Copper Giant Resources Corp. - Capital/Financing Update 2021

STANDBY PURCHASE AGREEMENT

THIS AGREEMENT (the " Agreement ") has been entered into as of July 15, 2021,

BETWEEN:

PERPETUAL ENERGY INC. , a corporation existing under the laws of the Alberta, (" Perpetual ")

-and-

RUBELLITE ENERGY INC. , a corporation existing under the laws of Alberta, (" Rubellite ")

(Perpetual and Rubellite are together the " Company ")

-and-

DREAMWORKS INVESTMENT HOLDINGS LTD. , a corporation

existing under the laws of Alberta, together with its Permitted Assignees, (the " Purchaser ")

RECITALS:

A. Rubellite proposes to issue Arrangement Warrants pursuant to the Arrangement;
B. The Purchaser is prepared to agree to purchase Common Shares pursuant to the exercise of Arrangement Warrants on the terms and subject to the conditions set forth in this Agreement;
C. The Purchaser is prepared to provide an Equity Backstop by agreeing to exercise its Basic Subscription Right and the Additional Subscription Privilege, on the terms and subject to the conditions set forth in this Agreement such that, together with the exercise by the other shareholders of their respective Basic Subscription Warrants and Additional Subscription Privileges an aggregate of $32,306,265 million of Common Shares will be issued in respect of the Arrangement Warrants;
D. Rubellite proposes to issue Common Shares pursuant to the Non-Brokered Private Placement; and
E. The Purchaser proposes to purchase, in aggregate, not less than $6 million of Common Shares pursuant to the Non-Brokered Private Placement, on the terms and subject to the conditions set forth in this Agreement.

NOW THEREFORE , in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto have agreed as set forth below.

ARTICLE 1 INTERPRETATION

1.1 Definitions.

In this Agreement and in the recitals hereto, unless something in the subject matter is inconsistent therewith:

" ABCA " means the Business Corporations Act , R.S.A. 2000, c. B-9, as amended;

" Additional Subscription Privilege " has the meaning set forth in Section 2.2;

" Affiliate " has the meaning ascribed thereto by the Securities Act;

" AIMCo " means Alberta Investment Management Corporation, an Alberta crown corporation formed under the Alberta Investment Management Corporation Act;

" AIMCo Beneficial Ownership Restriction " has the meaning set forth in Section 2.1;

" AIMCo Debt Settlement Agreement " means the debt settlement and contingent payment agreement dated July 12, 2021 between Perpetual and AIMCo whereby, among other things, AIMCo has agreed to exercise all of its Arrangement Warrants received pursuant to the Arrangement and Perpetual has agreed to transfer the AIMCo Bonus Shares (as such term is defined in the Arrangement) to AIMCo;

" Associate " has the meaning ascribed thereto by the Securities Act;

" Arrangement " means the proposed arrangement involving Perpetual, its shareholders and Rubellite under the provisions of Section 193 of the ABCA on the terms and conditions described in the Arrangement Agreement;

" Arrangement Agreement " means the agreement dated July 15, 2021 between Perpetual and Rubellite with respect to the Arrangement, and all amendments thereto;

" Arrangement Warrants " means share purchase warrants of Rubellite entitling the holders thereof to purchase Common Shares at a price of $2.00 per share or Common Shares and expiring at the Expiry Time, the terms of which are established under the Warrant Indenture;

" Basic Subscription Right " means the entitlement of a holder of Arrangement Warrants to subscribe for Common Shares at the Subscription Price per Common Share, based on the number of Arrangement Warrants, as such entitlement is further described in the Information Circular;

" Board " means the Board of Directors of Rubellite;

" Business Day " means any day, other than a Saturday or a Sunday, upon which banks are open for business in Calgary, Alberta;

" Common Shares " means common shares in the capital of Rubellite;

" Equity Backstop Amount " means the amount set forth in Section 3.1;

" Equity Backstop " means the obligation of the Purchaser to purchase the Equity Backstop Shares as provided for in Section 3.1;

" Equity Backstop Shares " has the meaning set forth in Section 3.1;

" Expiry Time " means the expiry time of the Arrangement Warrants on the date set forth in the Warrant Indenture, as may be extended;

" GAAP " means Canadian generally accepted accounting principles for publicly accountable enterprises, being International Financial Reporting Standards as adopted by the Accounting Standards Board of the Canadian Institute of Chartered Accountants;

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

" Information Circular " means the information circular to be prepared by Perpetual and forwarded as part of the proxy solicitation materials to shareholders in respect of the Meeting;

" Laws " means any federal, state, provincial, local or municipal, domestic or foreign, constitutional provision, statute, law, by-law, rule, regulation, permit, decree, injunction, judgment, order, or legally binding ruling, determination, common law rule, finding or writ of any Governmental Entity or of any court or other tribunal binding on or affecting the Person referred to in the context in which the word is used;

" Material Adverse Change " or " Material Adverse Effect " means any change, effect, event, occurrence, circumstance or state of facts that is, or would reasonably be expected to be material and adverse to the business, operations, results of operations, assets, capitalization or financial condition of the Company and its Subsidiaries, taken as a whole, but " Material Adverse Change " and " Material Adverse Effect " shall not include any change, effect, event, occurrence, circumstance or state of facts resulting from or arising in connection with:

(a) a matter which has been disclosed in the Information Circular which will be publicly filed by the Company on SEDAR;
(b)
any natural disaster;
(c) conditions affecting the oil and gas industry as a whole, including any increases in capital costs or capital expenditures resulting from inflationary pressures, and not disproportionately affecting the Company and its Subsidiaries, taken as a whole;
(d) any change in global, national or regional political conditions (including the outbreak or escalation of war or acts of terrorism) and not disproportionately affecting the Company and its Subsidiaries, taken as a whole, relative to other comparable oil and gas companies and entities operating in Canada;
(e) any changes in currency exchange, interest or inflation rates or commodities, securities or general economic, business, regulatory or market conditions or in national or global financial or capital markets;
(f) changes in the market price of crude oil, natural gas, related hydrocarbons or refined products;

