Tenaz Energy Corp. - Merger & Acquisition 2021

REORGANIZATION AND INVESTMENT AGREEMENT

AMONG

ALTURA ENERGY INC.

AND

ANTHONY MARINO, MICHAEL KALUZA, BRADLEY BENNETT, JONATHAN BALKWILL, DAVID LEUNG, TIMOTHY MORRIS, MARTY PROCTOR, AND MARK ROLLINS

August 30, 2021

Page

ARTICLE 1	INTERPRETATION ............................................................................................................... 1
1.1	Definitions ......................................................................................................................... 1
1.2	Interpretation Not Affected by Headings, etc. ................................................................. 10
1.3	Number, etc. ..................................................................................................................... 10
1.4	Date for Any Action ........................................................................................................ 10
1.5	Entire Agreement ............................................................................................................. 10
1.6	Currency........................................................................................................................... 11
1.7	Accounting Matters .......................................................................................................... 11
1.8	Inclusive Terminology ..................................................................................................... 11
1.9	Knowledge ....................................................................................................................... 11
1.10	Interpretation Not Affected by Party Drafting ................................................................. 11
ARTICLE 2	THE PRIVATE PLACEMENT, CHANGE OF MANAGEMENT AND RELATED
MATTERS .................................................................................................................................... 11
2.1	Unit Private Placement .................................................................................................... 11
2.2	Subscription Receipt Private Placement .......................................................................... 12
2.3	Change of Management ................................................................................................... 13
2.4	Treatment of Outstanding Stock Options ........................................................................ 14
2.5	Employees other than the Current Executives ................................................................. 15
2.6	Severance and Change of Control Obligations ................................................................ 15
2.7	Director and Officer Indemnities ..................................................................................... 15
2.8	[Reserved] ........................................................................................................................ 15
2.9	Altura Meeting ................................................................................................................. 15
2.10	Rights Offering ................................................................................................................ 17
2.11	Acquisition Opportunities ................................................................................................ 18
ARTICLE 3	COVENANTS ...................................................................................................................... 18
3.1	Covenants of Altura ......................................................................................................... 18
3.2	Covenants of the Initial Investor Group ........................................................................... 24
3.3	Mutual Covenants ............................................................................................................ 25
3.4	Non-Solicitation by Altura ............................................................................................... 25
3.5	Covenants Regarding Non-Solicitation by Altura ........................................................... 26
3.6	Notice by Altura of Superior Proposal Determination ..................................................... 28
3.7	Provision of Information; Access .................................................................................... 29
ARTICLE 4	REPRESENTATIONS AND WARRANTIES ..................................................................... 30

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Page

(continued)

4.1	Representations and Warranties of Altura ....................................................................... 30
4.2	Representations and Warranties of the Initial Investor Group ......................................... 44
4.3	Privacy Issues .................................................................................................................. 46
ARTICLE 5	CONDITIONS PRECEDENT .............................................................................................. 47
5.1	Mutual Conditions Precedent ........................................................................................... 47
5.2	Additional Conditions to Obligations of the Initial Investor Group ................................ 48
5.3	Additional Conditions to Obligations of Altura ............................................................... 49
5.4	Notice and Effect of Failure to Comply with Conditions ................................................ 50
5.5	Satisfaction of Conditions ................................................................................................ 51
ARTICLE 6	TERMINATION ................................................................................................................... 51
6.1	Termination ...................................................................................................................... 51
6.2	Effect of Termination ....................................................................................................... 51
6.3	Altura Non-Completion Fee ............................................................................................ 51
6.4	Limitations on Liability ................................................................................................... 52
ARTICLE 7	NOTICES .............................................................................................................................. 53
7.1	Notices ............................................................................................................................. 53
ARTICLE 8	GENERAL ............................................................................................................................ 54
8.1	Binding Effect .................................................................................................................. 54
8.2	Assignment ...................................................................................................................... 54
8.3	Amendment of Agreement ............................................................................................... 54
8.4	Expense Reimbursement .................................................................................................. 54
8.5	Disclosure ........................................................................................................................ 54
8.6	Severability ...................................................................................................................... 54
8.7	Further Assurances .......................................................................................................... 55
8.8	Time of Essence ............................................................................................................... 55
8.9	Governing Law ................................................................................................................ 55
8.10	Waiver .............................................................................................................................. 55
8.11	Third Party Beneficiaries ................................................................................................. 55
8.12	Actions Taken by the Initial Investor Group / Material Breach ...................................... 56
8.13	Counterparts ..................................................................................................................... 56

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REORGANIZATION AND INVESTMENT AGREEMENT

THIS REORGANIZATION AND INVESTMENT AGREEMENT is dated effective as of the 30[th] day of August 2021.

AMONG:

ALTURA ENERGY INC. , a corporation subsisting under the laws of the Province of Alberta (“ Altura ” or the “ Corporation ”)

AND:

ANTHONY MARINO, MICHAEL KALUZA, BRADLEY BENNETT, JONATHAN BALKWILL, DAVID LEUNG, TIMOTHY MORRIS, MARTY PROCTOR, AND MARK ROLLINS ( the “Initial Investor Group ”)

WHEREAS:

A. The Parties desire to enter into this Agreement to, among other things, establish the terms and conditions upon which the Private Placement will be completed, and the Current Board and Current Executives will be replaced by the New Board and New Executives.
B. Concurrently with the execution of this Agreement, certain shareholders of Altura who hold, in the aggregate, 9.0% of the issued and outstanding common shares of Altura have entered into the Support Agreements.
C. The Parties have entered into this Agreement to provide for the matters referred to in the foregoing recitals and for other matters set forth in this Agreement.

NOW THEREFORE , in consideration of the covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Parties do hereby covenant and agree as follows:

ARTICLE 1 INTERPRETATION

1.1 Definitions

In this Agreement (including the recitals hereto), unless there is something in the context or subject matter inconsistent therewith, the following defined terms have the meanings hereinafter set forth:

“ 1880675 ” means 1880675 Alberta Ltd., a corporation duly incorporated pursuant to the laws of the Province of Alberta;

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

“ Acquisition Proposal ” means a written proposal or offer by a third party (other than the Initial Investor Group) to acquire in any manner, directly or indirectly, beneficial ownership of more than 20% of the Altura Assets, to acquire in any manner, directly or indirectly, beneficial ownership or control or direction over

more than 20% of the outstanding voting shares of Altura, or to amalgamate, merge or otherwise combine with Altura, whether by:

(i) an arrangement, amalgamation, merger, consolidation, joint venture, partnership or other business combination;
(ii) by means of a recapitalization or a sale of shares in the capital of Altura (which for greater certainty shall include the issuance of securities from treasury); or
(iii) a take-over bid, tender offer or exchange offer or similar transaction involving Altura;

including any single or multi-step transaction or series of related transactions which is structured to permit such third party to acquire in any manner, directly or indirectly, beneficial ownership or control or direction over more than 20% of the Altura Assets, 20% of the outstanding voting shares of Altura, or to amalgamate, merge or otherwise combine with Altura;

“ Agency Agreement ” means the agency arrangement among Altura and the Agents, pursuant to which the Agents will offer the Subscription Receipts for sale;

“ Agents ” means the syndicate of agents under the Subscription Receipt Private Placement;

“ Agreement ” means this reorganization and investment agreement, as the same may be amended from time to time;

“ Altura Assets ” means all of the assets, properties, Permits, rights or other privileges (whether contractual or otherwise) of Altura;

“ Altura Circular ” means the information circular and proxy statement to be prepared and sent by Altura to the Altura Shareholders in connection with the Altura Meeting;

“ Altura Information ” means all information to be included in the Altura Circular other than the Initial Investor Group Information;

“ Altura Meeting ” means a special meeting of the Altura Shareholders held to approve the Altura Resolutions;

“ Altura Net Debt ” means current liabilities (excluding the fair value of financial instruments, the current portion of lease liabilities and the current portion of the decommissioning liability) plus long term debt, less current assets, in each case determined in accordance with GAAP in a manner consistent with the Financial Statements;

“ Altura Non-Completion Fee ” has the meaning set forth in Section 6.3;

“ Altura Resolutions ” means the resolutions to be considered by the Altura Shareholders to approve (i) the Change of Management and the Private Placement, (ii) the change of the name of Altura to “Tenaz Energy Corp.” (or such other name requested by the Initial Investor Group), (iii) the consolidation of the Common Shares on a basis directed by the Initial Investor Group and acceptable to Altura, acting reasonably, and (iv) such other matters as may be agreed to by Altura and the Initial Investor Group;

“ Altura Shareholders ” means the holders of Common Shares;

“ Altura Transaction Costs ” means the aggregate of all amounts payable by Altura in connection with the completion of the transactions contemplated by this Agreement and incurred prior to Closing, including, without limitation, in relation to any proxy solicitation, costs associated with the printing and mailing of the Altura Circular, and all amounts payable to its financial, legal, accounting and any other advisors in connection with the transactions contemplated herein and payments that may be made pursuant to severance or other change of control payments, including the cost of “run-off” insurance obtained pursuant to Section 2.7;

“ Altura Wells ” includes all producing, shut-in, water source, observation, disposal, injection, abandoned, suspended and other wells in which Altura has an interest;

“ Announced Acquisition Proposal ” has the meaning set forth in Section 3.6(a)(ii);

“ Applicable Canadian Securities Laws ”, in the context that refers to one or more Persons, means, collectively, and as the context may require, the securities legislation of each of the provinces and territories of Canada that apply to such Person or Persons or its or their business, undertaking, property or securities and emanate from a Person having jurisdiction over the Person or Persons or its or their business, undertaking, property or securities and the rules, regulations and policies published and/or promulgated thereunder, including the rules of the TSXV, as such may be amended from time to time prior to the Closing Date;

“ Applicable Laws ”, in the context that refers to one or more Persons, means the laws, statutes, regulations, by-laws, statutory rules, orders, ordinances, protocols, codes, guidelines, notices, directions (including all Applicable Canadian Securities Laws), and terms and conditions of any grant of approval, permission, authority or license of any court, Governmental Entity, statutory body or self-regulatory authority (including, without limitation, the TSXV) that apply to such Person or Persons or its or their business, undertaking, property or securities and emanate from a Person having jurisdiction over the Person or Persons or its or their business, undertaking, property or securities;

“ Board of Directors ” means the board of directors of Altura as it may be comprised from time to time, including any duly constituted committee thereof, unless the context requires otherwise;

“ Business Day ” means a day other than a Saturday, Sunday, a public holiday or a day when banks in Calgary, Alberta are not generally open for business;

“ Change of Management ” means the replacement of the Current Board and the Current Executives with the New Board and the New Executives, respectively, on the terms and conditions set forth herein;

“ Closing ” means the completion of the Unit Private Placement and the Change of Management;

“ Closing Date ” means the date on which Closing is to occur, which shall be:

(i) the first Business Day after the date on which the Altura Meeting is held, or (ii) such other date as the Initial Investor Group and Altura may agree.

“ Closing Time ” means 6:30 a.m. (Calgary time) on the Closing Date or such other time on the Closing Date as Altura and the Initial Investor Group may agree;

“ Common Shares ” means common shares in the capital of Altura, as constituted from time to time;

“ Confidentiality Agreement ” means the confidentiality agreement dated April 8, 2021 between Altura and Tenaz;

“ Continuing Current Board Member ” means a member of the Current Board that becomes a member of the New Board at the Closing;

“ Continuing Current Executive ” means a Current Executive that receives and accepts an offer for a new employment agreement pursuant to Section 2.3;

“ Continuing Person ” means a Continuing Current Executive or a Continuing Current Board Member;

“ Contract ” means any contract, agreement, license, franchise, lease, arrangement, commitment, understanding or other right or obligation (whether written or oral) to which Altura is a party or by which Altura is bound;

“ Current Board ” means the current board of directors of Altura, which, as of the date hereof, are David Burghardt, John Chambers, Darren Gee, John McAleer and Robert Maitland;

“ Current Executives ” means the current officers of Altura, which, as of the date hereof, are David Burghardt – President and Chief Executive Officer, Tavis Carlson – Vice-President, Financial and Chief Financial Officer and Secretary, Travis Stephenson – Vice-President, Engineering and Robert Pinckston – Vice-President, Exploration;

“ Current Market Price ” of a Common Share at any date means: (i) the price per share (denominated in Canadian dollars) equal to the volume weighted average price at which the Common Shares have traded for the 20 consecutive trading days prior to such date, which weighted average price per Common Share shall be determined by dividing the aggregate sale price of all such shares sold on a Recognized Exchange during the aforementioned 20 consecutive trading days by the total number of such shares so sold; or (ii) the price paid per share in an acquisition of all or substantially all of the Common Shares pursuant to an amalgamation, arrangement, take-over, reverse take-over, share exchange reorganization or other similar acquisition or merger transaction and where the consideration received per Common Share includes securities of another issuer, such securities shall be valued based on the volume weighted average trading price for the five (5) consecutive trading days on a Recognized Exchange upon which such securities trade immediately prior to the date the agreement to effect such transaction is announced and, if such securities are not listed on a Recognized Exchange, such value shall be determined by the board of directors of the Corporation, acting reasonably and in good faith;

“ Disclosure Letter ” means the disclosure letter dated the date hereof from Altura to the Initial Investor Group as amended, supplemented or otherwise agreed to between the Parties;

“ Eligible Options ” has the meaning set forth in Section 2.4(b);

“ Employee ” means an individual who is employed by Altura or 1880675, whether on a full-time or parttime basis;

“ Employee Obligations ” means any obligations or liabilities of Altura or 1880675 to pay any amount to or on behalf of its officers, directors, consultants or Employees, other than for salary, bonuses under their existing bonus arrangements, reimbursement of expenses, vacation pay and directors’ fees in the ordinary course, in each case consistent with historic practices and, without limiting the generality of the foregoing, Employee Obligations shall include the obligations of Altura or 1880675 to directors, officers, Employees or consultants for: (i) severance or termination payments on the change of control of Altura (which shall be

deemed to include the completion of the Private Placement and the Change of Management), resignation or otherwise pursuant to the Executive Agreements in the case of the Current Executives and pursuant to employment offers in the case of employees; and (ii) retention bonus payments pursuant to any retention bonus program or executive employment agreement;

“ Escrow Release Conditions ” means:

(i) the completion of the Unit Private Placement and Change of Management; and

(ii) such other customary escrow release conditions requested by National Bank in form and substance satisfactory to each of the Initial Investor Group and Altura, acting reasonably;

“ Executive Agreements ” means, collectively, the employment agreements between Altura and each of the Current Executives;

“ Financial Statements ” means, collectively:

(i) the audited consolidated comparative financial statements of Altura as at and for the year ended December 31, 2020 together with the notes thereto and the auditors’ report thereon; and

(ii) the unaudited financial statements of Altura as at and for the interim period ended June 30, 2021, together with the notes thereto;

“ GAAP ” has the meaning set forth in Section 1.7;

“ Good Oilfield Practice ” means the exercise of that degree of skill, diligence, prudence and foresight which would reasonably and ordinarily be expected to be applied by a skilled and experienced person engaged in the oil and gas industry in the Western Canadian Sedimentary Basin;

“ Governmental Entity ” means any:

(i) multinational, federal, provincial, state, regional, municipal, local or other government or any governmental or public department, court, tribunal, arbitral body, commission, board, bureau or agency;

(ii) any subdivision, agent, commission, board 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 foregoing;

“ Initial Investor Group ” means, collectively, Anthony Marino, Michael Kaluza, Bradley Bennett, Jonathan Balkwill, David Leung, Timothy Morris, Marty Proctor and Mark Rollins;

“ Initial Investor Group Information ” means the information to be included in the Altura Circular concerning the Initial Investor Group or otherwise provided by the Initial Investor Group;

“ Initial Investor Group Transaction Costs ” means the aggregate of all costs and expenses incurred prior to the Closing by either Tenaz or the Initial Investor Group in connection with the transactions contemplated by this Agreement or in furtherance of the business of Altura, including, without limitation, fees and expenses of legal counsel, financial advisors (including National Bank, in its capacity as financial

advisor and marketing agent in connection with the Subscription Receipt Private Placement), accountants, technical experts and other professional advisors;

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

“ Legal Proceeding ” means any litigation, action, application, suit, investigation, hearing, claim, deemed complaint, grievance, civil, administrative, regulatory or criminal, arbitration proceeding or other similar proceeding, before or by any tribunal and includes any appeal or review thereof and any application for leave for appeal or review;

“ Material Adverse Change ” or “ Material Adverse Effect ” means any effect, change (or any condition, event or development involving a prospective change), event, development, circumstance or occurrence with respect to the business, operations, results of operations, assets, capitalization or financial condition of Altura (taken as a whole) which effect, change, event, development, circumstance or occurrence is materially adverse to the business of Altura (taken as a whole) or to the value of the Common Shares, but “Material Adverse Change” or “Material Adverse Effect” shall not include a change or effect resulting from:

