to the Knowledge of the Company, currently there are no organizational campaigns,
petitions or other unionization activities seeking recognition of a collective
bargaining unit which could affect the Company. 
There are no controversies, strikes, slowdowns or work stoppages pending
or, to the Knowledge of the Company, threatened between the
Company and any of the employees, and the Company has not experienced any such
controversy, strike, slowdown or work stoppage within the past three years.  The Company is currently in compliance in all
material respects with all applicable Laws relating to the employment of labor,
including without limitation those related to wages, hours and collective
bargaining, and is not liable for any arrears of wages, taxes, penalties or
other sums for failure to comply with any of the foregoing.  The Company has paid in full to all employees
or adequately accrued for in accordance with Korean GAAP all wages, salaries,
commissions, bonuses, benefits and other compensation due to or on behalf of the
employees.  The Company is not a party
to, or otherwise bound by, any consent decree with, or citation by, any
Governmental Authority relating to employees or employment practices.  There are no Actions that have been asserted
or is now pending or, to the Knowledge of the Company, threatened with respect to the Company for unfair labor
practices, payment of withholding taxes, payment of wages, salary or severance,
safety and health standards or discrimination in employment practices.

 

20

 

8.24                           Taxes.  All returns and reports in respect of Taxes
required to be filed with respect to the Company have been timely filed.  All Taxes required to be shown on such
returns and reports or otherwise due have been timely paid.  All such returns and reports are true,
correct and complete in all material respects. 
No adjustment relating to such returns has been proposed formally or
informally by any Tax Authority.  There are
no pending or, to the Knowledge of
the Company, threatened Actions
for the assessment or collection of Taxes against the Company.  There are no tax liens on any Assets other
than for Taxes not yet due.  No power of
attorney that is currently in force has been granted with respect to any matter
relating to Taxes that could affect the Company.  On the Financial Statements, reserves and
allowances have been provided adequate to satisfy all Liabilities for Taxes
relating to the Company as of the date thereof (without regard to the
materiality thereof).

 

8.25                           Insurance.  All Assets and all material properties and
risks of the Company are covered by valid and currently effective insurance
policies issued in favor of the Company, in such types and amounts and covering
such risks as are consistent with customary practices and standards of companies
engaged in businesses and operations similar to those of the Company.  A list of such insurance policies (including
the policy number, the amount of coverage, the type of insurance, insurance
carrier, annual premium, date of expiration, and any pending claims or
contributions thereunder which are material to Sellers) is contained in Schedule 8.25.

 

8.26                           Environment

 

(a)                                                          The
Company has not engaged in or permitted, and to the Knowledge of the Company,
no previous owner, tenant, occupant or user of any parcel of the Real Property
has engaged in or permitted, any operations or activities upon, or any use or
occupancy of, any parcel of the Real Property (or any portion thereof) for the
purpose of or in any way involving the handling, manufacture, treatment,
storage, use, generation, release, discharge, refining, dumping or disposal of
any Hazardous Materials on, under, in or about any parcel of the Real Property,
or transported any Hazardous Materials to, from or across any parcel of the
Real Property.

 

(b)                                                         No
Hazardous Materials are presently constructed, deposited, stored or otherwise
located on, under, in or about any parcel of the Real Property.

 

(c)                                                          The
Company is in compliance with, and there are no existing violations by the
Company under, all applicable Environmental Laws in all material respects, and no investment or expense is required
by the Company in order to maintain such compliance.

 

(d)                                                         The
Company has obtained all Permits and filed all notices which are required to be
obtained or filed by it or those engaged by it for use of the Assets and the
conduct of the Business under applicable Environmental Laws, and there has been
no change in the facts and circumstances reported or assumed in the application
for or granting of such Permits.

 

(e)                                                          The
Company is in compliance in all material respects
with all terms and conditions of such required Permits, including without
limitation filing all 

 

21

 

notices, reports and other statements which are required to be obtained
or filed under such Permits.

 

(f)                                                            There
are no past or present events, conditions, circumstances, activities,
practices, incidents, actions or plans which may interfere with or prevent
continued compliance with the Environmental Laws, or which may give rise to any
statutory Liability, or otherwise form the basis of any Action under any
Environmental Laws, based on or related to the manufacture, processing,
distribution, use, treatment, storage, presence, disposal, transport or
handling, or the emission, discharge, release or threatened release into the
environment, of any Hazardous Materials.

 

8.27                           Product
Liability and Product Warranty.  Schedule 8.27 contains a true and
complete description of (i) all warranties granted or made with respect to
products sold, or services rendered, by the Company; and (ii) the Company’s
product liability and product warranty experience for the last five years.  Except as set forth in Schedule 8.27,
the Company has not suffered any product liability or product warranty claims.

 

8.28                           Brokers.  No broker or finder is entitled to any
brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.

 

8.29                           Full
Disclosure.  The Company is not aware of any facts
pertaining to the Company or the Business which materially adversely affect the
Company or the Business or which are reasonably
likely in the future to have a Material Adverse Effect on the Company or the Business and
which have not been disclosed in this Agreement, the Schedules hereto or the
Financial Statements or otherwise disclosed to Purchaser in writing.

 

9.                                       Representations
and Warranties of Purchaser and NAVTEQ

 

As of the date of this Agreement, Purchaser and
NAVTEQ represent and warrant to, and agree with, Sellers and the Company as
follows:

 

9.1                                 Organization.  Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the Netherlands, with
full power and authority to conduct its business in the manner in which it has
been conducted and to execute,
deliver and perform this Agreement and the Ancillary Agreements to which it
will become a party.  NAVTEQ is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, U.S.A., with full power and authority to conduct its
business in the manner in which it has been conducted and to execute, deliver
and perform this Agreement and the Ancillary Agreements to which it will become
a party.  Purchaser and NAVTEQ are duly
qualified to do business in, and are in good standing under the laws of, each
jurisdiction in which the property owned or leased by them or the nature of their
businesses requires such qualification, except where the lack of such
qualification would not have a Material Adverse Effect on the business of
Purchaser or NAVTEQ.

 

9.2                                 Authority.  The execution, delivery and performance of
this Agreement and the Ancillary Agreements
by Purchaser and NAVTEQ have been duly authorized by all necessary
corporate action.  This Agreement and
each Ancillary Agreement, when executed 

 

22

 

and delivered by Purchaser and NAVTEQ, shall
be legal, valid and binding obligations of Purchaser and/or NAVTEQ, enforceable
against it or them, as the case may be, in accordance with the terms hereof and
thereof.  Neither the execution nor the
delivery of this Agreement nor the consummation of the transactions
contemplated hereby shall conflict with or result in a breach of the charter or
bylaws of Purchaser or NAVTEQ or any instrument or agreement binding on
Purchaser or NAVTEQ.

 

9.3                                 NVT
Stock.  The NVT Stock, when issued and delivered by NAVTEQ as described
herein, will be duly authorized, validly issued, fully paid, and nonassessable.

 

9.4                                 No
Conflict.  Neither the execution
nor the delivery of this Agreement nor the completion of the transactions
contemplated hereby by Purchaser or NAVTEQ will result in a conflict with any
of the provisions of the organizational documents of Purchaser or NAVTEQ or any
agreement or other instrument to which Purchaser or NAVTEQ is a party or by
which Purchaser or NAVTEQ is bound.

 

9.5                                 Brokers.  No broker or finder is entitled to any
brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Purchaser or NAVTEQ.

 

9.6                                 Investigation
and Evaluation.  Purchaser and NAVTEQ
acknowledge that (a) they are experienced in the operation of the type of
business conducted by the Company, and (b) they and their directors,
officers, attorneys, accountants and advisors have been given a full
opportunity to examine the books,
records and other information with respect to the Company and ask questions of
the Company.

 

9.7                                 SEC
Filings; Financial Statements.

 

(a)                                                          NAVTEQ
has filed, in all material respects,
all forms, reports, schedules, statements and other documents required to be
filed by it during the 12 months immediately preceding the date of this
Agreement (collectively, as supplemented and amended since the time of filing,
the “NAVTEQ SEC Reports”) with the SEC. 
The NAVTEQ SEC Reports (i) were prepared in all material respects
in accordance with all applicable requirements of the Securities Act and the
Exchange Act, as applicable, and (ii) did not, at the time they were
filed, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  The representation in clause
(ii) of the preceding sentence does not apply to any misstatement or
omission in any NAVTEQ SEC Report that was superseded by subsequent NAVTEQ SEC
Reports.

 

(b)                                                         The
audited consolidated financial statements and unaudited consolidated interim
financial statements of NAVTEQ and its consolidated subsidiaries included or
incorporated by reference in the NAVTEQ SEC Reports have been prepared in
accordance with generally accepted accounting principles in effect in the
United States consistently applied during the periods indicated (except as may
otherwise be indicated in the notes) and present fairly the financial position,
results of operations and cash flows of NAVTEQ and its consolidated subsidiaries on a 

 

23

 

consolidated basis at the respective dates and for the respective
periods indicated (except interim financial statements may not contain all
notes and are subject to year-end adjustments).

 

10.                                 Covenants
of Sellers and the Company

 

10.1                           Conduct
of Business.  Between the date hereof
and the Closing Date, the Company shall:

 

(a)                                                          conduct
the Business only in the usual and Ordinary Course of Business;

 

(b)                                                         refrain
from amending the articles of incorporation of the Company or its internal rules or
regulations, except as may be first approved in writing by Purchaser;

 

(c)                                                          refrain
from making any material change in its accounting practices or procedures other
than changes required by Korean GAAP;

 

(d)                                                         except
as required by Law, not take any action that would render, or which reasonably
may be expected to render, any representation or warranty made by the Company
in this Agreement untrue at the Closing;

 

(e)                                                          refrain
from (i) making any purchases, sales or transfers of any material
properties; (ii) entering into any materials contracts or commitments; (iii) mortgaging,
pledging, subjecting to lien or otherwise encumbering any of its material Assets;
and (iv) borrowing or lending any funds;

 

(f)                                                            refrain
from incurring any Liabilities other than those that are in the Ordinary Course
of Business;

 

(g)                                                         refrain
from making any change in the compensation or benefit payable or to become
payable to any of its employees or agents or making any new bonus payment or
arrangement or benefit to or with any of them;

 

(h)                                                         have
in effect and maintain at all times all insurance now in force as described in Schedule 8.25;

 

(i)                                                             refrain
from changing the number of authorized or issued shares of its capital stock,
from declaring, setting aside or paying any dividend or other distribution with
respect to the capital stock, or from directly or indirectly redeeming,
purchasing or otherwise acquiring any additional shares of its capital stock or
effecting a split, reclassification or other change in or of any of its capital
stock; and

 

(j)                                                             use
all commercially reasonable efforts
to preserve the Business organization intact, to keep available the services of
its present officers and employees and to make no changes therein, and to
preserve the goodwill of all suppliers, customers, sales representatives and
others having business relations with the Company.

 

24

 

10.2                           Access.  From
the date of this Agreement through the Closing Date, the Company shall
allow Purchaser’s representatives, attorneys and accountants reasonable access during normal business hours upon reasonable
notice to the records and files, audits and properties of the Company as
well as all information relating to taxes, commitments, contracts, titles and
financial condition of, or otherwise pertaining to, the business and affairs of
the Company.  From the date hereof, the Company will use commercially reasonable
efforts to cause its accountants to cooperate with Purchaser and its
accountants in making available all financial information concerning the
Company as is requested, and Purchaser and its accountants shall have the right
to examine all working papers pertaining to examinations of the Company, or
preparation of its reports, by its accountants.

 

10.3                           Authorizations.  The Company
shall use commercially reasonable efforts
to obtain all Permits, if any, necessary to allow the consummation by
Sellers of the transactions contemplated hereby.

 

10.4                           Conditions.  Sellers and the Company will use their
commercially reasonable efforts to cause the conditions set forth in Section 12
to be satisfied and to consummate the transactions contemplated by this
Agreement as soon as reasonably possible and in any event prior to the Closing
Date.

 

10.5                           No
Shop.  Between the date
of this Agreement and the Closing
Date, or unless earlier terminated in accordance with this Agreement, none of the Sellers, the Company or any of their respective
officers, directors, affiliates, employees, representatives or agents, shall,
directly or indirectly, solicit, initiate or participate in any way in
discussions or negotiations with, or provide any information or assistance to,
any Person or group of Persons (other than Purchaser) concerning any sale or
other disposition of the Purchased Shares, Business or the Assets (other than
sales of inventory in the Ordinary Course of Business) or assist or participate
in, facilitate or encourage any effort or attempt by any other Person to do or
seek any of the foregoing.  Sellers and the Company shall promptly
communicate to Purchaser the terms of any proposal or contract which it or the
Company may receive in respect of any such transaction.

 

11.                                 Covenants of Purchaser
and NAVTEQ

 

11.1                           Conditions.  Purchaser and NAVTEQ will use their
commercially reasonable efforts to cause the conditions set forth in Section 13
to be satisfied and to consummate the transactions contemplated by this
Agreement as soon as reasonably possible and in any event prior to the Closing
Date.

 

11.2                           Foreign
Investment Report.  Prior to the Closing, Purchaser shall
prepare and submit to the applicable Korean authorities a report of foreign
investment under the Foreign Investment Promotion Law and other related
documents with respect to the purchase of the Purchased Shares, and Sellers and
the Company shall render commercially
reasonable assistance and support to Purchaser in such preparation and
submission.

 

11.3                           Employees.  Employees of the Company (other than Key
Employees) will continue as employees for at least one year after the Closing
Date, on substantially the same terms and conditions as they are employed
immediately prior to the Closing Date, subject to the right of the Company to
terminate the employment of an employee for cause.  Each 

 

25

 

employee will receive base compensation no
less than the base compensation (or in the case of commissioned employees, not
less than the commission structure) provided to such employee by the Company
immediately prior to the Closing Date.

 

12.                                 Conditions for the
Benefit of Purchaser and NAVTEQ

 

All obligations of Purchaser and NAVTEQ to
take the actions required to be taken by them at Closing are subject to the
fulfillment or waiver, in whole or in part, of each of the following conditions
on or before the Closing Date:

 

12.1                           Representations
and Warranties.  Subject to additions
and deletions occurring in the Ordinary Course of Business, none of which individually or in the aggregate shall
have had a Material Adverse Effect,
all representations and warranties made by Sellers and the Company herein shall be true and correct as of the Closing
Date, with the same force and effect as though such representations and
warranties had been made as of the Closing Date.  In addition, all representations and
warranties made by Sellers in the Subscription and the Registration Rights
Agreements shall be true and correct as of the Closing Date.

 

12.2                           Fulfillment
of Covenants.  All of the covenants,
terms and conditions of this Agreement to be complied with by Sellers and the
Company on or before the Closing Date shall have been complied with in all material respects.

 

12.3                           Corporate
Actions of Purchaser.  Purchaser
shall have obtained all necessary approvals of its board of directors for the
consummation of the transaction contemplated under this Agreement.

 

12.4                           Third
Party Authorizations. 
Sellers and the Company shall
have received all Permits necessary to validly sell and assign the Purchased Shares
to Purchaser and to otherwise perform its obligations under this Agreement.

 

12.5                           Employment
Agreement.  Mr. Yong Won Lee shall have
executed the employment agreement in form and substance satisfactory to
Purchaser (the “Employment Agreement”). 
The Employment Agreement may include non-compete and non-solicitation
provisions, invention assignment provisions, details on employee compensation
and other terms and conditions of employment.

 

12.6                           Payment Agency Agreement.  Purchaser, Sellers and the Payment
Agent shall have executed the Payment Agency Agreement pursuant to Section 2.2.

 

12.7                           Escrow
Agreement.  Purchaser, NAVTEQ and Sellers shall have executed
the Escrow Agreement pursuant to Section 6.1, and Sellers shall have filed a report to the Bank of Korea with respect
to the Escrow Agreement and received acceptance of such report.

 

12.8                           Subscription
and Registration Rights Agreements.  Sellers shall have executed and delivered to
NAVTEQ the Subscription and the Registration Rights Agreements pursuant to Section 4.1,
and such Subscription and the Registration Rights Agreements shall remain in
full force and effect at the Closing Date.

 

12.9                           Stock Options.  All
options listed in Schedule 8.2 shall have been exercised or
cancelled, and all corresponding shares of stock of the Company shall have
been issued.

 

26

 

12.10                     Assignment of
Patents.  Mr. Yong-Won Lee shall have executed and delivered to
NAVTEQ an agreement (the “Patents Assignment Agreement”) in the form attached hereto as Exhibit 12.10 under which he has assigned all of his rights and interests in and to the patents
described in Schedule 12.10 to the Company.

 

12.11                     Proprietary Information and Inventions Agreement.  All
employees of the Company shall have executed the Proprietary Inventions Assignment Agreement substantially in
the form attached hereto as Exhibit 12.11.

 

12.12                     Resignation of
Directors and Statutory Auditor.  All existing members of the board of
directors and the statutory auditor of the Company shall have submitted their resignations in the form
attached hereto as Exhibit 12.12.

 

12.13                     Opinion
of Counsel.  Purchaser shall have
received the opinion of Bae, Kim &
Lee, counsel for Sellers and the Company, dated as of the Closing Date, in
form and substance satisfactory to Purchaser.

 

12.14                     Purchaser’s
Option.  In case any condition
referred to in this Section 12 to be performed or complied with at or
prior to the Closing Date shall not have been so performed or complied with
within ninety (90) days of the date hereof, Purchaser and NAVTEQ may, without
limiting any other right that they may have, at their sole option, either:

 

(a)                                                          terminate
this Agreement by giving written notice to Sellers, and in such event Purchaser
and NAVTEQ shall be released from all further obligations hereunder, except
that the obligations in Sections 18.2 and 18.17 shall survive the termination
of this Agreement; or

 

(b)                                                         waive
compliance with any such term, covenant or condition in whole or in part.

 

13.                                 Conditions for the
Benefit of Sellers

 

All obligations of Sellers hereunder to take
the actions required to be taken by them at the Closing are subject to the
fulfillment or waiver, in whole or in part, of each of the following conditions
on or before the Closing Date:

 

13.1                           Representations
and Warranties.  All representations
and warranties made by Purchaser and NAVTEQ herein shall be true and correct in all material respects at the date
hereof and as of the Closing Date, with the same force and effect as though
such representations and warranties had been made as of the Closing Date.

 

13.2                           Fulfillment
of Covenants.  All of the covenants,
terms and conditions of this Agreement to be complied with by Purchaser and NAVTEQ
on or before the Closing Date shall have been complied with in all material respects.

 

13.3                           Foreign
Investment Report.  Purchaser shall have
submitted a report of foreign investment as provided in Section 11.2, and
received acceptance of such report from the applicable Korean authorities.

 

27

 

13.4                           Sellers’
Option.  In case any condition
referred to in this Section 13 to
be performed or complied with at or prior to the Closing Date shall not have
been so performed or complied with within ninety (90) days of the date hereof, Sellers
may, without limiting any other right that Sellers may have, at their sole option, either:

 

(a)                                                          terminate
this Agreement by giving written notice to Purchaser and NAVTEQ, and in such
event Sellers shall be released from all further obligations hereunder, except
that the representation in Section 8.28 and the obligations in Sections
18.1, 18.2 and 18.17 shall
survive the termination of this Agreement; or

 

(b)                                                         waive
compliance with any such term, covenant or condition in whole or in part.

 

14.                                 Indemnification by Sellers

 

14.1                           Indemnification
by Certain Sellers.  Except as set
forth in Section 14.4, Certain Sellers shall jointly and severally
indemnify and hold harmless the Company, Purchaser
and NAVTEQ against and in respect
of any and all Liabilities, losses, damages, claims, costs and expenses, including without limitation reasonable
attorneys’ fees (collectively, the “Losses”)
arising out of, resulting from, or due to:

 

(a)                                                          except
as set forth on Schedule 8.9, the unpaid balance of any accounts
receivable, stated in the Audited Financial Statements and the Interim Financial Statements, as of one hundred twenty (120) days after the due date thereof, less the reserve for doubtful
accounts established in the Interim Financial Statements, in which event
Purchaser shall cause the Company to hold all accounts receivable with respect
to which Purchaser has received indemnification under this Section 14 for
the account of Sellers and use reasonable efforts to collect such accounts
receivable in the Ordinary Course of Business on behalf of Sellers, applying
payments to the oldest unpaid account receivable (unless such has been disputed
by the customer) and remitting the same to Sellers; provided, however, that the
Company shall not be required, in connection with the collection of any such
accounts receivable, to incur any out-of-pocket expense without reimbursement
thereof by Sellers;

 

(b)                                                         any
Governmental Order against Purchaser,
NAVTEQ or the Company arising in connection with any Action against the
Company, or arising out of any occurrence or state of facts existing, on or
prior to the Closing, to the extent that such Governmental Order is both (a) not
covered or inadequately covered by insurance and (b) not reserved for or
reflected in the Interim Financial Statements, and further only to the extent
of that portion of such Governmental Order which pertains to the time period
prior to the Closing Date;

 

(c)                                                          any
dividends or other distributions that are
or may become payable with respect to the shares of preferred stock of the
Company for the periods preceding the Closing Date;

 

28

 

(d)                                                         any
shortfall in the severance payments paid
or accrued for the present and former employees of the Company for the periods
preceding the Closing Date;

 

(e)                                                          any
breach of representation or warranty
set forth in Section 8.24;

 

(f)                                                            any
nonpayment of the amount of downward adjustment of the Purchase Price as
specified in Section 5;

 

(g)                                                         any
misrepresentation or breach of warranty or non-fulfillment of any covenant on
the part of Sellers or the Company under
this Agreement, or from any misrepresentations in or omission from any
schedule, certificate or written statement furnished or to be furnished to
Purchaser hereunder;

 

(h)                                                         the
termination (including, without limitation, any bilateral agreement to
terminate or settle) of any agreement or contract prior to the Closing Date;

 

(i)                                                             any demands or claims by any current or former
officer, employee or agent of the Company for compensation based on patents,
inventions or other intellectual property rights which were made or
conceived or reduced to practice or learned by such officer, employee or agent, either alone or jointly with
others, during the period of his employment
or other relationship with the
Company; and

 

(j)                                                             any
Actions, demands, assessments or judgments, costs and expenses incidental to
any of the foregoing matters set forth in Sections 14.1(a) through 14.1(i).

 

14.2                           Reimbursement.  Certain Sellers jointly and severally agree to promptly reimburse the Company, Purchaser and NAVTEQ upon demand for any payment
or adjustment made by the Company, Purchaser
or NAVTEQ at any time in respect
of any matter to which the foregoing indemnity relates.