(g) changes in the trading price or trading volume of the Common Shares (in and of itself, it being understood that causes underlying such change in market price or volume may be taken into account in determining whether a Material Adverse Change or Material Adverse Effect has occurred to the extent not otherwise excluded from this definition);
(h) changes in Laws or the interpretation, application or non-application of Laws by Governmental Entities (other than specifically relating to or against the Company or its Subsidiaries) and not disproportionately affecting the Company and its Subsidiaries, taken as a whole;
(i) the announcement or existence of the Arrangement, this Agreement and the transactions contemplated hereby and described in the Information Circular (including any legal proceeding as a result thereof); or
(j) any failure of the Company or its Subsidiaries to meet any public projections, forecasts or estimates of production, resources or cash flow (in and of itself, it being understood that causes underlying such failure may be taken into account in determining whether a Material Adverse Change or Material Adverse Effect has occurred to the extent not otherwise excluded from this definition);

" material change " means a material change for the purposes of Securities Laws; " material fact " means a material fact for the purposes of Securities Laws;

" Misrepresentation " has the meaning ascribed to such term for the purposes of Securities Laws;

" Meeting " means the special meeting of shareholders of Perpetual to be held to consider the Arrangement, and any adjournments thereof;

" Non-Brokered Private Placement " means the non-brokered private placement of Common Shares in conjunction with the Arrangement of a minimum of 5,000,000 Common Shares to certain officers, and members of the board of directors of Rubellite, AIMCo and other strategic subscribers as determined by Perpetual and its respective associates and affiliates and up to a maximum of 10,000,000 Common Shares at a price of $2.00 per Common Share;

" Order " means any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency, or other Governmental Entity or by any arbitrator;

" Ordinary Course of Business " means an action taken by a Person will be deemed to have been taken in the "Ordinary Course of Business" if such action is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person;

" Organizational Documents " means (i) the articles or certificate of incorporation or amalgamation, as applicable, and the bylaws of a corporation; (ii) the partnership agreement and any statement of partnership of a general partnership; (iii) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (iv) articles of organization and operating agreement of a limited liability company; (v) any charter or similar document adopted or filed in connection with the creation, formation, or organization of a Person; and (vi) any amendment to any of the foregoing;

" Outside Date " means 5:00 p.m. (Calgary time) on November 30, 2021;

" Permitted Assignees " has the meaning set forth in Section 13.3;

" Person " means an individual, company or corporation (with or without share capital), partnership, limited partnership, limited liability partnership, limited liability company, association, joint venture, syndicate, trust, estate, custodian, trustee, executor, administrator, nominee or other legal personal representative, or other entity or organization, including a Governmental Entity or political subdivision or an agency or instrumentality thereof;

" Record Date " means the record date for the purpose of the Arrangement that will be established by the Company in the Information Circular, unless otherwise mutually agreed upon in writing by the Company and the Purchaser;

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

" Securities " means, collectively, the Arrangement Warrants, the Common Shares issuable upon the exercise of the Arrangement Warrants (including the Equity Backstop Shares);

" Securities Act " means the Securities Act (Alberta), as amended;

" Securities Commissions " means, collectively, the securities commissions or similar securities regulatory authorities in each of the Provinces of Canada;

" Securities Laws " means applicable securities Laws, including the respective regulations thereunder and the published policy statements, instruments, blanket orders and decisions of the Securities Commissions or similar regulatory authorities in each of the Provinces of Canada, the rules and policies of the TSX;

" SEDAR " means the System for Electronic Document Analysis and Retrieval;

" Subscription Price " means $2.00 per Common Share, being the price at which each Common Share is issuable upon the exercise of Arrangement Warrants pursuant to the Arrangement;

" Subsidiary " means any entity with respect to which a Person (or a Subsidiary thereof) has the power, through the ownership of securities or otherwise, to elect at least a majority of the directors, or similar managing body, or in which such Person owns directly or indirectly 50% or more of the fair market value of the equity of such entity;

" Termination Date " means the earlier of: (i) the Outside Date; and (ii) the effective date upon which this Agreement is terminated pursuant to Article 10;

" Threatened " means a claim, proceeding, dispute, action, or other matter will be deemed to have been "Threatened" if any demand or statement has been made (orally or in writing) or any notice has been given (orally or in writing), or if any other event has occurred or any other circumstances exist, that would lead a prudent Person to conclude that such a claim, proceeding, dispute, action, or other matter is likely to be asserted, commenced, taken, or otherwise pursued in the future;

" TSX " means the Toronto Stock Exchange; and

" Warrant Indenture " means a warrant indenture between Rubellite and Odyssey Trust Company, as trustee, establishing the terms of the Arrangement Warrants.

1.2 Headings, etc.

The division of this Agreement into articles, sections, paragraphs and clauses and the provision of headings are for the convenience of reference only and shall not affect the construction or interpretation of this Agreement. The terms "this agreement", "hereof", "hereunder" and similar expressions refer to this Agreement as a whole and not to any particular article, section, paragraph, clause or other portion hereof and include any agreement or instrument supplemental or ancillary hereto. Unless something in the subject matter or context is inconsistent therewith, references herein to articles, sections, paragraphs or clauses are to articles, sections, paragraphs or clauses of this Agreement.

1.3 Plurality and Gender

Words importing the singular number only shall include the plural and vice versa, words importing the masculine gender shall include the feminine and neuter genders and vice versa.

1.4 Currency

Unless otherwise specifically stated, all references to dollars and cents in this Agreement are to the lawful currency of Canada.

1.5 Statutes

Any reference to a statute, act or law shall include and shall be deemed to be a reference to such statute, act or law and to the regulations, instruments and policies made pursuant thereto, with all amendments made thereto and in force from time to time, and to any statute, act or law that may be passed which has the effect of supplementing or superseding such statute, act or law so referred to. ARTICLE 2 ARRANGEMENT

2.1 Conduct of Arrangement

Subject to and in accordance with the terms hereof, Rubellite agrees to issue pursuant to the Arrangement, the Arrangement Warrants to persons that are the holders of record of Common Shares on the Record Date and the Common Shares issuable upon exercise of the Arrangement Warrants to the holders of record of the Arrangement Warrants on the Expiry Date provided that the Company has satisfied itself that such holder is entitled to receive the Securities under the Arrangement in accordance with the Laws of such jurisdiction and the Company agrees without obliging the Company to register the Securities or file a prospectus or other similar disclosure document or to make any other filings or become subject to any reporting or disclosure obligations that the Company is not otherwise already obligated to make. For greater certainty, the Company acknowledges and agrees that, based on the representations and warranties made by the Purchaser in Section 7.1 hereof and subject to compliance by the Purchaser with the restrictions set forth in Section 3.1, the Purchaser is entitled to subscribe for Securities under the Basic Subscription Right and the Additional Subscription Privilege, including the Equity Backstop Shares under applicable Securities Laws. The Purchaser and the Company further agree that pursuant to the terms of the AIMCo Debt Settlement Agreement, AIMCo is only permitted and/or obligated to subscribe for or otherwise acquire Common Shares (including, without limitation, AIMCo Bonus Shares and the Newco Common Shares issuable on the exercise of the Arrangement Warrants and pursuant to the Non-Brokered Offering) if its Deemed Beneficial Ownership (as such term is defined in the AIMCo Debt Settlement Agreement) does not then exceed 9.99%, and then only to the extent that such rights or obligations would not cause its