(i) a matter that has prior to the date hereof been publicly disclosed in Altura’s SEDAR filings or communicated by Altura to the Initial Investor Group in writing;
(ii) conditions affecting the oil and gas industry in western Canada as a whole including, without limitation, changes in Applicable Laws, commodity prices, taxes or royalties;
(iii) general economic, financial, currency exchange, securities or commodity market conditions in Canada, the United States or elsewhere;
(iv) any changes arising from matters specifically contemplated by this Agreement or consented to or approved in writing by the Initial Investor Group;
(v) any changes based solely on any change in the trading prices or volumes of the Common Shares; or
(vi) any changes arising from the announcement of this Agreement,

provided, however, that in each case, the causes underlying such changes may be considered to determine whether such causes constitute a Material Adverse Change or a Material Adverse Effect and where, in the case of (ii) and (iii), such effect relating to or resulting from the foregoing does not have a disproportionate effect on the current or future financial condition, business, operations, results of operations, assets, properties, capitalization, condition (financial or otherwise), liabilities (contingent or otherwise) or cash flows or prospects of Altura (taken as a whole) as compared to the corresponding effect on comparable Persons operating in the industries and geographic areas in which Altura or 1880675 operate;

“ Maximum Subscription Receipt Placement ” has the meaning set forth in Section 2.2(a);

“ McDaniel ” means McDaniel & Associates Consultants Ltd.;
“ Minimum Subscription Receipt Placement ” has the meaning set forth in Section 2.2(a);
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“ National Bank ” means National Bank Financial Inc.;

“ Net Value of the Exercised Options ” means the last closing price of the Common Shares on the TSXV prior to the date of exercise minus $0.21 (provided any resulting negative value shall be deemed to be zero), multiplied by the number of Eligible Options exercised;

“ New Board ” means the persons that will be appointed as the new directors of Altura on the Closing Date, such persons being: Marty Proctor, Mark Rollins, Anna Alderson, and Anthony Marino, provided that in the event that any proposed member of the New Board does not agree to become a director of Altura at the Closing, the Initial Investor Group may propose a substitute nominee satisfactory to Altura, acting reasonably;

“ New Executives ” means the persons that will be appointed as the new officers of Altura on the Closing Date, such persons and their respective titles in Altura immediately following the Closing Time being: Anthony Marino – President and Chief Executive Officer, Michael Kaluza – Chief Operating Officer, Bradley Bennett – Chief Financial Officer, Jonathan Balkwill – VP Business Development, David Leung – Senior Business Development Engineer and Timothy Morris – Land Negotiator, provided that in the event that any proposed member of the New Executives does not agree to become an officer of Altura at the Closing, the Initial Investor Group may propose a substitute nominee satisfactory to Altura, acting reasonably;

“ Non-Continuing Current Executive ” means any Current Executive that does not receive and accept an offer for a new employment agreement pursuant to Section 2.3;

“ Notice Period ” has the meaning set forth in Section 3.6(a)(ii);

“ Operator ” means in respect of a licence in which Altura has an interest, the person designated as operator for the time being under the relevant operating agreement;

“ Outside Date ” means:

(i) October 29, 2021, or

(ii) such other date as the Initial Investor Group and Altura may agree;

“ Parties ” means, collectively, Altura and the Initial Investor Group and “ Party ” means any one of them;

“ Permits ” means any license, permit, certificate, franchise, consent, order, grant, easement, covenant, approval, classification, registration or other authorization of and from any person, including any Governmental Entity;

“ Person ” includes any individual, firm, partnership, joint venture, venture capital fund, association, trust, trustee, executor, administrator, legal personal representative, estate group, body corporate, corporation, unincorporated association or organization, Governmental Entity, syndicate or other entity, whether or not having legal status;

“ Private Placement ” means, collectively, the Unit Private Placement and the Subscription Receipt Private Placement;

“ Proposed Agreement ” has the meaning set forth in Section 3.6(a)(i);

“ Public Record ” means all information filed by Altura with any Securities Authority in compliance, or intended compliance, with any Applicable Canadian Securities Laws available through SEDAR;

“ Recognized Exchange ” means the Toronto Stock Exchange, the TSX Venture Exchange, any of their successors or such other stock exchange comparable or trading system as is approved as a Recognized Exchange by the directors of Altura, acting reasonably;

“ Record Date ” has the meaning set forth in Section 2.10(a);

“ Representatives ” has the meaning set forth in Section 3.4 in respect of Altura and in Section 2.9(g) in respect of the Initial Investor Group;

“ Reserves Report ” has the meaning set forth in Section 4.1(oo);

“ Returns ” has the meaning set forth in Section 4.1(x)(i);

“ Right ” has the meaning set forth in Section 2.10(a);

“ Rights Offering ” has the meaning set forth in Section 2.10;

“ Securities Act ” means the Securities Act , R.S.A. 2000, c. S-4;

“ Securities Authorities ” means the securities commissions or similar securities regulatory authorities in each of the provinces and territories of Canada;

“ Stock Option Plan ” means the stock option plan of Altura in effect as of the date hereof;

“ Stock Options ” means the outstanding options to acquire Common Shares granted under the Stock Option Plan;

“ Subscribers ” means the subscribers for Units, being the Initial Investor Group and such other Persons as determined by the Initial Investor Group;

“ Subscription Receipt Agreement ” has the meaning set forth in Section 2.2(c);

“ Subscription Receipt Private Placement ” has the meaning set forth in Section 2.2(a);

“ Subscription Receipts ” means subscription receipts of Altura convertible into Common Shares pursuant to the terms of the Subscription Receipt Agreement;

“ Subscription Receipt Subscription Agreements ” means the subscription agreements to be entered into between Altura and each subscriber that purchases Subscription Receipts under the Subscription Receipt Private Placement, such agreements to be in a form agreed upon by the Initial Investor Group and National Bank, and consented to by Altura, acting reasonably;

“ Subsidiary ” has the meaning set forth in the Securities Act;

“ Superior Proposal ” means an unsolicited bona fide written Acquisition Proposal made after the date of this Agreement:

(i) that any required financing to complete such Acquisition Proposal has been demonstrated to the satisfaction of the Board of Directors, acting in good faith
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(after receipt of advice from its financial advisor and outside legal counsel) to have been obtained or is reasonably likely to be obtained;

(ii) that is not subject to a due diligence and/or access condition other than to permit access to the books, records or personnel of Altura which is not more extensive than that which would customarily be provided for confirmatory due diligence purposes and which access shall not extend beyond the third day after which such access is first afforded to the Person making such Acquisition Proposal;
(iii) that the Board of Directors and any relevant committee thereof has determined in good faith (after receipt of advice from its financial advisor and outside legal counsel) is reasonably capable of completion within a time frame that is reasonable in the circumstances taking into account all legal, financial, regulatory and other aspects of such Acquisition Proposal and the person making such Acquisition Proposal; and
(iv) in respect of which the Board of Directors and any relevant committee thereof determines in good faith (after receipt of advice from its financial advisor with respect to (B) below and outside legal counsel with respect to (A) below) that:
(A) failure to recommend such Acquisition Proposal to Altura Shareholders would be inconsistent with its fiduciary duties under Applicable Laws; and
(B) such Acquisition Proposal would, if consummated in accordance with its terms, reasonably be expected to result in a transaction more favourable to the Altura Shareholders, from a financial point of view, than the transactions contemplated herein, including any adjustment to the terms and conditions of the transactions contemplated by this Agreement proposed by the Initial Investor Group pursuant to Section 3.6 of this Agreement;

“ Support Agreements ” means agreements between the Initial Investor Group and certain Altura Shareholders pursuant to which each such Altura Shareholder (including each of the Current Executives and each member of the Current Board) has agreed, among other things and as applicable, to (i) resign as a director and/or officer of Altura at the Closing, (ii) enter into option surrender agreements with Altura to cancel all Stock Options held by him or her at or prior to the Closing (except as provided for in Section 2.4 herein), (iii) vote all of the Common Shares beneficially owned or controlled by them in favour of the Altura Resolutions, and (iv) not sell or otherwise transfer his or her Common Shares for the period specified in the Support Agreements;

“ Tax ” or “ Taxes ” has the meaning set forth in Section 4.1(x)(i);

“ Tenaz ” means Tenaz Energy Corp., a company organized by the Initial Investor Group;

“ Terminating Options ” means all Stock Options granted by Altura other than the Eligible Options;

“ Third Party Beneficiaries ” has the meaning set forth in Section 8.11;

“ TSXV ” means the TSX Venture Exchange;

“ Unit ” means a unit consisting of one Common Share and one Warrant;

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“ Unit Private Placement ” means the sale of the Units to the Subscribers by Altura as provided for herein;

“ Unit Subscription Agreements ” means the subscription agreements to be entered into between Altura and each Subscriber that purchases Units under the Unit Private Placement, such agreements to be in a form to be agreed upon by Altura and the Initial Investor Group, each acting reasonably;

“ U.S. Exchange Act ” means the United States Exchange Act of 1934 , as amended, and the rules and regulations of the United States Securities and Exchange Commission thereunder;

“ U.S. Securities Act ” means the United States Securities Act of 1933 , as amended; and

“ Warrant ” means a Common Share purchase performance warrant of Altura entitling the holder thereof to acquire one Common Share for a price of $0.18 prior to the date that is five (5) years from the date of issuance of the Warrants and vesting at any time and from time to time as follows: (i) one third of the Warrants after the Current Market Price of the Common Shares equals or exceeds $0.25; (ii) one third of the Warrants after the Current Market Price of the Common Shares equals or exceeds $0.315; and (iii) one third of the Warrants after the Current Market Price of the Common Shares equals or exceeds $0.36 and upon such other terms and conditions as are agreed upon by Altura and the Initial Investor group, each acting reasonably.

1.2 Interpretation Not Affected by Headings, etc.

The division of this Agreement into articles, sections and subsections is for convenience of reference only and does not affect the construction or interpretation of this Agreement. The terms “this Agreement”, “hereof”, “herein” and “hereunder” and similar expressions refer to this Agreement (including any schedules attached hereto) and not to any particular article, section or other portion hereof and include any agreement or instrument supplementary or ancillary hereto.

1.3 Number, etc.

Words importing the singular number include the plural and vice versa, words importing the use of any gender include all genders, and words importing persons include firms and corporations and vice versa.

1.4 Date for Any Action

If any date on which any action is required to be taken hereunder by any of the Parties is not a Business Day and a business day in the place where an action is required to be taken, such action is required to be taken on the next succeeding day which is a Business Day and a business day, as applicable, in such place.

1.5 Entire Agreement

This Agreement, the Disclosure Letter and the Confidentiality Agreement, together with the agreements and documents herein and therein referred to, constitute the entire agreement among the Parties pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, among the Parties with respect to the subject matter hereof, including, but not limited to, the non-binding proposal dated July 23, 2021.

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1.6 Currency

All references to “$” or sums of money that are referred to in this Agreement are expressed in lawful money of Canada, unless specified otherwise.

1.7 Accounting Matters

Unless otherwise stated, all accounting terms used in this Agreement shall have the meanings attributable thereto under Canadian generally accepted accounting principles, as defined by the Accounting Standards Board of the Canadian Institute of Chartered Accountants in the Handbook of the Canadian Institute of Chartered Accountants at the relevant time applied on a consistent basis which shall include, for greater certainty, International Financial Reporting Standards (“ GAAP ”).

1.8 Inclusive Terminology

Whenever used in this Agreement, the words “includes” and “including” and similar terms of inclusion shall not, unless expressly modified by the words “only” or “solely”, be construed as terms of limitation, but rather shall mean “includes but is not limited to” and “including but not limited to”, so that references to included matters or items shall be regarded as illustrative without being either characterizing or exhaustive.

1.9 Knowledge

Where any representation or warranty contained in this Agreement is expressly qualified by reference to the knowledge of Altura, it refers to the actual knowledge of the Current Executives after due inquiry.

1.10 Interpretation Not Affected by Party Drafting

The Parties acknowledge that their respective legal counsel have reviewed and participated in settling the terms of this Agreement, and the Parties agree that any rule of construction to the effect that any ambiguity is to be resolved against the drafting party will not be applicable in the interpretation of this Agreement.

ARTICLE 2 THE PRIVATE PLACEMENT, CHANGE OF MANAGEMENT AND RELATED MATTERS

2.1 Unit Private Placement

(a) Subject to the satisfaction of the conditions set out in Article 5 and the other terms and conditions of this Agreement, Altura and the Initial Investor Group agree to complete the Unit Private Placement to the Subscribers on the Closing Date at the Closing Time.
(b) At least 48 hours prior to the Closing Time, the Initial Investor Group shall provide a complete list of the Subscribers to Altura, including the number of Units being subscribed for by each Subscriber and detailed registration instructions for each Subscriber, in a form that will reasonably permit Altura to prepare the required certificates for the Closing Time.
(c) The Initial Investor Group and the other Subscribers shall subscribe for and purchase not less than 19,444,444 Units at a price of $0.18 per Unit (the “ Unit Private Placement ”).
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(d) At Closing, the Initial Investor Group shall provide to Altura:
(i) executed Unit Subscription Agreements for each Subscriber;
(ii) certified cheques, bank drafts or wire transfer of each Subscriber in immediately available funds, or payment in such other form as may be acceptable to Altura and the Initial Investor Group, acting reasonably, for the aggregate subscription proceeds for the Units purchased by the Subscribers; and
(iii) such other documents and deliveries as are required pursuant to the Unit Subscription Agreements.
(e) Upon receipt of the executed agreements and certified cheques, bank drafts or wire transfer or other payment and any other documents or deliveries provided for in Section 2.1(c), Altura shall execute and accept all validly executed Unit Subscription Agreements, and deliver to the Subscribers validly issued Common Share certificates and Warrant certificates in the names of the applicable Subscribers for the securities issuable under the Unit Private Placement.
(f) The parties agree that the Unit Private Placement shall be completed substantially concurrently with the Change of Management and the conversion of the Subscription Receipts and in such manner as is reasonably necessary to facilitate the Closing.

2.2 Subscription Receipt Private Placement

(a) The Parties acknowledge and agree that, in addition to the Unit Private Placement, Altura shall complete a private placement prior to the Closing Date of not less than 111,111,111 Subscription Receipts (the “ Minimum Subscription Receipt Placement ”) and not more than 277,777,778 Subscription Receipts (the “ Maximum Subscription Receipt ”) at a price of $0.18 per Subscription Receipt (collectively, the “ Subscription Receipt Private Placement ”) to such subscribers in such allocations and amounts as may be identified by the Initial Investor Group, in its sole discretion.
(b) The Subscription Receipt Private Placement will be undertaken on a “best efforts” agency basis by National Bank Financial. The Initial Investor Group shall be solely responsible for dealing with and directing National Bank, in its capacity as agent for the Subscription Receipt Private Placement, and Altura hereby irrevocably constitutes and appoints the Initial Investor Group as its attorney to exercise from time to time and at all times, in its absolute and unfettered discretion, all rights to negotiate and settle the terms of the Subscription Receipt Private Placement, including, without limitation, term sheets, letters of intent, confidentiality agreements, the Agency Agreement, the Subscription Receipt Agreement and Subscription Receipt Subscription Agreements in relation thereto; provided that any binding agreement shall be in a form and substance satisfactory to Altura, acting reasonably. Altura shall reasonably cooperate and provide all assistance reasonably requested by the Initial Investor Group or National Bank in connection with the Subscription Receipt Private Placement, including but not limited to:
(i) allowing the Agents (and their counsel and consultants) to conduct all due diligence which the Agents may reasonably require or consider necessary or appropriate in order to fulfill the Agents’ obligations as registrants to complete the Subscription Receipt Private Placement;
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(ii) providing the Agents (and their counsel and consultants) reasonable access to Altura’s properties (if any), senior management personnel and corporate, financial and other records, for the purposes of conducting such due diligence, and
(iii) making available Altura’s directors, senior management and counsel to answer any questions which the Agents may have and to participate in one or more due diligence sessions to be held prior to closing of the Subscription Receipt Private Placement.
(c) At closing of the Subscription Receipt Private Placement, upon (i) receipt of the executed Subscription Receipt Subscription Agreements; (ii) the payment of the net subscription proceeds for the Subscription Receipts purchased by the subscribers therefor into escrow pursuant to the terms of a subscription receipt agreement to be entered into among Altura, National Bank (in its capacity as lead agent of the Subscription Receipt Private Placement) and a Canadian trust company or other escrow agent acceptable to Altura, the Initial Investor Group and National Bank (the “ Subscription Receipt Agreement ”) and; (iii) the delivery of any other documents as are required pursuant to the Agency Agreement, the Subscription Receipt Agreement and the Subscription Receipt Subscription Agreements, Altura shall execute the Agency Agreement and the Subscription Receipt Agreement and execute and accept all validly executed Subscription Receipt Subscription Agreements, and deliver to the subscribers validly issued Subscription Receipt certificates in the names of the applicable subscribers for the securities issuable under the Subscription Receipt Private Placement.
(d) Altura shall be responsible for the commission and other fees and expenses payable to National Bank in connection with the Subscription Receipt Private Placement in accordance with the terms and conditions of the Agency Agreement, provided that the Subscription Receipt Private Placement is completed. In the event that the Subscription Receipt Private Placement is not completed, Altura shall not be responsible for any fees and expenses payable to National Bank.
(e) Upon satisfaction of the Escrow Release Conditions, each Subscription Receipt will entitle the holder thereof to one Common Share pursuant to the terms of the Subscription Receipt Agreement.