 

14.3                           Basket and Cap.  Certain Sellers shall indemnify and hold harmless the Company, Purchaser and
NAVTEQ with respect to any Loss suffered by the Company, Purchaser or
NAVTEQ under Sections 14.1(g) through 14.1(j) if, and only if, such Loss together with the aggregate of all
Losses theretofore incurred by the
Company, Purchaser or NAVTEQ
under such Sections shall exceed twenty-five thousand U.S. dollars (US$25,000),
in which case Certain Sellers shall be liable for the aggregate
amount of all Losses suffered by the Company, Purchaser or NAVTEQ, up to a
maximum equal to one hundred percent
(100%) of the Purchase Price, as adjusted.  For the avoidance of doubt, Certain
Sellers shall indemnify and hold
harmless the Company, Purchaser and NAVTEQ with respect to any Loss
suffered by the Company, Purchaser
or NAVTEQ under Section 14.1(a) through 14.1(f) from the first dollar
without any basket, but subject to the cap noted in this Section 14.3.

 

14.4                           Indemnification
by Other Sellers.  Each Seller other than Certain Sellers shall severally indemnify and hold
harmless the Company, Purchaser and NAVTEQ against and in respect of any and
all Losses solely arising out of, resulting from, or due to any
misrepresentation or breach of warranty set forth in Section 7 (but only for 

 

29

 

misrepresentations or breaches of warranties by
such Seller and not
by other Sellers) and Section 8.  The indemnification
obligations of each Seller other than Certain Sellers under this Section 14.4
shall be limited to the total amount of the Purchase Price received by such
Seller as shown in Schedule C-1.

 

14.5                           Claim
for Indemnification.  Sellers
shall be given prompt written notice of each claim for indemnification under
this Section 14, stating the basis for the claim and the amount thereof,
to the extent that such amount has been determined at the time when such notice
is given.  Sellers’ Representative and Purchaser
shall instruct the Escrow Agent to pay to either the Company, Purchaser or NAVTEQ from
the Escrow Amount an amount equal to any payment entitled to be received under Section 14.1, 14.2 or 14.4; provided that Purchaser
or NAVTEQ may retain all or any portion of the Deferred Payment to satisfy any
claim for indemnification under Section 14.1(h).  If the Escrow Amount and/or the Deferred
Payment are not sufficient to satisfy Certain Sellers’ or Sellers’ indemnification
obligations set forth above, as the case may be, Certain Sellers or Sellers, as
the case may be, shall remain liable for the deficiency.  Certain Sellers or Sellers, as the case may
be, shall be given prompt notice of and a reasonable opportunity to defend any
claim against Purchaser, NAVTEQ or
the Company by a third party which might result in a claim for indemnification
under this Section 14.  The Company, Purchaser and NAVTEQ agree to cooperate and make
available to Sellers all books and records and such officers, employees and
agents as are reasonably necessary and useful in connection with Sellers’
defense against any such claim.

 

15.                                 Indemnification by Purchaser

 

15.1                           Indemnification.  Purchaser
and NAVTEQ shall indemnify and hold harmless Sellers against and in respect of any and all Losses arising out of, resulting from,
or due to:

 

(a)                                                          any
misrepresentation, breach of warranty or non-fulfillment of any covenant on the
part of Purchaser or NAVTEQ under
this Agreement, or from any misrepresentations in or omission from any
schedule, certificate or written statement furnished or to be furnished to Sellers hereunder; and

 

(b)                                                         any
and all Actions, demands, assessments or judgments, costs and expenses
incidental to any of the foregoing matters set forth in Section 15.1(a).

 

15.2                           Reimbursement.  Purchaser
and NAVTEQ agree to promptly reimburse Sellers upon demand for any payment or adjustment made by Sellers at
any time in respect of any matter to which the foregoing indemnity relates.

 

15.3                           Claim
for Indemnification.  Purchaser shall be given prompt written
notice of each claim for indemnification under this Section 15, stating
the basis for the claim and the amount thereof, to the extent that such amount
has been determined at the time when such notice is given.  Purchaser
shall be given prompt notice of and a reasonable opportunity to defend
any claim against Sellers by a third
party which might result in a claim for indemnification under this Section 15. 
Sellers agree to
cooperate and make available to Purchaser
all books and records and such officers, employees and agents as are
reasonably necessary and useful in connection with Purchaser’s defense against any such claim.

 

30

 

15.4                           Basket and Cap.  Purchaser
and NAVTEQ shall jointly and severally indemnify and hold harmless Sellers with respect to any Loss
suffered by Sellers under Section 15.1(a) or 15.1(b) if, and only if, such
Loss together with the aggregate of all Losses theretofore incurred by
Purchaser under such Sections
shall exceed twenty-five thousand U.S.
dollars (US$25,000), in which case
Purchaser shall be liable for the aggregate amount of all Losses suffered by
Sellers, up to a maximum equal to
seventy percent (70%) of the Purchase Price, as adjusted.

 

16.                                 Survival of
Representations, Warranties, Covenants and Indemnification Obligations

 

16.1                           General.  Subject to Section 16.2, all
representations, warranties, covenants and indemnification obligations of any Party contained in this
Agreement, or made pursuant hereto, shall survive the Closing and any
investigation at any time made by or on behalf of any other Party for a period of one (1) year after the Closing Date (for Sellers other than Certain
Sellers) and for a period of four (4) years after the Closing Date (for all other Parties), as long as a
claim for indemnification shall have been made in accordance with Section 14.4 or 15.3, as the case may be, prior to the expiration of such survival
period; provided that the representations and warranties contained in Sections
7.1, 7.2, 8.2 and 8.15 shall not terminate but shall continue
indefinitely.  If any such claim shall
have been made prior to such expiration, such expiration shall not affect or in
any way impair the rights of a Party to
indemnification in respect of the particular matter as to which the claim was
made, whether or not the amount of indemnification to which a Party is entitled in respect of such
matter shall have been determined prior to such expiration.

 

16.2                           Survival
of Tax Liabilities.  Certain Sellers’
indemnification obligations with respect to Tax Liabilities shall survive the
Closing Date and any investigation of Purchaser until the expiration of the
applicable statute of limitations.

 

17.                                 Appointment of
Representative

 

17.1                           Appointment.  Each Seller appoints Mr. Yong-Won Lee as
their agent and attorney-in-fact (the “Sellers’ Representative”), with full power and authority (including power of substitution), except as otherwise provided in this
Agreement, in the name of and for and on behalf of the Sellers, or in its own
name as Sellers’ Representative, to take all
actions required or permitted under this Agreement or any other agreements
contemplated hereby (including the giving and receiving of all accountings,
reports, notices and consents) and the signing of all certificates, notices,
instructions and other documents and making all determinations hereunder and
thereunder.

 

17.2                           Authority.  The authority conferred hereby to Sellers’ Representative shall be an agency
coupled with an interest, and all authority conferred hereby is irrevocable and
not subject to termination by the Sellers (or any of them), or by operation of
law, whether by the death or incapacity of any of the Sellers, or the
occurrence of any other event.  If any of
the Sellers should die or become incapacitated or if any other such event should
occur, any action taken by the Sellers’
Representative shall be as valid as if such death or incapacity, termination or
other event had not occurred, regardless of whether or not the Sellers’ Representative, the Purchaser, NAVTEQ
or the Company shall have received notice of such death, incapacity,
termination or other event.  Any notice
given to the Sellers’
Representative pursuant to this Agreement or any other agreements contemplated
hereby 

 

31

 

shall constitute effective notice to all Sellers,
and any other party to this Agreement or any other Person may rely on any
notice, consent, election or other communication received from the Sellers’ Representative as if such notice,
consent, election or other communication had been received from all Sellers.
Without limiting any of the foregoing, the decision of the Sellers’ Representative with respect to any
matter shall be binding on all the Sellers, and Purchaser shall be required
only to deal with the Sellers’
Representative.

 

18.                                 Miscellaneous

 

18.1                           Commission.  Sellers shall indemnify and hold harmless
Purchaser and NAVTEQ against and with respect to any and all Liabilities,
losses, damages, claims, costs and expenses (including without limitation reasonable
attorneys’ fees) arising out of or due to any claim for brokerage or other
commissions relative to this Agreement or the transactions contemplated hereby
claimed by any Person retained or employed by Sellers and any and all Actions, demands,
assessments or judgments, costs and expenses incidental to the foregoing.

 

18.2                           Election of Remedies.  Any waiver of any condition of Closing shall
constitute an election of remedies, and the Party waiving such condition shall have no claim for any breach of this
Agreement to the extent of such waiver.

 

18.3                           Expenses.  Each Party shall bear its own expenses
(including without limitation legal and accounting fees) incurred in connection
with the preparation and execution of this Agreement and the Ancillary Agreements and the consummation of the transactions
contemplated hereby unless specifically
provided otherwise in this Agreement or any Ancillary Agreement.

 

18.4                           Further
Assurances.  Each Party shall from
time to time execute and deliver all further documents and instruments and do
all acts and things as the other Party may, either before or after the Closing
Date, reasonably required in order to effectively carry out or better evidence
or perfect the full intent and meaning of this Agreement.

 

18.5                           Entire
Agreement.  This Agreement and the agreements
referred to in or contemplated by this Agreement constitute the entire
understanding and agreement among the Parties and supersede any and all prior
or contemporaneous, oral or written, representations, communications,
understandings and agreements among the Parties with respect to the subject
matter hereof or thereof to the extent inconsistent with or contradictory to
this Agreement or such other agreements.

 

18.6                           Incorporation
by Reference.  The Schedules attached
hereto or referred to herein are deemed to be a part of this Agreement and are
incorporated herein by reference.

 

18.7                           Modifications.  This Agreement shall not be modified,
amended, canceled or altered in any way, and may not be modified by custom,
usage of trade or course of dealing, except by an instrument in writing signed
by all Parties.  All amendments or
modifications of this Agreement shall be binding upon the Parties despite any
lack of consideration so long as the same shall be in writing and executed by
the Parties.

 

18.8                           Waiver.  The performance of any obligation required of
a Party hereunder may be waived only by a written waiver signed by the other
Parties, and such waiver shall be 

 

32

 

effective only with respect to the specific
obligation described.  The waiver by any Party
of a breach of any provision of this Agreement by any other Party shall not
operate or be construed as a waiver of any subsequent breach of the same
provision or another provision of this Agreement.

 

18.9                           Assignment.  Neither this Agreement nor any right or
obligation hereunder may be assigned by any Party without the prior written
consent of the other Parties, and any attempted assignment without the required
consents shall be void.

 

18.10                     Severability.  If any provision hereof is found invalid,
illegal or unenforceable pursuant to any Governmental Order, the remainder of
this Agreement shall remain valid, legal and enforceable according to its
terms, and such invalid, illegal or unenforceable provision shall be replaced with
a provision that approximates the substance and spirit of the invalid, illegal
or unenforceable provision as closely as possible without being invalid,
illegal or unenforceable.

 

18.11                     Governing
Law.  This Agreement and all disputes
arising out of or in connection with this Agreement shall be governed by,
interpreted under, and construed and enforceable in accordance with, the laws of the State of New York, U.S.A., without giving effect
to conflict of law principles.

 

18.12                     Arbitration.
 Any
dispute, controversy or difference arising among the Parties out of or in relation to this Agreement or for the
breach thereof shall be resolved exclusively by arbitration in Seoul,
Korea.  Such arbitration shall be
conducted in the English language in accordance with the Rules of
Conciliation and Arbitration of the International Chamber of Commerce by three (3) arbitrators,
of whom one shall be appointed by Purchaser
and/or NAVTEQ, another shall be appointed by Sellers, and the third shall be appointed by the first two (2) arbitrators.  If the third arbitrator is not so appointed
within one (1) month after the appointment of the first two (2) arbitrators,
the third arbitrator shall be selected in accordance with the Rules of
Conciliation and Arbitration of the International Chamber of Commerce.  The decision of the arbitrators shall be made
on the principles of majority rule.  The
award made by the arbitrators shall be final and binding upon the Parties and
may be enforced in any court of competent jurisdiction.  Notwithstanding the foregoing provision, the
Parties shall have the right to bring judicial proceedings to obtain
preliminary injunctive relief at any time during the pendency of arbitration
proceedings, provided that such preliminary injunctive relief shall be subject
to final arbitral decisions.  Unless the
arbitrators decide otherwise, the cost of arbitration shall be shared equally
by Purchaser and/or NAVTEQ, on the one
hand, and Sellers, on the other hand.

 

18.13                     Notices.  All notices, demands, requests, consents or
other communications hereunder shall be in writing and shall be given by
personal delivery, by express courier, by registered or certified mail with
return receipt requested, or by telex or facsimile, to the Parties at the
addresses shown below, or to such other address as may be designated by written
notice given by any Party to the other Parties. 
Unless conclusively proved otherwise, all notices, demands, requests,
consents or other communications hereunder shall be deemed effective upon
delivery if personally delivered, five (5) days after dispatch if sent by
express courier, ten (10) days after dispatch if sent by registered or
certified mail with return receipt requested, or confirmation of the receipt of
the facsimile by the recipient if sent by telex or facsimile.

 

33

 

	
  To Purchaser:

  
	
   

  	
   

  
	
   

  	
  NAVTEQ B.V.

  
	
   

  	
  The Merchandise Mart, Suite 900

  
	
   

  	
  Chicago, IL 60654

  
	
   

  	
  U.S.A.

  
	
   

  	
  Attention: Lawrence M. Kaplan

  
	
   

  	
  Facsimile: 312-894-7228

  
	
   

  	
   

  
	
   

  	
  with a copy to: 

  	
  Attention: David B. Mullen

  
	
   

  	
   

  	
  Facsimile: 312-894-7212

  
	
   

  	
   

  
	
  To NAVTEQ:

  
	
   

  	
   

  
	
   

  	
  NAVTEQ Corporation

  
	
   

  	
  The Merchandise Mart, Suite 900

  
	
   

  	
  Chicago, IL 60654

  
	
   

  	
  U.S.A.

  
	
   

  	
  Attention: Lawrence M. Kaplan

  
	
   

  	
  Facsimile: 312-894-7228

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  Attention: David B. Mullen

  
	
   

  	
   

  	
  Facsimile: 312-894-7212

  
	
   

  	
   

  
	
  To the
  Company:

  
	
   

  	
   

  
	
   

  	
  Mr. Mr. Yong-Won Lee

  
	
   

  	
  Chief Executive Officer

  
	
   

  	
  Picture Map International Co., Ltd.

  
	
   

  	
  345-1, Yatap-dong, Bundang-gu

  
	
   

  	
  Seongnam-si, Gyeonggi-do

  
	
   

  	
  Republic of Korea

  
	
   

  	
  Facsimile: 82-31-707-7253

  
	
   

  	
   

  
	
  To Sellers:

  
	
   

  	
   

  
	
   

  	
  c/o Mr. Yong-Won Lee

  
	
   

  	
  Sellers’ Representative

  
	
   

  	
  Picture Map International Co., Ltd.

  
	
   

  	
  345-1, Yatap-dong, Bundang-gu

  
	
   

  	
  Seongnam-si, Gyeonggi-do

  
	
   

  	
  Republic of Korea

  
	
   

  	
  Facsimile: 82-31-707-7253

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Dorsey & Whitney LLP

  
	
   

  	
  250 Park Avenue

  
	
   

  	
  New York, New York 10177

  

 

34

 

U.S.A.

Attn: Chang
Joo Kim, Esq.

Facsimile: 1-212-953-7201

 

18.14                     Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

18.15                     Captions.  The section headings and captions
contained herein are for purposes of reference and convenience only and shall
not in any way affect the meaning or interpretation of this Agreement.

 

18.16                     Number
and Gender.  Whenever used in this
Agreement, the singular terms shall include the plural and the plural the
singular, and the use of any gender shall be applicable to all genders.

 

18.17                     Confidentiality.  No Party shall disclose, disseminate or cause
to be disclosed the terms and conditions of this Agreement, except insofar as
disclosure is reasonably necessary to carry out and effectuate the terms of
this Agreement or as required by a court of competent jurisdiction or
governmental agency, and insofar as any Party is required by Law to disclose.

 

18.18                     Language.  The English language shall be the language
used for the interpretation of this Agreement.

 

35

 

IN WITNESS WHEREOF, the Parties have executed
this Agreement as of the day and year first above written.

 

	
  PURCHASER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NAVTEQ B.V.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  David B.
  Mullen

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name: 

  	
  David B.
  Mullen

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
    CFO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NAVTEQ:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NAVTEQ CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  David B.
  Mullen

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name: 

  	
  David B.
  Mullen

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  CFO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPANY:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PICTURE MAP INTERNATIONAL CO., LTD.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  Lee Yong Won

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name: 

  	
  Lee Yong Won

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SELLERS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [SIGNATURE SHOWN IN SCHEDULE C]

  	
   

  
													

 

36

 

Exhibit 2.2:
Payment Agency Agreement

 

Exhibit 4.1:
Subscription and Registration Rights Agreement

 

Exhibit 6.1:
Escrow Agreement

 

Exhibit 12.10:
Patents Assignment Agreement

 

Exhibit 12.11:
Proprietary Information and Inventions Agreement

 

Exhibit 12.12:
Resignation

 

37

 

Schedule C:
Share Ownership

 

	
  Sellers

  	
   

  	
  Number of

  Shares

  	
   

  	
  Purchase Price

  to Be Received

  	
   

  	
  Signature

  
	
  Mr. Yong-Won Lee

  Address: 611-304 Ulji
  Apt.,

  1145-14 Sanbon-dong, Gunpo-si,

  Gyeonggi-do, Korea, 435-040

  Resident Registration Number

  (RRN): 640120-1691216

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Su-Hyuk Hwang

  614-502 Ulji Apt., 1145-14
  

  Sanbon-dong, Gunpo-si,

  Gyeonggi-do, Korea, 435-040 

   

  RRN: 630724-1675817

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Jong-Seok Baek
  

  614-901 Ulji Apt., 1145-14

  Sanbon-dong, Gunpo-si,

  Gyeonggi-do, Korea, 423-762  

  RRN: 651222-1640326

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Sang-Ho Yoon  

  107-1702 Kwangbok
  Hyundai

  Apt., 55-1
  Chulsan-dong, 

  Gwangmyeong-si,

  Gyeonggi-do, Korea, 423-721

  RRN: 661015-1068621

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MR. Sa-Min Kim

  102-1504 Dongbo 2# Apt., 

  Sanghyun-dong, Suji Yongin-si,

  Gyeonggi-do, Korea, 449-746

  RRN: 680224-1042039

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

38

 

	
  Sellers

  	
   

  	
  Number of

  Shares

  	
   

  	
  Purchase Price

  to Be Received

  	
   

  	
  Signature

  
	
  Mr. Ha-Seok Lee

  106-701 Hyundai 1 Apt.,
  1344

  Bangbae-dong, Seocho-gu, Seoul,

  Korea, 137-060  

  RRN: 760612-1068610

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Hyeong-Seog Lee
  

  113-204 Seocho Ramian
  Apt., 

  1682 Seocho-dong, Seocho-gu, 

  Seoul, Korea, 137-070

  RRN: 730401-1068624

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Hyun-Sub Kim
  

  103-402 Hyundai Apt., 

  Yeonwon-mauel 550-4, Mabuk-

  ri, Kusung-eup, Yongin-si, 

  Gyeonggi-do, Korea,  449-937  

  RRN: 710201-1808310

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Kye-Sun Jang
  

  3rd Fl. 238-15,
  Jungja-dong, 

  Bundang-gu, Seongnam-si, 

  Gyeonggi-do, Korea, 463-815  

  RRN: 670426-1274011

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Hyung-Keun Seo
  

  802-1102 Cheongsol-mauel
  

  Daewon Apt., Keumkok-dong, 

  Bundang-gu, Seongnam-si, 

  Gyeonggi-do, Korea, 463-804  

  RRN: 630922-1683125

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Yoo-Seong Song
  

  1136-802 Changmi Apt.,
  1092 14 

  Sanbon-dong, Gunpo-si, 

  Gyeonggi-do, Korea, 435-040  

  RRN: 560223-1011137

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

39

 

	
  Sellers

  	
   

  	
  Number of

  Shares

  	
   

  	
  Purchase Price

  to Be Received

  	
   

  	
  Signature

  
	
  Mr. Jong-Hwan Kim
  

  102-1401 DaedongUbang
  Apt., 

  94-8 Uhyun-dong, Buk-gu, 

  Pohang-si, Gyeongsangbuk-do, 

  Korea, 791-757  

  RRN: 631111-1691812

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Kwang-Hyun Lee
  

  105-802 Inwangsan
  Hyundai 

  Apt., Hongje-dong, Seodaemun-

  gu, Seoul, Korea, 120-787  

  RRN: 511220-1042011

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ms. Myung-Seok Yang
  

  21-502 Usung Apt., 1332-1
  

  Seocho-dong, Seocho-gu, Seoul, 

  Korea,  137-773
  

  RRN: 610102-2482226

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ms. Jung-Won Kim
  

  138-6 Yeomkok-dong,
  Seocho-

  gu, Seou, Korea, 137-170  

  RRN: 630330-2019523

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Un-Sik Kim
  

  203-1001 Gil-hoon 2#
  Apt., 

  Jukjeon-1dong, Yongin-si, 

  Gyeonggi-do, Korea, 449-751  

  RRN: 680518-1041519

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Sung-Hoon Kim
  

  904-1101 Hansung Apt., 

  Jungsan-maul 1566-2, Ilsan-dong, 

  Ilsan-gu, Goyang-si Gyeonggi-

  do, Korea, 411-729  

  RRN: 610731-1047612

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

40

 

	
  Sellers

  	
   

  	
  Number of

  Shares

  	
   

  	
  Purchase Price

  to Be Received

  	
   

  	
  Signature

  
	
  Mr. Min-Ho Cho
  

  116-502 Hansol
  Noble-Village, 

  Jukjeon-2dong, Yongin-si, 

  Gyeonggi-do, Korea, 449-546  

  RRN: 640312-1830014

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ms. Kyung-Ok Lee
  

  76-502 Gaepo-Jugong 1#
  Apt., 

  Gaepo-dong, Seocho-gu, Seoul, 

  Korea, 135-240  

  RRN: 670818-2267813

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Woo-Hyun Lim
  

  103-703 Shinsanbon Zai
  1# Apt., 

  Dang-dong, Gunpo-si, Gyeonggi-

  do, Korea, 435-010  

  RRN: 540106-1690413

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Yong-Oh Jung
  

  614-502 Ulji Apt., 1145-14
  

  Sanbon-dong, Gunpo-si, 

  Gyeonggi-do, Korea, 435-040  

  RRN: 430413-1006035

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ms. Bu-Mi Ok
  

  305-204 Sunkyong 3#
  Apt., 

  Guseo-2dong, Geumjeong-gu, 

  Busan, Korea, 609-761  

  RRN: 421120-2093302

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Hyoung-Seok Lee
  

  101-1301 Yuwon Apt.
  Howon-

  dong, Uijeongbu-si, Gyeonggi-

  do, Korea, 480-782  

  RRN: 710709-1173218

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

41

 

	
  Sellers

  	
   

  	
  Number of

  Shares

  	
   

  	
  Purchase Price

  to Be Received

  	
   

  	
  Signature

  
	
  Mr. Hak-Tae Kim
  

  103-1502 Parktown, 51
  Sunae-

  dong, Bundang-gu, Seongnam-si, 

  Gyeonggi-do, Korea, 137-776  

  RRN: 640823-1690613

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Jin-Hoo Kim
  

  402 Seokjeon Building, 364-31
  

  Seokyo-dong, Mapo-gu, Seoul, 

  Korea, 121-210  

  RRN: 651116-1024018

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Chang-Joo Kim
  

  20 Fourth St., Closter, New 

  Jersey 07624, U.S.A.  