Deemed Beneficial Ownership (as such term is defined in the AIMCo Debt Settlement Agreement) to exceed 9.99% (the " AIMCo Beneficial Ownership Restriction ");

2.2 Additional Subscription Privilege

Each holder of Arrangement Warrants who has exercised in full the Basic Subscription Right attaching to its Arrangement Warrants by the Expiry Time, and only such holders, shall have the right to subscribe pursuant to the Arrangement for additional Common Shares (if such are available) as a result of Arrangement Warrants that are not exercised under the Basic Subscription Right at the Expiry Time, subject to pro ration, all as provided for in the Warrant Indenture and described in the Information Circular (the " Additional Subscription Privilege ").

ARTICLE 3

EQUITY BACKSTOP AND SHARE SUBSCRIPTION COMMITMENT

3.1 Equity Backstop and Share Subscription Commitment

Provided that the Company has complied with the provisions of this Agreement required to be complied with on or prior to the Expiry Time, the Purchaser will exercise its Basic Subscription Right and the Additional Subscription Privilege, if applicable, under the Arrangement and acquire Common Shares (the " Equity Backstop Shares ")) such that after giving effect to the purchase of Common Shares subscribed for and taken up by holders of Arrangement Warrants pursuant to the Basic Subscription Right and the Additional Subscription Privilege (including any Equity Backstop Shares subscribed for and taken up by the Purchaser pursuant to its Basic Subscription Right and Additional Subscription Privilege, as applicable); and, at the closing time on the Expiry Time Rubellite will have received an aggregate amount in respect of the issuance of such equity securities that is not less than $32,306,265 million (the " Equity Backstop Amount "); and the Purchaser will subscribe for Common Shares issued pursuant to the NonBrokered Offering; and, at the closing time of the Non-Brokered Offering the Company will have received an aggregate amount in respect of the issuance of such equity securities that is not less than $6 million (the " Share Subscription Commitment "). The Purchaser and the Company agree that the Equity Backstop Amount and Share Subscription Commitment will be effected in such a manner as to comply with the terms of the AIMCo Debt Settlement Agreement and having regard at all times to the AIMCo Beneficial Ownership Restriction.

ARTICLE 4 COVENANTS OF THE ISSUER

4.1 Covenants

Subject to and in accordance with the terms hereof, the Company undertakes and agrees with and in favour of the Purchaser that:

(a) Consents and Approvals. The Company will use its commercially reasonable efforts to obtain all necessary consents, approvals or exemptions for the entering into and performance by it of this Agreement and the transactions contemplated herein (including, for greater certainty, the issuance of the Arrangement Warrants and the Common Shares issuable upon the exercise of the Arrangement Warrants).
(b) Cease Trade Order or Other Investigation. From the date hereof through the earlier of: (i) the Expiry Time; and (ii) the termination of this Agreement, the Company will promptly notify the Purchaser in writing of any notice, written demand, request, inquiry or other correspondence (in

each case, both formal or informal) by any Securities Commission, the TSX or other Governmental Entity: (A) that concerns any matter relating to the affairs, securities, directors or officers of the Company that may affect the Arrangement or any other transaction contemplated herein; or (B) that relates to the issuance, or threatened or contemplated issuance, by any such Person of any order suspending or preventing the Arrangement or any cease trading or similar order or ruling relating to any securities of the Company. Any notice delivered to the Purchaser pursuant to this Section shall contain reasonable details of the notice, demand, request, inquiry, correspondence, order or ruling in question. The Company shall use all commercially reasonable efforts to prevent the issuance of any orders contemplated in this Section 4.1(b) and, if issued, to obtain their prompt withdrawal.

(c) TSX Listing. The Company shall take all action as may be required and appropriate so that the Arrangement Warrants, the Common Shares issuable upon exercise of the Arrangement Warrants including the Equity Backstop Shares, and the Common Shares to be issued pursuant to the NonBrokered Offering are approved for listing and posting for trading on the TSX, subject to receipt of customary final documentation.
(d) Securities Laws. The Company shall take all action as may be necessary and appropriate so that the Arrangement, the issuance and sale of the Equity Backstop Shares and the other transactions contemplated in this Agreement will be effected in accordance with Securities Laws. The Company shall consult with the Purchaser and its advisors and representatives upon the Purchaser's reasonable request regarding the manner in which the Arrangement, the issuance and sale of the Equity Backstop Shares, and the other transactions contemplated herein will comply with Securities Laws, and the Company shall provide to the Purchaser and its advisors copies of any documents that are to be submitted by it to any Securities Commission, the TSX or other regulatory authority for such purpose (including, for greater certainty, the Information Circular and any agreement or instrument required to be filed) prior to being so submitted and the Company shall give the Purchaser and its advisors reasonable time and opportunity to comment on same and Company shall give due consideration to such comments, and the Company shall not file the Information Circular on SEDAR without first obtaining approval from the Purchaser in respect of the form and content thereof, which approval will not be unreasonably withheld or delayed, provided that the Purchaser's approval may be requested and obtained in respect of a draft in substantially final form without requiring further approval from Purchaser for immaterial changes made after the date of such draft.
(e) Obtaining of Report. The Company will cause Odyssey Trust Company, as transfer agent, to deliver to the Purchaser, promptly upon request during the pendency of the Arrangement and, in any event, as soon as is practicable following the Expiry Time, details concerning the total number of Common Shares duly subscribed and paid for by holders of Arrangement Warrants under the Arrangement, including those Common Shares subscribed and paid for pursuant to the Additional Subscription Privilege.
(f) No Issuance of Securities. Other than as contemplated by this Agreement or the Arrangement, during the period from the date hereof until the Expiry Time, the Company will not issue any Common Shares or securities convertible or exchangeable or exercisable into Common Shares other than pursuant to the exercise of any options and other securities outstanding under the Company's current equity incentive plans or the exercise of any other convertible, exchangeable securities of the Company outstanding as of the date hereof.