2.3 Change of Management

(a) At Closing and subject to Section 2.3(b):
(i) subject to paragraph (ii) below, the Current Board shall be reconstituted through the resignations of the members of the Current Board and the members of the New Board shall be appointed, as necessary, to fill the vacancies created by such resignations without the necessity of the holding of a meeting of the Altura Shareholders for this purpose;
(ii) unless John Chambers resigns at or prior to Closing, he shall continue to be a member of the Board of Directors following Closing and should John Chambers resign at or prior to Closing, the Initial Investor Group may propose a substitute nominee satisfactory to Altura, acting reasonably; and
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(iii) subject to Section 2.3(c), each of the Current Executives shall resign from his office and employment, and the New Executives shall be appointed by the New Board as officers of Altura.
(b) Altura and each member of the Current Board and Current Executive (in each case, other than any Continuing Current Executive and John Chambers, if he has not resigned) shall execute mutual resignations and releases, in a form acceptable to Altura and the Initial Investor Group, acting reasonably. Altura and the Initial Investor Group each agree to take all commercially reasonable steps within their power to facilitate the resignation of the Current Board and Current Executives and the appointment of the New Board and New Executives, as applicable, at the Closing in the manner provided in Section 2.3(a).
(c) Altura shall, if requested by the Initial Investor Group, make an offer of employment (effective as of the Closing) to any or more Current Executives identified by the Initial Investor Group, all on such terms and conditions as determined by the Initial Investor Group, in its sole and absolute discretion. If such offer of employment is accepted by the Current Executive prior to the Closing, the Current Executive will not be terminated or required to resign, and will continue in his employment with Altura effective as of the Closing in the position set forth in the offer of employment, on the terms and conditions set forth therein.

2.4 Treatment of Outstanding Stock Options

(a) Terminating Options. Altura covenants and agrees that it will use all commercially reasonable efforts to enter into option surrender agreements with the holders of Stock Options (other than any such holder who did not execute a Support Agreement) to the effect that all Terminating Options held by such holders will be terminated for no consideration effective as of the Closing.
(b) Eligible Options. Subject to Sections 2.4(c) and 2.4(d), the 4,800,000 Stock Options issued and outstanding as of the date hereof with an exercise price of $0.21 per share (the “ Eligible Options ”) may be exercised by the holders thereof in accordance with the Stock Option Plan.
(c) Cash and cashless exercise. Subject to the approval of the TSXV, a holder of Eligible Options may pay the exercise price in cash or may choose to utilize the cashless exercise as provided for in the Stock Option Plan, and the number of Common Shares issuable upon exercise of Stock Options shall be equal to the Net Value of the Exercised Options divided by the last closing price of the Common Shares on the TSXV prior to the date of exercise.
(d) Expiry Dates. The expiry date of the Eligible Options:
(i) held by any Continuing Person shall be reduced to the date that is 12 months following the Closing Date; and
(ii) held by any Person who is not a Continuing Person shall be reduced to 90 days following the Closing Date in accordance with the terms of the Stock Option Plan.

Altura covenants and agrees that it shall enter into option amendment agreements with the Continuing Persons to amend the expiry date as provided for in subparagraph (i) above.

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(e) Acceleration. The Parties acknowledge and agree that for the purposes of this Section 2.4, Altura shall be entitled to accelerate the vesting of any unvested Eligible Options effective as of the Closing Date.
(f) Exercise of Vested Stock Options. Nothing in this Section 2.4 shall prevent or restrict the exercise (including on a conditional basis subject to Closing occurring) pursuant to the Stock Option Plan prior to Closing of any vested Eligible Options or Terminating Options.

2.5 Employees other than the Current Executives

Should the employment of any Employee cease on a without cause basis following the Closing Date, that Employee will be treated in accordance with applicable employment legislation and common law requirements and any agreements or employment offers in effect with such Employee.

2.6 Severance and Change of Control Obligations

(a) Upon Closing and, provided that the Non-Continuing Current Executives have resigned and executed mutual releases as provided for herein, Altura shall pay to each NonContinuing Current Executive a severance payment plus any vacation pay owing at the Closing Date, in lieu of notice as if such Non-Continuing Current Executive had been terminated in connection with a change of control on the Closing Date pursuant to the terms of their respective Executive Agreement.
(b) Altura represents and warrants that the aggregate of all amounts payable as part of the severance obligations upon a change of control under the Executive Agreements, true and correct copies of which have been provided to the Initial Investor Group, will not exceed $925,000 in the aggregate, including any vacation pay. Altura shall pay to each of the NonContinuing Current Executives at Closing, net of any applicable withholdings, such amounts against delivery of the releases referred to in Section 2.3(b). Other than as set out in this Section 2.6, Altura represents and warrants to the Initial Investor Group that there are no Employee Obligations that will be triggered solely by the completion of the Private Placement and/or the Change of Management.

2.7 Director and Officer Indemnities

Altura shall continue to fulfil its obligations pursuant to indemnities provided or available to past and present officers and directors of Altura pursuant to the provisions of the constating documents of Altura, the ABCA, and any written indemnity agreements which have been entered into between Altura and its current officers and directors effective on or prior to the Closing Time. Altura shall obtain, on or prior to Closing, an insurance policy on a “trailing” run-off basis that has a maximum limit of $9,000,000 on terms and conditions otherwise no less advantageous to the directors and officers of Altura than those contained in the policy in effect on the date hereof for all present and former directors and officers of Altura covering claims made prior to the Closing Date and for a period of six years after the Closing Date.

2.8 [Reserved]

2.9 Altura Meeting

(a) Altura shall call and hold the Altura Meeting on or about October 7, 2021 and by no later than October 18, 2021 and shall put forward resolutions at the Altura Meeting approving the Altura Resolutions;
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(b) Altura shall prepare the Altura Circular, in consultation with the Initial Investor Group and its legal counsel and in compliance with Applicable Canadian Securities Laws and cause the Altura Circular to be mailed to the Altura Shareholders by no later than September 27, 2021 and filed with applicable Securities Authorities and Governmental Entities in all jurisdictions where the same are required to be mailed and filed;
(c) Altura shall ensure that the Altura Circular includes the recommendation of the Board of Directors that the Altura Shareholders vote in favour of the Altura Resolutions and shall publicly announce such recommendation at the time that it announces the calling of the Altura Meeting;
(d) the Initial Investor Group shall, in a timely manner, furnish Altura with the Initial Investor Group Information for inclusion in the Altura Circular, which the Initial Investor Group will ensure does not contain any misrepresentation or untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading in light of the circumstances in which they are made;
(e) Altura and the Initial Investor Group shall cooperate in the preparation, filing and mailing of the Altura Circular and Altura shall provide the Initial Investor Group and its Representatives with a reasonable opportunity to review and comment on the Altura Circular and any other relevant documentation and shall incorporate all reasonable comments thereon;
(f) Altura shall conduct the Altura Meeting in all material respects in accordance with the constating documents of Altura and any other instrument governing the Altura Meeting and as otherwise required by Applicable Law;
(g) Altura shall allow the Initial Investor Group’s financial advisors, legal counsel, representatives or agents (“ Representatives ”) to attend the Altura Meeting;
(h) Altura shall not adjourn, postpone or cancel (or propose to adjourn, postpone or cancel) the Altura Meeting without the prior written consent of the Initial Investor Group except:
(i) as required for quorum purposes (in which case the Altura Meeting shall be adjourned and not cancelled) or by Applicable Law or by a Governmental Entity; and
(ii) where Altura has provided the Initial Investor Group with the written notice in accordance with Section 3.6(a), in which case Altura may adjourn or postpone the Altura Meeting for a period not to exceed seven Business Days; and
(i) Altura shall use all commercially reasonable efforts to secure the approval of the resolutions put forward at the Altura Meeting by the Altura Shareholders and solicit proxies for the approval of the Altura Resolutions in accordance with Applicable Laws including, as mutually agreed to by the Parties, using the services of proxy solicitation agents. If so mutually agreed to, Altura shall engage (at its own cost and expense) and instruct proxy solicitation agents:
(i) to report to the Initial Investor Group and its designated representatives concurrently with their reports to Altura and to advise the Initial Investor Group as it may reasonably request, on a daily basis of each of the last seven Business Days
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prior to the Altura Meeting, as to the aggregate tally of the proxies received by Altura in respect of the Altura Resolutions; and

(ii) to co-operate with the Initial Investor Group and any solicitation agents or other representatives of the Initial Investor Group hired to assist in the solicitations of proxies in respect of the Altura Meeting.

2.10 Rights Offering

Provided that Closing occurs and subject to the receipt of all requisite regulatory approvals, Altura shall conduct a rights offering to the Altura Shareholders (the “ Rights Offering ”) on the following terms:

(a) Altura shall issue one right (“ Right ”) for each Common Share held to each Altura Shareholder of record on the record date (the “ Record Date ”) for the Rights Offering;
(b) neither the Subscribers nor subscribers under the Subscription Receipt Private Placement shall be entitled to participate in the Rights Offering (to the extent of the securities subscribed for in the Private Placement), and the Unit Subscription Agreement and Subscription Receipt Subscription Agreement shall include covenants by each of the Subscribers and subscribers under the Subscription Receipt Private Placement not to exercise, sell, trade or otherwise convey any interest in any Rights issuable in connection with the Common Shares issued under the Unit Private Placement or on conversion of the Subscription Receipts or pursuant to the exercise of Warrants;
(c) each eight Rights shall entitle the holder thereof to acquire one Common Share for an exercise price of $0.18;
(d) the Rights Offering shall be effected by way of a rights offering circular in reliance on the prospectus exemptions contained in Section 2.1 of National Instrument 45-106 Prospectus Exemptions and in compliance with Applicable Canadian Securities Laws;
(e) as soon as practicable after the Closing Date, Altura shall use all commercially reasonable efforts to obtain any required approvals from the applicable Securities Authorities and the TSXV to proceed with the Rights Offering and shall prepare and file concurrently with the applicable Securities Authorities and the TSXV:
(i) a rights offering notice in the form of NI 45-106F14 – Rights Offering Notice for Reporting Issuers , which rights offering notice shall also be sent to all Altura Shareholders; and
(ii) a rights offering circular in the form of NI 45-106F15 – Rights Offering Circular for Reporting Issuers .
(f) no “stand-by commitment” or “additional subscription privilege” (each as defined in N1 45-101) shall be granted in connection with the Rights Offering;
(g) no fractional Altura Shares shall be issued in connection with the Rights Offering with any fractional entitlements rounding to the nearest whole number; and
(h) the expiry date for the Rights Offering shall not exceed 90 days nor be less than 21 days from the date the rights offering notice is sent to Altura Shareholders.
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2.11 Acquisition Opportunities

(a) Altura hereby irrevocably constitutes and appoints the Initial Investor Group as its attorney to exercise from time to time and at all times, in its absolute and unfettered discretion, all rights to negotiate and settle the terms of any asset acquisition, including, without limitation, term sheets, letters of intent, confidentiality agreements, and purchase and sale agreements, as applicable, in relation thereto; provided that prior to entering into any binding agreement with respect to any of the above before the Closing Date, the Initial Investor Group shall obtain the approval of the Board of Directors.
(b) Altura shall from time to time and at all times do whatever may be requested by the Initial Investor Group in writing to enable or facilitate the Initial Investor Group’s exercise of the rights set forth in this Section 2.11.

ARTICLE 3 COVENANTS

3.1 Covenants of Altura

From the date hereof until the earlier of the Closing Date or termination of this Agreement, except in connection with the Private Placement or with the prior written consent of the Initial Investor Group, and except as otherwise expressly permitted or specifically contemplated by this Agreement, the Disclosure Letter or required by Applicable Laws:

(a) Altura’s business and affairs shall be conducted only in the usual and ordinary course consistent with past practices (for greater certainty, where it is an operator of any property, it shall operate and maintain such property in a proper and prudent manner in accordance with Good Oilfield Practice and the agreements governing the ownership and operation of such property) and it shall use all commercially reasonable efforts to maintain and preserve its business, assets and advantageous business relationships, including payment of all cash calls made and expenses which are due and payable in the ordinary course of business, provided that it shall be entitled and authorized to comply with all pre-emptive rights, first purchase rights or rights of first refusal that are applicable to its assets and that become operative by virtue of this Agreement or any of the transactions contemplated by this Agreement;
(b) Altura shall not, directly or indirectly, do or permit to occur any of the following:
(i) amend its constating documents;
(ii) declare, set aside or pay any dividend or distribution or make any other payment (whether in cash, shares or property) in respect of Altura’s outstanding securities;
(iii) except pursuant to the exercise of Stock Options outstanding on the date hereof to the extent permitted by Section 2.4, issue, grant, sell or pledge, or agree to issue, grant, sell or pledge, any Common Shares or any securities convertible into or exchangeable or exercisable for Common Shares (including any Stock Options), or otherwise evidencing a right to acquire Common Shares;
(iv) redeem, purchase or otherwise acquire any of the outstanding Common Shares or other securities;
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(v) split, combine, reclassify any of the Common Shares, undertake any other capital reorganization of Altura or incorporate or organize any Subsidiary;
(vi) reduce the capital or stated capital of Altura;
(vii) adopt or approve a plan of liquidation or resolutions providing for its liquidation, dissolution, merger, consolidation or reorganization of Altura;
(viii) make any changes to its existing accounting policies other than as required by Applicable Laws or GAAP;
(ix) enter into or modify any contract, agreement, commitment or arrangement with respect to any of the foregoing; or
(x) implement any shareholder rights plan;
(c) except where required by regulatory authorities or for the protection of life and property and except as required pursuant to agreements existing as of the date hereof, Altura will not, directly or indirectly, do or permit to occur any of the following:
(i) sell, pledge, dispose of or encumber any assets, except for oil, natural gas and natural gas liquid production in the ordinary course consistent with past practice;
(ii) expend or commit to expend amounts in respect of any capital expenditures, including approval of any work program, budget, expenditure or other capital commitment which are in excess of $50,000 individually or $150,000 in aggregate;
(iii) expend or commit to expend any amounts with respect to any operating expenses (which for greater certainty, includes general and administrative expenses) other than in the ordinary course of business;
(iv) reorganize, amalgamate, merge or otherwise combine Altura with any other Person;
(v) acquire (by merger, amalgamation, consolidation or acquisition of shares or assets or otherwise) any corporation, trust, partnership or other business organization or division thereof, or make any investment therein either by purchase of shares or securities, contributions of capital or property transfer;
(vi) acquire any assets having a cost in excess of $25,000 individually or $50,000 in the aggregate;
(vii) incur any indebtedness for borrowed money in excess of the amount available under Altura’s existing credit facilities, or any other material liability or obligation or issue any debt securities or assume, guarantee, endorse or otherwise become responsible for, the obligations of any other individual or entity, or make any loans or advances, other than in respect of fees payable to legal, financial and other advisors in the ordinary course of business or in respect of the transactions contemplated herein;
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(viii) authorize, recommend or propose any release or relinquishment of any material contract right;
(ix) waive, release, grant or transfer any material rights of value or amend, modify or change, or agree to amend, modify or change, in any material respect any existing material license, lease, contract, production sharing agreement, government land concession or other material document;
(x) abandon or fail to diligently pursue any application for any material licenses, leases, Permits, authorizations or registrations or take any action, or fail to take any action, that could lead to termination of any licenses;
(xi) pay, discharge or satisfy any material claims, liabilities or obligations other than as reflected or reserved against in the Financial Statements or otherwise in the ordinary course of business;
(xii) enter into or terminate any hedges, swaps or other financial instruments or like transactions; provided that, where Altura’s existing agreements require it to enter or terminate any hedge, swaps or other financial instruments or like transactions, Altura shall reasonably consult with the Initial Investor Group prior to doing so;
(xiii) enter into any agreements for the sale of production having a term of more than 30 days;
(xiv) enter into any material consulting or contract operating agreement that cannot be terminated on 30 days or less notice without penalty;
(xv) enter into any joint venture, operating agreement, farm-in or farm-out agreement, unitization agreement, transportation agreement or any other similar agreement, arrangement or relationship;
(xvi) engage in any transaction with any related parties; or
(xvii) authorize or propose any of the foregoing, or enter into or modify any contract, agreement, commitment or arrangement to do any of the foregoing;
(d) Altura shall not make any payment to any employee, officer or director outside of their ordinary and usual compensation for services provided, except to the extent that any such entitlement relates to:
(i) reasonable expense reports submitted in the ordinary course of business; or
(ii) payment to a former Employee or officer of an entitlement which has accrued prior to the date hereof;
(e) Altura shall not:
(i) grant any officer, director, employee or consultant an increase in compensation in any form;
(ii) grant any general salary increase;
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(iii) take any action with respect to the amendment or grant of any “change of control”, severance or termination pay policies or arrangements for any directors, officers, Employees or consultants;
(iv) adopt or amend or make any contribution to any bonus, profit-sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation or other compensation or other similar plan (or amend the terms of any outstanding rights thereunder), or form a trust fund or arrangement for the benefit of directors, officers, employees or consultants, except as is necessary to comply with the existing provisions of any such plans, programs, arrangements or agreements (including the Stock Options);
(v) advance any loan to or forgive any portion of any loan outstanding to any officer, director or any other party not at arm’s length to Altura; or
(vi) enter into or amend any indemnity agreement with any officer or director;
(f) Altura shall use its reasonable commercial efforts to cause its current insurance (or reinsurance) policies not to be cancelled, terminated, rendered void or voidable or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by bona fide insurance or re-insurance companies or providers providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect (provided that Altura shall be required to consult with the Initial Investor Group with respect to any such replacement policies, and if requested by the Initial Investor Group, shall permit the Initial Investor Group to obtain such replacement policies on behalf of Altura, provided such policies are for substantially similar premiums), and Altura will pay all premiums in respect of such insurance policies that become due after the date hereof (including in the event that the Initial Investor Group obtains any replacement policies with substantially similar premiums on behalf of Altura as provided for in this Section 3.1(f));
(g) Altura shall not take any action, or omit to take any action, that would render, or may reasonably be expected to render, any representation or warranty made by it in this Agreement untrue in any material respect (without giving effect to any materiality qualifiers contained therein) or that would result, or would reasonably be expected to result, in a breach by Altura of this Agreement, at any time prior to Closing or termination of this Agreement, whichever first occurs;
(h) Altura shall promptly notify the Initial Investor Group in writing of any existing or, to its knowledge, potential or threatened Material Adverse Change occurring or existing after the date hereof or of any change which may be of such a nature to render any representation or warranty misleading or untrue in any material respect (without giving effect to any materiality qualifiers contained therein) and Altura shall in good faith discuss with the Initial Investor Group any change in circumstances (actual or to the knowledge of Altura, threatened) which is of such a nature that there may be a reasonable question as to whether notice need to be given to the Initial Investor Group pursuant to this provision;
(i) Altura shall use its reasonable commercial efforts to obtain the consent of its bankers, lenders, landlord and any other third party consents required for the completion of the Private Placement and the Change of Management, without incurring any obligation to pay any fees or penalties, in a form satisfactory to the Initial Investor Group, acting reasonably,
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and, where obtained, provide the same to the Initial Investor Group on or prior to the Closing Date;