  RRN: 631217-1674932

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ICI Capital Ltd.
  

  K2 House, Suite 102, 269-16
  

  Nonhyun-dong, Kangnam-gu, 

  Seoul, Korea, 405-847  

  Business Registration Number
  

  (BRN): 1168169531

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NTC 02-8 KTIC Venture
  Fund  

  17th Fl. Shinan Bldg., 943-19
  

  Daechi-dong, Kangnam-gu, 

  Seoul, Korea, 135-280  

  BRN: 1208003846

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Korea Technology Investment
  Corp.  

  17th Fl. Shinan Bldg., 943-19
  

  Daechi-dong, Kangnam-gu, 

  Seoul, Korea, 135-845  

  BRN: 1208164573

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

42

 

	
  Sellers

  	
   

  	
  Number of

  Shares

  	
   

  	
  Purchase Price

  to Be Received

  	
   

  	
  Signature

  
	
  MIC2001-5 KTAC
  Partnership 4  

  8th Fl. Taechi Bldg., 889-11
  

  Daechi-dong, Kangnam-gu, 

  Seoul, Korea, 135-845  

  BRN: 1208003491

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mirae Asset H&B Venture
  Investment #1  

  17th Fl. Mirae Asset Venture 

  Tower, 996-1 Daechi-dong, 

  Kangnam-gu, Seoul, Korea, 135-280  

  BRN: 1208002833

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mirae Asset Venture Investment
  #3  

  17th Fl. Mirae Asset Venture 

  Tower, 996-1 Daechi-dong, 

  Kangnam-gu, Seoul, Korea, 135-280  

  BRN: 1208002911

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Hyung-Tae Kim
  

  705-1401 Casvill
  Kunyoung, 

  Jukjeon-dong, Yongin-si, 

  Gyeonggi-do, Korea, 449-160  

  RRN: 670605-1109519

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Jai-Yeol Jung
  

  17-612 Sang-a Apt., 505 

  Jungkye-2dong, Nowon-gu, 

  Seoul, Korea, 139-784  

  RRN: 700225-1047531

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Han-Suk Choi
  

  204 Gaman Green Villia, 647-9
  

  Jeongrung-3dong, Sungbuk-gu, 

  Seoul, Korea, 132-919  

  RRN: 731110-1010215

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

43

 

	
  Sellers

  	
   

  	
  Number of

  Shares

  	
   

  	
  Purchase Price

  to Be Received

  	
   

  	
  Signature

  
	
  Mr. Ho-Seok Jee
  

  3280 Sujin-2dong,
  Sujung-gu, 

  Seongnam-si, Gyeonggi-do, 

  Korea, 461-806  

  RRN: 740327-1019121

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ms. Yun-Jung Ji
  

  114-1003 Daewoo Prugio
  Apt., 

  Sinlim-11dong, Gwanak-gu, 

  Seoul, Korea, 153-754  

  RRN: 731226-2055518

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Young-Jun Kim
  

  502-405 Yanggi
  Hanyang Apt., 

  Sunae-dong, Seongnam-si, 

  Gyeonggi-do, Korea, 158-756  

  RRN: 730226-1397010

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mr. Nam-Young Oh
  

  Na-B02 Usam Villa, 376-3
  

  Gomae-ri, Gihung-eup, Yongin-

  si, Gyeonggi-do, Korea, 449-901  

  RRN: 690315-1482010

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

44

 

Schedule C-1
(Purchase Price Allocation)

 

45

 

Schedule 1.34:
Key Employees

 

Schedule 4.1:
Delivery Details

 

Schedule 8.2:
Options

 

Schedule 8.5:
No Conflict

 

Schedule 8.6:
Consents and Approvals

 

Schedule 8.7:
Financial Statements

 

Schedule 8.9:
Accounts Receivable

 

Schedule 8.10:
Permits

 

Schedule 8.11:
Absence of Certain Changes

 

Schedule 8.12:
Customers, Distributors and Suppliers

 

Schedule 8.13:
Related Party Transactions

 

Schedule 8.14:
Litigation

 

Schedule 8.16(a):
Material Contracts

 

Schedule 8.17(a):
Intellectual Property

 

Schedule 8.18:
Real Property

 

Schedule 8.19:
Tangible Personal Property

 

Schedule 8.21(a):
Encumbrances

 

Schedule 8.25:
Insurance

 

46

 

Schedule 8.27:
Product Liability and Product Warranty

 

Schedule 12.10:
Assignment of Patents

 

47Exhibit
10.1

 

 

UNOCAL
CANADA LIMITED

 

UNOCAL
CANADA ALBERTA HUB LIMITED

 

UNOCAL
CORPORATION

 

and

 

POGO
CANADA, ULC

 

POGO
PRODUCING COMPANY

 

 

SHARE
PURCHASE AGREEMENT

 

July 8, 2005

 

 

 

SHARE
PURCHASE AGREEMENT

 

TABLE
OF CONTENTS

 

	
  ARTICLE 1

  DEFINITIONS AND INTERPRETATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Definitions

  	
   

  	
   

  
	
  1.2

  	
   

  	
  Certain Rules of Interpretation

  	
   

  	
   

  
	
  1.3

  	
   

  	
  Knowledge

  	
   

  	
   

  
	
  1.4

  	
   

  	
  Entire Agreement

  	
   

  	
   

  
	
  1.5

  	
   

  	
  Applicable Law

  	
   

  	
   

  
	
  1.6

  	
   

  	
  Accounting Principles

  	
   

  	
   

  
	
  1.7

  	
   

  	
  Disclosure

  	
   

  	
   

  
	
  1.8

  	
   

  	
  Schedules

  	
   

  	
   

  
	
  1.9

  	
   

  	
  Joint and Several Liability

  	
   

  	
   

  
	
  1.10

  	
   

  	
  Interpretation If Closing Does Not Occur

  	
   

  	
   

  
	
  1.11

  	
   

  	
  Conflicts

  	
   

  	
   

  
	
  1.12

  	
   

  	
  Guarantees

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  PURCHASE AND SALE

  
	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Actions by Vendor and Purchaser Regarding
  Purchase

  	
   

  	
   

  
	
  2.2

  	
   

  	
  Place of Closing

  	
   

  	
   

  
	
  2.3

  	
   

  	
  Tender

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  PURCHASE PRICE

  
	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Purchase Price

  	
   

  	
   

  
	
  3.2

  	
   

  	
  Payment of Purchase Price

  	
   

  	
   

  
	
  3.3

  	
   

  	
  Post Closing Adjustment to the Net Working
  Capital Amount

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  REPRESENTATIONS AND WARRANTIES OF VENDOR

  
	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Incorporation and Registration

  	
   

  	
   

  
	
  4.2

  	
   

  	
  Right to Sell

  	
   

  	
   

  
	
  4.3

  	
   

  	
  Capitalization

  	
   

  	
   

  
	
  4.4

  	
   

  	
  Corporation and Subsidiaries

  	
   

  	
   

  
	
  4.5

  	
   

  	
  Due Authorization

  	
   

  	
   

  
	
  4.6

  	
   

  	
  Residence of Vendor

  	
   

  	
   

  
	
  4.7

  	
   

  	
  Enforceability of Obligations

  	
   

  	
   

  
	
  4.8

  	
   

  	
  No Advisors or Consultants

  	
   

  	
   

  
	
  4.9

  	
   

  	
  Government Authorizations

  	
   

  	
   

  
	
  4.10

  	
   

  	
  Benefit Plans and Labour Matters

  	
   

  	
   

  
	
  4.11

  	
   

  	
  Financial Statements

  	
   

  	
   

  
	
  4.12

  	
   

  	
  Distributions

  	
   

  	
   

  
	
  4.13

  	
   

  	
  Business Carried on in the Ordinary Course

  	
   

  	
   

  
	
  4.14

  	
   

  	
  Environmental Matters

  	
   

  	
   

  
	
  4.15

  	
   

  	
  Assets

  	
   

  	
   

  
	
  4.16

  	
   

  	
  Material Obligations

  	
   

  	
   

  

 

 

	
  4.17

  	
   

  	
  Litigation

  	
   

  	
   

  
	
  4.18

  	
   

  	
  Intellectual Property

  	
   

  	
   

  
	
  4.19

  	
   

  	
  Taxes

  	
   

  	
   

  
	
  4.20

  	
   

  	
  Absence of Certain Changes

  	
   

  	
   

  
	
  4.21

  	
   

  	
  Certain Contracts, Agreements, Plans and
  Commitments

  	
   

  	
   

  
	
  4.22

  	
   

  	
  Resource Pools and Undepreciated Capital
  Cost Balances

  	
   

  	
   

  
	
  4.23

  	
   

  	
  Operation of Assets

  	
   

  	
   

  
	
  4.24

  	
   

  	
  Minute
  Books

  	
   

  	
   

  
	
  4.25

  	
   

  	
  Corporate Registers

  	
   

  	
   

  
	
  4.26

  	
   

  	
  Books and Records and Internal Controls

  	
   

  	
   

  
	
  4.27

  	
   

  	
  SMOG
  Run

  	
   

  	
   

  
	
  4.28

  	
   

  	
  Hart Scott Rodino Information

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  REPRESENTATIONS AND WARRANTIES OF PURCHASER

  
	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Incorporation

  	
   

  	
   

  
	
  5.2

  	
   

  	
  Due Authorization

  	
   

  	
   

  
	
  5.3

  	
   

  	
  Enforceability of Obligations

  	
   

  	
   

  
	
  5.4

  	
   

  	
  Investment Canada

  	
   

  	
   

  
	
  5.5

  	
   

  	
  Authorizations

  	
   

  	
   

  
	
  5.6

  	
   

  	
  Financing

  	
   

  	
   

  
	
  5.7

  	
   

  	
  Brokers

  	
   

  	
   

  
	
  5.8

  	
   

  	
  Purchaser as Principal

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  REGARDING REPRESENTATIONS, WARRANTIES

  AND COVENANTS

  
	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Materiality

  	
   

  	
   

  
	
  6.2

  	
   

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

  	
   

  	
   

  
	
  6.3

  	
   

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

  	
   

  	
   

  
	
  6.4

  	
   

  	
  No Consequential Damages

  	
   

  	
   

  
	
  6.5

  	
   

  	
  No Other Representations, Warranties or
  Covenants of Vendor

  	
   

  	
   

  
	
  6.6

  	
   

  	
  No Other Representation, Warranties or
  Covenants of Purchaser

  	
   

  	
   

  
	
  6.7

  	
   

  	
  Restrictions on Claims and Actions

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  PURCHASER’S CONDITIONS

  
	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Correctness and Accuracy of Representations
  and Warranties

  	
   

  	
   

  
	
  7.2

  	
   

  	
  Performance of Obligations

  	
   

  	
   

  
	
  7.3

  	
   

  	
  Governmental Approvals, Consents, and
  Authorizations

  	
   

  	
   

  
	
  7.4

  	
   

  	
  Other Consents and Approvals

  	
   

  	
   

  
	
  7.5

  	
   

  	
  No Injunctions or Restraints

  	
   

  	
   

  
	
  7.6

  	
   

  	
  Vendor’s Closing Deliveries

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  VENDOR’S CONDITIONS

  
	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Correctness and Accuracy of Representations
  and Warranties

  	
   

  	
   

  
	
  8.2

  	
   

  	
  Performance of Obligations

  	
   

  	
   

  

 

ii

 

	
  8.3

  	
   

  	
  Governmental Approvals, Consents, and
  Authorizations

  	
   

  	
   

  
	
  8.4

  	
   

  	
  Other Consents and Approvals

  	
   

  	
   

  
	
  8.5

  	
   

  	
  No Injunctions or Restraints

  	
   

  	
   

  
	
  8.6

  	
   

  	
  Purchaser’s Closing Deliveries

  	
   

  	
   

  
	
  8.7

  	
   

  	
  Deposit

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  OTHER COVENANTS

  
	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Conduct of Business Prior to Closing

  	
   

  	
   

  
	
  9.2

  	
   

  	
  Negative Covenants

  	
   

  	
   

  
	
  9.3

  	
   

  	
  Dealings or Operations Regarding Assets

  	
   

  	
   

  
	
  9.4

  	
   

  	
  Intercorporate Obligations

  	
   

  	
   

  
	
  9.5

  	
   

  	
  Access to Books and Records and Other
  Assets

  	
   

  	
   

  
	
  9.6

  	
   

  	
  Confidentiality

  	
   

  	
   

  
	
  9.7

  	
   

  	
  Actions to Satisfy Closing Conditions

  	
   

  	
   

  
	
  9.8

  	
   

  	
  Preservation of Records

  	
   

  	
   

  
	
  9.9

  	
   

  	
  Competition Act Filing and Investment
  Canada Act Filing

  	
   

  	
   

  
	
  9.10

  	
   

  	
  Assignment of Confidentiality Agreements

  	
   

  	
   

  
	
  9.11

  	
   

  	
  Insurance

  	
   

  	
   

  
	
  9.12

  	
   

  	
  Employee Related Matters

  	
   

  	
   

  
	
  9.13

  	
   

  	
  Consent to Jurisdiction

  	
   

  	
   

  
	
  9.14

  	
   

  	
  US Financial Statements

  	
   

  	
   

  
	
  9.15

  	
   

  	
  Reserves Report (US)

  	
   

  	
   

  
	
  9.16

  	
   

  	
  Purchase Not Conditional on Financing

  	
   

  	
   

  
	
  9.17

  	
   

  	
  Compliance with Privacy Laws

  	
   

  	
   

  
	
  9.18

  	
   

  	
  Bank Accounts

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  INDEMNIFICATION

  
	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Mutual Indemnifications for Breaches of
  Covenants and Warranties

  	
   

  	
   

  
	
  10.2

  	
   

  	
  Procedures Relating to Indemnification
  Between Vendor and Purchaser

  	
   

  	
   

  
	
  10.3

  	
   

  	
  Indemnification Procedures for Third Party
  Claims

  	
   

  	
   

  
	
  10.4

  	
   

  	
  Holding of Indemnities

  	
   

  	
   

  
	
  10.5

  	
   

  	
  Claims Net of Insurance and Taxes

  	
   

  	
   

  
	
  10.6

  	
   

  	
  Mitigation

  	
   

  	
   

  
	
  10.7

  	
   

  	
  Adjustment to Purchase Price

  	
   

  	
   

  
	
  10.8

  	
   

  	
  Subrogation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11

  TAX MATTERS

  
	
   

  	
   

  	
   

  
	
  11.1

  	
   

  	
  Liabilities for Taxes

  	
   

  	
   

  
	
  11.2

  	
   

  	
  Tax
  Returns

  	
   

  	
   

  
	
  11.3

  	
   

  	
  Confidentiality of Tax Information

  	
   

  	
   

  
	
  11.4

  	
   

  	
  Section 338 Election

  	
   

  	
   

  
	
  11.5

  	
   

  	
  Tax
  Claims

  	
   

  	
   

  
	
  11.6

  	
   

  	
  Assistance and Cooperation

  	
   

  	
   

  

 

iii

 

	
  ARTICLE 12

  TERMINATION AND CLOSING

  
	
   

  	
   

  	
   

  
	
  12.1

  	
   

  	
  Termination

  	
   

  	
   

  
	
  12.2

  	
   

  	
  Regarding Termination by Purchaser

  	
   

  	
   

  
	
  12.3

  	
   

  	
  Regarding Termination by Vendor

  	
   

  	
   

  
	
  12.4

  	
   

  	
  Deposit

  	
   

  	
   

  
	
  12.5

  	
   

  	
  Notice of Termination

  	
   

  	
   

  
	
  12.6

  	
   

  	
  Effect of Termination

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13

  GENERAL

  
	
   

  	
   

  	
   

  
	
  13.1

  	
   

  	
  Non-Waiver

  	
   

  	
   

  
	
  13.2

  	
   

  	
  Public Notices

  	
   

  	
   

  
	
  13.3

  	
   

  	
  Notices

  	
   

  	
   

  
	
  13.4

  	
   

  	
  Assignment

  	
   

  	
   

  
	
  13.5

  	
   

  	
  Further Assurances

  	
   

  	
   

  
	
  13.6

  	
   

  	
  No
  Recourse

  	
   

  	
   

  
	
  13.7

  	
   

  	
  Time of the Essence

  	
   

  	
   

  
	
  13.8

  	
   

  	
  Amendment

  	
   

  	
   

  
	
  13.9

  	
   

  	
  Invalidity

  	
   

  	
   

  
	
  13.10

  	
   

  	
  Counterparts

  	
   

  	
   

  
	
  13.11

  	
   

  	
  Enforcement

  	
   

  	
   

  
	
  13.12

  	
   

  	
  No Third-Party Beneficiaries

  	
   

  	
   

  
	
  13.13

  	
   

  	
  Expenses

  	
   

  	
   

  
	
  13.14

  	
   

  	
  Removal of Name

  	
   

  	
   

  

 

iv

 

SCHEDULES

 

	
  Schedule
  1.1(a)

  	
   

  	
  Escrow
  Agreement

  
	
  Schedule
  1.1(b)

  	
   

  	
  SMOG Run

  
	
  Schedule
  1.1(c)

  	
   

  	
  Unaudited
  Financial Statements

  
	
  Schedule 1.3

  	
   

  	
  Vendor
  Knowledge Individuals

  
	
  Schedule 4.4(c)

  	
   

  	
  Subsidiaries

  
	
   

  	
   

  	
  Part 1 

  	
  Corporate
  Subsidiaries (Alberta)

  
	
   

  	
   

  	
  Part 2

  	
  Corporate
  Subsidiary (Nova Scotia)

  
	
   

  	
   

  	
  Part 3

  	
  Partnership
  Subsidiaries

  
	
  Schedule
  4.5(c)

  	
   

  	
  Defaults Due
  to this Agreement

  
	
  Schedule
  4.5(e)

  	
   

  	
  Change of
  Control Provisions

  
	
  Schedule 4.9

  	
   

  	
  Material
  Government Authorizations – Vendor and Unocal

  
	
  Schedule 4.10

  	
   

  	
  Benefit
  Plans

  
	
  Schedule 4.14

  	
   

  	
  Environmental
  Matters 

  
	
  Schedule 4.15(a)

  	
   

  	
  Permitted
  Encumbrances

  
	
  Schedule 4.15(c)

  	
   

  	
  Notices of
  Defaults 

  
	
  Schedule 4.15(d)

  	
   

  	
  Government
  Proceedings

  
	
  Schedule 4.15(e)

  	
   

  	
  Authorizations
  for Expenditure

  
	
  Schedule 4.15(g)

  	
   

  	
  Marketing
  and Transportation Agreements

  
	
  Schedule 4.16

  	
   

  	
  Material
  Contracts and Liabilities

  
	
  Schedule 4.17

  	
   

  	
  Open Litigation
  Claims

  
	
  Schedule 4.18

  	
   

  	
  Intellectual
  Property

  
	
  Schedule 4.19(a)

  	
   

  	
  Tax Matters

  
	
  Schedule 4.19(h)

  	
   

  	
  Tax
  Elections

  
	
  Schedule 4.19(i)

  	
   

  	
  Subpart F
  Income

  
	
  Schedule 4.19(j)

  	
   

  	
  United
  States Property

  
	
  Schedule
  4.22

  	
   

  	
  Estimated
  Resource Pools

  
	
  Schedule
  4.23

  	
   

  	
  Areas of
  Mutual Interest 

  
	
  Schedule 5.5

  	
   

  	
  Material
  Government Authorizations – Purchaser and Pogo

  
	
  Schedule
  7.6(e)

  	
   

  	
  Vendor’s
  Opinions

  
	
  Schedule
  8.6(e)

  	
   

  	
  Purchaser’s
  Opinions

  

 

v

 

SHARE PURCHASE AGREEMENT

 

THIS AGREEMENT is made as
of July 8, 2005 among:

 

UNOCAL
CANADA LIMITED

a
corporation continued under the laws of Alberta

 

 - and –

 

UNOCAL
CANADA ALBERTA HUB LIMITED

a
corporation incorporated under the laws of Alberta

 

(Unocal
Canada Limited and Unocal Canada Alberta Hub Limited are hereinafter

collectively called “Vendor”)

 

- and –

 

UNOCAL CORPORATION

a corporation incorporated under the laws of
Delaware 

(hereinafter called “Unocal”)

 

- and –

 

POGO
CANADA, ULC

an
Alberta unlimited liability corporation 

(hereinafter called “Purchaser”)

 

- and –

 

POGO PRODUCING COMPANY

a corporation incorporated under the laws of Delaware 

(hereinafter called “Pogo”)

 

RECITALS:

 

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

 

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

 

IN CONSIDERATION of the covenants,
agreements, representations, warranties and payments herein set forth, the
Parties, together with Unocal and Pogo, covenant and agree as follows:

 

 

ARTICLE 1

DEFINITIONS AND INTERPRETATION

 

1.1          Definitions

 

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

 

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

 

(a)           abandon
wells;

 

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

 

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

 

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

 

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

 

“ABCA” means the Business
Corporations Act (Alberta).

 

“Accounting Firm” means a mutually agreed
on, nationally recognized accounting firm.

