QUOTA PURCHASE AGREEMENT

Exhibit 2.1

QUOTA PURCHASE AGREEMENT

BETWEEN

POGO OVERSEAS PRODUCTION BV,

AS SELLER,

AND

TOREADOR RESOURCES CORPORATION,

AS PURCHASER.

Dated as of June 7, 2005

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Index of Defined Terms

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List of Schedules

Seller’s Schedules

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QUOTA PURCHASE AGREEMENT

     This Quota Purchase Agreement (this “Agreement”), is dated as of June 7, 2005, by and between Pogo Overseas Production BV, a company organized under the laws of the Netherlands (“Seller”) and Toreador Resources Corporation, a corporation organized under the laws of Delaware (“Purchaser”). Seller and Purchaser are sometimes referred to collectively as the “Parties” and individually as a “Party”.

RECITALS :

     Seller owns or controls all of the quotas (the “Quota”) of Pogo Hungary Oil and Gas Exploration and Exploitation Limited Liability Company, a limited liability company organized under the laws of the Republic of Hungary (the “Company”);

     The Company is the exclusive beneficiary of various oil and gas and related interests in Hungary; and

     Seller desires to sell and Purchaser desires to purchase the Quota of the Company owned and/or controlled by Seller.

     NOW, THEREFORE, in consideration of the premises and of the mutual promises, representations, warranties, covenants, conditions and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1. PURCHASE AND SALE

          Section 1.1. Purchase and Sale. On the terms and conditions contained in this Agreement, Seller agrees to sell to Purchaser and Purchaser agrees to purchase, accept and pay for the Quota.

          Section 1.2. Certain Definitions . As used herein:

          (a) “Assets” means, collectively, all of the Company’s right, title, and interest in and to the following:

               (i) The License;

               (ii) All presently existing contracts, agreements and instruments to the extent applicable to and used or held for use in connection with the Company’s interests in the License, including operating agreements, unitization, pooling and communitization agreements, joint venture agreements, farmin and farmout agreements, exchange agreements, transportation agreements, processing agreements, agreements for the sale and purchase of oil, gas and/or other liquid or gaseous hydrocarbons or any combination thereof (“Hydrocarbons”), all of which are hereinafter collectively referred to as “Contracts”;

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               (iii) All Hungarian Permits, easements, permits, licenses, servitudes, rights-of-way, surface leases and other rights appurtenant to, and used or held for use solely in connection with, the use, ownership, operation or maintenance of the License or other Assets;

               (iv) All equipment, machinery, fixtures and other tangible personal property and improvements located on the Contract Area or used or held for use solely in connection with the use, ownership, operation or maintenance of the License or other Assets (the “Equipment”);

               (v) All vehicles and vessels, and leases or charters of vehicles and vessels, specifically used or held for use in connection with the use, ownership, operation or maintenance of the License or other Assets;

               (vi) All rights, claims and causes of action, and all prepaid expenses, attributable to or arising out of the License or other Assets or the business of the Company, including without limitation the net operating losses (NOLs) listed on Schedule 1.2(a)(vi);

               (vii) All historic expenditures with respect to the License or other Assets available to offset revenues for purposes of Hungarian Taxes and the Hungarian Returns; and

               (viii) All Records.

          (b) “Affiliate” means, with respect to any Person, a Person that directly or indirectly controls, is controlled by or is under common control with such Person, with control in such context meaning the ability to direct the management or policies of a Person through ownership of voting shares or other securities, pursuant to a written agreement, or otherwise.

          (c) “Balance Sheet Date” means April 30, 2005.

          (d) “Business Day” means any day other than a Saturday, a Sunday, or a day on which banks are closed for business in Houston, Texas, United States of America.

          (e) “Code” means the Internal Revenue Code of 1986, as amended.

          (f) “Confidentiality Agreement” means that certain confidentiality agreement between Pogo Producing Company and Purchaser dated March 2, 2005.

          (g) “Contract Area” means the area subject to the License, as such area may be amended or relinquished from time to time.

          (h) “Encumbrance” means any lien, charge, claim, encumbrance, obligation, security interest, option, or restriction of any kind.

          (i) “Governmental Authority” means any government and/or any political subdivision thereof, including departments, courts, commissions, boards, bureaus, ministries, agencies or other instrumentalities.