(j) Altura shall use its reasonable commercial efforts to satisfy or cause satisfaction of the conditions set forth in Sections 5.1 and 5.2, as soon as possible following execution of this Agreement to the extent that the satisfaction of the same is within the control of Altura;
(k) except for proxies and other non-substantive communications with securityholders or if prohibited under Applicable Laws, Altura will furnish promptly to the Initial Investor Group or the Initial Investor Group’s counsel, a copy of each notice, report, schedule or other document delivered, filed or received by Altura in connection with:
(i) the Private Placement;
(ii) the Altura Meeting;
(iii) any filings under Applicable Laws in connection with the transactions contemplated hereby; and
(iv) any dealings with Governmental Entities in connection with the transactions contemplated hereby;
(l) Altura will make all necessary filings and applications under Applicable Laws, including Applicable Canadian Securities Laws, required to be made on the part of Altura in connection with the transactions contemplated herein and shall take all reasonable action necessary to be in material compliance with such Applicable Laws;
(m) Altura will furnish promptly to the Initial Investor Group or the Initial Investor Group’s counsel any requests from any Governmental Entity for any information in respect of the business, operations, financial condition or assets of Altura or any material third party complaint, investigation or hearing (or investigations indicating the same may be contemplated) to the extent that it relates to or could affect Altura or its properties or assets in a material way or the transactions contemplated by this Agreement;
(n) Altura shall not take any action, refrain from taking any action, permit any action to be taken or not to be taken, inconsistent with this Agreement which might reasonably directly or indirectly interfere with or adversely affect the consummation of the transactions contemplated by this Agreement, and Altura shall take all commercially reasonable actions to give effect to the transactions contemplated by this Agreement;
(o) in the event of and in relation to a material dispute or Legal Proceeding or any event which may reasonably be expected to lead to a material dispute or legal action and which relates to or may reasonably be expected to relate to Altura (a “ Dispute ”), Altura shall, until such time as any final compromise, agreement, expert determination or non-appealable decision of a court or tribunal of competent jurisdiction is made in respect of the Dispute or the Dispute is otherwise finally disposed of:
(i) consult with the Initial Investor Group, and take such action to assess, contest, dispute, defend, appeal or compromise the Dispute as the Initial Investor Group may reasonably request;
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(ii) keep the Initial Investor Group promptly informed of the progress of the Dispute and provide the Initial Investor Group with copies of all relevant documents and such other information in Altura’s possession as may be requested by the Initial Investor Group, acting reasonably; and
(iii) not cease to defend the Dispute or make any admission of liability, agreement, settlement or compromise in relation to the Dispute without the prior written consent of the Initial Investor Group, such consent not to be unreasonably delayed or withheld;
(p) Altura will during the term of this Agreement deliver to the Initial Investor Group as soon as they become available true and complete copies of any report or statement filed by it with Securities Authorities subsequent to the date hereof. As of their respective dates, such reports and statements (excluding any information therein provided by the Initial Investor Group, as to which Altura makes no representation):
(i) will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading; and
(ii) will comply in all material respects with all requirements of Applicable Laws including Applicable Canadian Securities Laws.

The financial statements of Altura issued by Altura or to be included in such reports and statements (excluding any information therein provided by the Initial Investor Group, as to which Altura makes no representation) will be prepared in accordance with GAAP (except: (I) as otherwise indicated in such financial statements and the notes thereto or, in the case of audited statements, in the related report of Altura’s auditors; or (II) in the case of unaudited interim financial statements, to the extent they may not include footnotes or may be condensed or summary statements) and will present fairly the financial position, results of operations and changes in financial position of Altura as of the dates thereof and for the periods indicated therein (subject, in the case of any unaudited interim financial statements, to normal year-end audit adjustments);

(q) Altura shall:

(i) duly and on a timely basis file all Returns required to be filed by it on or after the date hereof and all such Returns will be true, complete and correct in all material respects;
(ii) timely pay all Taxes which are due and payable unless validly contested; (iii) not make or rescind any material express or deemed election relating to Taxes, or file any amended Returns;
(iii) not make a request for a Tax ruling or enter into a closing agreement with any Governmental Entity;
(iv) not settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes;
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(v) not change in any material respect any of its methods of reporting income, deductions or accounting for Tax purposes from those employed in the preparation of its Return for a taxation year ending in 2020 and prior to the date hereof; and
(vi) properly reserve (and reflect such reserves in its books and records and financial statements) in accordance with past practice and in the ordinary course of business, for all Taxes accruing in respect of Altura which are not due or payable prior to the Closing Date;
(r) Altura shall duly and timely deduct and withhold all Taxes that are required to be deducted, withheld or remitted by Altura under Applicable Laws for amounts paid or credited to or for the account or benefit of any Person, including, without limitation, Taxes on payments to any present or former employees, officers or directors or non-residents of Canada, and Altura shall remit such amounts to the appropriate Governmental Entity within the times prescribed by such Applicable Laws; and
(s) Altura shall not announce an intention, enter into any agreement, or otherwise make a commitment to do any of the things prohibited by any of the foregoing.

3.2 Covenants of the Initial Investor Group

From the date hereof until the Closing Date or termination of this Agreement, except with the prior written consent of Altura (such consent not to be unreasonably withheld or delayed), and except as otherwise expressly permitted or specifically contemplated by this Agreement or required by Applicable Laws:

(a) the Initial Investor Group shall not take any action, or omit to take any action, that would render, or may reasonably be expected to render, any representation or warranty made by it in this Agreement untrue in any material respect (without giving effect to any materiality qualifiers contained therein) or that would result, or would reasonably be expected to result, in a breach by the Initial Investor Group of this Agreement, at any time prior to Closing or termination of this Agreement, whichever first occurs;
(b) the Initial Investor Group shall promptly notify Altura in writing of any change which may be of such a nature to render any representation or warranty misleading or untrue in any material respect (without giving effect to any materiality qualifiers contained therein) and the Initial Investor Group shall in good faith discuss with Altura any change in circumstances (actual or, to the knowledge of the Initial Investor Group, threatened) which is of such a nature that there may be a reasonable question as to whether notice need to be given to Altura pursuant to this provision;
(c) the Initial Investor Group shall use its reasonable commercial efforts to satisfy or cause satisfaction of the conditions set forth in Sections 5.1 and 5.3 as soon as possible following execution of this Agreement to the extent that the satisfaction of the same is within the control of the Initial Investor Group;
(d) the Initial Investor Group shall not take any action, refrain from taking any action, permit any action to be taken or not to be taken, inconsistent with this Agreement which might directly or indirectly interfere with or adversely affect the consummation of the transactions contemplated by this Agreement, and the Initial Investor Group shall take all
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commercially reasonable actions to give effect to the transactions contemplated by this Agreement;

(e) the Initial Investor Group shall cooperate with Altura and its counsel in completing all necessary filings with the Securities Authorities and the TSXV, as applicable, in connection with the Private Placement and the other transactions contemplated hereby, including the filing of personal information forms with the TSXV;
(f) the Initial Investor Group will furnish promptly to Altura or Altura’s counsel any requests from any Governmental Entity for any information in respect of the Initial Investor Group or any material third party complaint, investigation or hearing (or investigations indicating the same may be contemplated) to the extent that it relates to or could affect Altura or its properties or assets in a material way or the transactions contemplated by this Agreement; and
(g) the Initial Investor Group shall not announce an intention, enter into any agreement, or otherwise make a commitment to do any of the things prohibited by any of the foregoing, except as may be permitted by this Agreement.

3.3 Mutual Covenants

From the date hereof until the Closing Date or termination of this Agreement, each of the Initial Investor Group and Altura will, in a prompt and timely manner, use its reasonable commercial efforts to satisfy (or cause the satisfaction of) the conditions precedent to its obligations hereunder and to take, or cause to be taken, all other action and to do, or cause to be done, all other things necessary, proper or advisable under Applicable Laws to complete the transactions contemplated herein, including using reasonable commercial efforts:

(a) to obtain all necessary waivers, consents and approvals required to be obtained by it from other parties to contracts, including the consents of Altura’s lenders as required under Section 5.1;
(b) to obtain all necessary consents, assignments, waivers and amendments to or terminations of any instruments and take such measures as may be appropriate to fulfill its obligations hereunder and to carry out the transactions contemplated hereby;
(c) to effect all necessary registrations and filings and submissions of information requested by Governmental Entities required to be effected by it in connection with the transactions contemplated herein, and the Parties will use reasonable commercial efforts to cooperate with the other in connection with the performance by the other of their obligations under this Section 3.3 including continuing to provide reasonable access to information and to maintain ongoing communications as between the Parties; and
(d) not take any action which is inconsistent with this Agreement or which would reasonably be expected to significantly impede the consummation of the transactions contemplated herein.

3.4 Non-Solicitation by Altura

Altura shall immediately cease and cause to be terminated all discussions, solicitations, initiations, encouragements and negotiations, if any, with any parties (other than the Initial Investor Group or its

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affiliates) by Altura or its officers, directors, employees, financial advisors, legal counsel, representatives or agents (“ Representatives ”) with respect to any actual or potential Acquisition Proposal. Altura shall immediately following the entering into of this Agreement send a letter to all Persons who have had discussions or negotiations or who have entered into confidentiality agreements with Altura pertaining to any actual or potential Acquisition Proposal within six months prior to the date of this Agreement requesting that, and shall use commercially reasonable efforts to have, all materials provided to such parties by Altura, or prepared by such parties in respect of Altura, be destroyed or returned to Altura or its Representatives as the case may be in accordance with the terms of the confidentiality agreements with such parties. Altura shall immediately advise the Initial Investor Group orally and in writing of any response or action (actual, anticipated, contemplated or threatened) by any recipient of such letter which could hinder, prevent or delay or otherwise adversely affect the completion of the transactions contemplated herein.

3.5 Covenants Regarding Non-Solicitation by Altura

(a) Altura shall not, directly or indirectly, through any Representative of Altura, or otherwise:
(i) solicit, initiate, knowingly encourage or otherwise knowingly facilitate (including by way of furnishing information or entering into any form of agreement, arrangement or understanding) any inquiries or proposals regarding an Acquisition Proposal or potential Acquisition Proposal;
(ii) participate in any negotiations or discussions regarding, or provide any confidential information with respect to or otherwise cooperate in any way with, any Acquisition Proposal or potential Acquisition Proposal;
(iii) withhold, withdraw or modify in a manner adverse to the Initial Investor Group the approval of the Board of Directors of the transactions contemplated hereby;
(iv) approve or recommend any Acquisition Proposal or potential Acquisition Proposal;
(v) waive any provision of, or release or terminate any standstill provisions contained in any confidentiality agreement, non-disclosure, standstill or other agreement with any third party; or
(vi) cause Altura to enter into any agreement related to any Acquisition Proposal or potential Acquisition Proposal;

provided however that, notwithstanding any other provision of this Agreement,

(vii) nothing shall prevent the Board of Directors from considering or participating in discussions or negotiations in respect of or responding to an unsolicited bona fide Acquisition Proposal from any Person (but, subject to Section 3.6, not approve, recommend, accept or enter into any agreement, arrangement or understanding with respect to such Acquisition Proposal), provided that :
(A) the Board of Directors determines in good faith, after consultation with financial and outside legal advisors, that the Acquisition Proposal could reasonably constitute a Superior Proposal;
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- (B) the Board of Directors after consultation with outside legal advisors, determines in good faith it is necessary for the Board of Directors to take such action in order to avoid breaching its fiduciary duties; and
- (C) prior to entering into discussions or negotiations with or responding to any person regarding the Superior Proposal, Altura notifies the Initial Investor Group of its determination that such Acquisition Proposal could reasonably constitute a Superior Proposal; and
(viii) provided that Altura is not otherwise in breach of this Agreement, the Board of Directors may release a Person who is subject to a standstill obligation in favour of Altura from that standstill obligation if, prior to the Closing Time, Altura receives a request from such Person to waive or release such Person from that standstill obligation in order for such Person to make an unsolicited bona fide Acquisition Proposal but only to the extent required to allow such Person to provide the Acquisition Proposal for consideration by the Board of Directors in accordance with and to the extent permitted by this Section 3.5.
(b) Promptly, and in any event within 24 hours after the receipt by Altura or its Representatives of any Acquisition Proposal, or any material amendments to such Acquisition Proposal, or any request for non-public information relating to Altura, Altura shall notify the Initial Investor Group at first orally and then in writing. Such written notice shall include a description of the terms and conditions of any inquiry or Acquisition Proposal or any amendment thereto and the identity of the Person making such inquiry or Acquisition Proposal and shall include a copy of any Acquisition Proposal. Altura shall, upon request of the Initial Investor Group, promptly inform the Initial Investor Group of the status, including any change to the material terms, of any such Acquisition Proposal.
(c) If Altura receives a request for material non-public information from a Person who proposes an Acquisition Proposal in respect of Altura (the existence and content of which have been disclosed to the Initial Investor Group as set forth herein), and the Board of Directors determines that such proposal could reasonably constitute a Superior Proposal pursuant to Section 3.5(a) then, and only in such case, the Board of Directors may, subject to the execution of a confidentiality agreement and standstill agreement, in a form substantially similar to the Confidentiality Agreement, provide such Person with copies, access to or disclosure of information regarding Altura; provided however, that:
(i) Altura sends a copy of any such confidentiality agreement and standstill agreement to the Initial Investor Group immediately upon its execution;
(ii) the confidentiality agreement and standstill agreement in question permits Altura to notify the Initial Investor Group of the fact that Altura has received an Acquisition Proposal; and
(iii) the Initial Investor Group is provided with a list of, and access to, the information, if any, provided to such Person that was not previously provided to the Initial Investor Group.
(d) Altura shall reaffirm its recommendation of the Private Placement, the Change of Management and the other transactions contemplated herein by press release promptly after:
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(i) any Acquisition Proposal which is publicly announced and determined not to be a Superior Proposal; or
(ii) Altura and the Initial Investor Group enter into any material amendment to this Agreement.
(e) Altura shall ensure that its Representatives are aware of the provisions of this Section 3.5, and it shall be responsible for any breach of this Section 3.5 by its Representatives.