 

“Affiliate” means, as to a Person, any other
Person controlling, controlled by or under common control with that Person
where “control”, “controlling” or “controlled” means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of another Person, whether through the ownership of voting securities
or by contract, partnership agreement, trust arrangement or other means, either
directly or indirectly, that results in control in fact; provided that direct
or indirect ownership of shares of a corporation carrying more than 50% of the
voting rights shall constitute control of that corporation; and further
provided that:

 

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

 

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

 

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

 

“Applicable Laws” means all laws (including Environmental
Laws and Privacy Laws), statutes, rules, regulations, official directives and
orders of Government Authorities (whether

 

2

 

administrative,
regulatory, legislative, executive or otherwise) including judgments, orders
and decrees of courts, commissions or bodies exercising similar functions.

 

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

 

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

 

“Audited Financial Statements” means the audited consolidated
financial statements of the Corporation and the Subsidiaries for the fiscal
years ended December 31, 2004 and 2003, in each case consisting of a
consolidated balance sheet, a consolidated statement of earnings and retained
earnings and a consolidated statement of cash flows, and the audited
consolidated statement of earnings and retained earnings and a consolidated
statement of cash flows for the fiscal year ended December 31, 2002, in
each case prepared in accordance with generally accepted accounting principles.

 

“Authorizations” means all permits, licenses, exemptions,
orders, variances, approvals, consents, authorizations, registrations,
qualifications and filings with or under any Applicable Laws and having the
force of law.

 

“Banking Facilities” means, collectively, the credit
facilities available to the Corporation under the Syndicated Credit Agreement
and the Demand Credit Agreement.

 

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

 

“Benefit Plans” means all plans and arrangements to which the
Corporation or any of the Subsidiaries is a party or by which the Corporation
or any of the Subsidiaries is bound or under which the Corporation or any of
the Subsidiaries has, or will have, any liability or contingent liability,
relating to:

 

(a)           Pension
Plans;

 

(b)           Insurance
Plans; or

 

(c)           Compensation
Plans;

 

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

 

“Books and Records” means all books and records of the
Corporation and the Subsidiaries, including financial, corporate, operations
and sales books, inventory and other asset records, books of account, sales and
purchase records, the Title and Operating Documents, customer files, production
data, equipment maintenance data, accounting records, sales and promotional
data, advertising materials, cost and pricing information, supplier lists,
customer lists, business reports, plans and projections and all other similar
documents, surveys, plans, files, records,

 

3

 

correspondence,
and other data and information, financial or otherwise, including all data and
information stored on computer-related or other electronic media but excepting
therefrom all Proprietary Information.

 

“Business” means the business of the Corporation and the
Subsidiaries.

 

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

 

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

 

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

 

“Closing Date” means:

 

(a)           the
fifth Business Day following the day on which all of the Conditions set forth
in Sections 7.3(a), 7.3(b), 7.4, 8.3(a), 8.3(b), and 8.4  have been satisfied or duly waived by the
Party entitled to waive the same and notice of satisfaction or waiver has been
given by the applicable Party to the other Party which notice each Party agrees
to give promptly to the other; provided that, unless the Parties determine
otherwise, the Closing Date shall not in any event be before the earlier of:

 

(i)            the
fifth Business Day after Purchaser receives the Audited Financial
Statements and unaudited financial statements referred to in Section 9.14
and the Reserves Report (US); and

 

(ii)           the 90th
day after the date of this Agreement; or

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

(b)           a “no
action letter” has been received from the Commissioner indicating that the
Commissioner has determined that she does not at that time intend to make an
application for an order under Section 92 of the Competition Act in respect of
the Purchase; or

 

(c)           in the
event that neither an ARC nor a “no action letter” is issued or received, the
relevant waiting period under Section 123 of the Competition Act shall
have expired and there shall be no threatened or actual application by the
Commissioner for an order under Sections 92 or 100 of the Competition Act.

 

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

 

“Confidentiality Agreement” means the Confidentiality
Agreement dated June 7, 2005 between Unocal, on behalf of itself and its
Affiliates, and Pogo.

 

“constating document” means the articles of incorporation,
bylaws, memorandum of association, partnership agreement or similar
constituting documents of a Person.

 

“Contracts” means, with respect to any Person, any contracts,
licences, leases, arrangements, agreements and commitments of that Person, and
includes all quotations, orders or tenders for contracts which remain open for
acceptance and all manufacturers’ or suppliers’ warranties, guarantees or
commitments (express or implied), but excludes any oral contract, arrangement,
agreement or commitment relating to goods or services (including the sale of
Petroleum Substances) entered into in the Ordinary Course of the Business.

 

“Corporate Subsidiaries” means the
Subsidiaries described in Part 1 and Part 2 of Schedule 4.4(c).

 

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

 

“Corporation Trade-marks” means any and all trade-marks owned
by the Corporation or the Subsidiaries.

 

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

 

“Demand Credit Agreement”
means the agreement dated May 21, 2002 among Unocal Canada Limited and the
Corporation, as borrowers, Unocal, Union Oil Company of California and the
Corporation, as guarantors, and The Toronto-Dominion Bank, as lender.

 

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

 

“Disclosed Environmental Liabilities” means
any and all Environmental Liabilities (whether presently realized or projected)
caused by, arising from, incurred in connection with or otherwise relating in
any way to the matters in the Environmental Documentation and any of the
health,

 

5

 

safety and
environmental records or reports of the Corporation and the Subsidiaries made
available to Purchaser or its Representatives for review before the date of
this Agreement.

 

“Disclosed Personal
Information” has the meaning given to that term in Section 9.17(a).

 

“Distributions” means the aggregate amount of the dividends,
returns of capital or other distributions, of cash or other property, that may
be made by the Corporation and the Subsidiaries to any of Vendor and Vendor’s
Affiliates (other than the Corporation and the Subsidiaries); but shall not
include any payment pursuant to Section 9.4 including any amounts paid or
property distributed to Unocal Canada Limited on the redemption of the
Preferred Shares referred to in Section 9.4(b).

 

“Employees” means all individuals employed by the Corporation
or any of the Subsidiaries including those employees on long term disability
leave or other absence.

 

“Encumbrances” means any lien, charge, Security Interest or
other encumbrance of any kind or character whatsoever.

 

“Environment” means the atmosphere, the surface and sub-surface of the earth,
groundwater and surface waters and plants and animals; and “Environmental” means relating to or in
respect of the Environment.

 

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

 

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

 

“Environmental Laws” means all Applicable Laws relating in
whole or in part to the protection of the Environment, and includes those
Applicable Laws relating to the storage, generation, use, handling,
manufacture, processing, transportation, treatment, release and disposal of
Hazardous Substances.

 

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

 

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

 

(b)           compliance
with present and future Environmental Laws and Applicable Laws related to
employee and public health and safety matters including the protection,
reclamation, remediation or restoration of the Environment;

 

(c)           Abandonment
and Reclamation Obligations;

 

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

 

6

 

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

 

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

 

“Environmental Matters” means any activity,
event or circumstance in respect of any of the Assets or the conduct of the
Business pertaining to the storage, use, holding, collection, accumulation,
assessment, generation, manufacture, processing, treatment, stabilization,
disposition, handling, transportation or release of Hazardous Substances or
Petroleum Substances on, at or into the Environment;

 

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

 

“Escrow Agent” means CIBC Mellon Trust Company, a corporation
existing under the federal laws of Canada.

 

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

 

“Exchange Act” means the United States Securities Exchange
Act of 1934.

 

 “Final
Working Capital Statement” has the meaning given to that term in
Section 3.3(b).

 

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

 

“Goldman Sachs Commitment” has the meaning given to that term
in Section 5.6.

 

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

 

“Government Authorization” means all Authorizations,
including any Environmental Approvals, issued to, or required by, the
Corporation or any of the Subsidiaries by or from, any Government Authorities.

 

7

 

“Hazardous Substance” means any pollutant, contaminant,
hazardous substance, hazardous material, toxic substance, dangerous substance
or dangerous good as defined, judicially interpreted or identified in any
Environmental Law.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Information Memorandum” means the document entitled “Information
Memorandum” issued by CIBC World Markets Inc. and Waterous & Co. dated June
2005, as amended and supplemented from time to time before the date of this
Agreement.

 

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

 

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

 

“Interim Period” means the period from the
Working Capital Date to and including the Closing Date.

 

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

 

“Investment Canada Approval” means the approval (or deemed
approval) by the responsible Minister designated pursuant to the Investment
Canada Act, of the completion of the Purchase under this Agreement.

 

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

 

“Losses” means, in respect of a Person and
in relation to a matter, any and all losses, damages, costs, expenses, charges
(including all penalties, assessments and fines) which that Person suffers,
sustains, pays or incurs in connection with that matter and includes reasonable
costs of legal counsel (on a solicitor and client basis) and other professional
advisors and consultants and

 

8

 

reasonable
costs of investigating and defending Claims arising from the matter, regardless
of whether those Claims are sustained; and also includes Taxes on a settlement
payment or damage award in respect of that matter, but does not include
consequential or indirect losses or loss of profits.

 

“Marketing Agreement” means the Marketing
Agreement dated effective September 1, 2000 between the Corporation and
Unocal Canada Limited.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Material Claim” has the meaning given to that term in
Section 6.1(a).

 

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

 

(a)           a
Contract involving payments in excess of $5,000,000 by or to the Corporation or
any Subsidiary in any consecutive twelve month period (excluding any
payment by way of penalty or liquidated damages), which cannot be terminated by
the Corporation without penalty on three months’ notice or less;

 

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

 

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

 

9

 

but does not include:

 

(i)            Title and Operating
Documents;

 

(ii)           Benefit Plans; or

 

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

 

“Net Working Capital Amount” means an amount
calculated as of the Working Capital Date for the Corporation and the
Subsidiaries equal to the aggregate of all of their:

 

(a)           cash
on hand or on deposit with banks or other depositories;

 

(b)           accounts
receivable and accrued receivables less the allowance for doubtful accounts;

 

(c)           prepaid
expenses including prepaid Taxes; and

 

(d)           other
current assets not described above;

 

minus:

 

(e)           accounts payable and
accrued current liabilities;

 

(f)            Taxes
payable by them relating to any period on or before the Working Capital Date,
whether or not the same have become due, and calculated on the assumption that
the Corporation and each of the Subsidiaries had a fiscal year for purposes of
the Tax Act ending on the Working Capital Date; and

 

(g)           other
current liabilities not described above, but specifically excluding long term
asset retirement obligations (including as part of that exclusion provisions
for future lease reclamation).

 

Deferred
income taxes shall not be treated as a current asset or a current liability and
will not affect the calculation of the Net Working Capital Amount.

 

For the purposes of this definition of Net Working Capital Amount:

 

(i)            all of those amounts
included in the definition shall be calculated on a consolidated basis for the
Corporation and the Subsidiaries in accordance with generally accepted
accounting principles; and

 

(ii)           the note receivable owed by
Unocal Canada Limited to the Corporation that is referred to in Section 9.4(b)
shall be excluded.

 

“Notice” has the meaning given to that term in Section 13.3.

 

“Office Lease” means the Lease of Office
Space dated as of November 1, 2001 between Scotia Centre Limited, as
landlord, and the Corporation, as tenant.

 

“Ordinary Course” means, with respect to an action or actions
taken by a Person, that such action or actions is or are consistent with
prudent industry practice and the past practices of the

 

10

 

Person and is
or are taken in the ordinary course of normal day-to-day operations of that
Person; and when used with reference to the Corporation and the Subsidiaries
specifically includes any transfers of any of the Assets between or among the
Corporation and the Subsidiaries or any of the Subsidiaries, and any
arrangements or agreements between or among the Corporation and the
Subsidiaries or between or among any of the Subsidiaries.

 

“Outside Date” means December 31, 2005.

 

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

 

“Partnership Subsidiaries” means the
Subsidiaries described in Part 3 of Schedule 4.4(c).

 

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

 

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

 

“Permitted Encumbrance” has the meaning given to that term in
Schedule 4.15(a).

 

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

 

“Personal Information” means information
about an Employee, but does not include an individual’s name, position name or
title, business telephone number, business address, business email or business
fax number.

 

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

 

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

 

“Preferred Shares” means the unlimited number of Class A
preferred shares that may be issued by the Corporation.

 

“Preliminary Net Working Capital Amount” has
the meaning given to that term in Section 3.3(a).

 

11

 

“Prime Rate” means the annual rate of interest announced from
time to time by The Bank of Nova Scotia as its reference rate then in effect
for determining interest rates it will charge on Canadian dollar commercial
loans made by it in Canada.

 

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

 

“Prohibited Name and Marks” has the meaning given to that
term in Section 13.14.

 

“Proprietary Information” means all Books And Records in
respect of or in connection with:

 

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

 

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

 

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

 

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

 

“Purchase Money Obligation” means any secured debt of the Corporation
or any Subsidiary created or assumed to finance any part of the purchase price
of real or tangible personal property, including any extensions, renewals or
refunding of any of that debt.

 

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

 

“Purchased Shares” means all of the issued and outstanding
shares in the capital of the Corporation; and for certainty “Purchased Shares”
shall not include any Preferred Shares that are redeemed pursuant to
Section 9.4.

 

“Purchaser” means Pogo Canada, ULC, an Alberta unlimited liability
corporation.

 

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

 

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

 

“Purchaser’s Objection” has the meaning
given to that term in Section 3.3(c).

 

“Purchaser’s Process Agent” has the meaning given to that
term in Section 9.13.

 

“PWC” means PricewaterhouseCoopers LLP,
Chartered Accountants.

 

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

 

(a)           its
Affiliates, successors and assigns;

 

(b)           its
directors, officers and employees;

 

12

 

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

 

(d)           its
Representatives.

 

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

 

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

 

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

 

“Reserves Report (Can)” means a report
(National Instrument 51-101 compliant) containing estimates of the proved
reserves of Petroleum Substances attributable to the Assets to be prepared by
Ryder Scott using escalating and constant pricing, including a Form 51-101F2 -
Report on Reserves Data by Independent Qualified Reserves Evaluator or Auditor
and a Form 51-101F3 — Report of Management and Directors on Oil and Gas
Disclosure of the Corporation.

 

“Reserves Report (US)” means a report
containing estimates of the proved reserves of Petroleum Substances
attributable to the Assets to be prepared by Ryder Scott.

 

“Resource Pools” means

 

(a)           cumulative Canadian
exploration expenses;

 

(b)           cumulative Canadian
development expenses;

 

(c)           cumulative Canadian oil and
gas property expenses;

 

(d)           Undepreciated Capital Cost;
and

 

(e)           non-capital loss carry
forwards;

 

as those terms
are defined in the Tax Act.

 

“Ryder Scott” means Ryder Scott Company
Petroleum Engineers.

 

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

 

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

 

“Securities Act of 1933” means the United
States Securities Act of 1933.

 

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

 

“Senior Officers” means with respect to:

 

(a)           Vendor,
president and chairman and the vice-presidents;

 

13

 

(b)           the
Corporation or any Subsidiary, the president, the senior vice-president and
chief financial officer and the vice-president corporate development; and

 

(c)           Purchaser,
the chief executive officer, the president and the vice-president finance.

 

“SMOG Run” means the Northrock Standard
Measure of Oil and Gas Reserves Year-End Data Input in respect of the Assets
prepared by Unocal for its 2004 annual report year, a copy of which document is
attached as Schedule 1.1(b).

 

“Straddle Period” means, in the case of the
Corporation or any Corporate Subsidiary, any taxation year and, in the case of any
Partnership Subsidiary, any fiscal year, in any case beginning on or before and
ending after the Working Capital Date.

 

“Subsidiaries” means the entities listed in Part 1, Part 2
and Part 3 of Schedule 4.4(c).

 

“Syndicated Credit Agreement” means the Amended and Restated
Credit and Guarantee Agreement dated as of November 24, 2004 among Unocal
Canada Limited and the Corporation, as borrowers, Unocal, Union Oil Company of
California, Unocal Canada Limited and the Corporation, as guarantors, the Lenders
party thereto, BNP Paribas (Canada), as Administrative Agent, and The Bank of
Nova Scotia, as Syndication Agent.

 

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

 

“Tax Benefit” has the meaning given to that
term in Section 10.5(b).

 

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

 

“Tax Rate” has the meaning given to that
term in Section 10.5(b).

 

“Tax Returns” includes all returns, reports, declarations,
elections, notices, filings, forms, information returns and statements filed or
required to be filed in respect of Taxes.

 

“Taxes” means all taxes, duties, fees, premiums, assessments,
imposts, levies and other charges of any kind whatsoever imposed by any
Government Authority, together with all interest, penalties, fines, additions
to tax or other additional amounts imposed in respect thereof, including those
levied on, or measured by, or referred to as, income, gross receipts, profits,
capital, transfer, land transfer, sales, goods and services, harmonized sales,
use, value-added, excise, stamp, withholding, business, franchising, property,
employer health, payroll, employment, health, social services, education and
social security taxes, all surtaxes, all customs duties and import and export
taxes, all license and registration fees and all employment insurance, health
insurance and Canada and other Government Authority pension plan premiums or
contributions.

 

“Title and Operating Documents” means
documents of title including:

 

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

 

(b)           operating
procedures; unit agreements; unit operating agreements; agreements for the
construction, ownership and operation of gas plants, pipelines, gas gathering
systems and similar facilities; pooling agreements; royalty agreements; farmin
and farmout agreements; participation and subparticipation agreements; trust
declarations and

 

14

 

agreements;
agreements providing for the gathering, measurement, processing, compression or
transportation of Petroleum Substances; well operating contracts and surface
leases, pipeline easements, road use agreements and other contracts granting
surface interests;

 

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

 

“Unaudited Financial
Statements” means the unaudited consolidated financial statements of
the Corporation and the Subsidiaries for the fiscal years ended
December 31, 2003 and 2004, and the unaudited consolidated financial
statements of the Corporation and the Subsidiaries for the three month
period ended March 31, 2005, in each case consisting of a consolidated
balance sheet and a consolidated statement of earnings prepared in accordance
with generally accepted accounting principles, which financial statements are
attached as Schedule 1.1(c).

 

“Undepreciated Capital Cost” means “undepreciated
capital cost”, as defined in and for the purposes of the Tax Act.

 

“Unocal” means Unocal Corporation, a corporation
incorporated under the laws of Delaware.

 

“Unused Tax Credits” has the meaning given
to that term in Section 11.4(e).

 

“US$” or “US
Dollars” means lawful currency of the United States.

 

“Vendor” means, collectively, Unocal Canada Limited, a
corporation continued under the laws of Alberta, and Unocal Canada Alberta Hub
Limited, a corporation incorporated under the laws of Alberta.

 

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

 

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

 

“Vendor’s Counsel” means Stikeman Elliott LLP.

 

“Vendor’s Insurance” has the meaning given to that term in
Section 9.11(a).

 

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

 

“Vendor’s Investment Bankers” means, collectively, CIBC World
Markets Inc. and Waterous & Co.

 

“Vendor’s Process Agent” has the meaning given to that term
in Section 9.13.

 

“Vendor’s Review Period” has the meaning
given to that term in Section 3.3(d).

 

“Working Capital Date” means June 30,
2005.

 

1.2          Certain
Rules of Interpretation

 

In this
Agreement (including the Schedules):

 

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

 

15

 

(b)           except
for references to money amounts in Article 3, and in Section 6.2(c)(ii)
which references shall be to US Dollars, or as otherwise expressly specified in
this Agreement, all references to money amounts are to Canadian currency;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

(m)          where any conversion of
Canadian currency or US Dollars from one to the other is required, the Parties
shall use the average of the Bank of Canada posted noon spot exchange rates on
the Business Day prior to the Business Day on which the conversion takes place.

 

1.3          Knowledge

 

Any reference
in this Agreement (including in the Schedules) to “the knowledge” or “to the
best of the knowledge” of Vendor, the Corporation or a Subsidiary or of which
Vendor, the Corporation or any Subsidiary is “aware” will be deemed to mean a
reference to the actual knowledge of the applicable individuals set forth in Part
1 of Schedule 1.3 without any obligation on those individuals to make
investigation or inquiry.

 

1.4          Entire
Agreement

 

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

 

1.5          Applicable
Law

 

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

 

1.6          Accounting
Principles

 

Except as
otherwise provided herein:

 

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

 

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

 

in accordance
with generally accepted accounting principles in the United States.

 

1.7          Disclosure

 

Reference to
any matter on any Schedule shall not be deemed to be an acknowledgement by
Vendor, or to otherwise imply, that the matter meets or exceeds any applicable
threshold of materiality or any other relevant threshold.

 

1.8          Schedules

 

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

 

	
  Schedule
  1.1(a)

  	
   

  	
  Escrow
  Agreement

  	
   

  
	
  Schedule
  1.1(b)

  	
   

  	
  SMOG Run

  	
   

  
	
  Schedule
  1.1(c)

  	
   

  	
  Unaudited
  Financial Statements

  	
   

  
	
  Schedule 1.3

  	
   

  	
  Vendor
  Knowledge Individuals

  	
   

  
	
  Schedule 4.4(c)

  	
   

  	
  Subsidiaries

  	
   

  
	
   

  	
   

  	
  Part 1

  	
  Corporate
  Subsidiaries (Alberta)

  
	
   

  	
   

  	
  Part 2

  	
  Corporate
  Subsidiary (Nova Scotia)

  
	
   

  	
   

  	
  Part 3

  	
  Partnership
  Subsidiaries

  
					

 

17

 

	
  Schedule
  4.5(c)

  	
   

  	
  Defaults Due
  to this Agreement

  	
   

  
	
  Schedule
  4.5(e)

  	
   

  	
  Change of
  Control Provisions

  	
   

  
	
  Schedule 4.9

  	
   

  	
  Material
  Government Authorizations – Vendor and Unocal

  	
   

  
	
  Schedule 4.10

  	
   

  	
  Benefit
  Plans

  	
   

  
	
  Schedule 4.14

  	
   

  	
  Environmental
  Matters

  	
   

  
	
  Schedule 4.15(a)

  	
   

  	
  Permitted
  Encumbrances

  	
   

  
	
  Schedule 4.15(c)

  	
   

  	
  Notices of
  Defaults

  	
   

  
	
  Schedule 4.15(d)

  	
   

  	
  Government
  Proceedings

  	
   

  
	
  Schedule 4.15(e)

  	
   

  	
  Authorizations
  for Expenditure

  	
   

  
	
  Schedule 4.15(g)

  	
   

  	
  Marketing
  and Transportation Agreements

  	
   

  
	
  Schedule 4.16

  	
   

  	
  Material
  Contracts and Liabilities

  	
   

  
	
  Schedule 4.17

  	
   

  	
  Open
  Litigation Claims

  	
   

  
	
  Schedule 4.18

  	
   

  	
  Intellectual
  Property

  	
   

  
	
  Schedule 4.19(a)

  	
   

  	
  Tax Matters

  	
   

  
	
  Schedule 4.19(h)

  	
   

  	
  Tax
  Elections

  	
   

  
	
  Schedule 4.19(i)

  	
   

  	
  Subpart F
  Income

  	
   

  
	
  Schedule 4.19(j)

  	
   

  	
  United
  States Property

  	
   

  
	
  Schedule 4.22

  	
   

  	
  Estimated
  Resource Pools

  	
   

  
	
  Schedule
  4.23

  	
   

  	
  Areas of
  Mutual Interest

  	
   

  
	
  Schedule 5.5

  	
   

  	
  Material
  Government Authorizations – Purchaser and Pogo

  	
   

  
	
  Schedule
  7.6(e)

  	
   

  	
  Vendor’s
  Opinions

  	
   

  
	
  Schedule
  8.6(e)

  	
   

  	
  Purchaser’s
  Opinions

  	
   

  

 

1.9          Joint and Several Liability

 

Unocal Canada
Limited and Unocal Canada Alberta Hub Limited shall be jointly and severally
liable for all of their covenants, liabilities and obligations under this
Agreement.