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          (j) “Hungarian Environmental Laws” means all Hungarian Laws relating to (a) the condition or protection of air, groundwater, surface water or soil, (b) the protection of natural resources, cultural resources or biological resources, or (c) the generation, storage, transportation, release or disposal of any pollutants, contaminants, waste, or other discharged substances (whether or not hazardous or toxic).

          (k) “Hungarian Governmental Authority” means any Governmental Authority in or of the Republic of Hungary.

          (l) “Hungarian Laws” means any Laws of the Republic of Hungary, including relevant international treaties and conventions in effect in or offshore of Hungary.

          (m) “Hungarian Permits” means all permits, licenses, variances, approvals and other authorizations of Hungarian Governmental Authorities required to use, own, operate or maintain the Assets.

          (n) “Hungarian Taxes” mean all Taxes imposed by any Hungarian Governmental Authority.

          (o) “Laws” means all laws, statutes, rules, regulations, ordinances, orders, decrees, requirements, judgments and codes of Governmental Authorities.

          (p) “License” means that certain Exploration License No. 1828/99 located in Hungary, as originally granted by the Szolnok Mining District Office on April 20, 1999, and as amended, modified, supplemented or extended from time to time.

          (q) “Permitted Encumbrances” shall mean:

               (i) The terms and conditions of the License;

               (ii) The terms and conditions of the Contracts set forth on Schedule 3.2(k);

               (iii) Liens for Hungarian Taxes not yet delinquent;

               (iv) Materialman’s, mechanic’s, contractor’s or other similar liens or charges for amounts arising in the ordinary course of business under applicable Law for amounts not yet delinquent; and

               (v) Rights reserved to or vested in any Hungarian Governmental Authority to control or regulate any of the Assets in any manner, and all applicable Hungarian Laws.

          (r) “Person” means any individual, corporation, partnership, limited liability company, trust, estate, Governmental Authority or any other entity.

          (s) “Records” means all books, records, data, files, maps and accounting records related to the License or other Assets or used or held for use in connection with the use,

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ownership, operation or maintenance thereof, or which otherwise relate to the Company or its business, but excluding (i) corporate, financial and Tax records of the Company’s Affiliates that relate to such Affiliates’ business generally, even if they contain incidental references to the Company or its business, (ii) any books, records, data, files, maps and accounting records licensed from a third Person for which the license will terminate upon a change in control of the Company or for which a transfer fee or similar payment will be incurred upon a change in control of the Company (unless Purchaser elects to pay such fee), (iii) any computer software that is proprietary to any Affiliate of the Company, (iv) work product of legal counsel for the Company or any Affiliate of either respect to matters for which Seller retains full responsibility under Article 10; and (v) records relating to the sale of the Quota or the Assets, including any bids received from and records of negotiations with third Persons (the “Excluded Records”).

          (t) “Tax” means all taxes, including income tax, surtax, remittance tax, presumptive tax, net worth tax, special contribution, production tax, pipeline transportation tax, value added tax, withholding tax, gross receipts tax, windfall profits tax, profits tax, severance tax, personal property tax, real property tax, sales tax, service tax, transfer tax, use tax, excise tax, premium tax, customs duties, stamp tax, motor vehicle tax, entertainment tax, insurance tax, capital stock tax, franchise tax, occupation tax, payroll tax, employment tax, social security, unemployment tax, disability tax, alternative or add-on minimum tax, estimated tax, special remuneratory benefit, and any other assessments, duties, fees, levies or other charges imposed by a Governmental Authority together with any interest, fine or penalty thereon, or addition thereto.

          (u) “Tax Returns” means all returns, reports, declarations, claims for refund, statements, forms or other filings with respect to Taxes, including any schedules, attachments or amendments thereto.

ARTICLE 2. PURCHASE PRICE

          Section 2.1. Purchase Price . The purchase price for the Quota (the “Purchase Price”) shall be US$9,000,000.

          Section 2.2. Performance Deposit . Simultaneously with the execution hereof, Purchaser has deposited with Seller ten percent (10%) of the Purchase Price (the “Performance Deposit”).

ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SELLER

          Section 3.1. Disclaimers

          (a) Except as and to the extent expressly set forth in this Article 3 or in the certificates of Seller to be delivered pursuant to Section 7.2(c), (i) Seller makes no representations or warranties, express or implied, and (ii) Seller expressly disclaims all liability and responsibility for any representation, warranty, statement or information made or communicated (orally or in writing) to Purchaser or any of its Affiliates, employees, agents, consultants or representatives (including, without limitation, any opinion, information, projection or advice that may have been provided to Purchaser by any officer, director, employee, agent, consultant, representative or advisor of Seller or any of its Affiliates).