3.6 Notice by Altura of Superior Proposal Determination

(a) Altura covenants and agrees that:
(i) Altura shall not approve, recommend or enter into any agreement (a “ Proposed Agreement ”) in respect of an Acquisition Proposal (other than a confidentiality agreement contemplated by Section 3.5(c)) on the basis that it would constitute a Superior Proposal; and
(ii) the Board of Directors will not withdraw, modify or change any recommendation concerning the Private Placement, the Change of Management and the other transactions contemplated herein after the public announcement of an Acquisition Proposal that is a Superior Proposal in respect of which no Proposed Agreement has been entered into (an “ Announced Acquisition Proposal ”) or recommend any Announced Acquisition Proposal, or recommend that holders of Common Shares deposit their Common Shares under, vote in favour of or otherwise accept any Announced Acquisition Proposal or resolve to do so;

unless :

(C) it has provided the Initial Investor Group with written notice that the Board of Directors has determined that it has received a Superior Proposal and, in the case of Section 3.6(a)(i) above, it has provided the Initial Investor Group with a copy of any Proposed Agreement not less than 72 hours prior to its proposed execution by Altura, and in the case of Section 3.6(a)(ii) above, it has provided the Initial Investor Group with not less than 72 hours written notice that the Board of Directors intends to withdraw, modify or change its recommendation regarding the transactions contemplated herein following the public announcement of an Announced Acquisition Proposal or to recommend any Announced Acquisition Proposal (either such 72 hour period referred to herein, the “ Notice Period ”);
(D) it has complied with Sections 3.5 and 3.6 with respect thereto; and
(E) before entering into any Proposed Agreement, this Agreement shall have been terminated pursuant to Section 6.1(d).

Any Proposed Agreement or such written notice, as applicable, shall, if relevant, be accompanied by a written document from the Board of Directors regarding the value in financial terms that the Board of Directors has, in consultation with financial advisors, determined in good faith should be ascribed to any non-cash

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consideration offered under the Proposed Agreement or Announced Acquisition Proposal, as applicable.

(iii) During the Notice Period, Altura acknowledges that the Initial Investor Group shall have the opportunity, but not the obligation, to offer to amend the terms of this Agreement and the transactions contemplated herein. The Board of Directors will review any offer by the Initial Investor Group to amend the terms of this Agreement in good faith in order to determine, in the exercise of its fiduciary duties, whether the Initial Investor Group’s amended offer, upon acceptance by Altura, would result in such Superior Proposal ceasing to be a Superior Proposal. In addition, during such Notice Period, Altura shall, and shall cause its financial and legal advisors to, negotiate in good faith with the Initial Investor Group and its financial and legal advisors, to make such adjustments in the terms and conditions of this Agreement and the transactions contemplated herein as would enable Altura to proceed with the transactions contemplated herein, as amended, rather than the Superior Proposal. If the Board of Directors so determines, it will enter into an amended agreement with the Initial Investor Group reflecting the Initial Investor Group’s amended proposal. If:
- (A) the Initial Investor Group does not offer to amend the terms of this Agreement; or
- (B) both (x) the Board of Directors determines, in good faith and after consultation with its financial and legal advisors that such Superior Proposal continues to be a Superior Proposal and therefore rejects the Initial Investor Group’s amended proposal, and (y) Altura has complied with the other requirements of Sections 3.5 and 3.6, Altura shall be entitled to enter into the Proposed Agreement and withdraw, modify or change its recommendation concerning the Transactions and recommend the Superior Proposal.
(iv) Altura also acknowledges and agrees that each successive modification of any Acquisition Proposal shall constitute a new Acquisition Proposal for purposes of the requirement under Section 3.6(a) to initiate an additional 72 hour notice period.
(b) In the event that Altura provides the notice contemplated by Section 3.6(a) at a time which is less than 72 hours prior to the Altura Meeting, the Initial Investor Group shall be entitled to require Altura to adjourn or postpone the Altura Meeting to a date that is not more than seven Business Days after the date of such notice.

3.7 Provision of Information; Access

From and after the date hereof, subject to the terms of the Confidentiality Agreement, Altura shall provide the Initial Investor Group and its Representatives access, during normal business hours and at times as the Initial Investor Group may reasonably request, to its premises (including field offices and sites), books, contracts, records, computer systems, properties, Employees and management personnel and shall furnish promptly to the Initial Investor Group, all information concerning its business, properties and personnel as the Initial Investor Group may reasonably request, in order to permit the New Executives to assume control of Altura in an efficient and informed manner, all immediately upon but not prior to the Closing Date. Upon written request by the Initial Investor Group, but subject to Altura obtaining the consent (using reasonable commercial efforts) of any required third party operator or any joint venture group

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member, management of the Initial Investor Group and its Representatives will be permitted to attend any operations meetings held by Altura and Altura shall use reasonable commercial efforts to enable management of the Initial Investor Group to attend any meetings of Altura relating to the business, assets and/or operations of Altura, including meetings pursuant to any operating agreements to which Altura is party. Altura agrees to use its reasonable commercial efforts to keep the Initial Investor Group fully apprised in a reasonably timely manner of every circumstance, action, occurrence or event occurring or arising after the date hereof that would be material to a prudent operator of the business and operations of Altura. The Initial Investor Group agrees that they shall be bound by the Confidentiality Agreement in the same manner and to the same extent as if they were direct counterparties to Altura for the purposes of the Confidentiality Agreement.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES

4.1 Representations and Warranties of Altura

Except as set forth in the Disclosure Letter, Altura hereby represents and warrants (and, as applicable, covenants) to the Initial Investor Group as follows and acknowledges that the Initial Investor Group is relying upon these representations, warranties and covenants in connection with the entering into of this Agreement, that:

(a) Organization and Qualification of Altura. Each of Altura and 1880675 is a corporation duly amalgamated or incorporated, as the case may be, and organized and validly existing under the Applicable Laws of the Province of Alberta and has the requisite power and authority to own its properties and conduct its business as now owned and conducted. Each of Altura and 1880675 is duly registered to do business and is in good standing in each jurisdiction in which the character of its properties, owned or leased, or the nature of its activities make such registration necessary.
(b) Authority Relative to this Agreement. Altura has the requisite corporate authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the Board of Directors, and no other proceedings on the part of Altura are or will be necessary to authorize this Agreement and the transactions and documentation contemplated hereby other than the approval of the Altura Shareholders of the Private Placement and Change of Management that may be required by the TSXV. This Agreement has been duly executed and delivered by Altura and constitutes the legal, valid and binding obligation of Altura enforceable against Altura in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other Applicable Laws relating to or affecting creditors’ rights generally, and to general principles of equity.
(c) No Subsidiaries. Other than 1880675, Altura has no subsidiaries and Altura has no ownership interest in any partnership, corporation or other business organization. Altura is the beneficial owner and holder of record of all of the issued and outstanding securities in the capital of 1880675, with good and valid title to all such securities, free and clear of all liens and encumbrances (other than those created pursuant to the existing credit facilities of Altura) and no person, firm, corporation or other entity holds any securities convertible or exchangeable into shares of 1880675 or has any agreement, warrant, option, right or privilege (whether pre-emptive or contractual) being or capable of becoming an agreement, warrant, option or right (whether or not on condition(s)) for the purchase or other
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acquisition of any unissued shares, securities (including convertible securities) or warrants of 1880675.

(d) No Violations.
(i) None of the execution and delivery of this Agreement by Altura, the consummation of the transactions contemplated hereby or the compliance by Altura with any of the provisions hereof will:
- (A) violate, conflict with, or result in a breach of any provision of, require any consent, approval or notice under, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) or result in a right of termination or acceleration under, or result in a creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of Altura or 1880675 under any of the terms, conditions or provisions of: (x) the constating documents of Altura or 1880675; or (y) any note, bond, mortgage, indenture, deed of trust, agreement, lien, contract or other material instrument or obligation to which Altura or 1880675 is a party or to which Altura, 1880675 or their properties or assets may be subject or by which Altura or 1880675 is bound, other than pursuant to the Executive Agreements, Altura’s credit agreement and related documents and Altura’s office lease;
- (B) subject to compliance with the statutes and regulations referred to in Section 4.1(d)(ii), violate any judgement, ruling, order, writ, injunction, determination, award, decree, statute, ordinance, rule or regulation applicable to Altura or 1880675; or
- (C) cause the suspension or revocation of any authorization, consent, approval or license currently in effect.
(ii) Other than in connection or compliance with Applicable Canadian Securities Laws or other Applicable Laws and the rules and policies of the TSXV and the approvals of the Altura Shareholders contemplated herein:
- (A) there is no legal impediment to Altura’s consummation of the Private Placement and the other transactions contemplated by this Agreement; and
- (B) no filing or registration with, or authorization, consent or approval of, any domestic or foreign Governmental Entity is necessary by Altura in connection with the making or the consummation of Private Placement and the other transactions contemplated herein.

(e) Capitalization of Altura.

(i) As of the date hereof, the authorized share capital of Altura consists of an unlimited number of Common Shares and an unlimited number of preferred shares. As of the date hereof, 108,920,974 Common Shares and no preferred shares are issued and outstanding. There are 9,638,334 Stock Options outstanding as of the date hereof and there are no other options, puts, calls, conversion privileges, warrants or other rights, agreements or commitments of any character whatsoever requiring the
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issuance, sale or transfer by Altura of any shares of Altura or any securities or rights of any kind convertible into, or exchangeable or exercisable for, or otherwise evidencing a right to acquire, any shares of Altura, nor are there any outstanding stock appreciation rights, phantom equity or similar rights, agreements, arrangements or commitments based upon the share price, book value, income or other attribute of Altura. All outstanding Common Shares have been duly authorized and validly issued, are fully paid and non-assessable and are not subject to, nor were they issued in violation of, any pre-emptive rights.

(ii) There are no outstanding bonds, debentures or other evidences of indebtedness of Altura having the right to vote (or that are convertible for or exercisable into securities having the right to vote) with the holders of outstanding securities on any matter. Altura does not have any obligation to repurchase, redeem or otherwise acquire any of its outstanding securities or with respect to the voting or disposition of any of its outstanding securities. No holder of securities issued by Altura has any right to compel Altura to register or otherwise qualify securities for public sale in Canada or the United States.
(f) No Material Adverse Change. Since December 31, 2020, no Material Adverse Change has occurred that has not been publicly disclosed.
(g) Information. To the knowledge of Altura, all data and information provided by Altura (or any of its Representatives) to the Initial Investor Group and its Representatives is complete and true and correct in all material respects and does not omit any data or information necessary to make the data and information provided, taken as a whole, not misleading in any material respect. There has been no breach of any confidentiality agreements or obligations by virtue of the disclosure to the Initial Investor Group and its affiliates, agents and representatives of such data and information, except for any such breach which would not have a Material Adverse Effect.
(h) Absence of Undisclosed Liabilities. Altura has no material liabilities of any nature (matured or unmatured, fixed or contingent), other than:
(i) those set forth or adequately provided for in the balance sheets and associated notes thereto included in the Financial Statements (the “ Balance Sheets ”);
(ii) those incurred in the ordinary course of business since the dates of the Balance Sheets and consistent with past practice; and
(iii) those incurred in connection with the execution of this Agreement.
(i) Net Debt. As at close of business on August 27, 2021, the Altura Net Debt was less than $4,250,000.
(j) Cash. As at close of business on August 27, 2021, Altura had:
(i) a cash balance of [ Amount Redacted ] ;
(ii) outstanding cheques of [ Amount Redacted ] ; and
(iii) drawings against its credit facilities of [ Amount Redacted ]
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(k) No Guarantees. Neither Altura nor 1880675 has guaranteed, endorsed, assumed, indemnified or accepted any responsibility for, and does not and will not guarantee, endorse, assume, indemnify or accept any responsibility for, contingently or otherwise, any indebtedness or the performance of any obligation of any other Person.
(l) Bankruptcy and Insolvency Matters. To the knowledge of Altura:
(i) no action or proceeding has been commenced or filed by or against Altura or 1880675 which seeks or may lead to:
- (A) receivership, bankruptcy, a commercial proposal or similar proceeding of Altura or 1880675;
- (B) the adjustment or compromise of claims against Altura or 1880675; or
- (C) the appointment of a trustee, receiver, liquidator, custodian or other similar officer for Altura or 1880675 or any portion of either of their assets, and no such action or proceeding has been authorized or is being considered by or on behalf of Altura or 1880675 and no creditor or securityholder of Altura or 1880675 has threatened to commence or advised that it may commence, any such action or proceeding; and
(ii) neither Altura nor 1880675 has:
- (A) made, and is not considering making, an assignment for the benefit of its creditors; and
- (B) requested, and is not considering requesting, a meeting of its creditors to seek a reduction, compromise, composition or other accommodation with respect to its respective indebtedness.
(m) Swaps. Except as disclosed in the Disclosure Letter, neither Altura nor 1880675 have any obligations or liabilities, direct or indirect, vested or contingent in respect of any rate swap transactions, options, swaps or transactions in any tradeable environmental instrument or allowance, basis swaps, forward rate transactions, commodity swaps, commodity options, equity or equity index swaps, equity or equity index options, bond options, interest rate options, foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, production sales transactions having terms greater than 90 days or any other similar transactions (including any option with respect to any of such transactions) or any combination of such transactions.
(n) Employment Matters.
(i) Altura has provided the Initial Investor Group with a correct and complete list, or copies of any relevant agreements (the “ Employment Information ”) in respect of each Employee, director, independent contractor, consultant and agent of Altura or 1880675 who currently provides material services to the administration, operation, maintenance and management of Altura or 1880675 pursuant to an agreement which may not be terminated with less than three months’ notice (or pay in lieu thereof), whether actively at work or not, their salaries, wage rates,
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commissions and consulting fees, bonus arrangements, benefits, positions, status as full-time or part-time Employees, location of employment and length of service.

(ii) Except as provided for in Section 2.6, there are no Employee Obligations, and no Employee or former Employee has any agreement as to length of notice or severance payment required to terminate his or her employment, other than such as results by Applicable Law from the employment of an Employee without an agreement as to notice or severance.
(iii) All amounts due or accrued for all salary, wages, bonuses, commissions, vacation with pay, and other employee benefits in respect of Employees which are attributable to the period before Closing will be paid at or prior to the Closing Time and are or shall be accurately reflected in the books and records of Altura.
(iv) Altura and 1880675 are in compliance with all material terms and conditions of employment and in all material respects with all Applicable Laws respecting employment, including pay equity, wages and hours of work and occupational health and safety, and to the knowledge of Altura, neither it nor 1880675 has received notice of any outstanding claims, complaints, investigations or orders under any such Applicable Laws.
(v) Neither Altura nor 1880675 has received notice of any outstanding assessments, penalties, fines, liens, charges, surcharges, or other amounts due or owing pursuant to any workers’ compensation legislation and Altura has not been reassessed in any material respect under such legislation and, to the knowledge of Altura, no audit of Altura or 1880675 is currently being performed pursuant to any applicable worker’s compensation legislation.
(vi) To the knowledge of Altura, there are no charges pending under Occupational Health and Safety legislation (“ OHSA ”) in respect of Altura or 1880675. Altura and 1880675 have complied in all material respects with the terms and conditions of the OHSA, as well as with any orders issued under OHSA. There are no appeals of any orders under OHSA currently outstanding.
(vii) Neither Altura nor 1880675 is a party to any actual, or to the knowledge of Altura pending or threatened application, complaint or other Legal Proceeding under any Applicable Law relating to Employees or former Employees nor is Altura aware of, nor is there, any factual or legal basis on which any such Legal Proceeding might be commenced.
(viii) To the knowledge of Altura, none of the Employees is in violation of any noncompetition, non-solicitation, non-disclosure or any similar agreement with any third party.
(o) Brokerage Fees. Except as disclosed in the Disclosure Letter, Altura has not retained nor will it retain any financial advisor, broker, agent or finder or paid or agreed to pay any financial advisor, broker, agent or finder on account of this Agreement, any transaction contemplated hereby or any transaction presently ongoing or contemplated.
(p) Conduct of Business. Except as would not have a Material Adverse Effect, Altura and 1880675 have conducted and are conducting their business in the ordinary course of
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business consistent with past practice, in accordance with Good Oilfield Practice, and in compliance in all material respects with all Applicable Laws in each jurisdiction in which they carry on business. To the knowledge of Altura, each of Altura and 1880675 owns, possesses or has obtained, and is in compliance with, all licences, Permits, certificates, orders, grants, registrations, consents, approvals and other authorizations of or from any Governmental Entity necessary to conduct its business. Altura has not conducted any business except in relation to oil and gas exploration and development and activities ancillary thereto.