 

1.10        Interpretation
If Closing Does Not Occur

 

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

 

1.11        Conflicts

 

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

 

1.12        Guarantees

 

(a)           Unocal hereby guarantees
the performance by Unocal Canada Limited and Unocal Canada Alberta Hub Limited
of all of their covenants, obligations and liabilities under this Agreement and
covenants with Purchaser that Unocal is and that it shall be directly liable as
principal obligor for the performance of any of those covenants, obligations
and liabilities without necessity or requirement for Purchaser to pursue or
exhaust its remedies or recourse against Unocal Canada Limited or Unocal Canada
Alberta Hub Limited.

 

(b)           Pogo hereby guarantees the
performance by Purchaser of all of Purchaser’s covenants, obligations and
liabilities under this Agreement and covenants with Vendor that Pogo is and
that it shall be directly liable as principal obligor for the performance of
any of those covenants, obligations and liabilities without necessity or
requirement for Vendor to pursue or exhaust its remedies or recourse against
Purchaser.

 

18

 

ARTICLE 2

PURCHASE AND SALE

 

2.1          Actions
by Vendor and Purchaser Regarding Purchase

 

Subject to the
terms and conditions of this Agreement, at the Closing Time:

 

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

 

(b)           each
Party shall deliver to the other Party all documents required to be delivered
by it at the Closing Time pursuant to Article 7 and Article 8.

 

2.2          Place
of Closing

 

The Closing shall
take place at the Closing Time at the offices of Vendor’s Counsel located at
Suite 4300, Bankers Hall West, 888 – 3rd Street SW, Calgary,
Alberta, or at such other place as may be agreed on in writing by Vendor and
Purchaser.

 

2.3          Tender

 

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

 

ARTICLE 3

PURCHASE PRICE

 

3.1          Purchase
Price

 

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

 

(a)           US$1,800,000,000
(the “Base Price”);

 

(b)           plus the Net Working
Capital Amount (if positive); or minus the Net Working Capital Amount (if
negative); minus

 

(c)           any Distributions made
during the Interim Period.

 

The Purchase
Price shall be subject to adjustment in accordance with Section 3.3.

 

3.2          Payment
of Purchase Price

 

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

 

(a)           on
execution and delivery of this Agreement, Purchaser shall pay to the Escrow
Agent to be held by the Escrow Agent pursuant to the Escrow Agreement an amount
equal to US$180,000,000 (the “Deposit”) as a
deposit against the payment of the Purchase Price; and

 

(b)           at the
Closing Time, subject to Article 12, Purchaser shall pay to Vendor, an aggregate
amount equal to:

 

19

 

(i)            the
sum of the Base Price and the Preliminary Net Working Capital Amount (if
positive); minus

 

(ii)           the
sum of the Deposit (including interest thereon, less applicable withholding
Taxes), the Preliminary Net Working Capital Amount (if negative) and any
Distributions made during the Interim Period.

 

The Deposit
shall be paid by the Escrow Agent to Vendor as part of the Purchase Price.  Subject to this Agreement and the Escrow Agreement,
the Parties shall cause the Escrow Agent to deliver the Deposit to Vendor at
the Closing Time.

 

3.3          Post
Closing Adjustment to the Net Working Capital Amount

 

(a)           Vendor
shall, not later than three Business Days before the Closing Date, provide to
Purchaser a statement setting forth Vendor’s good faith estimate (the “Preliminary Net Working Capital Amount”) of
the Net Working Capital Amount and the actual amount of the Distributions made or to be
made during the Interim Period.  The amount of those Distributions shall be
converted from Canadian currency into US Dollars as of the date of that
statement.  The Preliminary Net Working
Capital Amount and the amount of the Distributions made during the Interim
Period provided in that statement shall be included in
calculating the amounts payable by Purchaser to Vendor at the Closing Time
pursuant to Section 3.2(b)(i) or Section 3.2(b)(ii), as applicable.

 

(b)           Vendor,
with the assistance of the Corporation and the Subsidiaries, shall prepare and
deliver to Purchaser, within 30 days after the Closing Date, a statement
setting forth Vendor’s determination of the Net Working Capital Amount (the “Final Working Capital Statement”) based on:

 

(i)            the
actual information available from accounting systems of Vendor and the records
of the Corporation and the Subsidiaries; and

 

(ii)           a
conversion of the Net Working Capital Amount from Canadian currency to US
Dollars as of the effective date of the Final Working Capital Statement.

 

(c)           Purchaser
shall, within 30 days after Vendor’s delivery of the Final Working Capital
Statement, complete its review of the Final Working Capital Statement.  If Purchaser disputes Vendor’s determination
of any of the Net Working Capital Amount as set forth in the Final Working
Capital Statement, Purchaser will
so notify Vendor, on or before the last Business Day of that 30 day period, in
writing (the “Purchaser’s Objection”).  That notice will set forth a specific
description of the basis of Purchaser’s Objection and the adjustments to the
Final Working Capital Statement that Purchaser believes should be made.  If Purchaser does not deliver a Purchaser’s
Objection within that period, the Final Working Capital Statement shall be
conclusive and binding on the Parties.

 

(d)           Vendor
will have 30 days (“Vendor’s Review Period”)
from its receipt of Purchaser’s Objection to review and respond to it, and the
Parties will thereafter attempt in good faith to reach an agreement with
respect to any matters in dispute.  If
Vendor and Purchaser are unable to resolve their disagreement within 15 days following Vendor’s Review Period, they will
refer that disagreement to the Accounting Firm, who will, acting as experts and
not as arbitrators, determine, only with respect to the remaining differences
so submitted, whether and to what extent, if any, any of the Final Working
Capital Statement requires adjustment.

 

20

 

Vendor and
Purchaser will direct the Accounting Firm to use its best efforts to render its
determination within 20 Business Days. The Accounting Firm’s determination will
be conclusive and binding on Vendor and Purchaser.  In resolving any disputed item, the
Accounting Firm must not assign a value to that item greater than the greatest
value for that item claimed by either Vendor or Purchaser or less than the
smallest value for that item claimed by either Vendor or Purchaser.  Vendor and Purchaser will each pay one half
of the fees and disbursements incurred by the Accounting Firm.

 

(e)           The
Net Working Capital Amount as set forth in the Final Working Capital Statement,
shall be revised to reflect any revisions agreed to by the Parties or
determined by the Accounting Firm.  If
the Net Working Capital Amount (including any revisions required to be made to
the Final Working Capital Statement) is:

 

(i)            greater than the Preliminary
Net Working Capital Amount then Purchaser shall pay Vendor an amount equal to
that difference; or

 

(ii)           less than the Preliminary
Net Working Capital Amount then Vendor shall pay Purchaser an amount equal to
that difference.

 

Notwithstanding the
foregoing, if there is a disagreement between Vendor and Purchaser as to any
items in the Final Working Capital Statement which disagreement is required to
be resolved by the Accounting Firm in accordance with the procedures provided
in Section 3.3(d) then no payment pursuant to paragraph (i) or
paragraph (ii) above, as applicable, shall be required to be made by the
applicable Party unless the difference between the Preliminary Net Working
Capital Amount and the Net Working Capital Amount incorporating the Accounting
Firm’s determinations is greater than US $1,500,000.

 

Any payment
required pursuant to this Section 3.3(e) is to be made within five
Business Days following the final determination of the Net Working Capital
Amount rendered by the Accounting Firm or as agreed to by the Parties.  Any payments required pursuant to the
foregoing shall be made together with interest thereon at a rate per annum
equal to the Prime Rate calculated for the period from the Working Capital Date
to but excluding the date of payment.  No
further adjustments shall be made to the Purchase Price with respect to the Net
Working Capital Amount.  Any such payment
(excluding the part thereof that is interest) shall be treated by Vendor and
Purchaser as an adjustment to the Purchase Price.

 

(f)            Vendor
and Purchaser shall cooperate and Purchaser shall cause the Corporation and the
Subsidiaries to cooperate to facilitate the preparation and delivery of the
Final Working Capital Statement in accordance with this Section 3.3.
During the period of time from and after the Closing Date through to the time
of delivery of the Final Working Capital Statement, and, if applicable, the
Accounting Firm’s determinations, Purchaser shall afford, and shall cause the
Corporation and the Subsidiaries to afford, to the Accounting Firm, Vendor,
counsel or financial advisors retained by Vendor in connection with any
adjustment to the Preliminary Net Working Capital Amount contemplated by this
Section 3.3, reasonable access during normal business hours to all the
properties, Contracts, personnel and Books and Records of the Corporation and
the Subsidiaries and work papers relevant to the adjustment contemplated by
this Section 3.3.

 

21

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF VENDOR

 

Vendor
represents and warrants to Purchaser the matters set out below:

 

4.1          Incorporation
and Registration

 

(a)           Unocal
Canada Limited is a corporation continued and existing under the ABCA and
Unocal Canada Alberta Hub Limited is a corporation incorporated and existing
under the ABCA.  Each of Unocal Canada
Limited and Unocal Canada Alberta Hub Limited is current in the filing of all
necessary corporate returns under the ABCA.

 

(b)           The
Corporation and each of the Corporate Subsidiaries set forth in Part 1 of
Schedule 4.4(c) is a corporation incorporated and existing under the ABCA,
is current in the filing of all necessary corporate returns under the ABCA and
has all necessary corporate power and capacity to own and lease the Assets
owned and leased by it and to carry on its Business as presently conducted.

 

(c)           The Corporate Subsidiary set
forth in Part 2 of Schedule 4.4(c) is an unlimited liability company
existing under the laws of Nova Scotia, is current in the filing of all
necessary company returns and has all necessary corporate power and capacity to
own and lease the Assets owned and leased by it and to carry on its Business as
now conducted.

 

(d)           Each
of the Partnership Subsidiaries other than Bennett Energy and Tethys Energy
Partnership (which are formed pursuant to the laws of Utah and Bermuda,
respectively) is a general partnership formed pursuant to the Partnership Act (Alberta), each of the
Partnership Subsidiaries is validly existing under the laws of its jurisdiction
of formation and each of the Partnership Subsidiaries is duly organized and has
all necessary partnership power and authority to own and lease the Assets owned
and leased by it and to carry on its Business as presently conducted.

 

(e)           Neither
the nature of the Business nor the locations or character of the Assets owned
or leased by the Corporation or any of the Subsidiaries requires the
Corporation or any of the Subsidiaries to be registered, licensed or otherwise
qualified as an extra-provincial or foreign corporation in any jurisdiction
where they are not so registered, licensed or qualified except for any
registration, licence or qualification in any jurisdiction where the sole
reason for that registration, licence or qualification is the ownership by the
Corporation or a Corporate Subsidiary of its interest in the Partnership
Subsidiary that is carrying on business in that jurisdiction.

 

(f)            The
Corporation and each of the Subsidiaries is a “private issuer” as defined in
Multilateral Instrument 45-103 “Capital
Raising Exemptions” adopted by, among others, the Alberta Securities
Commission.

 

4.2          Right
to Sell

 

(a)           Vendor
is the sole registered and beneficial owner of the Purchased Shares with good legal
and beneficial title thereto, free and clear of all Encumbrances and adverse
claims other than restrictions on transfers and permitted number of beneficial
owners set out in the articles of incorporation of the Corporation and any
Encumbrances arising out of any action taken by, or in favour of, Purchaser.

 

22

 

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

 

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

 

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

 

(e)           There
is no contract, option or other right binding on Vendor or which may become
binding on Vendor to sell, assign or transfer the Purchased Shares or the
shares, partnership units or other equity interests of the Subsidiaries, other
than pursuant to this Agreement.

 

4.3          Capitalization

 

(a)           The
authorized capital of the Corporation consists of an unlimited number of
Class A Common Shares, an unlimited number of Class B Common Shares
and an unlimited number of Class A Preferred Shares of which the following are
issued and outstanding:

 

	
  Shareholder

  	
   

  	
  Class A Common

  	
   

  	
  Class B Common

  	
   

  	
  Class A Preferred

  
	
  Unocal Canada Limited

  	
   

  	
  731,659

  	
   

  	
  62,886,476

  	
   

  	
  5,000, less
  the number of Preferred Shares to be redeemed pursuant to Section 9.4(b)
  on or before the Closing Date

  
	
  Unocal Canada Alberta Hub Limited

  	
   

  	
  29,588

  	
   

  	
   

  	
   

  	
   

  

 

(b)           The
authorized capital of Northrock Energy Ltd. consists of an unlimited number of
common shares and the authorized capital of 832507 Alberta Ltd. consists of an
unlimited number of Class “A”, “B”, “C”, “D”, “E”, “F”, “G”, “H” and “I”
shares.

 

4.4          Corporation
and Subsidiaries

 

(a)           The
only Persons in which the Corporation holds shares, units, partnership
interests or other securities are the Subsidiaries.

 

(b)           The
Corporation is the sole registered and beneficial owner of all of the issued
and outstanding shares of the Corporate Subsidiaries set forth in Part 1
of Schedule 4.4(c) and the Corporation and/or one or more of the
Subsidiaries are the sole owners of the shares of each of the Corporate
Subsidiaries set forth in Part 2 of Schedule 4.4(c) and the units of
or partnership interests in each of the Partnership Subsidiaries set forth in
Part 3 of Schedule 4.4(c).

 

23

 

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

 

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

 

(e)           All of
the Purchased Shares and all of the issued and outstanding shares of the
Corporate Subsidiaries and the units of or the partnership interests in the
Partnership Subsidiaries, as applicable, have been duly and validly issued and
are outstanding as fully paid and non-assessable shares, units or partnership
interests, as applicable.

 

(f)            No
options, warrants, pre-emptive rights, commitments, subscriptions or other
rights to purchase issued or unissued shares or other securities of the
Corporation or any of the Corporate Subsidiaries or units of or partnership
interests in any of the Partnership Subsidiaries, or create any additional
class of shares, and no securities or obligations convertible into or
exchangeable for shares or other securities of or units of or partnership
interests in any of the Corporation or any of the Subsidiaries, have been
issued, granted, authorized, allotted or agreed to be issued or are outstanding
other than:

 

(i)            in
the case of the Purchased Shares, rights in favour of Purchaser pursuant to
this Agreement; and

 

(ii)           options to purchase the
Corporation’s Class B Common Shares pursuant to the Northrock Resources Ltd.
Amended and Restated June 2000 Stock Option Plan, which options will expire and
be of no further force or effect on the Closing.

 

4.5          Due
Authorization

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)           No
Encumbrances, rights of first refusal or preferential rights to purchase will
be created or triggered by, and no material consent or approval of any third
party will be required 

 

24

 

in
conjunction with the execution, delivery or performance of obligations under
this Agreement by Vendor except in favour of Purchaser and except for the
Required Approvals.

 

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

 

4.6          Residence
of Vendor

 

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

 

4.7          Enforceability
of Obligations

 

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

 

4.8          No
Advisors or Consultants

 

Neither
the Corporation nor any Subsidiary has employed, or is subject to the valid
Claim of, any advisor, finder, consultant or other similar intermediary in
connection with the Purchase who will be entitled to a fee, commission or other
similar payment contingent on the completion of the Purchase.  Vendor is solely responsible for any fee,
commission or other payment that may be due to Vendor’s Investment Bankers and
other advisors in connection with the Purchase.

 

4.9          Government
Authorizations

 

No
material Government Authorizations are required on the part of Vendor or Unocal
in connection with the Purchase or the performance of its other obligations
under this Agreement except for those set forth in Schedule 4.9.

 

4.10        Benefit Plans and Labour
Matters

 

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

 

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

 

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

 

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

 

(iv)          is a party to or bound by or subject to any written employment
agreement, written or oral, consulting or service agreement with or respecting
its Employees.

 

(b)           No collective bargaining agreement is currently being negotiated by
the Corporation or any of its Subsidiaries with respect to any Employee.  There are no certification proceedings
outstanding in respect of the Employees and, to the knowledge of Vendor, there
are no attempts to organize or certify any of the Employees.  There is no current or pending labour strike,
dispute, work slowdown or work stoppage against the 

 

25

 

Corporation
or any of its Subsidiaries or, to the knowledge of Vendor, threatened against
the Corporation or any of its Subsidiaries. 
To the knowledge of Vendor, no trade union or employee association has
applied to have the Corporation or any of its Subsidiaries declared a related
or successor employer pursuant to any Applicable Law.

 

(c)           To the knowledge of Vendor, neither the Corporation nor any of its
Subsidiaries has committed any unfair labour practices.  No unfair labour practice complaint,
grievance or arbitration proceeding is pending or, to the knowledge of Vendor,
threatened against the Corporation or any of its Subsidiaries.

 

(d)           All Benefit Plans have been administered by the Corporation or any
of its Subsidiaries in material compliance with Applicable Laws and their
respective terms.  No promises have been
made in respect of changes to any of the Benefit Plans, other than those that
are set out in the current texts of the Benefit Plans.  No Pension Plan is a multi-employer pension
plan as that term is defined in pension benefits legislation.  Neither the Corporation nor any of its
Subsidiaries has ever sponsored or participated in a Pension Plan that is a
registered pension plan.

 

4.11        Financial
Statements

 

The
Unaudited Financial Statements are, and the Audited Financial Statements
delivered pursuant to Section 9.14 will be:

 

(a)           complete
and accurate in all material respects;

 

(b)           in
accordance with the Books and Records; and

 

(c)           prepared
in accordance with generally accepted accounting principles consistently
applied during the periods involved;

 

and
fairly present or, with respect to the Audited Financial Statements, will
fairly present in all material respects the consolidated financial position of
the Corporation and the Subsidiaries as of the dates thereof and the
consolidated results of their operations and their cash flows for the periods
then ended.

 

4.12        Distributions

 

No
Distributions have been made from or after the Working Capital Date, except for
cash Distributions as may be set forth in the statement to be provided pursuant
to Section 3.3(a).

 

4.13        Business
Carried on in the Ordinary Course

 

Since
December 31, 2004:

 

(a)           the Business has been carried on in the Ordinary Course except with
respect to the sale process commenced by the Corporation as set out in the
Information Memorandum; and

 

(b)           other than as set forth in Schedule 4.17, the Business has been
conducted in material compliance with all Applicable Laws.

 

4.14        Environmental
Matters

 

(a)           On or
before the Closing Time, Vendor shall provide or cause to be provided or made
available to Purchaser all Environmental Documentation in the possession or
control of Vendor or the Corporation or any of the Subsidiaries in respect of
the Business or the Assets produced for or received by Vendor, the Corporation
or the Subsidiaries since 

 

26

 

June 1,
2000.  To Vendor’s knowledge, except as
described in Schedule 4.14, there are no Material Environmental
Liabilities that have occurred since June 1, 2000 that have not been
remedied.

 

(b)           Except
as set out in Schedule 4.14, neither the Corporation nor any Subsidiary
has received:

 

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

 

(ii)           any
demand or notice issued with respect to the breach of Environmental Laws, which
demand or notice remains outstanding.

 

(c)           Without
limitation of any other provisions of this Agreement, except as specifically
set forth in this Section 4.14, Vendor makes no representations or
warranties with respect to the extent of any existing or future liability
relating to any Environmental Matter, Environmental Liability or the
application of any Environmental Laws, including in respect of or relating to
Hazardous Substances.

 

4.15        Assets

 

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

 

(i)            Permitted
Encumbrances; and

 

(ii)           other
restrictions on transfers and permitted number of beneficial owners set out in
the constating documents of the Corporation and the Subsidiaries.

 

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

 

(i)            is in
default or will be in default on the completion of the Purchase under any
Material Contract or, to Vendor’s knowledge, any Title and Operating Document;
or

 

(ii)           has
failed to comply with, perform, observe or satisfy, in any material respect,
any term, condition, obligation or liability which has heretofore arisen under
the provisions of any Material Contract or any Title and Operating Document;

 

which defaults or failures could reasonably be expected to have a Material Adverse
Effect.

 

(c)           Except
as described in Schedule 4.15(c), neither the Corporation nor any
Subsidiary has received notice of default under, and none of them is to Vendor’s
knowledge in default under, any obligation, agreement or document or under any
order, writ, injunction or decree of any Government Authority, nor is the
Corporation or any Subsidiary to Vendor’s knowledge in breach of any Applicable
Laws which could reasonably be expected to have a Material Adverse Effect.

 

27

 

(d)           Except
as described in Schedule 4.15(d) or relating to Environmental Matters
disclosed in accordance with Section 4.14 prior to the date hereof, no
action before any Government Authority has been commenced or, to Vendor’s
knowledge, is threatened, against the Corporation or any Subsidiary which could
reasonably be expected to have a Material Adverse Effect.

 

(e)           Except
as set forth in Schedule 4.15(e) and except for operating costs incurred
in the Ordinary Course of the Business, there are no outstanding authorizations
for expenditure or other financial commitments respecting the Assets which are
due as at the date hereof pursuant to which individual expenditures of greater
than $100,000 may be required by the Corporation or any Subsidiary after the
Closing Date.

 

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

 

(g)           Without
limiting the generality of the foregoing provisions of this Section 4.15,
except for agreements that can be terminated without penalty on notice of 90
days or less or as set out in Schedule 4.15(g), neither the Corporation
nor any of the Subsidiaries is a party to or bound by any Material:

 

(i)            contracts
for the sale of Petroleum Substances;

 

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

 

(iii)          agreements
for the transportation, processing or disposal of Petroleum Substances other
than Title and Operating Documents; or

 

(iv)          take or
pay arrangements;

 

relating to the Assets.