(g) Changes to Terms. Other than as may be required to comply with applicable Securities Laws, the Company shall not amend the terms of the Arrangement, including for greater certainty any change to the Subscription Price, without the prior written consent of the Purchaser.

4.2 Other Covenants

As soon as practicable following the execution of this Agreement and in compliance with applicable Laws, including Securities Laws:

(a) the Company shall use its reasonable commercial efforts to solicit holders of Common Shares to exercise their Arrangement Warrants;
(b) except for non-substantive communications with the holders of the Common Shares, the Company shall furnish promptly to the Purchaser or the Purchaser's legal advisors, a copy of each notice, report, schedule or other document delivered, filed or received by the Company from the holders of the Common Shares or regulatory agencies in connection with:
(i) the transactions contemplated by this Agreement;
(ii) any filings under applicable Laws (including Securities Laws) that are proposed to be made in connection with the transactions contemplated by this Agreement; and
(iii) any dealings with Governmental Entities in connection with the transactions contemplated by this Agreement.

ARTICLE 5 CHANGES

5.1 Material Change

During the period from the date of this Agreement to the Expiry Time, the Company shall promptly notify the Purchaser in writing of the full particulars of:

(a) any material change (actual, anticipated, contemplated or threatened, financial or otherwise) in the business, affairs, operations, assets, liabilities (contingent or otherwise) or capital of the Company and its Subsidiaries taken as a whole;
(b) any fact, event or circumstance which has arisen or been discovered and would have been required to have been stated in the Information Circular had the fact, event or circumstance arisen or been discovered on, or prior to, the date of the Information Circular; and
(c) any change in any matter (which for the purposes of this Agreement shall be deemed to include the disclosure of any previously undisclosed material fact) contained in the Information Circular, including all documents incorporated by reference, that would have been required to be stated or disclosed in the Information Circular had it arisen or been discovered on, or prior to, the date of the Information Circular that is, or may be, of such a nature as to render any statement in the Information Circular misleading or untrue or that would result in the Information Circular not containing full, true and plain disclosure of all material facts relating to the Company, its Subsidiaries and the Securities or a Misrepresentation in the Information Circular or which would result in the Information Circular not complying (to the extent that such compliance is required) with Securities Laws.

The Company shall promptly, and in any event within any applicable time limitation, comply, to the reasonable satisfaction of the Purchaser, with all applicable filings and other requirements under Securities Laws as a result of any of the foregoing. The Company shall in good faith discuss with the Purchaser any fact, event or change in circumstances (actual, anticipated, contemplated or threatened, financial or otherwise) which is of such a nature that there is reasonable doubt as to whether written notice to the Purchaser need be given under this paragraph.

5.2 Change in Expiry Time

If a material change or a change in a material fact occurs prior to the Expiry Time, then, provided that none of the rights to terminate this Agreement pursuant to Article 10 hereof has otherwise been exercised, the Expiry Time shall be, unless the Company and the Purchaser otherwise agree in writing, the later of the previously scheduled Expiry Time and the sixth Business Day following the date on which all applicable filings or other requirements of Securities Laws with respect to such material change or change in a material fact have been complied with, and any appropriate receipt or documents for such filings and notice of such filings from the Company or the Company's counsel have been received by the Purchaser, provided however, that in no event shall the Expiry Time be later than the Outside Date.

ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE ISSUER

6.1 Representations

The Company covenants, represents and warrants, as applicable, to the Purchaser that:

(a) Each of the Company and its Subsidiaries is a corporation duly incorporated, amalgamated or organized, as applicable, and validly subsisting and in good standing under the Laws of its respective jurisdiction of incorporation, amalgamation or organization, as applicable, has the requisite corporate power and authority to carry on its respective business as currently conducted, own its respective properties and assets, and carry out its obligations under this Agreement and the transactions contemplated herein, and is duly qualified as a corporation to carry on business and is in good standing in each jurisdiction in which the nature of its respective business or assets make such qualification necessary.
(b) This Agreement has been duly authorized, executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and except as limited by the application of equitable principles when equitable remedies are sought.
(c) The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated herein have been duly authorized by all necessary action on the part of the Company and does not and will not result in a breach by the Company of, does not create a state of facts which, after notice or lapse of time or both, will result in a breach by the Company of, and does not and will not violate or conflict with, in any manner which might reasonably be expected to have a material and adverse effect to the business, operations, assets, capital or condition (financial or otherwise) of the Company, the Arrangement or the other transactions contemplated herein, any provision of:
(i) the Organizational Documents of the Company or its Subsidiaries,

(ii) the director or shareholder resolutions of the Company or its Subsidiaries,
(iii) any applicable Law,
(iv) any Order applicable to the Company or its Subsidiaries; or
(v) any indenture, mortgage, agreement, contract or other instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries or any of their respective assets or property is bound.
(d) No consent, approval, order or authorization of, or declaration or filing with, any Governmental Entity is required by or with respect to the Company in connection with the execution and delivery of this Agreement or the consummation of the transactions by the Company contemplated herein, other than those required by, or filings required to be made with the Securities Commissions and the TSX.
(e) The corporate records and minute books of the Company and its Subsidiaries are complete and correct in all material respects and such minute books contain copies of minutes of all meetings of the Board and shareholders and of all written resolutions of such Board and shareholders, other than those in connection with this Agreement and the transactions contemplated herein.
(f) Rubellite has no material Subsidiaries.
(g) No Securities Commission or similar regulatory authority has issued any Order preventing or suspending trading of any securities of the Company, and the Company is not in default of any material requirement of applicable Securities Laws.
(h) At the Expiry Time, the Common Shares issued to the Purchaser under the Arrangement and pursuant to the Equity Backstop will be duly issued as fully paid and non-assessable and will be duly and validly authorized and issued by the Company.
(i) At the Expiry Time, the distribution of the Common Shares pursuant to the Arrangement will comply with applicable Securities Laws.
(j) The authorized capital stock of Rubellite consists of an unlimited number of Common Shares and an unlimited number of preferred shares, issuable in series. As of the date of this Agreement, there are issued and outstanding 3 Common Shares and no preferred shares. Except for this Agreement or otherwise disclosed in the Information Circular or contemplated by the Arrangement, there are no subscriptions, options to purchase shares of Rubellite, conversion or exchange rights, warrants, pre-emptive rights or other agreements, claims or commitments of any nature whatsoever (whether firm or conditional) obligating the Company to issue, transfer, deliver to sell, or cause to be issued, transferred, delivered or sold, additional shares or other securities or interest of Rubellite or obligating Rubelllite to grant, extend or enter into any such agreement or commitment.
(k) All issued and outstanding Common Shares of Rubellite have been duly authorized and validly issued, and are fully paid and non-assessable shares in the capital of Rubellite. When issued and delivered to the respective purchaser and paid for by the respective purchaser in accordance with the terms and conditions of the Arrangement and/or the terms and conditions of this Agreement and the Securities will be validly issued, fully paid and non-assessable and will be free and clear of all liens, pledges, claims, encumbrances, security interests and other restrictions created by, through or under Rubellite except for any restrictions on resale or transfer imposed by applicable Laws. The