(q) Public Record. Altura has timely filed with the Securities Authorities all material forms, reports, schedules, statements and other documents required to be filed by Altura with the Securities Authorities. Altura has not filed any confidential material change report that, at the date hereof, remains confidential. All documents and information filed by Altura with any Securities Authority in compliance, or intended compliance, with any Applicable Canadian Securities Laws complied in all material respects with all applicable requirements of Applicable Canadian Securities Laws and did not contain, at the respective date of such document or information, any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, unless such document or information was subsequently corrected or superseded prior to the date hereof. There are no outstanding or unresolved comments in comment letters from any Securities Authority with respect to any of Altura’s filings and neither Altura nor any of its filings is the subject of an ongoing audit, review, comment or investigation by any Securities Authority or the TSXV.
(r) Financial Statements. The Financial Statements were prepared in accordance with GAAP and present fairly in accordance with GAAP the financial position, results of operations and changes in financial position of Altura (taken as a whole) as of the dates thereof and for the periods indicated therein and reflect appropriate and adequate reserves in respect of contingent liabilities, if any, of Altura (taken as a whole). There has been no material change in Altura’s accounting policies, except as required under GAAP or as described in the notes to the Financial Statements.
(s) Off-Balance Sheet Arrangements. Altura is not a party to any off-balance sheet arrangements, as that term is understood under GAAP.
(t) Books and Records . The corporate records, books of account and minute books of Altura and 1880675 have been maintained in accordance with all applicable statutory requirements and are complete and accurate in all material respects. All such corporate records, books of account and minute books have been made available to the Initial Investor Group or its legal counsel.
(u) Litigation, etc. There is no claim, action, inquiry, suit, hearing, arbitration, investigation or other criminal, civil or administrative proceeding outstanding, or to the knowledge of Altura, pending or threatened against or relating to Altura or 1880675 or affecting any of their properties or assets nor is Altura or 1880675 subject to any outstanding order, writ, injunction or decree that has had or is reasonably likely to have a Material Adverse Effect or that is reasonably likely to prevent or materially delay consummation of the transactions contemplated herein and Altura is not otherwise aware of any circumstance currently in existence that could be reasonably likely to give rise to any such claim, action, inquiry, suit, hearing, arbitration, investigation, proceeding, order, writ, injunction or decree.
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(v) Environmental. Except as would not, or would not be reasonably expected to, have a Material Adverse Effect:
(i) neither Altura nor 1880675 is in violation of any federal, regional, provincial, municipal or local Applicable Laws, regulations, orders, government decrees, ordinances, regulatory approvals, common law, directives, decisions or treaties in each case having the force of law and binding on Altura or 1880675, with respect to environmental, health or safety matters (collectively, “ Environmental Laws ”);
(ii) Altura and 1880675 have operated their business at all times and have generated, received, handled, used, stored, treated, shipped, recycled and disposed of all waste and contaminants in compliance with Environmental Laws;
(iii) except as permitted by Environmental Laws, there have been no unremediated spills, releases, deposits or discharges of hazardous or toxic substances, contaminants or wastes within Altura’s or 1880675’s ownership, possession or control at any time, other than those which have been or are in the process of being rectified in compliance with Environmental Laws (written details of which have been provided to the Initial Investor Group), on or from or under or in any of the real property owned or leased by Altura at any time;
(iv) there have been no unremediated releases, deposits or discharges, in violation of Environmental Laws, of any hazardous or toxic substances, contaminants or wastes, within the ownership, possession or control of Altura or 1880675, into the earth, air or into any body of water or any municipal or other sewer or drain water systems;
(v) no orders, directions, demands or notices have been threatened or have been issued and remain outstanding pursuant to any Environmental Laws relating to the business or assets of Altura or 1880675, other than abandonment and reclamation orders, directions or notices issued in the normal course of business to the extent not in breach of any applicable Environmental Laws;
(vi) each of Altura and 1880675, as of the date hereof, holds all licenses, Permits, consents, approvals, agreements, certificates and regulatory approvals required under any Environmental Laws in connection with the operation of its business as presently conducted and the ownership and use of its assets and all such licenses, Permits, consents, approvals, agreements, certificates and regulatory approvals are in full force and effect and Altura does not have notice of any circumstances that may lead to the revocation, cancellation or curtailment of any of the same; and
(vii) full and accurate particulars of or, in the case of a document, a copy of, all environmental or health and safety assessments, audits, reviews or investigations, whether in draft or final form, which concern in whole or in part (directly or indirectly) the current or previous operations of Altura and which are in the possession or control of Altura have been made available to the Initial Investor Group.
(w) [Reserved]
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(x) Tax Matters.

(i) Tax Definitions . For purposes of this Agreement, the following definitions shall apply:
The term “ Taxes ” shall mean all taxes, duties, imposts, levies, assessments, tariffs and other charges, however denominated, including any interest, penalties or other additions that may become payable in respect thereof, imposed, assessed or collected by any Governmental Entity, including, without limiting the generality of the foregoing, all income or profits taxes (including, but not limited to, federal income taxes and provincial income taxes), capital, capital gains, payroll and employee withholding taxes, employment insurance, social insurance taxes, sales and use taxes, ad valorem taxes, royalties, value added taxes, excise taxes, franchise taxes, gross receipts taxes, business license taxes, occupation taxes, real and personal property taxes, stamp taxes, insurance taxes, environmental taxes, transfer taxes, workers’ compensation and other governmental charges, and other obligations of the same or of a similar nature to any of the foregoing, which Altura or 1880675 is required to pay, withhold or collect.

The term “ Returns ” shall mean all reports, estimates, declarations of estimated tax, information statements, elections, returns and other documentation relating to, or required to be filed in connection with, any Taxes.

(ii) Returns Filed and Taxes Paid . Since January 1, 2016, all Returns required to be filed by or on behalf of Altura or 1880675 have been duly filed on a timely basis and such Returns are true, complete and correct in all material respects. All Taxes shown to be payable on the Returns or on subsequent assessments with respect thereto have been paid in full on a timely basis or have been accrued for in the Financial Statements, and no other Taxes are payable by Altura or 1880675 with respect to items or periods covered by such Returns. The income Tax liability of Altura and 1880675 has been assessed by each relevant Governmental Entity in respect of the taxation years of Altura and 1880675 ending before the date hereof.
(iii) Tax Reserves . Altura has paid all applicable Taxes or Altura has provided adequate accruals in the Financial Statements (including income Taxes and related future Taxes) for all such unpaid Taxes in accordance with GAAP. Altura has made adequate provision in accordance with GAAP in its books and records for any amount of Taxes accruing in respect of any accounting period ending subsequent to December 31, 2020. Altura has duly and timely paid all Taxes, including instalments in respect of Taxes, that are due and payable whether or not assessed by any appropriate Governmental Entity.
(iv) Liens . There are no outstanding liens for Taxes upon any property or assets of Altura or 1880675, other than liens for Taxes not yet due and payable and for which Altura has provided adequate accruals in the Financial Statements in accordance with GAAP.
(v) Deficiencies .
(A) No deficiencies have been asserted and are outstanding against Altura or 1880675 with respect to Taxes, including relating to transfer pricing.
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(B) Neither Altura nor 1880675 is a party to any action or proceeding for assessment or collection of Taxes, nor has any such event been asserted or threatened.
(C) No waiver or extension of any statute of limitations is in effect with respect to Taxes or Returns of Altura or 1880675.
(D) The Returns of Altura and 1880675 are not the subject of any audit by a Governmental Entity, and no such audit is, to Altura’s knowledge, pending or threatened and there are no contingent liabilities for Taxes or any grounds for an assessment or reassessment with respect to Taxes.
(vi) Withholdings . All Taxes required to be deducted, withheld or remitted by Altura or 1880675 under Applicable Laws for amounts paid or credited to or for the account or benefit of any Person, including, Taxes on payments to any present or former Employees, officers or directors or non-residents of Canada, have been duly deducted and withheld and have been duly and timely remitted to the appropriate Governmental Entity. Each of Altura or 1880675 has charged, collected and remitted on a timely basis all Taxes as required under applicable legislation on any supply, sale or delivery whatsoever made by Altura.
(vii) Jurisdiction . Except in the ordinary course of business and in compliance with Applicable Laws, neither Altura nor 1880675 has been required to file any Return with, and has never been liable to pay any Taxes to, any Governmental Entity outside Canada. No claim has ever been made by a Governmental Entity in a jurisdiction where Altura or 1880675 does not file Returns that it is or may be subject to the imposition of any Tax by that jurisdiction.
(viii) Taxes of Other Persons . Except in the ordinary course of business and in compliance with Applicable Laws, neither Altura nor 1880675 is subject to liability for Taxes of any other Person. Neither Altura nor 1880675 has acquired property from any Person in circumstances where Altura or 1880675 did or could become liable for any Taxes of such Person. The value of the consideration paid or received by Altura or 1880675 for the acquisition, sale, transfer or provision of property (including intangibles) or the provision of services (including financial transactions) from or to a Person with whom Altura or 1880675 was not dealing at arm’s length within the meaning of the ITA was equal to the estimated fair market value of such property acquired, provided or sold or services purchased or provided. Neither Altura nor 1880675 has entered into any agreement with, or provided any undertaking to, any Person pursuant to which it has assumed liability for the payment of income Taxes owing by such Person.
(ix) Flow-Through Obligations . Altura has incurred and renounced all amounts required, and has complied with all representations and covenants, pursuant to any agreements to issue shares as “flow-through shares” for the purposes of the ITA.
(x) Control . Since January 1, 2016, there has not been an acquisition of control of Altura for purposes of the ITA.
(xi) Tax Pools . As at December 31, 2020, Altura tax pools were not less than $43,211,979, including not less than $3,082,359 of Canadian exploration expense,
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$13,183,819 of Canadian development expense, $8,283,595 of undepreciated capital cost, $18,489,442 of non-capital losses and $172,763 of other tax pools.

(xii) GST . Altura is duly registered with the Canada Revenue Agency under the Excise Tax Act (Canada) for purposes of the goods and services tax (“ GST ”). All input tax credits claimed by Altura for GST purposes were calculated in accordance with Applicable Law. Altura has complied with all registration, reporting, payment, collection and remittance requirements in respect of GST and provincial sales tax or harmonized tax legislation.
(y) Employee Benefit Plans. Altura:
(i) has no liability, or contingent or prospective liability, to provide benefits under any defined benefit plans (including individual plans) and has not made any promises with respect to the provision of any benefits on a defined benefit basis;
(ii) other than Altura’s existing group insurance plan, has no other employee benefit plans and has not made any promises with respect to increased benefits under such plans; and
(iii) has no stock option plans or stock-based compensation arrangements other than the Stock Option Plan.
(z) Reporting Issuer Status and TSXV Listing.
(i) Altura is a reporting issuer in the provinces of British Columbia, Alberta and Ontario. The Common Shares are listed and posted for trading on the TSXV. Altura is not in default of Applicable Canadian Securities Laws or the rules and policies of the TSXV.
(ii) Altura has not taken any action to cease to be a reporting issuer in any of the provinces of British Columbia, Alberta and Ontario nor has Altura received notification from any Securities Authority seeking to revoke the reporting issuer status of Altura. No delisting, suspension of trading or cease trade or other order or restriction with respect to any securities of Altura is in effect, has been threatened, or is expected to be implemented or undertaken, or, to the knowledge of Altura, is pending, and to its knowledge, Altura is not subject to any formal or informal review, enquiry, investigation or other proceeding relating to any such order or restriction.
(aa) Shareholder Rights Plan. There is not in effect with respect to Altura any shareholder rights plan.
(bb) Personal Property. To the knowledge of Altura, Altura has good and valid title to, or a valid and enforceable leasehold interest in, all personal property owned or leased by it in connection with the Altura Assets, except as would not, individually or in the aggregate, have a Material Adverse Effect.
(cc) Title. Although it does not warrant title to its petroleum and natural gas rights, except for those encumbrances in favour of Altura’s lenders or such “permitted encumbrances” as are customary in the oil and gas industry, the petroleum and natural gas rights of Altura are
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free and clear of all liens, adverse claims, charges and encumbrances created by, through or under Altura.

(dd) Properties.

Except as would arise or exist in the ordinary course of operating as an oil and gas company in western Canada (including Crown or freehold lessor royalties, industry operating agreements or procedures and ordinary course expirations, relinquishments or forfeitures as provided under the terms of Crown or freehold licenses or leases), to the knowledge of Altura:

(i) there are no earn-in rights, rights of first refusal, royalty rights or similar provisions;
(ii) Altura has not received any notice, whether written or oral, from any Governmental Entity or any Person with jurisdiction or applicable authority of any revocation or intention to revoke its interests in any of the Altura Assets; and
(iii) there are no disputes, adverse claims, actions, suits or proceedings that have been commenced or that, to Altura’s knowledge, are pending or threatened affecting or which could affect the title to or right of Altura to explore or develop the Altura Assets.
(ee) Restrictions. Except as disclosed in the Disclosure Letter, neither Altura nor 1880675 is a party to or otherwise bound by any area of mutual interest agreement or other similar agreement which in any material respect restricts the ability of Altura to operate or, directly or indirectly, acquire any interest.
(ff) Operational Matters. Except as would not, individually or in the aggregate, have a Material Adverse Effect, all rentals, royalties, overriding royalty interests, production payments, net profits, interest burdens, payments and obligations due and payable, or performable, as the case may be, on or prior to the date hereof under, with respect to, or on account of, any direct or indirect Altura Assets have been: (i) paid; (ii) performed; or (iii) provided for prior to the date hereof.
(gg) Processing and Transportation Commitments. Except as disclosed in the Disclosure Letter, all of the material third party processing and transportation agreements of Altura having a duration of greater than 30 days are disclosed in the Disclosure Letter and other than as set forth in the Disclosure Letter, Altura does not have any material third party processing or transportation agreements or any obligations to deliver sales volumes to any other person having a duration of greater than 90 days.
(hh) Permits. Altura and 1880675 have obtained and possess all Permits required by Applicable Laws necessary to engage in their businesses, as now conducted, and Altura and 1880675 are not in material default under any such agreements, Permits, plans, certificates and other rights and authorizations except where the failure to have obtained or to be not in default of such Permits would not have a Material Adverse Effect.
(ii) Production Allowables and Production Penalties. To the knowledge of Altura:
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(i) none of the Altura Wells has been produced in excess of applicable production allowables imposed by any Applicable Laws or Governmental Entity and Altura has no knowledge of any impending change in production allowables imposed by any Applicable Laws or Governmental Entity that may be applicable to any of the wells in which Altura holds an interest, other than changes of general application in the jurisdiction in which such wells are situated; and
(ii) Altura has not received notice of any production penalty or similar production restriction of any nature imposed or to be imposed by any Governmental Entity, including gas-oil ratio, off-target and overproduction penalties imposed by any Governmental Entity that may be applicable, and, to Altura’s knowledge, none of the wells in which it holds an interest is subject to any such penalty or restriction.
(jj) Take-or-Pay Commitments. Altura has not, as of the date of this Agreement received:
(i) any advance payments for petroleum or services not already delivered or provided prior to receipt of payment, or
(ii) any material accrued “take-or-pay” or “send-or-pay” liabilities under any agreement.
(kk) Operation and Condition of Altura Wells. Except as would not, individually or in the aggregate, have a Material Adverse Effect, all of the Altura Wells for which Altura:
(i) was or is operator, were or have been drilled and, if and as applicable, completed, operated and abandoned in accordance with Good Oilfield Practices; and
(ii) was not or is not operator, have, to Altura’s knowledge, been drilled and, if and as applicable, completed, operated and abandoned in accordance with Good Oilfield Practices.
(ll) Operation and Condition of Tangibles. To Altura’s knowledge all tangible depreciable property or assets located within, on or about the Altura Assets were or have been constructed, operated and maintained in accordance with Good Oilfield Practices during all periods in which Altura was the operator thereof.
(mm) No Expropriation. No Altura Assets have been taken or expropriated by any Governmental Entity nor has any notice or proceeding in respect thereof been given or commenced or threatened nor, to the best of the knowledge of Altura, is there any intent or proposal to give any such notice or to commence any such proceeding.
(nn) Restrictions on Business Activities. Except for Applicable Laws of general application, there is no agreement, judgment, injunction, order or decree binding upon Altura or 1880675 that has or could reasonably be expected to have the effect of materially prohibiting, restricting or impairing any material business practice of Altura or 1880675, any material acquisition of property by Altura or 1880675 or the conduct of any material business by Altura or 1880675, as now conducted (including following the transactions contemplated by this Agreement).
(oo) Engineering Reports. Altura has no reason to believe that the report of McDaniel dated April 14, 2021 and effective December 31, 2020 (the “ Reserves Report ”) evaluating
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certain oil and gas assets of Altura was not accurate in all material respects as at the effective date of such report, and, except for any impact of changes in commodity prices and normal course production from such date, which may or may not be material, Altura has no knowledge of a Material Adverse Change in the production, reserves, estimates of future net production revenues or other relevant information from that disclosed in the Reserves Report. Altura has provided to McDaniel all material information concerning land descriptions, well data, facilities and infrastructure, ownership and operations, future development plans and historical technical and operating data respecting the principal oil and gas assets of Altura, in each case as at the effective date of such report, and, in particular, all material information respecting the interests of Altura in its principal oil and gas assets and royalty burdens and net profits interest burdens thereon and such information was accurate and correct in all material respects as at the respective dates thereof and did not omit any information necessary to make any such information provided not misleading as at the respective dates thereof and there has been no Material Adverse Change in any of the material information so provided since the date thereof.