 

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

 

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

 

4.16        Material
Obligations

 

(a)           Neither
the Corporation nor any Subsidiary is a party to or bound by any agreement of
any nature to acquire any shares or other securities of any corporation,
partnership interests in any partnerships or any other equity interests or to
merge or consolidate with any other entity, to sell or acquire any assets
having a fair market value in excess of $10,000,000 or to acquire, capitalize
or invest in any business.

 

28

 

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

 

(i)            in
the Ordinary Course of the Business;

 

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

 

(iii)          pursuant
to the Banking Facilities to be cancelled or from which the Corporation and any
Subsidiary will be released on or before Closing.

 

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

 

(d)           Neither
the Corporation nor any of the Subsidiaries will have any indebtedness for
borrowed money at the Closing Time.

 

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

 

(i)            Environmental
Liabilities;

 

(ii)           Liabilities
under the Title and Operating Documents and under the Material Contracts listed
in Schedule 4.16;

 

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

 

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

 

(v)           Liabilities
described or referred to in Schedule 4.16 and in the other Schedules to
this Agreement including the commitments described in Schedule 4.15(e);

 

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

 

4.17        Litigation

 

(a)           Schedule 4.17 sets forth a list of open litigation Claims
(including those which are the subject of arbitration and, to Vendor’s
knowledge, any threatened Claims) which, as of the date of this Agreement, have
been duly served on the Corporation or any of the Subsidiaries where the
amounts claimed exceeds or could reasonably be expected to exceed
$500,000.  Vendor makes no
representations or warranties with respect to validity or effect of any of
those Claims.

 

29

 

(b)           Except as set forth in Schedule 4.17, there are no unsatisfied
judgments against the Corporation or any Subsidiary or any consent decrees or
injunctions to which the Corporation or Subsidiary is subject.

 

4.18        Intellectual
Property

 

As of
the date of this Agreement, Schedule 4.18 sets forth and describes all
material Intellectual Property used in whole or part in the Business and
specifies, for each item, whether the Intellectual Property is owned by the
Corporation or a Subsidiary, or whether the Intellectual Property is used by
the Corporation or a Subsidiary under a license agreement or other arrangement
with another Person.

 

4.19        Taxes

 

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

 

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

 

(ii)           pay
all Taxes (including instalments) due and payable by them prior to the date
hereof; and

 

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

 

and except as provided in Schedule 4.19(a) there
are no Claims pending or, to Vendor’s knowledge, threatened by any Government
Authority against the Corporation or any Subsidiary in respect of Taxes.

 

(b)           Except
as provided in Schedule 4.19(a) and Schedule 4.19(h), neither the
Corporation nor any Subsidiary has entered into any agreement, waiver or other
arrangement with any Government Authority respecting Taxes payable by them or
Tax Returns required to be filed by them.

 

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

 

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

 

(e)           Except as provided in Schedule 4.19(a), there are no matters
under audit or appeal with any Government Authority relating to Taxes of the
Corporation or any of the Subsidiaries.

 

(f)            None of Section 78, 80, 80.01, 80.02, 80.03 or 80.04 of the Tax
Act or any equivalent provision of the Tax legislation of any of the provinces
or any other jurisdiction, have applied or will apply to any of the Corporation
or the Subsidiaries at any time up to and including the Closing Date.

 

(g)           None of the Corporations or the Subsidiaries has acquired property from
a non-arm’s length Person, within the meaning of the Tax Act, for
consideration, the value of which is 

 

30

 

less
than the fair market value of the property acquired in circumstances which
would subject it to a liability under section 160 of the Tax Act.

 

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

 

(i)            The taxation year end of each of the Corporation and the Corporate
Subsidiaries is as follows with respect to:

 

(i)            the Corporation, December 31;

 

(ii)           Northrock Energy Ltd., December 31;

 

(iii)          832507 Alberta Ltd., December 31; and

 

(iv)          3094725 Nova Scotia Company, to be selected.

 

The fiscal period end of each of the Partnership
Subsidiaries is as follows with respect to:

 

(i)            Northrock Resources Partnership, January 1;

 

(ii)           Tethys Energy Partnership, January 31;

 

(iii)          Bennett Energy Partnership, 
September 14; and

 

(iv)          each of Northrock Resources (Southern Alberta), Northrock Resources
(Northern Alberta and B.C.), Northrock Resources (West Central Alberta),
Northrock Resources (NWT), Northrock Resources (SW Sask) and Northrock
Resources (SE Sask), to be selected.

 

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

 

(k)           Except as provided in Schedule 4.19(h), no election pursuant to
U.S. Treasury Regulations Section 301.7701-3 has been made with respect to the
Corporation or any of the Subsidiaries.

 

(l)            Except as provided in Schedule 4.19(i), none of the Corporation or
any of the Subsidiaries at any time during 2005 and on or before the Closing
Date had or will have subpart F income, within the meaning of section 952 of
the Code.

 

(m)          Except as provided in Schedule 4.19(j), none of the Corporation or
any of the Subsidiaries at any time during 2005 and on or before the Closing
Date owned or will own any United States property, within the meaning of
section 956 of the Code.

 

(n)           Neither the Corporation nor any of the Subsidiaries owns any United
States real property interest, within the meaning of section 897(c)(1)(A) of
the Code.

 

31

 

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

 

4.20        Absence of Certain Changes

 

Except
as disclosed to Purchaser in this Agreement or the Schedules to this Agreement,
since December 31, 2004, there has not been:

 

(a)           any change in the financial
condition, Assets, Business, operations or prospects of the Corporation and the
Subsidiaries taken as a whole that has had a Material Adverse Effect, which
change arose from developments specific to the Corporation or the Subsidiaries
not generally affecting other entities similarly situated in the petroleum and
natural gas industry in Canada;

 

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

 

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

 

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

 

4.21        Certain
Contracts, Agreements, Plans and Commitments

 

Other
than in respect of the Title and Operating Documents and the agreements
required to be disclosed on a Schedule to this Agreement, Schedule 4.16 is a
complete and correct list of all Material Contracts to which the Corporation or
any of the Subsidiaries is a party or by which it is bound, or to which any of
them adhere or in which any of them participates (complete and correct copies
of descriptions of each of which, as in effect on the date hereof, have been
made available to Purchaser), including:

 

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

 

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

 

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

 

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

 

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

 

32

 

4.22        Resource Pools and
Undepreciated Capital Cost Balances

 

The
information concerning the estimated Resource Pools and Undepreciated Capital
Cost balances with respect to the Corporation and the Subsidiaries, as at
January 1, 2005, is set forth in Schedule 4.22.  The Corporation and the Subsidiaries will not
claim or renounce amounts in respect of the Resource Pools or Undepreciated
Capital Cost balances prior to Closing except to reduce income for tax purposes
of the Corporation and the Corporate Subsidiaries for their taxation years
ending immediately before the Closing Date or as permitted by Section 11.1(d)
or Section 11.2(a).

 

4.23        Operation of Assets

 

(a)           Except
as provided in Schedule 4.23, to Vendor’s knowledge, neither the
Corporation nor any of the Subsidiaries are party to a Contract containing area
of mutual interest or area of exclusion provisions applicable to or binding on
the Corporation or the Subsidiaries that Materially restricts the right of the
Corporation or any Subsidiary to continue the Business as currently conducted
after Closing.

 

(b)           No
officer, director or consultant of the Corporation or any of the Subsidiaries,
any associate or Affiliate of any such person or any party not at arm’s length
to the Corporation will own or will have or be entitled to any royalty, net
profits interest, carried interest or other encumbrance of any nature
whatsoever which are based on production from the Assets or any revenue or
rights attributed thereto.

 

(c)           To Vendor’s knowledge, since June 2000, all operations in respect of
the Assets have been conducted in accordance with good oilfield practices in
Canada in effect at the time that the operations were conducted.

 

(d)           The Corporation and the Subsidiaries have obtained all material
permits, licenses and other authorizations which are required under Applicable
Law to own or operate the Assets.

 

4.24        Minute
Books

 

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

 

4.25        Corporate Registers

 

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

 

4.26        Books and Records and
Internal Controls

 

(a)           As of December 31, 2004, the Corporation and the Subsidiaries
existing at that date each have in place:

 

(i)            the “disclosure controls and procedures” (as defined in Rules
13a-15(e) and 15d-15(e) of the Exchange Act);

 

(ii)           a process of “internal control over financial reporting” (as defined
in Rules 13a-15(f) and 15d-15(f) of the Exchange Act); and

 

(iii)          a system of internal accounting controls;

 

33

 

in each case as required in order for Unocal to comply
with the requirements of the Exchange Act and the United States Sarbanes-Oxley
Act of 2002, including Section 13(b)(2)(B) under the Exchange Act and the
certification requirements of Sections 302 and 906 of the United States
Sarbanes -Oxley Act of 2002.

 

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

 

4.27        SMOG Run

 

The
SMOG Run complies in all material respects with the applicable requirements of
federal securities laws of the United States, including Regulation S-X
promulgated by the SEC and Industry Guide 2 under the Securities Act of 1933.

 

4.28        Hart Scott Rodino
Information

 

Neither the Corporation nor any of
the Subsidiaries has assets in the United States of a value of
US $53,000,000 or greater nor have they individually or collectively made
direct sales to any Persons in the United States of a value of
US $53,000,000 or greater in the last two years.

 

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser
represents and warrants to Vendor the matters set out below:

 

5.1          Incorporation

 

Purchaser
is a duly incorporated unlimited liability corporation and validly existing
under the laws of Alberta.

 

5.2          Due
Authorization

 

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

 

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

 

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

 

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

 

(ii)           any
Contract to which Purchaser is a party or by which Purchaser is bound that is
material to the business of Purchaser; or

 

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

 

34

 

5.3          Enforceability
of Obligations

 

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

 

5.4          Investment
Canada

 

Purchaser
is a “WTO Investor” within the meaning of the Investment
Canada Act and shall comply with that act.

 

5.5          Authorizations

 

Assuming
the accuracy of Section 4.28, no material Government Authorizations are
required on the part of Purchaser or Pogo in connection with the Purchase or the
performance of its other obligations under this Agreement except for those set
forth in Schedule 5.5.

 

5.6          Financing

 

Purchaser
has received and delivered to Vendor a true and complete copy of the commitment
letter from Goldman Sachs Credit Partners L.P. to Pogo dated July 5, 2005
that relates to the provision of all of the financing required by Purchaser in
connection with the Purchase contemplated by this Agreement, and all
agreements, arrangements or undertakings related to that commitment letter to which
Purchaser, Pogo or any of their Affiliates is a party and all schedules,
annexes, exhibits or other attachments to any thereof, other than those
documents relating solely to fee arrangements in connection with that letter
(collectively, the “Goldman Sachs Commitment”).  For greater certainty, the documents relating
solely to fee arrangements do not contain any conditions precedent relating to
the provision of the financing referred to in the Goldman Sachs Commitment.  The Goldman Sachs Commitment is in effect and
neither Purchaser nor Pogo has agreed to any material amendment or modification
thereof that would adversely affect Purchaser’s ability to obtain financing as
contemplated thereby and neither Purchaser nor Pogo is in material breach or
default thereunder.  Purchaser or Pogo is
in a position to satisfy all conditions to advances under the Goldman Sachs
Commitment to the extent such conditions are within their control.  The aggregate proceeds of the financings to
which the Goldman Sachs Commitment relates are, together with available funds
of Purchaser (details in respect of which have been delivered by Purchaser to
Vendor), sufficient to pay the Purchase Price, as it may be adjusted pursuant
to this Agreement.

 

5.7          Brokers

 

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

 

5.8          Purchaser
as Principal

 

Purchaser
is acquiring the Purchased Shares, in its capacity as principal, and is not
purchasing those Purchased Shares for the purpose of resale or distribution to
a third party.

 

35

 

ARTICLE 6

REGARDING REPRESENTATIONS, WARRANTIES 

AND COVENANTS

 

6.1          Materiality

 

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

 

(a)           there
occurs or could reasonably be expected to occur a reduction in the fair market
value of the Purchased Shares or the Assets in excess of $3,000,000 in the case
of any single incorrect or inaccurate representation or warranty or breach of a
covenant (a “Material Claim”) for
any reason including:

 

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

 

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

 

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

 

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

 

and the aggregate amount of all Material Claims of
Purchaser exceeds $300,000,000 and those inaccuracies or breaches have not been
cured before the Closing Time; or

 

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

 

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

 

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

 

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

 

(i)            the
representations and warranties in Section 4.2 and Section 4.4 and the
indemnities related thereto shall survive for an indefinite period from the
Closing; and

 

36

 

(ii)           the
representations and warranties in Section 4.19 and the indemnities related
thereto (including the indemnities in Article 11 shall continue in full
force and effect for the benefit of Purchaser until 120 days after the later
of:

 

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

 

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

 

(b)           Purchaser
shall not be entitled to make any Claim under this Agreement unless each such
Claim is in excess of $2,000,000 in the case of any single incorrect or
inaccurate representation or warranty or breach of a covenant and the aggregate
amount of all of those Claims as a result of all incorrect or inaccurate
representations and warranties and the breaches of all covenants of Vendor
contained in this Agreement (including any Claims for indemnity arising out of
those incorrect or inaccurate representations or warranties and those breaches
of covenants) is equal to or greater than $50,000,000, in which case Purchaser
will be entitled (subject to Section 6.2(c)) to recover all Losses of
Purchaser related to those Claims.  For
purposes of this Section 6.2(b), including any applicable Claims pursuant
to Article 10, after Closing any applicable representation and warranty or
covenant of Vendor shall be deemed not to be qualified by any reference in the
text thereof to Material or to a Material Adverse Effect and Vendor’s
representation and warranty in Section 4.15(a) shall not be deemed not to
be qualified by any reference in the text thereof to “to Vendor’s knowledge” or
words to that effect.

 

The
foregoing dollar minimums in this Section 6.2(b)
shall not apply to any Claims in respect of inaccurate or incorrect
representations and warranties or breaches of covenants in Section 4.2,
Section 4.4, Section 4.12, Section 4.16(d) or Section 4.19
nor shall they apply to amounts owing to Purchaser or the Corporation pursuant
to Section 3.3 or Section 9.11.

 

(c)           Notwithstanding
any other provisions of this Agreement, the maximum cumulative Liability of
Vendor in the aggregate in respect of all Material Claims regarding:

 

(i)            incorrect
or inaccurate representations and warranties in Section 4.2 or
Section 4.4 (including on indemnities arising therefrom) will be limited
to an amount not greater than the amount equal to the difference between the
Purchase Price minus the amount of all Liabilities of Vendor referred to in
Section 6.2(c)(ii); and

 

(ii)           incorrect
or inaccurate representations and warranties (other than those contained in
Section 4.2 or Section 4.4) and breaches of covenants in this
Agreement (including on indemnities arising therefrom) will be limited to
US$450,000,000.

 

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

 

The
representations and warranties of Purchaser set forth in Article 5 shall
survive the Closing for the benefit of Vendor for a period of eighteen months from
the Closing, after which time Vendor shall 

 

37

 

not be
entitled to advance, make or bring any Claims whatsoever against Purchaser with
respect to those representations and warranties, or any other indemnities
relating thereto.

 

6.4          No
Consequential Damages

 

Neither
Party will, in any circumstances whatsoever, be liable under this Agreement to
the other Party for indirect, incidental, consequential, exemplary or punitive
damages, suffered, sustained, paid, incurred or claimed by the other Party or
the other Party’s Related Parties; provided that the foregoing does not
restrict Purchaser after Closing from recovering damages (other than the
foregoing kinds of damages) from Vendor for Losses suffered by the Corporation
or any one or more of the Subsidiaries. 
However, nothing in this Agreement shall in any way limit the right of
any Indemnified Person to be indemnified pursuant to Article 10 for any
and all indirect, incidental, consequential, exemplary or punitive damages of
every nature and kind whatsoever, including loss of profits and revenues, that
are part of any Claim by a Person other than a Party to this Agreement or a
Related Party.

 

6.5          No
Other Representations, Warranties or Covenants of Vendor

 

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

 

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

 

(b)           except
as set forth in Article 4 and Article 9 of this Agreement, neither
Vendor, the Corporation nor any Subsidiary nor anyone acting on any of their
behalves (including any of their Related Parties) have made any representation,
warranty, covenant or agreement whatsoever, either express or implied, with
respect to the Corporation or any of the Subsidiaries, or their respective Assets,
Liabilities or Business activities. 
Without limiting the foregoing provisions of this Section 6.5(b),
no representation, warranty, covenant or agreement has been made by Vendor, the
Corporation, any Subsidiary or any other such Person in relation to:

 

(i)            except
for the representations and warranties expressly provided in Article 4,
any data or information provided or made available to Purchaser by Vendor’s
Investment Bankers, on plant or site visits, in management presentations, in
meetings with Vendor’s management or employees or otherwise;

 

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

 

(iii)          except
as expressly provided in Article 4, the Environmental condition of any
Asset or any Environmental Liability;

 

(iv)          any
engineering or geological information or interpretations thereof or any
economic evaluations;

 

(v)           except
as expressly provided in Article 4, title to the Assets;

 

38

 

(vi)          except
as expressly provided in Article 4, Liabilities or Claims related to the
Assets or any operations related to the Assets;

 

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

 

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

 

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

 

(x)            the
state or condition of the Assets (which are acknowledged by Purchaser to be on
an “as-is” basis), including the physical condition of the Assets or the
fitness for a particular purpose thereof, or the merchantability, Environmental
condition, existence of latent or patent defects, quality or other aspect or
characteristic of the Assets;

 

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

 

(c)           Vendor
has provided Purchaser with the opportunity to conduct all such enquiries,
investigations and due diligence regarding the Corporation, the Subsidiaries,
and the respective Assets, Liabilities and Business activities of the Corporation
and the Subsidiaries and all such other matters as Purchaser considered
necessary or desirable in connection with the completion of the Purchase in
accordance with this Agreement, and Purchaser has entered into this Agreement
as a result of its own due diligence, investigations, enquiries, advice and
knowledge, and Purchaser assumes full business and financial risk in connection
with the Purchase including the Assets and the Business;

 

(d)           Purchaser
has knowledge and experience in the oil and gas industry generally, and is
capable of evaluating the merits associated with entering into and performing
its obligations under this Agreement; and

 

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

 

6.6          No Other Representation,
Warranties or Covenants of Purchaser

 

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

 

(a)           Purchaser
makes no other representations, warranties, covenants or agreements to or with
Vendor except as expressly set forth in this Agreement, and this Agreement
contains all the representations, warranties, covenants and agreements of
Purchaser 

 

39

 

relating
to the Purchase.  No other statements or
representations (whether express or implied) by any Person have induced or
influenced Vendor to enter into this Agreement or to agree to any of its terms,
or have been relied on in any way by Vendor as being accurate or have been
taken into account by Vendor as being important to Vendor’s decision to enter
into this Agreement or agree to any of its terms; and

 

(b)           except
for its rights under this Agreement and the Escrow Agreement, Vendor hereby
waives all rights and remedies (whether now existing or hereafter arising and
including all common law, tort, contractual, equitable and statutory rights and
remedies) against Purchaser, the Corporation or any Subsidiary or anyone acting
on any of their behalves in respect of the Purchased Shares, the Assets, the
Business or any representations or statements made, or information or data
furnished, to Vendor or anyone acting on Vendor’s behalf in connection
therewith or otherwise (whether made or furnished by or on behalf of Purchaser
and whether made or furnished orally or by electronic, faxed, written or other
means); provided
that nothing in this Section 6.6(b) shall be deemed to limit the scope or
effect of the express provisions of Article 5 and Article 9.

 

6.7          Restrictions
on Claims and Actions

 

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

 

(a)           there may be any difference
between the forecasts, projections or estimates of the quantities, values and
other matters regarding the oil and gas reserves applicable to the Assets
contained in the Reserves Report (US), the Reserves Report (Can) or other
materials that may be prepared by Ryder Scott as compared to the estimates of
those reserves contained in the SMOG Run or in Unocal’s Regulation S-X filings
with the SEC;

 

(b)           the
Claim is based on any fact, matter or circumstance which, before the date of
this Agreement, had been disclosed in writing to Purchaser or Purchaser’s
Representatives by Vendor, the Corporation, any Subsidiary or any Person acting
on behalf of Vendor, the Corporation or any Subsidiary, including Vendor’s
Investment Bankers, Vendor’s Counsel, or any officer, employee, agent,
consultants or adviser of any of them;

 

(c)           provision
has been made in the Unaudited Financial Statements for any fact, matter or
circumstance on which the Claim is based;

 

(d)           the
Claim is based on any risk (actual or potential), fact, matter or circumstance
which was recorded on or referred to in the Personal Property Registries of
British Columbia, Alberta, Saskatchewan and the Northwest Territories with
respect to Vendor, the Corporation and the Subsidiaries, other than Northrock
Resources (NWT) as at the date of this Agreement;

 

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

 

40

 

(f)            the circumstances giving rise to the Claim result in a savings in
Taxes to Purchaser or any Affiliate of Purchaser (but only to the extent that
such Claim would be reduced by the net present value of a Tax Benefit pursuant
to Section 10.5(b) if Purchaser were entitled to indemnification for that
Claim); or

 

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

 

All
disclosures in writing by or on behalf of Vendor on or before the date of this
Agreement, including those in this Agreement (including the Schedules to this
Agreement), are to be taken as relating to each of Vendor’s representations,
warranties, covenants and agreements in this Agreement to the extent that the
relationship is reasonably apparent, and to Vendor’s indemnities provided in
this Agreement.

 

ARTICLE 7

PURCHASER’S CONDITIONS

 

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

 

7.1          Correctness
and Accuracy of Representations and Warranties

 

The
representations and warranties of Vendor contained in Article 4 shall be
correct and accurate in all material respects as at the Closing Time with the
same effect as if made at and as of the Closing Time (except to the extent
those representations and warranties expressly relate to an earlier date, in
which case such representations and warranties shall be correct and accurate in
all material respects on and as of such earlier date, and except to the extent
those representations and warranties are affected by actions or omissions
consented to or waived by Purchaser), and Purchaser shall have received a
certificate to that effect at or before the Closing Time from a Senior Officer
of Vendor.