issuance of the Securities will not be subject to any pre-emptive or similar rights, it being acknowledged by the Purchaser that the number of Equity Backstop Shares it may be entitled to receive pursuant to this Agreement will depend on the number of Common Shares issued to those Persons who have exercised Arrangement Warrants prior to the Expiry Time.

(l) Rubellite has no material debt or liability of any kind whatsoever (whether accrued, contingent, absolute or otherwise) except for debt or liabilities incurred in the Ordinary Course of Business or as otherwise described in the Information Circular or contemplated to be incurred in connection with the Arrangement.
(m) Since incorporation of the Company, there has not been any Material Adverse Change that has not been publicly disclosed and the Company has not filed any confidential material change reports.
(n) Neither the Company nor any of its Subsidiaries has received any notice of or is in default or violation of any Order of any Governmental Entity or any applicable Laws which would reasonably be expected to have a Material Adverse Effect on the Company.
(o) There are no outstanding judgments or Orders against the Company or its Subsidiaries or to which the Company or its Subsidiaries are subject or by which their assets are bound and, other than proceedings described in all material respects in the Information Circular or which have been publicly disclosed by the Company on SEDAR as of the date hereof, there are no claims, proceedings, actions or lawsuits in existence, or to the Company's knowledge, Threatened or asserted against the Company or its Subsidiaries or with respect to any of the assets of the Company or its Subsidiaries or the interests of the Company or its Subsidiaries therein which would reasonably be expected to have a Material Adverse Effect on the Company or to have a material and adverse effect on the Arrangement or the other transactions contemplated herein.
(p) Neither the Company nor any of its Subsidiaries is a party to or bound by any agreement or guarantee, indemnification, assumption or endorsement or any other like commitment of the obligations, liabilities (contingent or otherwise), or indebtedness of any Person except as entered into in the Ordinary Course of Business, indemnification of directors and officers in accordance with the by-laws of the Company and applicable laws, and indemnification obligations in favour of investment dealers in connection with securities offerings or other financial advisory services.
(q) Each of the Company and its Subsidiaries has conducted and is conducting its activities or business in compliance in all material respects with all applicable Laws, including without limitation those of the country, province, territory, region, state and municipality in which each of the Company and its Subsidiaries carries on business or conducts its activities and neither the Company nor any of its Subsidiaries has received notice of any alleged violation of any such laws, rules and regulations.
(r) Each of the Company and its Subsidiaries has filed, or caused to be filed, in a timely manner all required tax and similar information returns that it is required to file pursuant to applicable Laws and has paid, or caused to be paid, in a timely manner, or made provision for payment (in accordance with GAAP) of, all taxes which are due and payable, and has provided adequate reserves (in accordance with GAAP) for the payment of any tax, the payment of which is being contested, except to the extent that any failure to make any such filing, payment, provision or reserves would not reasonably be expected to result in a Material Adverse Change.

ARTICLE 7 COVENANTS, REPRESENTATIONS AND WARRANTIES OF PURCHASER

7.1 Representations

The Purchaser represents and warrants to the Company that:

(a) The Purchaser is duly organized and validly subsisting under the laws of the Province of Alberta.
(b) This Agreement has been duly authorized, executed and delivered by the Purchaser and constitutes a legal, valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms, except as enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and except as limited by the application of equitable principles when equitable remedies are sought.
(c) The execution, delivery and performance by the Purchaser of this Agreement and the consummation by the Purchaser of the transactions contemplated herein have been duly authorized by all necessary action on the part of the Purchaser and does not and will not result in a breach by the Purchaser of, does not create a state of facts which, after notice or lapse of time or both, will result in a breach by the Purchaser of, and does not and will not violate or conflict with, in any manner which might reasonably be expected to have a material adverse effect on the Purchaser or the other transactions contemplated herein, any provision of:
(i) the Organizational Documents of the Purchaser,
(ii) the director or shareholder resolutions of the Purchaser,
(iii) any applicable Law, or
(iv) any Order applicable to the Purchaser.
(d) No consent, approval, order or authorization of, or declaration or filing with, any Governmental Entity is required by or with respect to the Purchaser in connection with the execution and delivery of this Agreement or the consummation of the transactions by the Purchaser contemplated hereby, other than those required by the Securities Commissions and the TSX.
(e) The Purchaser will have, on the Expiry Time (regardless of the number of Arrangement Warrants that are exercised by the holders of Arrangement Warrants prior to the Expiry Time) the financial ability and sufficient funds to make and complete the payment for all of the Securities that it has committed to purchase pursuant to the Equity Backstop and the availability of such funds will not be subject to the consent, approval or authorization of any Person(s) other than those which will have been obtained by the Purchaser on or prior to the Expiry Time.
(f) The Purchaser will be acquiring Arrangement Warrants, Common Shares issuable upon the exercise of the Arrangement Warrants and the Common Shares to be issued pursuant to the NonBrokered Offering as principal for its own account and not with a view to distributing, reselling or otherwise disposing of such securities or any part thereof in violation of Securities Laws.
(g) The Purchaser and its advisors have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Purchaser. The Purchaser and its advisors have been afforded

the opportunity to ask questions of the Company. Neither such inquiries nor any other due diligence investigations conducted by the Purchaser or its advisors or its representatives shall modify, amend or affect the Purchaser's right to rely on the Company's representations and warranties contained herein. The Purchaser understands that its investment in the Common Shares pursuant to the Arrangement involves a high degree of risk. The Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Common Shares pursuant to the Arrangement or the Non-Brokered Offering.