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          (b) EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN THIS ARTICLE 3 OR IN THE CERTIFICATES OF SELLER TO BE DELIVERED AT CLOSING PURSUANT TO SECTION Section 7.2(d), WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO (I) TITLE TO ANY OF THE ASSETS, (II) THE CONTENTS, CHARACTER OR NATURE OF ANY DESCRIPTIVE MEMORANDUM, OR ANY REPORT OF ANY PETROLEUM ENGINEERING CONSULTANT, OR ANY GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO THE ASSETS, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF PETROLEUM SUBSTANCES IN OR FROM THE ASSETS, (IV) ANY ESTIMATES OF THE VALUE OF THE ASSETS OR FUTURE REVENUES GENERATED BY THE ASSETS, (V) THE PRODUCTION OF PETROLEUM SUBSTANCES FROM THE ASSETS, OR WHETHER PRODUCTION HAS BEEN CONTINUOUS, OR IN PAYING QUANTITIES, (VI) THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF THE ASSETS, OR (VII) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE OR COMMUNICATED TO PURCHASER OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR PRESENTATION RELATING THERETO, AND FURTHER DISCLAIM ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY EQUIPMENT, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT PURCHASER HAS MADE, CAUSED TO BE MADE OR SHALL CAUSE TO BE MADE SUCH INSPECTIONS AS PURCHASER DEEMS APPROPRIATE.

          (c) Any representation “to the knowledge of Seller” or “to Seller’s knowledge” or any variant thereof is limited to matters within the actual conscious awareness of Seller’s current officers and directors.

          (d) Inclusion of a matter on a schedule attached hereto with respect to a representation or warranty that addresses matters having a Material Adverse Effect shall not be deemed an indication that such matter does, or may, have a Material Adverse Effect. Matters may be disclosed on a schedule for purposes of information only. As used herein, “Material Adverse Effect” means a material adverse effect on the ownership, operation or value of the Company and the Assets, taken as a whole; provided, however, that “Material Adverse Effect” shall disregard effects resulting from general changes in Hydrocarbon prices; general changes in industry, capital markets, economic, regulatory or political conditions; general changes resulting from civil unrest, natural disasters (subject to Section 7.4), insurrection or similar disorders; or changes in Laws.

          Section 3.2. Representations and Warranties . Subject to Section 3.1, and the other terms and conditions of this Agreement, Seller represents and warrants to Purchaser the following:

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          (a)  Existence and Qualification . Seller is a company duly organized and validly existing under the laws of the jurisdiction of its incorporation or organization and is duly qualified to do business as a foreign company in each jurisdiction in which it is required to qualify in order to conduct its business, except where the failure to so qualify would not, individually or in the aggregate, have a Material Adverse Effect.

          (b)  Power . Seller has the corporate power to enter into and perform this Agreement (and all documents required to be executed and delivered by Seller at Closing) and to consummate the transactions contemplated by this Agreement (and such documents).

          (c)  Authorization and Enforceability . The execution, delivery and performance of this Agreement (and all documents required to be executed and delivered by Seller at Closing), and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary corporate action on the part of Seller. This Agreement has been duly executed and delivered by Seller (and all documents required to be executed and delivered by Seller at Closing shall be duly executed and delivered by Seller) and this Agreement constitutes, and at the Closing such documents shall constitute, the valid and binding obligations of Seller, enforceable in accordance with their terms except as such enforceability may be limited by applicable bankruptcy or other similar Laws affecting the rights and remedies of creditors generally as well as to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

          (d)  No Conflicts . The execution, delivery and performance of this Agreement by Seller, and the consummation of the transactions contemplated by this Agreement shall not (i) violate any provision of the certificate of incorporation, bylaws or equivalent organizational documents of Seller, (ii) result in default (with due notice or lapse of time or both) or the creation of any Encumbrance or give rise to any right of termination, cancellation or acceleration under any material note, bond, mortgage, indenture, license or agreement to which Seller is a party or by which it is bound, (iii) violate any judgment, order, ruling, or decree applicable to Seller as a party in interest or (iv) violate any Laws applicable to Seller, except any matters described in clauses (ii), (iii), or (iv) above which would not have a Material Adverse Effect.