(pp) No Insider Rights. No director, officer, insider or other party not at arm’s length to Altura has any material right, title or interest in (or the right to acquire any right, title or interest in) any royalty interest, participation interest or any other interest whatsoever, in any properties of Altura or 1880675.
(qq) Related Party Transactions. Altura is not indebted to any director, officer, Employee or agent of, or independent contractor to, Altura or any of its affiliates or associates (except for amounts due as normal salaries, bonuses, directors’ fees or other forms of normal compensation for services rendered and in reimbursement of ordinary expenses). No director, officer, Employee or agent of Altura or any of its affiliates or associates is a party to any loan, contract, arrangement or understanding or other transactions with Altura required to be disclosed pursuant to Applicable Canadian Securities Laws.
(rr) Insurance. Policies of insurance are in force as of the date hereof naming Altura as an insured, copies of which have been provided to the Initial Investor Group. All such policies shall remain in force and effect and shall not be cancelled or otherwise terminated as a result of the transactions contemplated by this Agreement.
(ss) Confidentiality Agreements. Since December 31, 2020, Altura has not waived or released the applicability of any “standstill” or other similar provisions of any confidentiality or other similar agreements (other than industry operating and similar agreements).
(tt)

Material Agreements.

(i) All agreements, contracts, royalties, ancillary documents, Permits, licences, regulatory approvals, plans, certificates and other rights and authorizations that are material to the business, the assets, the equity value or the operations of Altura (taken as a whole) (the “ Material Agreements ”) have been made available to the Initial Investor Group.
(ii) To the knowledge of Altura:
(A) all Material Agreements are in full force and effect, and Altura or 1880675, as applicable, is entitled to all rights and benefits thereunder in accordance with the terms thereof in all material respects; and
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- (B) Altura or 1880675, as applicable, has complied in all material respects with all terms of such Material Agreements, have paid all amounts due thereunder, have not waived any material rights thereunder and no material default or breach exists in respect thereof on the part of Altura or 1880675, as applicable, and Altura is not aware of a material breach by any other person who is party to or bound by any Material Agreement.
(iii) None of the Material Agreements are subject to any termination fees, cancellation costs or other similar penalties which would become payable upon termination of such contract or agreement following a change of control of Altura or upon completion of the transactions contemplated by this Agreement.
(iv) There is no non-competition, exclusivity or other similar agreement, commitment or understanding in place, whether written or oral, to which Altura or 1880675 or, to the knowledge of Altura, any director, officer, employee or consultant of Altura or 1880675 is a party or is otherwise bound that would now or hereafter:
- (A) limit in any material respect either the type of business in which Altura may engage or the manner or locations in which it may so engage in any business; or
- (B) could require the disposition of any material assets of Altura or 1880675.
(v) The execution, delivery and performance of this Agreement does not and will not result in the restriction of Altura (taken as a whole) from engaging in its business or from competing with any Person or in any geographical area.
(uu) No Shareholder Agreements. Other than the Support Agreements, there are no shareholders agreements, registration rights agreements, voting trusts, proxies or similar agreements, arrangements or commitments to which Altura is a party or, to the knowledge of Altura, with respect to any shares or other equity interests of Altura or any other Contract relating to disposition, voting or dividends with respect to any equity securities of Altura.
(vv) Debt Service Reserve Account. Altura does not maintain a debt service reserve account or account of similar nature.
(ww) Auditors. There has not been a reportable event (within the meaning of Section 4.11 of National Instrument 51-102 Continuous Disclosure Obligations of the Canadian Securities Administrators) with Altura’s auditors.
(xx) U.S. Securities Law Matters. There is no class of securities of Altura which is registered pursuant to Section 12 of the U.S. Exchange Act, nor is Altura subject to any reporting obligation pursuant to Section 15(d) of the U.S. Exchange Act, and Altura is not, and has never been, subject to any requirement to register any class of its equity securities pursuant to Section 12(g) of the U.S. Exchange Act. No securities of Altura have been traded on any national securities exchange in the United States.
(yy) Place of Principal Offices. Altura is not incorporated in the United States, is not organized under the laws of the United States and does not have its principal office within the United States.
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(zz) Locations of Assets and U.S. Sales. All of the assets and property of Altura, including all entities “controlled by” Altura for the purposes of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, are located outside the United States and did not generate sales in or into United States exceeding US$75.9 million during Altura’s most recent completed fiscal year.
(aaa) Foreign Private Issuer. Altura is a “foreign private issuer” within the meaning of Rule 405 of Regulation C under the U.S. Securities Act.
(bbb) Investment Company. Altura is not registered nor, assuming it was incorporated in the United States, required to be registered as an “investment company” pursuant to the United States Investment Company Act of 1940, as amended.
(ccc) Land Position. Altura’s net undeveloped land position as at the date hereof was not less than 34,000 net acres.
(ddd) Production. Altura’s production as at close of business on August 27, 2021 was approximately 1,100 boe/d.
(eee) Authorizations for Expenditure. Altura has authorizations for expenditures and other like commitments, the outstanding portion of which, in an aggregate amount does not exceed [ Amount Redacted ] , net to Altura, and all such authorizations and commitments are set forth in the Disclosure Letter.

4.2 Representations and Warranties of the Initial Investor Group

Each member of the Initial Investor Group represents and warrants to and in favour of Altura, severally and not jointly, and acknowledges that Altura is relying upon such representations and warranties in connection with the matters contemplated by this Agreement:

(a) Authority and Enforceability. Such Person has the right, power, authority, legal capacity and competence to enter into this Agreement and to perform all of its obligations hereunder and has taken all action necessary to authorize the execution, delivery and performance of this Agreement and the transactions described herein. This Agreement has been duly executed and delivered by such Person and is a legal, valid and binding obligation of the person enforceable against the Person in accordance with its terms subject to bankruptcy or similar Applicable Laws affecting enforcement of creditors’ rights generally and to the extent that equitable remedies such as specific performance and injunction are in the discretion of the court from which they are sought.
(b) No Violations. None of the execution and delivery of this Agreement by such person, the consummation of the transactions contemplated hereby or the compliance by such person with any of the provisions hereof will:
(i) violate, conflict with, or result in a breach of any provision of, require any consent, approval or notice under, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under any of the terms, conditions or provisions of any agreement, contract or other material instrument or obligation to which such person is a party or to which such person is bound; or
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(ii) violate any judgement, ruling, order, writ, injunction, determination, award, decree, statute, ordinance, rule or regulation applicable to such person

(except, in the case of each of clauses (i) and (ii) above, for such violations, conflicts, breaches, defaults, terminations which, or any consents, approvals or notices which if not given or received, would not materially adversely affect the consummation of the transactions contemplated herein).

(c) Legal Impediment. Other than in connection or compliance with Applicable Canadian Securities Laws and the rules of the TSXV, there is no legal impediment to such person’s consummation of the Private Placement and the other transactions contemplated by this Agreement.
(d) Litigation, etc. There are no actions, suits or proceedings pending or, to the knowledge of such person, threatened against or adversely affecting the Initial Investor Group at law or in equity or before or by any federal, provincial, municipal or other governmental court, department, commission, board, bureau, agency or instrumentality, domestic or foreign, that might materially adversely affect the consummation of the transactions contemplated herein.
(e) Eligible to Participate in the Unit Private Placement. Such person is eligible to purchase Units under the Unit Private Placement in accordance with available prospectus exemptions under Applicable Canadian Securities Laws.
(f) Qualification as an Officer and/or Director. Such person, if contemplated to be appointed as a director and/or officer of Altura at the Closing, meets the criteria of the ABCA and the TSXV to act as an officer and/or director of Altura and such person has no reason to believe that the TSXV will not permit such person to act as an officer and/or director of Altura following the submission and review of a properly executed personal information form.
(g) No Bankruptcy. Such person has never become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, become subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold his assets. Such person has never been a director or executive officer of any company that, while acting in that capacity or within a year of ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.
(h) No Sanctions or Penalties. Such person has never been the subject of disciplinary action by a professional association, been subject to a penalty or sanction imposed by a court or securities regulator relating to securities or corporate matters, entered into a settlement agreement with a securities regulator or been found by a court to have committed fraud, breach of trust, theft or any similar wrongdoing, whether in a civil or criminal matter.
(i) Unit Private Placement. Such person will have prior to Closing sufficient funds to complete its investment in the Unit Private Placement in the amount disclosed to Altura.
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4.3 Privacy Issues

(a) For the purposes of this Section 4.3, the following definitions shall apply:

“ Applicable 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 but not limited to the Personal Information Protection and Electronic Documents Act (Canada) and/or any comparable provincial legislation including the Personal Information Protection Act (Alberta);

“ Authorized Authority ” means, in relation to any Person, transaction or event, any:

(i) federal, provincial, municipal or local governmental body (whether administrative, legislative, executive or otherwise), both domestic and foreign;
(ii) agency, authority, commission, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government;
(iii) court, arbitrator, commission or body exercising judicial, quasi-judicial, administrative or similar functions; and
(iv) other body or entity created under the authority of or otherwise subject to the jurisdiction of any of the foregoing, including any stock or other securities exchange, in each case having jurisdiction over such Person, transaction or event; and

“ Personal Information ” means information (other than business contact information when used or disclosed for the purpose of contacting such individual in that individual’s capacity as an employee or an official of an organization and for no other purpose) about an identifiable individual disclosed or transferred to the Initial Investor Group by Altura in accordance with this Agreement.

(b) The Parties acknowledge that they are responsible for compliance at all times with Applicable Privacy Laws which govern the collection, use or disclosure of Personal Information disclosed to either Party pursuant to or in connection with this Agreement (the “ Disclosed Personal Information ”).
(c) Prior to the completion of the transactions contemplated herein, neither Party shall use or disclose the Disclosed Personal Information for any purposes other than those related to the performance of this Agreement. After the completion of the transactions contemplated herein, a Party may only collect, use and disclose the Disclosed Personal Information for the purposes for which the Disclosed Personal Information was initially collected from or in respect of the individual to which such Disclosed Personal Information relates or for the completion of the transactions contemplated herein, unless:
(i) either Party shall have first notified such individual of such additional purpose, and where required by Applicable Laws, obtained the consent of such individual to such additional purpose; or
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(ii) such use or disclosure is permitted or authorized by Applicable Laws, without notice to, or consent from, such individual.
(d) Each Party acknowledges and confirms that the disclosure of the Disclosed Personal Information is necessary for the purposes of determining if the Parties shall proceed with the transactions contemplated herein, and that the Disclosed Personal Information relates solely to the carrying on of the business or the completion of the transactions contemplated herein.
(e) Each Party acknowledges and confirms that it has taken and shall continue to take reasonable steps to, in accordance with Applicable Laws, prevent accidental loss or corruption of the Disclosed Personal Information, unauthorized input or access to the Disclosed Personal Information, or unauthorized or unlawful collection, storage, disclosure, recording, copying, alteration, removal, deletion, use or other processing of such Disclosed Personal Information.
(f) Subject to the following provisions, each Party shall at all times keep strictly confidential all Disclosed Personal Information provided to it, and shall instruct those employees or advisors responsible for processing such Disclosed Personal Information to protect the confidentiality of such information in a manner consistent with the Parties’ obligations hereunder. Prior to the completion of the transactions contemplated herein, each Party shall take reasonable steps to ensure that access to the Disclosed Personal Information shall be restricted to those employees or advisors of the respective Party who have a bona fide need to access such information in order to complete the transactions contemplated herein.
(g) Where authorized by Applicable Laws, each Party shall promptly notify the other Party to this Agreement of all inquiries, complaints, requests for access, variations or withdrawals of consent and claims of which the Party is made aware in connection with the Disclosed Personal Information. To the extent permitted by Applicable Laws, the Parties shall fully co-operate with one another, with the Persons to whom the Disclosed Personal Information relates, and any Authorized Authority charged with enforcement of Applicable Privacy Laws, in responding to such inquiries, complaints, requests for access, variations or withdrawals of consent and claims.
(h) Upon the expiry or termination of this Agreement, or otherwise upon the reasonable request of either Party, the other Party shall forthwith cease all use of the Disclosed Personal Information acquired by it in connection with this Agreement and will return to the requesting Party or, at the requesting Party’s request, destroy in a secure manner, the Disclosed Personal Information (and any copies thereof) in its possession.

ARTICLE 5 CONDITIONS PRECEDENT

5.1 Mutual Conditions Precedent

The respective obligations of the Parties to consummate the transactions at the Closing as contemplated herein are subject to the satisfaction, on or before the Closing Date, of the following conditions precedent, any of which may be waived by the mutual consent of such Parties without prejudice to their right to rely on any other of such conditions:

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(a) the approval of the Altura Shareholders to the Private Placement and Change of Management at the Altura Meeting shall have been obtained;
(b) the TSXV shall have conditionally approved the completion of the Private Placement and the Change of Management on terms and conditions satisfactory to the Initial Investor Group and Altura, each acting reasonably;
(c) the Subscription Receipt Private Placement shall have been completed;
(d) all necessary consents of the lenders of Altura required as of the date hereof shall have been obtained and no repayment shall be required with respect to the existing credit facilities of Altura as a consequence of any of the transactions contemplated herein; and
(e) there shall have been no action taken under Applicable Laws, nor any statute, rule, regulation or order which is enacted, enforced, promulgated or issued by any Governmental Entity, that:
(i) makes illegal or otherwise directly or indirectly restrains, enjoins or prohibits the transactions contemplated herein; or
(ii) results in a judgement preventing, or assessment of material damages directly or indirectly relating to, the transactions contemplated herein.

The foregoing conditions are for the mutual benefit of the Initial Investor Group, on the one hand, and Altura, on the other hand, and may be asserted by either of the Initial Investor Group or Altura regardless of the circumstances and may be waived by the Initial Investor Group or Altura (with respect to itself) in their sole discretion, in whole or in part, at any time and from time to time without prejudice to any other rights which such Party may have, subject to Section 6.1.

5.2 Additional Conditions to Obligations of the Initial Investor Group

The obligations of the Initial Investor Group to consummate the transactions at the Closing as contemplated herein are subject to the satisfaction, on or before the Closing Date or such other time specified in the relevant condition precedent, of the following conditions precedent:

(a) Altura shall have mailed the Altura Circular and other documentation required in connection with the Altura Meeting by no later than September 27, 2021;
(b) Altura shall have convened and held the Altura Meeting by no later than October 18, 2021;
(c) Altura shall have furnished the Initial Investor Group with:
(i) certified copies of the resolutions duly passed by the Board of Directors approving this Agreement and the consummation of the transactions contemplated herein; and
(ii) certified copies of the resolution of the Altura Shareholders duly passed at the Altura Meeting approving the Altura Resolutions;
(d) the representations and warranties made by Altura in this Agreement shall be true and correct as of the Closing Date as if made on and as of such date (except to the extent such
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representations and warranties speak as of an earlier date or except as affected by transactions contemplated or permitted by this Agreement), except where the failure of such representations and warranties to be true and correct, individually or in the aggregate, would not result in, or would not reasonably be expected to have, a Material Adverse Effect or would not, or would not reasonably be expected to, materially impede completion of the Private Placement and the Change of Management, and Altura shall have provided to the Initial Investor Group a certificate of two senior officers certifying such accuracy on the Closing Date on behalf of Altura and not in their personal capacities, and the Initial Investor Group will have no knowledge to the contrary;

(e) no Material Adverse Change in respect of Altura shall have occurred from and after the date hereof and prior to the Closing Date;
(f) Altura shall have complied with its covenants and obligations herein in all material respects, and Altura shall have provided to the Initial Investor Group a certificate of two senior officers certifying compliance with such covenants on the Closing Date on behalf of Altura and not in their personal capacities, and the Initial Investor Group will have no knowledge to the contrary;
(g) subject to Section 2.4, on or before the Closing Date, all outstanding Stock Options shall have been terminated for no consideration;
(h) the Altura Transaction Costs shall not exceed $425,000, provided that in the event Altura Transaction Costs includes severance or other change of control payments, such amount may increase to the extent of such severance or other change of control payments, but in any event not to exceed $1,350,000, and the Initial Investor Group shall have received a certificate of Altura addressed to the Initial Investor Group and dated the Closing Date, signed on behalf of Altura by two senior executive officers of Altura (on Altura's behalf and without personal liability), confirming the foregoing as at the Closing Date; and
(i) all of the documents required to be delivered by or on behalf of Altura at the Closing pursuant to the provisions hereof shall have been delivered to the satisfaction of the Initial Investor Group, acting reasonably.

The conditions in this Section 5.2 are for the exclusive benefit of the Initial Investor Group and may be asserted only by the Initial Investor Group regardless of the circumstances or may be waived only by the Initial Investor Group in its sole discretion, in whole or in part, at any time and from time to time without prejudice to any other rights which the Initial Investor Group may have, subject to Section 6.1.

5.3 Additional Conditions to Obligations of Altura

The obligations of Altura to consummate the transactions at the Closing as contemplated herein are subject to the satisfaction, on or before the Closing Date or such other time specified in the relevant condition precedent, of the following conditions precedent:

(a) the representations and warranties made by each member of the Initial Investor Group in this Agreement shall be true and correct as of the Closing Date as if made on and as of such date (except to the extent such representations and warranties speak as of an earlier date or except as affected by transactions contemplated or permitted by this Agreement), except where the failure of such representations and warranties to be true and correct, individually or in the aggregate, would not or would not reasonably be expected to materially impede
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completion of the Private Placement and the Change of Management, and each member of the Initial Investor Group shall have provided to Altura a certificate certifying compliance with such covenants on the Closing Date, and Altura will have no knowledge to the contrary;

(b) the Initial Investor Group shall have complied with its covenants and obligations herein in all material respects, and each member of the Initial Investor Group shall have provided to Altura a certificate certifying compliance with such covenants on the Closing Date, and Altura will have no knowledge to the contrary;
(c) properly executed Unit Subscription Agreements, together with certified cheques or bank drafts or other forms of payment and other required items, have been delivered by the Subscribers as contemplated in Section 2.1 (including, for greater certainty, for the number of Units described in Section 2.1) to the satisfaction of Altura, acting reasonably; and
(d) all of the documents required to be delivered by or on behalf of the Initial Investor Group at the Closing pursuant to the provisions hereof shall have been delivered to the satisfaction of Altura, acting reasonably.