7.2 Covenants

Subject to and in accordance with the terms hereof, the Purchaser undertakes and agrees with and in favour of the Company that:

(a) it will co-operate with the Company in obtaining such consents and approvals as are reasonably required in order to permit the Purchaser to acquire all of the Common Shares that may be issued to it pursuant to the Arrangement, the Non-Brokered Offering and this Agreement;
(b) it will co-operate with the Company in the preparation and filing of the Information Circular to the extent information is reasonably required from the Purchaser or is otherwise contemplated hereunder;
(c) it will not sell, transfer or otherwise convey or encumber any of the Common Shares it holds directly or indirectly, beneficially or otherwise until the Expiry Time;
(d) other than in connection with the exercise of its Basic Subscription Right under the Arrangement and Additional Subscription Privilege in accordance with Section 3.1 and in relation to any proposed acquisition of Common Shares pursuant to the Non-Brokered Offering, it will not directly or indirectly, jointly or in concert with any other Person, propose, offer, negotiate or agree to purchase or otherwise acquire any securities of the Company, including without limitation Arrangement Warrants and Common Shares, until and including the Expiry Time; and
(e) it will exercise its Basic Subscription Right and, to the extent permitted, its Additional Subscription Privilege in accordance with Section 3.1.

ARTICLE 8 CLOSING CONDITIONS

8.1 Mutual Conditions

The respective obligations of each of the Company and the Purchaser to complete the
closing of the transactions set out in this Agreement are subject to the following conditions being satisfied in full (each of which may only be waived by mutual written consent): (a) There shall not be any claims, litigation, investigations or proceedings, including appeals and applications for review, in progress, or to the knowledge of the Company or the Purchaser, pending, commenced or Threatened, by any Person that have a reasonable likelihood of success in the judgement of the Purchaser and the Company, each acting reasonably, in respect of the Arrangement or the transactions contemplated thereby, which would make illegal or would otherwise directly or indirectly restrain, enjoin or prohibit the Arrangement or the transactions contemplated hereby, or result in any judgement or assessment of material damages, directly or indirectly, relating to the Arrangement or the transactions contemplated hereby.

(b) There will be no inquiry, investigation (whether formal or informal) or other proceeding pending, commenced or Threatened by or before any Governmental Entity, in relation to the Company or any of its Subsidiaries, their respective directors or officers or in relation to the Common Shares, the Arrangement or the Securities, any of which suspends or ceases trading in the Arrangement Warrants or Common Shares or operates to prevent or restrict the lawful distribution of the Securities (which suspension, cessation, prevention or restriction, as the case may be, is continuing).
(c) There shall not be any Order issued by a Governmental Entity pursuant to Laws, nor shall there be any change of Law, in either case which suspends or ceases trading in the Arrangement Warrants or the Common Shares or operates to prevent or restrict the lawful distribution of the Securities (which suspension, cessation, prevention or restriction, as the case may be, is continuing).
(d) The TSX shall have conditionally approved the listing of the Arrangement Warrants and the Common Shares issuable upon the exercise of the Arrangement Warrants, subject to the filing of customary documents with the TSX.

8.2 Additional Conditions in Favour of Purchaser

The obligation of the Purchaser to complete the transactions contemplated herein is also subject to the following conditions being satisfied in full, which conditions are for the exclusive benefit of the Purchaser, and thus the satisfaction of which is determined by the Purchaser in its sole and absolute discretion, any of which may be waived, in whole or in part, by the Purchaser, in its sole and absolute discretion:

(a) other than as permitted herein, the terms and conditions of the Arrangement shall not have been changed in any material respect;
(b) no approvals of the holders of Common Shares are required;
(c) no Material Adverse Change shall have occurred since the date hereof;
(d) the Company will have made and/or obtained all necessary filings, approvals, orders, rulings and consents of all relevant securities regulatory authorities and other Governmental Entities required in connection with the Arrangement and the purchase of the Equity Backstop Shares by the Purchaser as contemplated by this Agreement;
(e) the Arrangement and other transactions contemplated hereby have been conducted in accordance with applicable Laws, including Securities Laws and in accordance with this Agreement;
(f) the TSX has not imposed any conditions on the transactions contemplated herein, including the Arrangement or the Non-Brokered Offering, that are not acceptable to the Purchaser, acting reasonably; and
(g) the Company shall have performed or complied with, in all material respects, each of its terms, conditions and covenants contained in this Agreement and each of its representations and warranties shall be true and correct as of the closing time on the Expiry Time with the same force and effect as if made at and as of the Expiry Time, and the Purchaser shall have received at Closing a certificate or certificates dated the Expiry Time and signed by the Chief Executive Officer and the Chief Financial Officer of the Company or such other officers of the Company acceptable to the Purchaser, acting reasonably, (on the Company's behalf and without personal liability) in form

and content satisfactory to the Purchaser, acting reasonably, addressed to the Purchaser certifying for and on behalf of the Company after having made due enquiry and after having carefully examined the Information Circular including all documents incorporated by reference that:

(i) no order, ruling or determination having the effect of suspending the sale or ceasing the trading of the Securities or any other securities of the Company or prohibiting the sale of the Securities has been issued by any Government Entity and is continuing in effect and no proceedings for that purpose have been instituted or are pending or, to the knowledge of such officers, contemplated or Threatened under Securities Laws or by any Governmental Entity;
(ii) no Material Adverse Change has occurred or has been disclosed (if previously undisclosed) at any time since the date hereof;
(iii) each of the conditions set forth in Section 8.1 have been satisfied or waived, and each of the conditions set forth in Section 8.3, except those that have been waived in writing by the Company, have been satisfied;
(iv) the Company has duly performed or complied with, in all material respects, all terms, conditions and covenants of this Agreement on its part to be complied with or to be satisfied by it up until Closing; and
(v) the representations and warranties of the Company contained in this Agreement are true and correct as of the closing time on the Expiry Time with the same force and effect as if made at and as of the Expiry Time.