          (e)  Company .

               (i)  Title to Quota . Seller owns or controls one hundred percent (100%) of all the quotas representing the registered capital of the Company, which is Three Million Hungarian Forints (HUF3,000,000.00), free and clear of any Encumbrances, except for Permitted Encumbrances. The Quota is not subject to any voting agreement or other contract, agreement, arrangement, commitment or understanding, including any such agreement, arrangement, commitment or understanding restricting or otherwise relating to the voting, dividend rights or disposition of the Quota.

               (ii)  Existence and Qualification . The Company is a limited liability company duly organized and validly existing under the Laws of the Republic of Hungary and is duly qualified to do business in each jurisdiction where it does business, except where the failure to so qualify would not, individually or in the aggregate, have a Material Adverse Effect.

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               (iii)  Power . The Company has the corporate power and authority to own, lease or otherwise hold the Assets owned by the Company and conduct its business in the manner presently conducted.

               (iv)  No Conflicts . The consummation by Seller of transactions contemplated by this Agreement shall not (i) violate any provision of the organizational and formation documents of the Company, (ii) result in default (with due notice or lapse of time or both) or the creation of any Encumbrance or give rise to any right of termination, cancellation or acceleration under any material note, bond, mortgage, indenture, license or agreement to which the Company is a party or by which it is bound, (iii) violate any judgment, order, ruling, or decree applicable to the Company as a party in interest, or (iv) violate any Laws applicable to the Company, except any matters described in clauses (ii), (iii), or (iv) above which would not have a Material Adverse Effect.

               (v)  Organizational Documents . Seller has delivered to Purchaser true and complete copies of the organizational and formation documents, as amended to the Closing Date, of the Company. The members’ lists and quota transfer certificates (which have been made available for inspection by Purchaser prior to the date hereof) are true, complete and current.

               (vi)  Quota . The entire registered capital of the Company is Three Million Hungarian Forints (HUF3,000,000.00). The entire Quota has been fully paid, non-assessable and not issued in violation of any preemptive rights. Except for the Quota, there are no outstanding shares of capital stock or other equity securities of the Company, or any contractual arrangements giving any Person a right to receive any benefits or rights similar to the rights enjoyed by or accruing to the holders of the Quota. Other than this Agreement, there are no outstanding warrants, options, rights, convertible or exchangeable securities or other commitments pursuant to which Seller or the Company is or may become obligated to issue or sell any Quota of the Company.

               (vii)  Balance Sheet . The unaudited balance sheet of the Company (the “Balance Sheet”) as of the Balance Sheet Date attached hereto as Schedule 3.2(e)(vii) has been prepared from the books and records of the Company in conformity with Hungarian generally accepted accounting principles and practices as provided under Hungarian Law (the “Accounting Principles”) and fairly presents in all material respects the financial position of the Company as of the date thereof. Seller retains the right to utilize cash in excess of working capital needs through the date of closing to repay the intercompany loan with Pogo Overseas Production BV.

               (viii)  Subsidiaries . Except as disclosed on Schedule 3.2(e)(viii), the Company does not directly or indirectly own any capital stock or other equity interest in any Person.

               (ix)  Employees . Except to the extent required by Hungarian Law, Schedule 3.2(e)(ix) sets forth a list of (i) all employees of the Company as of the date hereof, and (ii) all written employment agreements, collective bargaining agreements, labor awards and employee benefit plans applicable to such employees as of the date hereof. The Company has delivered to Purchaser true and complete copies of the agreements, awards and plans set forth on

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such schedule.

          (f)  Litigation . Except as disclosed on Schedule 3.2(f), there are no actions, suits or proceedings pending, or to Seller’s knowledge, threatened in writing, before any Governmental Authority or arbitrator with respect to the Company or the Assets.

          (g)  Taxes and Assessments . Except as disclosed on Schedule 3.2(g), the Company has filed all material Tax Returns required to be filed by the Company. Except as disclosed on Schedule 3.2(g), the Company has paid all Taxes shown on such Tax Returns. Except as disclosed on Schedule 3.2(g), the Company has not received written notice of any pending claim against the Company from any applicable taxing authority for assessment of Taxes with respect to the Assets.