 

7.2          Performance
of Obligations

 

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

 

7.3          Governmental
Approvals, Consents, and Authorizations

 

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

 

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

 

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

 

41

 

7.4          Other
Consents and Approvals

 

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

 

7.5          No
Injunctions or Restraints

 

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

 

7.6          Vendor’s
Closing Deliveries

 

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

 

(i)            the statement referred to in Section 3.3(a) setting forth
Vendor’s estimate of the Preliminary Net Working Capital Amount and the amount
of Distributions made during the Interim Period; and

 

(ii)           the list of bank accounts and safety deposit boxes referred to in
Section 9.18; and

 

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

 

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

 

(ii)           certified
copies of:

 

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

 

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

 

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

 

42

 

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

 

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

 

(v)           an
opinion of counsel to Vendor and counsel to Unocal as to the matters set forth
in Schedule 7.6(e) which opinion regarding Unocal may be given by or in
reliance on an opinion from in-house counsel of Unocal and may be subject to
customary assumptions, qualifications and limitations.  With respect to any factual matters relevant
to the opinions, counsel may rely on certificates of a Senior Officer of Vendor
and Unocal, as applicable;

 

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

 

(vii)         a
receipt for payment of the amount provided in Section 3.2(b);

 

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

 

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

 

ARTICLE 8

VENDOR’S CONDITIONS

 

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

 

8.1          Correctness
and Accuracy of Representations and Warranties

 

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

 

8.2          Performance
of Obligations

 

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

 

8.3          Governmental
Approvals, Consents, and Authorizations

 

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

 

43

 

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

 

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

 

8.4          Other
Consents and Approvals

 

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

 

8.5          No
Injunctions or Restraints

 

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

 

8.6          Purchaser’s
Closing Deliveries

 

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

 

(a)           amount
of the Purchase Price provided in Section 3.2(b) by wire transfer in
accordance with Section 2.3;

 

(b)           certified
copies of:

 

(i)            the
constating documents of Purchaser and Pogo;

 

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

 

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

 

(c)           a
certificate of status with respect to Purchaser and Pogo issued by an
appropriate Government Authority;

 

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

 

(e)           an
opinion of counsel to Purchaser and counsel to Pogo as to the matters set forth
in Schedule 8.6(e) which opinion regarding Pogo may be given by or in
reliance on an opinion from in-house counsel of Pogo or other United States
counsel and may be subject

 

44

 

to
customary assumptions, qualifications and limitations.  With respect to any factual matters relevant
to the opinions, counsel may rely on certificates of a Senior Officer of
Purchaser and Pogo, as applicable;

 

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

 

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

 

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

 

8.7          Deposit

 

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

 

ARTICLE 9

OTHER COVENANTS

 

9.1          Conduct
of Business Prior to Closing

 

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

 

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

 

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

 

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

 

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

 

9.2          Negative Covenants

 

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

 

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

 

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

 

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

 

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

 

45

 

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

 

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

 

(iii)          declare, set aside, make or pay any Distributions or redemptions,
except in cash;

 

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

 

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

 

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

 

(B)           to the
Corporation or any Subsidiary; or

 

(C)           pursuant
to Permitted Encumbrances;

 

(vi)          create
any new Encumbrances on the Assets other than Permitted Encumbrances except in
the Ordinary Course of the Business and pursuant to the Title and Operating
Documents;

 

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

 

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

 

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

 

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

 

(viii)        make any
single capital expenditure in excess of $5,000,000 or make any capital
expenditures in the aggregate (including the value of new equipment subject to
lease as specified in Section 9.2(b)(xi)) in excess of $25,000,000, except in case of:

 

(A)          an emergency; or

 

46

 

(B)           amounts which the
Corporation or any Subsidiary may be committed to expend and has been
specifically disclosed to Purchaser including as provided in Schedule 4.15(e);

 

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

 

(x)            enter
into, amend in any material respect or terminate before the end of the term
thereof any Material Contract or any Title and Operating Document, except in
the Ordinary Course of the Business (including processing of assignments by
third parties in the Ordinary Course of the Business);

 

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

 

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

 

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

 

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

 

9.3          Dealings or Operations
Regarding Assets

 

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

 

(a)           voluntarily assume any obligation or commitment with respect to the
Assets, where the Corporation’s or the applicable Subsidiary’s share of the
expenditure associated with that obligation or commitment is estimated by
Vendor or the Corporation, acting reasonably, to exceed $5,000,000;

 

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

 

(i)            Assets which have become worn out or obsolete;

 

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

 

(iii)          otherwise in the Ordinary Course of the Business;

 

(c)           propose or initiate the exercise of any right (including bidding
rights at Crown sales, rights under areas of mutual interest provisions and
rights of first refusal) or option relative to, or arising as a result of the
ownership of, any of the Assets, or propose or initiate any operations on the
Assets which have not commenced or have not been committed to by the
Corporation or any Subsidiary as of the date hereof in excess of 

 

47

 

$5,000,000 or that would have a Material Adverse
Effect on the value of any of the Assets; or

 

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

 

If
Vendor, the Corporation or any Subsidiary makes expenditures or takes actions
necessary to prevent loss of life or injury to individuals, damage to or loss
of property, Vendor shall, or shall cause the Corporation or the applicable
Subsidiary to, give notice to Purchaser of those expenditures or actions and
Vendor’s, the Corporation’s or the applicable Subsidiary’s estimate of the
amounts expended or to be expended in connection therewith as soon as
reasonably possible in the circumstances.

 

9.4          Intercorporate
Obligations

 

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

 

(a)           Vendor
shall cause any indebtedness of the Corporation and the Subsidiaries to Unocal
Canada Limited or Vendor’s Affiliates to be paid or otherwise satisfied,
including by set-off;

 

(b)           Vendor
shall, and shall cause its Affiliates to, pay or otherwise satisfy any amounts
owed by them to the Corporation and the Subsidiaries and to facilitate that
payment shall cause an amount in value of the Preferred Shares held by Unocal
Canada Limited equal to the amount of the note receivable outstanding on the
date hereof and owed by Unocal Canada Limited to the Corporation to be redeemed
by the Corporation in exchange for the distribution to Unocal Canada Limited of
cash of that amount;

 

(c)           Vendor
shall use reasonable commercial efforts to cause any guarantees, credit support
or other financial assurances provided by Vendor or its Affiliates to
counterparties who have Contracts with the Corporation or any Subsidiary to be
released in a manner that does not have a Material Adverse Effect subject to
Purchaser complying with its obligations in this Section 9.4; and

 

(d)           Vendor
shall cause the Syndicated Credit Agreement to be amended to remove the
Corporation as a borrower thereunder and the Demand Credit Agreement to be
cancelled.

 

Purchaser
will at Vendor’s request at any time as part of the Closing furnish any
guarantees, credit support or other financial assurances as may be required by
the counterparties referred to in Section 9.4(c) so that Vendor and its
Affiliates can be released from their obligations in that regard.

 

9.5          Access
to Books and Records and Other Assets

 

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

 

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

 

(ii)           all
the Books and Records; and

 

48

 

(iii)          the
Assets of the Corporation and the Subsidiaries and other material relevant to
the Business and in the possession or control of the Corporation or any
Subsidiary;

 

provided that such access does not unreasonably
interfere with the operation of the Business in the Ordinary Course.

 

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

 

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

 

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

 

(ii)           where to do so would cause
Vendor, the Corporation or any Subsidiary to be in violation of a
confidentiality obligation to another Person, except if the information subject
to that confidentiality obligation is Material, Purchaser agrees to keep that
Material information confidential and to indemnify Vendor and Vendor’s Related
Parties and hold Vendor and Vendor’s Related Parties harmless from and against
any Losses, Liabilities or Claims that Vendor and Vendor’s Related Parties may
suffer as a result of any disclosure.

 

If
any consent of any Person is required to permit the release of any information
to Purchaser, Vendor shall, on the
request of Purchaser, make all commercially reasonable efforts to obtain that
consent.  Vendor shall provide Purchaser
with notice as to any disclosure that is not provided for the reasons in this
Section 9.5(c).

 

9.6          Confidentiality

 

Prior
to the Closing, Purchaser shall keep, and shall cause its Related Parties to
keep, confidential all information disclosed to it by Vendor or Vendor’s
Representatives relating to Vendor and Vendor’s Related Parties in accordance
with the provisions of the Confidentiality Agreement.

 

9.7          Actions
to Satisfy Closing Conditions

 

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

 

49

 

9.8          Preservation
of Records

 

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

 

9.9          Competition
Act Filing and Investment Canada Act Filing

 

Without
limiting the provisions of Section 9.7:

 

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

 

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

 

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

 

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

 

(b)           each
Party shall:

 

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

 

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

 

(iii)          furnish
the other Party in advance with copies of all correspondence, filings and
communications between them and their Affiliates and their respective 

 

50

 

Representatives,
on the one hand, and the Canadian Competition Bureau or any representative
thereof or the Investment Review Division of Industry Canada or members of its
staff, on the other hand, with respect to this Agreement and the Purchase and
provide the other Party a reasonable opportunity to comment thereon and agrees
to consider those comments in good faith;

 

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

 

(d)           without limiting the
foregoing provisions of this Section 9.9, Purchaser agrees to use
commercially reasonable efforts to obtain any Authorization of any Government Authority
(including the Investment Canada Approval) necessary to enable the Parties to
consummate the Purchase as soon as practicable, but in any event no later than
the Outside Date, including committing to undertakings under the Investment
Canada Act and/or registration of a consent agreement under the Competition
Act, on terms and conditions (including such undertakings and consent
agreement, if any) which will not cause a Material Adverse Effect.

 

9.10        Assignment
of Confidentiality Agreements

 

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

 

9.11        Insurance

 

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

 

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

 

9.12        Employee Related Matters

 

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

 

51

 

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

 

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

 

(b)           Vendor acknowledges that certain of the Employees participate in
stock based and other compensation plans sponsored by Unocal or its Affiliates
(other than the Benefit Plans).  From and
after the date of execution of this Agreement, Vendor shall permit access by
Purchaser to the Employees for the purpose of communicating Purchaser’s plans
for compensation and benefit programs and practices and Purchaser may enter
into agreements with one or more of those Employees relating to employment,
compensation and/or benefits from and after the Closing Date.  Purchaser shall provide to Vendor a copy of
any written (including electronic) communications that Purchaser proposes be
provided to Employees or any of them before that communication is provided and
Purchaser will not unreasonably refuse to incorporate Vendor’s requested
changes in any of those communications.

 

9.13        Consent
to Jurisdiction

 

Each of the Parties and Unocal and Pogo:

 

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

 

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

 

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

 

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

 

Each of Purchaser and Pogo irrevocably appoints Fraser
Milner Casgrain LLP  (the “ Purchaser’s Process Agent”), with an office on the date
hereof at Calgary, Alberta, for the attention of Dale Skinner, as its agent to
receive on its behalf service of copies of a statement of claim and any other
process which may be served in any such Claim. 
That service may be made by delivering a copy of that statement of claim
or other process to Purchaser in care of Purchaser’s Process Agent at Purchaser’s
Process Agent’s address above.

 

Each of Vendor and Unocal irrevocably appoint Vendor’s
Counsel (the “Vendor’s  Process Agent”), with an office on the date hereof at
Calgary, Alberta, for the attention of Glenn

 

52

 

Cameron, as its agent to receive on its behalf service
of copies of a statement of claim and any other process which may be served in
any such Claim.  That service may be made
by delivering a copy of that statement of claim or other process to Vendor or
Unocal, as the case may be, in care of Vendor’s Process Agent at Vendor’s
Process Agent’s address above.

 

9.14        US Financial Statements

 

(a)           Vendor will request that PWC provide to Purchaser, with copies to
Vendor, as soon as reasonably possible:

 

(i)            the Audited Financial Statements, along with any consents, opinions
and reports of PWC, that:

 

(A)          would be required to be filed by Purchaser with the SEC to issue and
sell securities in one or more offerings registered under the Securities Act of
1933; and

 

(B)           are otherwise required for Purchaser to comply timely with
applicable federal securities laws of the United States, including
Rule 3-05 of Regulation S-X and Item 9.01 of Form 8-K promulgated by the
SEC; and

 

(ii)           unaudited financial statements of the Corporation and the
Subsidiaries (or their predecessors) for:

 

(A)          the six month periods ended June 30, 2005 and 2004; and

 

(B)           unless the Closing has occurred, the nine month periods ended
September 30, 2005 and 2004 by November 10, 2005.

 

(b)           All of the unaudited financial statements referred to in
Section 9.14(a)(ii) shall be prepared in accordance with generally
accepted accounting principles, and shall otherwise be in such form as is
required for Purchaser to comply in a timely manner with the applicable federal
securities laws of the United States, including those applicable to the
issuance and sale of securities in offerings registered under the Securities
Act of 1933.

 

(c)           Vendor further agrees to use commercially reasonable efforts to
assist Purchaser in the preparation of:

 

(i)            the pro forma financial information with respect to the Purchase
required by Article 11 of Regulation S-X to be included by Purchaser in filings
with the SEC; and

 

(ii)           information regarding the business and operations of the Corporation
and the Subsidiaries necessary or appropriate, in the judgment of Purchaser,
acting reasonably, to be included in offering documents, loan syndication
materials or other materials referred to in Section 13.2(d) that may be
used by Purchaser in obtaining financing for the Purchase.

 

9.15        Reserves Report (US)

 

Vendor will request that Ryder Scott
prepare and provide to Purchaser, with copy to Vendor, as soon as reasonably
possible, the Reserves Report (US). 
Vendor will request that in preparing the Reserves Report (US) Ryder
Scott’s estimates of reserves and present values of reserves reflected in the

 

53

 

Reserves Report (US) comply in all material
respects with the applicable requirements of the federal securities laws of the
United States, including, without limitation, Regulation S-X promulgated by the
SEC and Industry Guide 2 under the Securities Act of 1933.

 

9.16        Purchase Not Conditional on
Financing

 

Nothing in Section 5.6, Section 9.14,
Section 9.15, Section 13.2 or any other provision of this Agreement
shall make Purchaser’s obligation to complete the Purchase, including Purchaser’s
obligation to make the payments referred to in Section 3.2 on a timely
basis, conditional on Purchaser being able to obtain or complete any financing
for the Purchase pursuant to the Goldman Sachs Commitment or otherwise.

 

The breach or failure of Vendor, PWC, Ryder
Scott or any other relevant Person to comply with any of the covenants and obligations
contained in the Sections referred to above in this Section 9.16 or in
providing the financial statements or Reserves Reports (US) referred to therein
shall not be a default by Vendor under this Agreement including for purposes of
Section 12.1(d) or any basis for Purchaser to refuse to complete the
Purchase or to make any Claim against Vendor and Vendor shall have no liability
to Purchaser, Pogo, any of their Related Parties or any other Persons for or in
respect thereof.

 

9.17        Compliance with Privacy Laws

 

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

 

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

 

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

 

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

 

54

 

(e)           The Parties shall fully co-operate with one another, with the
Employees to whom the Personal Information relates, and any Government
Authority charged with enforcement of Privacy Laws, in responding to inquiries,
complaints, requests for access, and Claims in respect of Disclosed Personal
Information.

 

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

 

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

 

9.18        Bank Accounts

 

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

 

ARTICLE 10

INDEMNIFICATION

 

10.1        Mutual
Indemnifications for Breaches of Covenants and Warranties

 

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

 

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

 

(i)            any
past, present or future Environmental Matters or past, present or future
Environmental Liabilities, including all Disclosed Environmental Liabilities,
but excluding any Environmental Matters or Environmental Liabilities or Losses
or

 

55

 

Claims
which may be made or brought against any of Vendor Indemnified Persons, or
which they may suffer or incur, directly or indirectly, as a result of, arising
out of or in connection with any breach of any covenant hereunder on the part
of Vendor Indemnified Persons relating to Environmental Matters or Environmental
Liabilities or any inaccuracy or incorrectness of any representation or
warranty of Vendor relating to Environmental Matters contained in this
Agreement, or other document or certificate furnished by Vendor pursuant to
this Agreement or the existence of which Environmental Matters or Environmental
Liabilities reflects an inaccuracy or misrepresentation in any of Vendor’s
representations or warranties in Section 4.14 (Environmental Matters and
Environmental Liabilities in respect of which Vendor and the other Vendor
Indemnified Persons are indemnified pursuant to this Section 10.1(b) are
referred to as the “Indemnified Environmental
Matters” and the “Indemnified
Environmental Liabilities”, respectively) and Purchaser hereby
assumes all Losses, covenants and Liabilities in respect of any such
Indemnified Environmental Matters and Indemnified Environmental Liabilities,
regardless of whether such Indemnified Environmental Matters or Indemnified
Environmental Liabilities are attributable to, occurred, arose or accrued on,
before or subsequent to the Closing Date.

 

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

 

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

 

(ii)           all
Claims by a Person who is not Vendor or a Vendor Related Party to the extent
that those Claims directly or indirectly relate to the Purchased Shares, the
Corporation, any Subsidiary, the Assets or the Business, except for any Claims
which are the subject of indemnification provided by Vendor as expressly set
forth in this Agreement; and

 

(iii)          any
financing referred to in Section 13.2(d) except to the extent that the
Loss, Liability or Claim suffered by a Vendor Indemnified Person results or
arises from

 

56

 

any
misstatement or omission in information furnished by any Vendor Indemnified
Person to Purchaser or Pogo.

 

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

 

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

 

(ii)           the
restrictions in Section 6.5 or Section 6.7;

 

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

 

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

 

(v)           the
limitation that, for any Claim in respect of which Purchaser is the Indemnified
Party, if specific provision or reserve was made for that Claim in the Final
Working Capital Statement and by virtue thereof the amount of that provision or
reserve was deducted in determining the Purchase Price, then the amount of that
provision or reserve shall also be deducted from that Claim before determining
the amount of that Claim which may be subject to indemnification under this
Agreement.

 

10.2        Procedures
Relating to Indemnification Between Vendor and Purchaser

 

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

 

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

 

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

 

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

 

57

 

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

 

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

 

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

 

10.3        Indemnification
Procedures for Third Party Claims

 

(a)           In the
case of Claims made by a third party with respect to which indemnification is
sought hereunder, the Indemnified Party shall give prompt written notice, and
in any event within 20 days after it receives notice of that Claim, to the
Indemnifying Party of any such Claim made on it stating the nature and basis
for that Claim.  A failure to give that
notice within that period shall not preclude the Indemnified Party from
obtaining that indemnification but its right to indemnification shall be
reduced to the extent that any such delay materially prejudiced the defense of
the Claim or materially increased the amount of liability or cost of defense.

 

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

 

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

 

58

 

Party,
that Indemnified Party shall have the right to select separate counsel to
participate in the defence of that Claim on its behalf, at the expense of the
Indemnifying Party; and provided further that the Indemnifying Party shall not
be obligated to pay the expenses of more than one separate counsel for all
Indemnified Parties.

 

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

 

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

 

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

 

10.4        Holding
of Indemnities

 

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

 

10.5        Claims
Net of Insurance and Taxes

 

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

 

(b)           In
determining the amount of any Claim for which either Party is entitled to
indemnification under this Article 10, the gross amount thereof shall be
reduced by any net present value of the Tax Benefit realized by that Party in
connection with that Claim to the extent that Tax Benefit results directly from
the incurrence of that Claim.  If an
indemnification payment hereunder results in incremental Tax being payable by
the Indemnified Party, the amount of the applicable Claim shall be equal to:

 

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

 

divided
by:

 

(ii)           one
minus the Tax Rate;

 

59

 

provided, however, that no additional
indemnification payment for any applicable incremental Tax shall be payable
until final settlement of that Tax liability with the relevant Tax authority,
and only on receipt by the Indemnifying Party of a copy of an official
communication issued by the relevant Tax authority which evidences that final
settlement of the Tax liability and, in those circumstances, the Indemnifying
Party will also pay to the Indemnified Party interest, at Vendor’s Interest
Rate, on the indemnification amount payable from the date the obligation to
make that indemnification payment arose until the date on which that
indemnification payment is made.  For
purposes of this Section 10.5:

 

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

 

“Tax Rate”
means the rate of Tax exigible under the Applicable Laws to a relevant Person
for any relevant period of time.

 

10.6        Mitigation

 

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

 

10.7        Adjustment
to Purchase Price

 

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

 

10.8        Subrogation

 

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

 

ARTICLE 11

TAX MATTERS

 

11.1        Liabilities for Taxes

 

(a)           After Closing and subject to
the terms of this Article 11, Vendor shall be liable for and shall pay and
shall indemnify, defend and save and hold harmless Purchaser, the Corporation
and the Subsidiaries from and against:

 

(i)            all income Taxes of the
Corporation and each Corporate Subsidiary:

 

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

 

60

 

(B)           attributable to income
earned or realized by the Partnership Subsidiaries for fiscal years of the
Partnership Subsidiaries ending on or before the Working Capital Date;

 

(ii)           all putative income Taxes of
the Corporation and each Corporate Subsidiary for taxation years of the
Corporation or Corporate Subsidiary, as the case may be, ending after the
Working Capital Date, to the extent such income Taxes are attributable (x) to
income earned or realized by any Partnership Subsidiary during the period in a
Straddle Period of the Partnership that notionally ended on or before the
Working Capital Date, or (y) to income earned or realized by the Corporation or
Corporate Subsidiary, as the case may be, otherwise than as a member of any
Partnership Subsidiary, during the period in a Straddle Period of the
Corporation or Corporate Subsidiary, as the case may be, that notionally ended
on or before the Working Capital Date, all as calculated on the basis and using
the assumptions set forth in Section 11.1(c); and

 

(iii)          all other Taxes attributable
to periods ending (or portions thereof notionally ending) on or before the
Working Capital Date;

 

in all such cases to the extent that such Taxes are
not reflected in Net Working Capital Amount. 
After Closing and subject to the terms of this Article 11, Vendor
shall be liable for and shall pay and shall indemnify and save and hold
harmless Purchaser, the Corporation and the Subsidiaries from and against all
Taxes of the Corporation and each Subsidiary attributable to or which arise as
a result of any Distributions made during the Interim Period.  Vendor shall be entitled to any refund of (or
credit for) Taxes allocable to any period with respect to which Vendor is
liable for Taxes in accordance with the foregoing and, to the extent
applicable, shall also be entitled to any amount not reflected in the Net
Working Capital Amount by which any pre-paid or estimated Tax payments remitted
before the Closing Date with respect to any such taxation year or any such part
of any Straddle Period exceeds the Tax due and payable therefor.

 

(b)           After Closing and subject to
the terms of this Article 11, Purchaser shall
be liable for and shall pay or shall cause the Corporation and the Subsidiaries
to pay and shall indemnify, defend and save and hold harmless Vendor from and
against

 

(i)            all income Taxes of the
Corporation and each Corporate Subsidiary for taxation years ending after the
Working Capital Date to the extent such income Taxes are not income Taxes for
which Vendor is liable under Section 11.1(a);

 

(ii)           all other Taxes attributable
to periods beginning (or portions thereof notionally beginning) after the
Working Capital Date; and

 

(iii)          any
Taxes that are reflected in the Net Working Capital Amount.