8.3 Additional Conditions in Favour of Company

The obligation of the Company to complete the transactions contemplated hereby is also subject to the following conditions being satisfied in full, which conditions are for the exclusive benefit of the Company, any of which may be waived, in whole or in part, by the Company, in its sole and absolute discretion:

(a) the Purchaser has duly performed or complied with, in all material respects, all terms, conditions and covenants of this Agreement on its part to be complied with or to be satisfied by it up until Closing; and the Company shall have received a certificate of the Purchaser addressed to the Company and dated as of the Expiry Time, signed on behalf of the Purchaser by a senior executive officer of the Purchaser (on the Purchaser's behalf and without personal liability), confirming the same as at the closing time on the Expiry Time and certifying for and on behalf of the Purchaser that each of the conditions set forth in Section 8.1 have been satisfied or waived, and each of the conditions set forth in Section 8.2, except those that have been waived in writing by the Purchaser, have been satisfied; and
(b) the representations and warranties of the Purchaser contained in this Agreement shall be true and correct as of the closing time on the Expiry Time, as though made on and as of the closing time on the Expiry Time; and the Company shall have received a certificate of the Purchaser addressed to the Company and dated the Expiry Time, signed on behalf of the Purchaser by a senior executive officer of the Purchaser (on the Purchaser's behalf and without personal liability), confirming the same as at the closing time on the Expiry Time.

Each of the Company and the Purchaser agrees that it will use commercially reasonable efforts to cause the conditions set forth in this Article 8 to be satisfied to the extent that such conditions relate to acts to be performed or caused to be performed by such party.

ARTICLE 9

CONFIDENTIALITY AND PUBLIC ANNOUNCEMENT

9.1 Confidentiality

Neither of the parties hereto shall, without the prior consent of the other party, disclose the existence of this Agreement or its terms, the possibility of the Arrangement or other transactions contemplated herein or any of their respective possible terms, or any related discussions, except that such disclosure may be made to any party's officers, directors, partners, advisors and employees or in the Information Circular, or as may otherwise be required by Law or the rules of the TSX.

9.2 Public Announcement

Subject to applicable Securities Laws, the parties hereto will make a public announcement regarding this Agreement contemporaneously with (or that shall be included within) the public announcement to be made by the Company regarding the Arrangement. Each of the Company and the Purchaser acknowledges that a copy of this Agreement may be required to be filed with the Securities Commissions and the TSX following such public announcement. ARTICLE 10 TERMINATION

10.1 Termination by the Company or Purchaser

Either the Company or the Purchaser may terminate and cancel its obligations under this Agreement, without any liability on its part, if any of the conditions set out in Section 8.1 are not satisfied on or before the Outside Date.

10.2 Termination by the Company

The Company may terminate and cancel its obligations under this Agreement, without any
liability on its part, if: (a) the Purchaser is in default of its obligations hereunder and, following the Purchaser's receipt of written notice from the Company of the existence of such default, fails to remedy such breach on or before the Outside Date; or
(b) if any of the conditions set out in Section 8.3 are not satisfied on or before the Expiry Time.

10.3 Termination by the Purchaser

The Purchaser may terminate and cancel its obligations under this Agreement, without any

liability on its part, if:

(a) the Company is in default of its obligations hereunder and, following the Company's receipt of written notice from the Purchaser of the existence of such default, fails to remedy such breach on or before the Outside Date;

(b) if any of the conditions set out in Section 8.2 are not satisfied on or before the Expiry Time;
(c) any Material Adverse Change occurs at any time following the execution of this Agreement;
(d) the Common Shares or the Arrangement Warrants (other than, in the case of the Arrangement Warrants, following the Expiry Time) are de-listed or suspended or halted for a period greater than five Business Days for any reason by the TSX at any time period prior to the closing of the Arrangement; or
(e) the Arrangement is otherwise terminated or cancelled or the Closing has not occurred on or before the Outside Date.

10.4 Effect of Termination

Notwithstanding any other provision hereof, should the Company or the Purchaser validly terminate this Agreement pursuant to, and in accordance with, this Article 10, the obligations of both the Company and the Purchaser under this Agreement shall terminate and there shall be no further liability on the part of the Purchaser to the Company or on the part of the Company to the Purchaser hereunder except for: (i) any breach of this Agreement which occurred on or prior to the termination; and (ii) for any liability of any party that exists at such time or that may arise thereafter pursuant to Article 11 hereof.

ARTICLE 11 SURVIVAL AND INDEMNIFICATION

(a) The Company covenants and agrees to protect, indemnify and hold harmless the Purchaser for and on behalf of itself and for and on behalf of and in trust for each of its directors, officers, employees, agents and shareholders from and against any and all losses, claims, damages, liabilities, costs or expenses caused or incurred:
(i) by reason of or in any way arising, directly or indirectly, out of any Misrepresentation or alleged Misrepresentation in the Information Circular other than any Misrepresentation or alleged Misrepresentation relating to any information in the Information Circular relating to the Purchaser approved in writing by the Purchaser for inclusion in the Information Circular; and/or
(ii) by reason of or in any way arising, directly or indirectly, out of any order made or inquiry, investigation or proceeding commenced or threatened by any Securities Commission, or any other competent authority in Canada or before or by any Governmental Entity, based upon or relating to the Arrangement or the other transactions contemplated in this Agreement including, without limitation, any actions taken or statements made by or on behalf of the Company in connection with the Arrangement or the other transactions contemplated in this Agreement or any Misrepresentation or alleged Misrepresentation in the Information Circular other than any Misrepresentation or alleged Misrepresentation relating to any information in the Information Circular relating to the Purchaser approved in writing by the Purchaser for inclusion in the Information Circular; and/or
(iii) the non-compliance or alleged non-compliance by the Company with any requirement of the Securities Laws or any other applicable Laws in connection with the Arrangement or the other transactions contemplated in this Agreement, including the Company's noncompliance with any statutory requirement to make any document available for inspection; and/or