The conditions in this Section 5.3 are for the exclusive benefit of Altura and may be asserted by Altura regardless of the circumstances or may be waived by Altura in its sole discretion, in whole or in part, at any time and from time to time without prejudice to any other rights which Altura may have, subject to Section 6.1.

5.4 Notice and Effect of Failure to Comply with Conditions

(a) Each Party shall give prompt notice to the other Party of the occurrence, or failure to occur, at any time from the date hereof to the Closing Date of any event or state of facts which occurrence or failure would, or would be likely to:
(i) cause any of the representations or warranties of any Party contained herein to be untrue or inaccurate in any material respect; or
(ii) result in the failure to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by any Party hereunder; provided, however, that no such notification will affect the representations or warranties of the Parties or the conditions to the obligations of the Parties hereunder.
(b) If any of the conditions precedent set forth in Sections 5.1, 5.2, or 5.3 hereof shall not be complied with or waived by the Party or Parties for whom a right to waive such condition precedent has been provided for and for whose benefit such conditions are provided on or before the date required for the performance thereof, then a Party for whom a right to assert the benefit of the condition precedent is provided may, terminate this Agreement as provided in Section 6.1 hereof; provided that, prior to exercising its right to terminate this Agreement, the Party intending to rely thereon has delivered a written notice to the other Party, specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the Party delivering such notice is asserting as the basis for the non-fulfillment of the applicable conditions precedent, and shall provide in such notice that the other Party shall be entitled to cure any breach of a covenant or representation and warranty or other matters within five Business Days after receipt of such notice (except that no cure period shall be provided for a breach which by its nature cannot
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be cured and, in no event, shall any cure period extend beyond the Outside Date). More than one such notice may be delivered by a Party.

5.5 Satisfaction of Conditions

The conditions set out in this Article 5 are conclusively deemed to have been satisfied, waived or released when the Closing has occurred.

ARTICLE 6 TERMINATION

6.1 Termination

This Agreement may be terminated at any time prior to the Closing Date:

(a) by mutual written consent of the Initial Investor Group and Altura;
(b) as provided in Section 5.4(b);
(c) by the Initial Investor Group or Altura if a court of competent jurisdiction or a governmental, regulatory or administrative agency or commission shall have issued an order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting any of the transactions contemplated by this Agreement and such order, decree, ruling or other action shall have become final and non-appealable, provided that the Party seeking to terminate this Agreement pursuant to this Section 6.1(c) shall have used all commercially reasonable efforts to remove such order, decree, ruling or injunction;
(d) by Altura pursuant to Section 6.3;
(e) by the Initial Investor Group pursuant to Section 6.3; or
(f) by the Initial Investor Group or Altura if the Closing Date has not occurred by the Outside Date.

Furthermore, this Agreement shall automatically terminate immediately following Closing.

6.2 Effect of Termination

In the event of the termination of this Agreement, this Agreement shall forthwith become void and no Party shall have any liability or further obligation to the other Party hereunder, except with respect to (i) the obligations set forth in Section 4.3, this Section 6.2 and Section 6.4, (ii) if this Agreement is terminated pursuant to Section 6.1(d) or 6.1(e), Section 6.3, (iii) if Closing has occurred, Sections 2.7 and 8.11, and (iv) any other provisions of this Agreement which are required to give effect to the foregoing, all of which shall survive such termination; provided, however, that, subject to Section 6.4, no Party shall be relieved from liability for any willful breach of this Agreement prior to its termination. For greater certainty, termination of this Agreement shall affect the obligations of the Parties pursuant to the confidentiality restrictions set forth in the Confidentiality Agreement, except to the extent specified therein.

6.3 Altura Non-Completion Fee

(a) If at any time after the date of this Agreement and prior to its termination:
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(i) the Board of Directors shall:
(A) fail to make the recommendations referred to in Section 2.9(c);
(B) withdraw, modify or change the recommendations referred to in Section 2.9(c) in a manner adverse to the Initial Investor Group;
(C) fail to publicly reaffirm the recommendations referred to in Section 2.9(c) within five days of the public announcement of another Acquisition Proposal; or
(D) fail to publicly reaffirm the recommendations referred to in Section 2.9(c) within five days of a request from the Initial Investor Group, or resolve to do any of the foregoing;
(ii) the Board of Directors shall recommend that holders of Common Shares deposit their Common Shares under, vote in favour of or otherwise accept an Acquisition Proposal or shall resolve to do so; or
(iii) Altura accepts, recommends, approves or enters into an agreement (other than a confidentiality agreement referred to in Section 3.4) with any person providing for an Acquisition Proposal prior to the Closing Time, or publicly announces its intention to do any of the foregoing,

then, the Initial Investor Group or Altura (provided that it has complied with its obligations under Sections 3.4, 3.5 and 3.6) may terminate this Agreement and Altura shall pay to the Initial Investor Group an amount equal to $250,000 (the “ Altura Non-Completion Fee ”) concurrently with such termination where Altura is terminating this Agreement, or otherwise within two business days after the termination of this Agreement. On the date of the earliest such event, Altura shall be deemed to hold such sum in trust for the Initial Investor Group. Such payment shall be made in immediately available funds to an account designated by Bradley Bennett, on behalf of the Initial Investor Group. Altura shall only be required to make one payment of the Altura Non-Completion Fee pursuant to this Section 6.3.

(b) The Parties acknowledge that all of the applicable payments set out in this Article 6 are payments of liquidated damages which are a genuine pre-estimate of the damages which the Initial Investor Group will suffer or incur as a result of the event giving rise to such damages and resultant termination of this Agreement and are not penalties. Altura irrevocably waives any right it may have to raise as a defence that any such liquidated damages are excessive or punitive.
(c) The Parties agree and acknowledge that payment of the Altura Non-Completion Fee by Altura pursuant to Section 6.3(a) is the sole remedy of the Initial Investor Group under the circumstances contemplated by Section 6.3(a).

6.4 Limitations on Liability

(a) Notwithstanding any other provision of this Agreement, no member of the Initial Investor Group shall have any liability to Altura in connection with this Agreement whatsoever, whether at law or equity, in contract, in tort or otherwise, unless and until Altura has
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terminated this Agreement pursuant to Section 6.1(b), in which case the Initial Investor Group’s liability shall be limited to the willful breach of the obligations of the Initial Investor Group under this Agreement that occurred prior to such termination, subject to Section 6.4(b). For greater certainty, Altura acknowledges and agrees that it shall not pursue any equitable remedies against any member of the Initial Investor Group, including injunctions or orders for specific performance.

(b) Notwithstanding any other provision of this Agreement, the liability of the members of the Initial Investor Group in connection with this Agreement, whether at law or equity, in contract, in tort or otherwise, shall be limited to a claim by Altura for reimbursement of the Altura Transactions Costs incurred by Altura prior to termination of this Agreement (excluding any such amounts payable to Altura’s financial advisors in connection with the transactions contemplated hereby and any Employee Obligations) up to a maximum of $250,000 in the aggregate.

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7.1 Notices

All notices that may or are required to be given pursuant to any provision of this Agreement are to be given or made in writing and served personally or sent by email:

(a) in the case of the Initial Investor Group, to: Tenaz Energy Corp. Suite 610, 600-6[th] Ave SW Calgary, AB T2P 0S4 Attention: Anthony Marino, President and CEO Email: [email protected]

with a copy to:

Torys LLP Suite 4600, 525-8th Ave SW Calgary, AB T2P 1C1 Attention: Peter Danner Email: [email protected]

(b) in the case of Altura, to: Altura Energy Inc. Suite 2500, 605-5th Ave SW Calgary, AB T2P 3H5 Attention: David Burghardt, President and CEO Email: [email protected]

with a copy to:

Lawson Lundell LLP Suite 1100, 225-6th Ave SW Calgary, AB T2P 1N2

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Attention: Carolyn Simpson Email: [email protected]

or such other address as the Parties may, from time to time, advise to the other Parties by notice in writing. The date or time of receipt of any such notice will be deemed to be the date of delivery or the time such email is received.

ARTICLE 8 GENERAL

8.1 Binding Effect

This Agreement shall be binding upon and enure to the benefit of the Parties.

8.2 Assignment

No Party may assign any of its rights or obligations under this Agreement without prior written consent of the other Parties.

8.3 Amendment of Agreement

This Agreement may only be amended by mutual written agreement of the Parties. This Agreement may at any time and from time to time, before or after the holding of the Altura Meeting, be amended without, subject to Applicable Laws, further notice to or authorization on the part of the Altura Shareholders.

8.4 Expense Reimbursement

At or as soon as practicable following Closing, Altura shall pay the Initial Investor Group Transaction Costs to the Initial Investor Group or as directed by the Initial Investor Group.

8.5 Disclosure

Each Party shall receive the prior consent, not to be unreasonably withheld, of the other Parties prior to issuing or permitting any director, officer, employee or agent to issue, any press release or other written statement with respect to this Agreement or the transactions contemplated hereby. To the extent that the Initial Investor Group furnishes Altura with any information or statements to be included in any press release or other disclosure documents of Altura, the Initial Investor Group shall ensure such information or statements do not contain any misrepresentation or untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading in light of the circumstances in which they are made. Notwithstanding the foregoing, if any Party is required by Applicable Laws or administrative regulation to make any disclosure relating to the transactions contemplated herein, such disclosure may be made, but that Party will use reasonable commercial efforts to consult with the other Parties as to the wording of such disclosure prior to its being made.

8.6 Severability

If any one or more of the provisions or parts thereof contained in this Agreement should be or become invalid, illegal or unenforceable in any respect in any jurisdiction, the remaining provisions or parts

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thereof contained herein shall be and shall be conclusively deemed to be, as to such jurisdiction, severable therefrom and:

(a) the validity, legality or enforceability of such remaining provisions or parts thereof shall not in any way be affected or impaired by the severance of the provisions or parts thereof severed; and
(b) the invalidity, illegality or unenforceability of any provision or part thereof contained in this Agreement in any jurisdiction shall not affect or impair such provision or part thereof or any other provisions of this Agreement in any other jurisdiction.

8.7 Further Assurances

Each Party shall, from time to time and at all times hereafter, at the request of the other Parties, but without further consideration, do all such further acts, and execute and deliver all such further documents and instruments as may be reasonably required in order to fully perform and carry out the terms and intent hereof.

8.8 Time of Essence

Time shall be of the essence of this Agreement.

8.9 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta and the Parties irrevocably attorn to the jurisdiction of the courts of the Province of Alberta.

8.10 Waiver

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

8.11 Third Party Beneficiaries

The provisions of Section 2.7 are:

(a) intended for the benefit of all present and former directors and officers of Altura, as and to the extent applicable in accordance with their terms, and shall be enforceable by each of such persons and his or her heirs, executors administrators and other legal representatives (collectively, the “ Third Party Beneficiaries ”) and Altura shall hold the rights and benefits of Section 2.7 in trust for and on behalf of the Third Party Beneficiaries and Altura hereby accepts such trust and agrees to hold the benefit of and enforce performance of such covenants on behalf of the Third Party Beneficiaries; and
(b) in addition to, and not in substitution for, any other rights that the Third Party Beneficiaries may have by contract or otherwise.
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8.12 Actions Taken by the Initial Investor Group / Material Breach

Any action, determination, delivery or request required or permitted to be taken, made or performed by the Initial Investor Group hereunder shall be considered to be a joint and several collective action to be undertaken by the Initial Investor Group and Bradley Bennett shall have the power and authority (and each member of the Initial Investor Group hereby grants to Bradley Bennett the power and authority) to take such action for and on behalf of the Initial Investor Group. The failure by any individual member of the Initial Investor Group to comply with any of the covenants or obligations hereunder shall not be considered to be a breach by the Initial Investor Group of such covenants or obligations if the remaining members of the Initial Investor Group perform such covenants and obligations in the stead of the non-performing member of the Initial Investor Group or, where curable, cure such covenants or obligations (and where applicable, within the time periods provided herein) and provided that such failure does not adversely affect the ability of Altura and the Initial Investor Group to complete the Private Placement and the Change of Management (on the terms contemplated herein).

8.13 Counterparts

This Agreement may be executed by electronic signature and in counterparts, each of which shall be deemed an original, and all of which together constitute one and the same instrument.

[The remainder of this page has intentionally been left blank]

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IN WITNESS WHEREOF the Parties have executed this Agreement as of the date first above written.

ALTURA ENERGY INC.

By: Signed “David Burghardt” Name: David Burghardt Title: President and CEO

Signed “Anthony Marino” Signed “Jonathan Balkwill” ANTHONY MARINO (WITNESS)

(WITNESS)

Signed “Marty Proctor” Signed “Jonathan Balkwill” MARTY PROCTOR (WITNESS)

Signed “Mark Rollins” Signed “Jonathan Balkwill” MARK ROLLINS (WITNESS) Signed “Michael Kaluza” Signed “Jonathan Balkwill” MICHAEL KALUZA (WITNESS) Signed “Bradley Bennett” Signed “Jonathan Balkwill” BRADLEY BENNETT (WITNESS) Signed “Jonathan Balkwill” Signed “Bradley Bennett” JONATHAN BALKWILL (WITNESS) Signed “David Leung” Signed “Jonathan Balkwill” DAVID LEUNG (WITNESS) Signed “Timothy Morris” Signed “Jonathan Balkwill” TIMOTHY MORRIS (WITNESS)

AI assistant

Tenaz Energy Corp. — Merger & Acquisition 2021

46207_rns_2021-09-01_7e32d6dd-f3a6-4872-8127-68708cd98269.pdf

REORGANIZATION AND INVESTMENT AGREEMENT

AMONG

ALTURA ENERGY INC.

AND

TABLE OF CONTENTS

TABLE OF CONTENTS

(continued)

REORGANIZATION AND INVESTMENT AGREEMENT

AMONG:

AND:

WHEREAS:

ARTICLE 1 INTERPRETATION

1.1 Definitions

“ Escrow Release Conditions ” means:

“ Governmental Entity ” means any:

“ U.S. Securities Act ” means the United States Securities Act of 1933 , as amended; and

1.2 Interpretation Not Affected by Headings, etc.

1.3 Number, etc.

1.4 Date for Any Action

1.5 Entire Agreement

1.6 Currency

1.7 Accounting Matters

1.8 Inclusive Terminology

1.9 Knowledge

1.10 Interpretation Not Affected by Party Drafting

ARTICLE 2 THE PRIVATE PLACEMENT, CHANGE OF MANAGEMENT AND RELATED MATTERS

2.1 Unit Private Placement

2.2 Subscription Receipt Private Placement

2.3 Change of Management

2.4 Treatment of Outstanding Stock Options

2.5 Employees other than the Current Executives

2.6 Severance and Change of Control Obligations

2.7 Director and Officer Indemnities

2.8 [Reserved]

2.9 Altura Meeting

2.10 Rights Offering

2.11 Acquisition Opportunities

ARTICLE 3 COVENANTS

3.1 Covenants of Altura

(q) Altura shall:

3.2 Covenants of the Initial Investor Group

3.3 Mutual Covenants

3.4 Non-Solicitation by Altura

3.5 Covenants Regarding Non-Solicitation by Altura

3.6 Notice by Altura of Superior Proposal Determination

3.7 Provision of Information; Access

ARTICLE 4 REPRESENTATIONS AND WARRANTIES

4.1 Representations and Warranties of Altura

(e) Capitalization of Altura.

(x) Tax Matters.

(dd) Properties.

Material Agreements.

4.2 Representations and Warranties of the Initial Investor Group

4.3 Privacy Issues

ARTICLE 5 CONDITIONS PRECEDENT

5.1 Mutual Conditions Precedent

5.2 Additional Conditions to Obligations of the Initial Investor Group

5.3 Additional Conditions to Obligations of Altura

5.4 Notice and Effect of Failure to Comply with Conditions

5.5 Satisfaction of Conditions

ARTICLE 6 TERMINATION

6.1 Termination

6.2 Effect of Termination

6.3 Altura Non-Completion Fee

6.4 Limitations on Liability

7.1 Notices

ARTICLE 8 GENERAL

8.1 Binding Effect

8.2 Assignment

8.3 Amendment of Agreement

8.4 Expense Reimbursement

8.5 Disclosure

8.6 Severability

8.7 Further Assurances

8.8 Time of Essence

8.9 Governing Law

8.10 Waiver

Tenaz Energy Corp. Merger & Acquisition 2021