 

(c)           For purposes of
Section 11.1(a) and Section 11.1(b), whenever it is necessary to
determine the liability for Taxes of the Corporation or any Subsidiary for a
part of any Straddle Period, the Taxes for the part of the Straddle Period
ending on or before, and the part of the Straddle Period beginning after the
Working Capital Date shall be determined by assuming that:

 

(i)            the Straddle Period consists
of two taxation years (or in the case of the Partnership Subsidiaries, two
fiscal years), one which ended at the close of the

 

61

 

Working Capital Date and the other
of which began at the beginning of the day immediately after the Working
Capital Date;

 

(ii)           items of income, gain,
deduction, loss or credit of the Corporation or any Subsidiary for the Straddle
Period shall be allocated between those two assumed taxation years based on a
closing of the books; and

 

(iii)          Taxes other than income
Taxes will be allocated to each of the taxation years in proportion to the number
days in each such taxation year relative to the number of days in the entire
Straddle Period.

 

(d)           For
purposes of Section 11.1(a), Section 11.1(b) and Section 11.1(c), Vendor shall
cause to be prepared notional Tax Returns for the Corporation and each
Subsidiary for, in the case of each Partnership Subsidiary, the fiscal period
of the Partnership Subsidiary that is deemed under Section 11.1(c) to have
ended at the close of the Working Capital Date and, for the Corporation and
each Corporate Subsidiary, the taxation year of the Corporation or Corporate
Subsidiary, as the case may be, that is deemed under Section 11.1(c) to have
ended at the close of the Working Capital Date, for the purpose of determining
the putative income Taxes for which Vendor is liable under Section 11.1(a).  Vendor shall be entitled, in preparing such
notional Tax Returns, to claim the maximum allowable amounts (taking into
account any limitations applicable to short periods) in respect of
discretionary deductions, including without limitation Resource Pools as set
out in Schedule 4.22.  Purchaser shall
have an opportunity to review and comment on those Tax Returns, acting
reasonably, and Vendor shall reasonably consider and address any comments of
Purchaser in that regard.  The Taxes
reported on the notional Tax Returns shall then be included in the Final
Working Capital Statement; provided,
however, that any failure of the Parties to agree on the amount of Taxes
that should be reflected on any notional Tax Return shall be resolved pursuant
to Section 3.3(d).  If a determination by
any Government Authority with respect to the actual Tax Return to which such
notional Tax Return relates is inconsistent with such notional Tax Return, the
Taxes reported on the notional Tax Return shall be recomputed consistent with
such determination, and the Parties shall reimburse each other, as appropriate,
within 30 days after such redetermination.

 

(e)           The indemnities provided in
this Section 11.1 are in addition to but subject to the applicable provisions
of Article 6 (other than Section 6.1, Section 6.2(b) and
Section 6.2(c)).

 

11.2        Tax Returns

 

(a)           Vendor shall cause to be
prepared and filed on a timely basis all Tax Returns (if any) for the
Corporation and the Subsidiaries for any taxation year which ends on or before
the Closing Date and for which Tax Returns have not been filed as of that
date.  Purchaser shall have an
opportunity to review and comment on those Tax Returns, acting reasonably,
before the filing of those Tax Returns and Vendor shall reasonably consider and
address any comments of Purchaser in that regard.  Vendor shall be entitled, in preparing such
Tax Returns, to claim the maximum allowable amounts in respect of discretionary
deductions, including without limitation Resource Pools.

 

(b)           Purchaser shall cause to be
prepared and filed on a timely basis all Tax Returns for the Corporation and
the Subsidiaries for any taxation year which ends after the Closing Date and
for which Tax Returns have not been filed as of that date.  Vendor shall have an opportunity to review
and comment on any of those Tax Returns to the extent they relate

 

62

 

to any period before the Closing
Date, and to approve them, acting reasonably, before the filing of those Tax
Returns.

 

(c)           Vendor shall pay and remit
any Taxes due in respect of Tax Returns referred to in Section 11.2(a).  Purchaser shall or shall cause the
Corporation or any of the Subsidiaries to pay and remit any Taxes due in
respect of the Tax Returns referred to in Section 11.2(b).  Vendor or Purchaser shall reimburse the other
Party for any Taxes for which Vendor or Purchaser is liable pursuant to
Section 11.1(a) or Section 11.1(b), as applicable, but which are
payable with Tax Returns to be filed by the other Party pursuant to
Section 11.2(a) and Section 11.2(b), as applicable, on the written
request of the Party entitled to reimbursement, setting forth in detail the
computation of the amount owed by Vendor or Purchaser, as applicable, but in no
event earlier than ten days before the due date for the filing of any
applicable Tax Returns, except to the extent such amounts have already been
paid as adjustments to the Purchase Price. 
For greater certainty, Section 10.7 shall apply to any payment made
by one Party to the other pursuant to this Section 11.2(c).

 

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

 

(e)           Any Tax Return to be
prepared pursuant to the provisions of this Section 11.2 shall be prepared
in a manner consistent with practices followed in prior years with respect to
similar Tax Returns of the Corporation and the Subsidiaries provided such
historical practices are proper.

 

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

 

11.3        Confidentiality of Tax
Information

 

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

 

11.4        Section 338 Election

 

(a)           Purchaser has the right to
make an election under section 338(g) of the Code (“section 338 election”) with respect to
the Purchase and the deemed purchase of the shares of any eligible
Subsidiary.  Should Purchaser make a
section 338 election,

 

63

 

Purchaser and Vendor shall
cooperate fully with each other in the making of that election.

 

(b)           Provided that Purchaser
makes a section 388 election, the Purchase Price shall be allocated among the
Assets in a manner required by Section 338 of the Code.  Within 60 days after the Closing Date,
Purchaser will provide to Vendor copies of IRS Form 8883 and any required
exhibits thereto (the “Asset Acquisition
Statement”) with Purchaser’s proposed allocation of the Purchase
Price (together with any assumable Liabilities).  Within 15 days after the receipt of that
Asset Acquisition Statement, Vendor will propose to Purchaser any changes in
that Asset Acquisition Statement.  If no
such changes are proposed in writing to Purchaser, Vendor shall be deemed to
have agreed to, and accepted the Asset Acquisition Statement).  Purchaser and Vendor will endeavour in good
faith to resolve any differences with respect to the Asset Acquisition
Statement within 15 days after Purchaser’s receipt of written notice of
objection from Vendor.  Should the
Parties fail to reach an agreement as required under this Section 11.4(b)
the Parties further agree to engage, as a shared expense, the Accounting Firm
to resolve the issue.

 

(c)           Provided that Purchaser
makes a section 338 election, Vendor will, at the request of Purchaser,
cooperate with Purchaser to cause elections under section 754 of the Code to be
in effect on the Closing Date with respect to any entity:

 

(i)            in which the Corporation or
its Subsidiaries holds an interest; and

 

(ii)           that is treated as a
partnership for United States federal income tax purposes.

 

Any
increase or decrease in the adjusted basis of the property of any such
partnership resulting from the section 338 election shall be allocated among
the assets of the partnership in a manner required by section 755 of the Code
and agreed on by the Parties under procedures consistent with those described
in Section 11.4(b).

 

(d)           If Purchaser does not make a
section 338 election, Purchaser shall cause the Corporation not to make any
distributions that would reduce the amount Vendor must include in income as a
dividend under Section 964(e) of the Code with respect to the Purchase.

 

(e)           Provided that Purchaser
makes a section 338 election and, except as provided below, Purchaser shall pay
to Vendor the excess, if any (the total excess being the “Unused Tax Credits”), of:

 

(i)            the deemed paid credit that
would have been allowed by section 960 of the Code to Vendor’s United States
shareholders (as defined in section 951(b) of the Code) as a result of Vendor’s
sale of the Purchased Shares to Purchaser, if the limitations of sections 904
and 907 of the Code were applied without regard to the section 338 election;
less

 

(ii)           the deemed paid credit
actually allowed by section 960 of the Code (subject to the limitations of
sections 904 and 907 of the Code) to Vendor’s United States shareholders as a
result of Vendor’s sale of the Purchased Shares to Seller, after a final
determination by the appropriate Governmental Authority.

 

The payment
for the Unused Tax Credits shall be made within 30 days after the final determination
by the appropriate Governmental Authority and shall include any

 

64

 

penalties
and interest assessed in that final determination as a result of a disallowance
of the Unused Tax Credits.  Notwithstanding
the foregoing provisions of Section 11.4(e), Purchaser shall have no
obligation to make any payment for the Unused Tax Credits, penalties or
interest unless:

 

(A)          Vendor’s United States
shareholders claim on their original Tax Returns the deemed paid credits
described in Section 11.4(e)(i);

 

(B)           Vendor’s United States
shareholders defend the position taken on their original Tax Returns for the
deemed paid credits described in Section 11.4(e)(i) to the point of a
final determination by an appropriate Governmental Authority;

 

(C)           Purchaser is entitled to
review and comment on Vendor’s United States shareholders’ defense; and

 

(D)          Vendor’s United States
shareholders do not accept a determination from an appropriate Government
Authority that increases Unused Tax Credits without the written consent of
Purchaser.

 

11.5        Tax Claims

 

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

 

(b)           Purchaser shall represent
the interests of the Corporation and the Subsidiaries in and with respect to
any Tax Claim relating to taxation years ending on or before the Working
Capital Date and employ counsel of its own choice for that purpose.  Vendor shall be entitled to participate in or
with respect to that Tax Claim relating (in whole or in part) to Taxes
attributable to taxation years ending on or before the Working Capital Date
and, with the written consent of Purchaser, and at Vendor’s sole expense, may
assume the entire control of that Tax Claim. 
Purchaser, with the written consent of Vendor, shall have the right to
settle, either administratively or after the commencement of litigation, any
proceeding relating to Taxes of the Corporation and any of the Subsidiaries for
any taxation year ending on or before the Working Capital Date.  In the case of any Straddle Period, Vendor
shall be entitled to participate at its expense in or with respect to any Tax
Claim relating (in whole or in part) to Taxes attributable to the part of that
Straddle Period ending on or before the Working Capital Date, and with the
written consent of Purchaser, and at Vendor’s sole expense, may assume the
entire control of that Tax Claim.  From
and after the Closing, neither Purchaser, the Corporation, any Subsidiary nor
any of their respective Affiliates or Representatives shall settle or
compromise, or agree to settle or compromise, any Tax Claim which may be the
subject of indemnification by Vendor under Section 11.1 without the prior
written consent of Vendor.

 

(c)           If the results of any Tax
Claim involve an issue that:

 

(i)            recurs in any taxation year
(or part thereof) of the Corporation or any Subsidiary ending on or after the
Closing Date; or

 

65

 

(ii)           otherwise may reasonably be
expected to materially and adversely affect Purchaser, the Corporation or any
Subsidiary for any taxation year (or part thereof) ending on or after the
Closing Date, then there shall be no settlement, closing or other agreement
with respect to that issue without the consent of such affected Party, which
consent shall not be unreasonably withheld or delayed.  Purchaser shall have the right to control the
conduct of any Tax Claim relating to the Corporation or any Subsidiary with
respect to any Tax matter arising in a period (or part thereof) ending after
the Closing Date.

 

11.6        Assistance and Cooperation

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)            use reasonable efforts to
properly retain and maintain accounting and Tax records and information, in a
timely manner consistent with taxing authority guidelines, to the extent those
records and information relate to the Corporation and the Subsidiaries or any
of the Assets and the Business until 120 days following the expiration of the
applicable statute of limitations period, and promptly notify the other Party
prior to destruction of any of those Tax records or that information and
provide the other Party a reasonable opportunity to make and retain copies of
any of those Tax records or that information.

 

ARTICLE 12

TERMINATION AND CLOSING

 

12.1        Termination

 

This Agreement may be terminated at any
time before Closing:

 

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

 

(b)           by
Purchaser, subject to Section 6.1, if any of Purchaser’s Conditions shall
have not been fulfilled by the time required or shall have become incapable of
fulfillment other than as a result of Purchaser’s breach of this Agreement, and
shall not have been waived by Purchaser;

 

66

 

(c)           by
Vendor, if any of Vendor’s Conditions shall have not been fulfilled other than
as a result of Vendor’s breach of this Agreement by the time required or shall
have become incapable of fulfillment, and shall not have been waived by Vendor;
and

 

(d)           by
either Vendor or Purchaser, if the Closing does not occur on or before the
Outside Date; provided that the right to terminate this Agreement under this
Section 12.1(d) shall not be available to a Party whose failure to fulfill
any obligation under this Agreement, except as provided in Section 9.16,
has caused or resulted in the failure of the Closing to occur on or before the
Outside Date.

 

12.2        Regarding
Termination by Purchaser

 

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

 

12.3        Regarding
Termination by Vendor

 

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

 

12.4        Deposit

 

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

 

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

 

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

 

12.5        Notice of
Termination

 

In the event of termination by Vendor or
Purchaser pursuant to this Article 12, written notice thereof shall
forthwith be given to the other Party and the transactions contemplated by this
Agreement

 

67

 

(including the Parties’ obligation to
consummate the Purchase) shall be terminated without further action by either
Party.  If the transactions contemplated
by this Agreement are terminated as provided herein:

 

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

 

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

 

12.6        Effect of
Termination

 

Each Party’s right of termination under
this Article 12 is in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of a right of termination will not be
an election of remedies.  Nothing in this
Article 12 shall limit or affect any other rights or causes of action
either Purchaser or Vendor may have with respect to the representations,
warranties, covenants and indemnities in its favour contained in this
Agreement.  Nothing in this Article 12  shall be deemed to release either Party from
any liability for any breach by that Party of the terms and provisions of this
Agreement or to impair the right of either Party to compel specific performance
by the other Party of its obligations under this Agreement.

 

ARTICLE 13

GENERAL

 

13.1        Non-Waiver

 

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

 

13.2        Public
Notices

 

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

 

(b)           Neither
Party will make any press release or other public announcement respecting this
Agreement:

 

(i)            without
the consent of the other Party, not to be unreasonably withheld or delayed; or

 

(ii)           unless:

 

(A)          the
Party desiring to make the press release or other public announcement is
advised by its counsel that the release or announcement is required to comply
with any Applicable Law or the rules of any securities regulatory authority,
listing authority or stock

 

68

 

exchange
with which the disclosing Party or any Affiliate of either Party is bound to
comply; and

 

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

 

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

 

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

 

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

 

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

 

(d)           Purchaser or Pogo shall be entitled to use information respecting
the Assets in drafts or final copies of any prospectus, offering document or
loan syndication materials prepared pursuant to the Goldman Sachs Commitment in
which Purchaser or Pogo proposes to describe the Purchase to the extent that
any such information is required to comply with any Applicable Law or the rules
of any securities regulatory authority, listing authority or stock exchange
with which Purchaser or Pogo is bound to comply or is reasonably required with
respect to that prospectus, offering document or loan syndication; provided
that Vendor is given draft copies of the prospectus, offering document or those
loan syndication materials and approves, in advance of the filing or
distribution of any of those documents or materials, acting reasonably, any
references to Vendor, Unocal or the Purchase that may be provided therein.

 

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

 

69

 

13.3        Notices

 

Any notice or other writing required or
permitted to be given under this Agreement or for the purposes of this
Agreement (in this Section 13.3 referred to as a ”Notice”) shall be in writing and shall be sufficiently given
if delivered, or if transmitted by facsimile to:

 

(a)           in the
case of a Notice to Vendor or to Unocal:

 

c/o Unocal Corporation

2141 Rosecrans Avenue

Suite 4000

El Segundo, CA

90245 USA

 

Attention: 
Douglas M. Miller

Fax:   310.726.7819

 

with a copy to:

 

Stikeman Elliott LLP

4300 Bankers Hall, West Tower

888 – 3rd Street S.W.

Calgary, Alberta

T2P 5C5

 

Attention:  
Glenn Cameron

Fax:   403.266.7803;

 

(b)           in the
case of a Notice to Purchaser or to Pogo:

 

c/o Pogo Producing Company

5 Greenway Plaza, Suite 3000

Houston, Texas 77046 0504

 

Attention: General Counsel

Fax:  713.297.5050;

 

with a copy to:

 

Baker Botts L.L.P.

One Shell Plaza

910 Louisiana Street

Houston, Texas 77002-3995

 

Attention: 
Stephen A. Massad

Fax:  713.229.7775

 

70

 

and to:

 

Fraser Milner Casgrain LLP

30th Floor

Fifth Avenue Place

237-4th Avenue S.W.

Calgary, Alberta,

T2P 4X7 Canada

 

Attention:  Dale E. Skinner

Fax:  403.268.3100,

 

or at such other address or number as the
Person to whom that Notice is to be given shall have last notified the Person
giving the same in the manner provided in this Section 13.3.  Any Notice will be deemed to have been
validly and effectively given (i) if personally delivered, on the date of that
delivery if that date is a Business Day and that delivery was made before 4:00
p.m. (Calgary time), and otherwise on the next Business Day; or (ii) if
transmitted by facsimile or similar means of recorded communication on the
Business Day following the date of transmission if receipt of the transmission
has been confirmed back.

 

13.4        Assignment

 

Neither this Agreement nor any benefits,
rights or obligations under this Agreement shall be assignable by either Party,
by operation of Applicable Law or otherwise, without the prior express written
consent of the other Party which consent may be arbitrarily withheld.  Notwithstanding the foregoing prohibition on
assignment, Purchaser may assign all of its benefits, rights and obligations
under this Agreement to an Affiliate of Purchaser (but not if that assignment
would extend the time for, or render less certain, the completion of the
Purchase) provided that such assignment shall not release Purchaser from any of
its obligations under this Agreement and provided further that such Affiliate
enters into an agreement with Vendor satisfactory to Vendor, pursuant to which
that Affiliate expressly assumes all of Purchaser’s obligations under this
Agreement and, if that assignment occurs before the Closing, that Affiliate
covenants to remain an Affiliate of Purchaser until Closing.  Subject to the foregoing provisions of this
Section 13.4, this Agreement shall inure to the benefit of, be enforceable
by and be binding on the Parties, Unocal and Pogo and their respective
successors (including any successor by reason of amalgamation of any Party or
by Unocal or Pogo) and permitted assigns.

 

13.5        Further
Assurances

 

Each Party, Unocal and Pogo shall use all
commercially reasonable efforts to provide such further documents or
instruments required by any other Party, Unocal and Pogo as are reasonably
necessary to carry out the provisions of this Agreement, whether before or
after the Closing.

 

13.6        No
Recourse

 

Notwithstanding anything that may be
expressed or implied in this Agreement, except as provided in Section 1.12
and Section 13.4, each Party covenants, agrees and acknowledges that no
recourse under this Agreement shall be had against any current or future
shareholders or agents of either Party or any of its Affiliates, or any
current, former or future director, officer, employee, shareholder or agent of
any of the foregoing, whether by any legal or equitable proceeding, or by
virtue of any Applicable Law, it being expressly agreed and acknowledged that
no personal liability whatsoever shall attach to, be imposed on or otherwise be
incurred by any current or future shareholder or agent of either Party, or any
of its Affiliates, or any current or former or future director, officer,
employee, shareholder or agent of any of the foregoing, for any obligation of
the Parties under this Agreement.

 

71

 

13.7        Time of
the Essence

 

Time shall be of the essence of this
Agreement.

 

13.8        Amendment

 

This Agreement (including the Schedules
hereto) may not be amended, waived or modified except by an express instrument
in writing signed on behalf of each of the Parties.

 

13.9        Invalidity

 

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

 

13.10      Counterparts

 

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

 

13.11      Enforcement

 

The Parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms, or were otherwise
breached.  It is accordingly agreed that
the Parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement.

 

13.12      No
Third-Party Beneficiaries

 

This Agreement, other than as provided in
Sections 10.1, 13.4 and 13.6 and in the provisions of Article 10 and Article 11
relating to indemnification, is not intended to confer on any Person other than
the Parties any rights or remedies.

 

13.13      Expenses

 

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

 

13.14      Removal of
Name

 

Following the Closing, Purchaser, and its
Affiliates will not be entitled to use the name “Unocal” or any variation or derivation thereof, including any
logo, trademark or design containing either or both of those names (the “Prohibited Name and Marks”). Accordingly,
promptly following the Closing, Purchaser shall cause the Corporation and the
Subsidiaries to cause the destruction, disposal or replacement of stationery,
business cards and similar assets containing such Prohibited Name and Marks,
and shall cause the Corporation and the Subsidiaries to avoid the use of the
Prohibited Names and Marks.  In addition,
as soon as reasonably practicable, but in any event within the earlier of
60 days following Closing or the date required by Applicable Law,
Purchaser shall:

 

(a)           remove
any signage from the Assets that refers to the Prohibited Name and Marks; and

 

72

 

(b)           make all requisite filings with, and provide requisite notices to,
the appropriate Government Authorities to place title or other evidence of
operation or ownership in a name other than the Prohibited Name and Marks.

 

73

 

IN WITNESS WHEREOF the Parties, Unocal and Pogo have duly executed this
Agreement as of the date and year above written.

 

	
   

  	
  UNOCAL CANADA LIMITED

  
	
   

  	
  By:

  	
  /s/ Douglas M. Miller

  	
   

  
	
   

  	
  Name:

  	
  Douglas M. Miller

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNOCAL CANADA ALBERTA
  HUB LIMITED

  
	
   

  	
  By:

  	
  /s/ Douglas M. Miller

  	
   

  
	
   

  	
  Name:

  	
  Douglas M. Miller

  	
   

  
	
   

  	
  Title:

  	
  Vice President, Corp. Dev. Unocal Corp.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNOCAL CORPORATION

  
	
   

  	
  By:

  	
  /s/ Douglas M. Miller

  	
   

  
	
   

  	
  Name:

  	
  Douglas M. Miller

  	
   

  
	
   

  	
  Title:

  	
  Vice President, Corporate Development

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  POGO CANADA, ULC

  
	
   

  	
  By:

  	
  /s/ Stephen R. Brunner

  	
   

  
	
   

  	
  Name:

  	
  Stephen R. Brunner

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael J. Killelea

  	
   

  
	
   

  	
  Name:

  	
  Michael J. Killelea

  	
   

  
	
   

  	
  Title:

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  POGO PRODUCING COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen R. Brunner

  	
   

  
	
   

  	
  Name:

  	
  Stephen R. Brunner

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice President

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