(iv) by reason of, or in any way arising, directly or indirectly, out of any breach or default of or under any representation, warranty, covenant or agreement of the Company contained herein.
(b) The Purchaser covenants and agrees, solely with respect to itself, to protect, indemnify and hold harmless the Company for and on behalf of itself and for and on behalf of and in trust for each of its directors, officers, employees and agents from and against any and all losses, claims, damages, liabilities, costs or expenses caused or incurred by reason of, or in any way arising, directly or indirectly, out of any breach or default of or under any representation, warranty, covenant or agreement of the Purchaser contained herein or by reason of or in any way arising, directly or indirectly, out of any Misrepresentation or alleged Misrepresentation relating to any information in the Information Circular relating to the Purchaser approved in writing by the Purchaser for inclusion in the Information Circular.
(c) In the event that any claim, action, suit or proceeding, including, without limitation, any inquiry or investigation (whether formal or informal), is brought or instituted against any of the Persons in respect of which indemnification is or might reasonably be considered to be provided for herein, such Person (an " Indemnified Party ") shall promptly notify the Person from whom indemnification is being sought (being either the Company under Section 11.1 or the Purchaser under Section 11.2, as the case may be (the " Indemnifying Party ")) and the Indemnifying Party shall promptly retain counsel who shall be reasonably satisfactory to the Indemnified Party to represent the Indemnified Party in such claim, action, suit or proceeding, and the Indemnifying Party shall pay all of the reasonable fees and disbursements of such counsel relating to such claim, action, suit or proceeding.
(d) In any such claim, action, suit or proceeding, the Indemnified Party shall have the right to retain other counsel to act on his, her or its behalf, provided that the fees and disbursements of such other counsel shall be paid by the Indemnified Party unless:
(i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such other counsel; or
(ii) the named parties to any such claim, action, suit or proceeding (including any added, third or interpleaded parties) include both the Indemnifying Party and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them (such as the availability of different defenses).
(e) Subject to Section 11.4, it is understood and agreed that the Indemnifying Party shall not, in connection with any such claim, action, suit or proceeding in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate legal firm for all Persons in respect of which indemnification is or might reasonably be considered to be provided for herein and such firm shall be designated in writing by the Indemnified Party (on behalf of itself and its directors, officers, employees, agents and shareholders).
(f) Notwithstanding anything herein contained, no Indemnified Party shall agree to any settlement of any such claim, action, suit, proceeding, inquiry or investigation in respect of which indemnification is or might reasonably be considered to be provided for herein, unless the Indemnifying Party has consented in writing thereto, and the Indemnifying Party shall not be liable for any settlement of any such claim, action, suit, proceeding, inquiry or investigation unless it has consented in writing thereto.

(g) If the indemnification provided for in this Article 11 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any losses, claims, damages or liabilities referred to herein, the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the act or omission that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission provided, however, that no person guilty of fraudulent misrepresentation shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
(h) The obligations of the Company and the Purchaser under this Article 11 shall survive completion of any offerings described herein and the termination of this Agreement. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of the Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.

ARTICLE 12 NOTICE

12.1 Notice

Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be personally delivered or sent by facsimile transmission or by electronic mail, as set forth below, or to such other address, facsimile number, email address or person as may be designated by notice.

(a) In the case of the Company:

Perpetual Energy Inc./Rubellite Energy Inc. Suite 3200, 605 – 5[th] Avenue SW Calgary, Alberta T2P 3H5

Attention: Vice President, Finance and Chief Financial Officer Email: [email protected]

(b) In the case of the Purchaser:

Dreamworks Investment Holdings Ltd. 4700 Bankers Hall West 888 – 3[rd] Street SW Calgary, Alberta T2P 5C5

Attention: President Email: [email protected]

12.2 Receipt of Notice

Notice shall be deemed to be given on the day of actual delivery or the day of facsimile transmission or email transmittal, as the case may be, or if not a Business Day, on the next Business Day.

ARTICLE 13 MISCELLANEOUS

13.1 Expenses

The Company will be responsible for all expenses incurred in connection with the preparation, execution, and performance of this Agreement and related to the conduct of the Arrangement, including all fees and expenses of legal counsel, including without limitation all fees and disbursements in connection with any dealer manager or dealer managers engaged in connection with the Arrangement, all expenses related to roadshows and marketing activities, printing costs, translation fees and filing fees. In the event of termination of this Agreement, the obligation of each party to pay its own expenses will be subject to any rights of such party arising from a breach of this Agreement by the other party.

13.2 Further Assurances

The parties hereto agree to do all such things and take all such actions as may be necessary or desirable to give full force and effect to the matters contemplated by this Agreement.

13.3 Assignment

This Agreement may not be assigned by any party, by operation of Law or otherwise, without the prior written consent of the other party except that the Purchaser is permitted, without the consent of the Company, to assign at any time prior to Closing all of its rights and obligations to an Affiliate, Susan Riddell Rose or a Person controlled or directed by Susan Riddell Rose (collectively, a " Permitted Assignee "), subject to such Permitted Assignee entering into such documents or instruments, reasonably satisfactory to the Company, pursuant to which such Permitted Assignee agrees to be bound by, and to assume the obligations of the Purchaser under, this Agreement and each other agreement entered into in connection with this Agreement. In that case, such Permitted Assignee shall have and may exercise all the rights, and shall assume all of the obligations, of the Purchaser under this Agreement.

13.4 Enurement

This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.

13.5 Waiver

Failure by any party to insist in any one or more instances upon the strict performance of any one of the covenants or rights contained in this Agreement shall not be construed as a waiver or relinquishment of such covenant or right. No waiver by any party hereto of any such covenant or right shall be deemed to have been made unless expressed in writing and signed by the waiving party.

13.6 Amendments

No term or provision hereof may be amended, discharged or terminated except by an instrument in writing signed by the party against which the enforcement of the amendment, discharge or termination is sought.

13.7 Counterparts and Electronic Delivery

This Agreement may be executed in several counterparts and by facsimile or other electronic means, each of which when so executed shall be deemed to be an original and such counterparts and facsimiles or other electronic copies together shall constitute one and the same instrument and notwithstanding their date of execution they shall be deemed to be dated as of the date hereof.

13.8 Time

Time shall be of the essence of this Agreement.

13.9 Governing Law

This Agreement shall be governed by, interpreted and enforced in accordance with the Laws of the Province of Alberta and the federal Laws of Canada applicable therein. Each party hereby unconditionally and irrevocably submits to the exclusive jurisdiction of the courts of the Province of Alberta in respect of all matters arising out of this Agreement.

13.10 Severability

If any provision of this Agreement is determined to be invalid or unenforceable in whole or in part, such invalidity or unenforceability shall attach only to such provision or part thereof and the remaining part of such provision and all other provisions hereof shall continue in full force and effect. The parties hereto agree to negotiate in good faith a substitute provision which shall be as close as possible to the intention of any invalid or unenforceable provision as may be valid or enforceable. The invalidity or unenforceability of any provision in any particular jurisdiction shall not affect its validity or enforceability in any other jurisdiction where it is valid or enforceable.

13.11 Entire Agreement

This Agreement and any other agreements and other documents referred to herein and delivered in connection herewith, constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, between the parties with respect to the subject matter hereof.

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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed and delivered by their authorized officers as of the date first written above.

PERPETUAL ENERGY INC.

By: (signed) "Ryan Shay" Name: Ryan A. Shay Title: Vice President, Finance and Chief Financial Officer

RUBELLITE ENERGY INC.