          (h)  Environmental Laws . To Seller’s knowledge, the Company has complied with, and the operation of the License has been in compliance with, all applicable Hungarian Environmental Laws, except such failures to comply as, individually or in the aggregate, would not have a Material Adverse Effect. Except for contamination that would not, individually or in the aggregate, have a Material Adverse Effect, to Seller’s knowledge, there has been no contamination of groundwater, surface water or soil on the Contract Area resulting from activities under the License which requires remediation under applicable Hungarian Environmental Laws.

          (i)  Outstanding Capital Commitments . Except as provided in the current approved work program and budget under the current operating agreement covering the Contract Area, or as otherwise disclosed on Schedule 3.2(i), there are no outstanding authorizations for expenditures or other binding commitments to make capital expenditures which are binding on the Company and which Seller reasonably anticipates will individually require expenditures by Seller in excess of US$50,000.

          (j)  Compliance with Laws . Except with respect to the Hungarian Environmental Laws, which are addressed in Section 3.2(h) and except as disclosed on Schedule 3.2(j), to Seller’s knowledge, the Company has complied with, and the License has been operated and maintained in compliance with, all applicable Hungarian Laws, except such failures to comply as would not, individually or in the aggregate, have a Material Adverse Effect.

          (k)  Contracts . All material Contracts to which the Company is a party or by which the Company or the Assets are bound are set forth on Schedule 3.2(k). Seller has provided Purchaser with complete and correct copies of all such Contracts, including all amendments thereto. Neither the Company, nor to the knowledge of Seller, any other Person, is in default under any such Contract except as disclosed on Schedule 3.2(k) and except such defaults as would not, individually or in the aggregate, have a Material Adverse Effect. Except as disclosed on Schedule 3.2(k), there are no Contracts with Affiliates of Seller that will be binding on the Company or the Assets after Closing.

          (l)  Payments for Production . The Company is not obligated by virtue of an advance payment or other similar payment (other than royalties, overriding royalties and similar arrangements established in the License or under applicable law or as reflected on Schedule

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3.2(l)), to deliver Hydrocarbons, or proceeds from the sale thereof, attributable to the Company’s interests in the License at some future time without receiving payment therefor at or after the time of delivery.

          (m)  Consents, Approvals and Preferential Purchase Rights . Except as set forth on Schedule 3.2(m), and preemptive rights granted under Subsection 2 of Section 134 of the Hungarian Act No. CXLIV of 1997 on Business Associations to (i) the members of the Company, (ii) the Company, and (iii) a person designated by the Company’s member’s meeting, and except for consents and approvals by Governmental Authorities that are customarily obtained after Closing, there are no preferential rights to purchase the Quota or any of the Assets held by Third Persons which would become exercisable, nor are there any material approvals or consents necessary to be obtained from third Persons (including any Governmental Authority), in each case as a result of the execution of this Agreement or the consummation of the transactions contemplated by this Agreement.

          (n)  Absence of Certain Changes . Except as set forth on Schedule 3.2(n), since the Balance Sheet Date the Company has conducted its businesses and the Assets have been operated in the ordinary course consistent with past practices, except such failures to comply as would not, individually or in the aggregate, have a Material Adverse Effect.

          (o)  Title to Assets . The Company has good title to the Assets, free and clear of all Encumbrances, except for Permitted Encumbrances.

          (p)  No Undisclosed Liabilities . The Company does not have any debts, liabilities or obligations, whether accrued, fixed, absolute or contingent and whether due or to become due, except (i) as set forth on Schedule 3.2(p) or the Balance Sheet or notes thereto, (ii) those which may arise pursuant to any Permitted Encumbrance, (iii) those which may arise after the Balance Sheet Date in the ordinary course, and (iv) those which would not, individually or in the aggregate, have a Material Adverse Effect.

          (q)  Insurance . Schedule 3.2(q) provides a description of all material insurance policies of the Company, other than directors’ and officers’ liability policies, by which the Company or any of its Assets are covered against losses, all of which are now in full force and effect. To the extent that any such policy is owned or held by Seller or any of its Affiliates (other than the Company), it may be terminated as of the close of business on the Closing Date; provided, however, that Seller agrees to use commercially reasonable efforts to maintain such policies (or policies of substantially the same nature) in full force and effect at all times until the close of business on the Closing Date.

          (r)  Liability for Brokers’ Fees . Purchaser shall not directly or indirectly have any responsibility, liability or expense, as a result of undertakings or agreements of Seller or the Company, for brokerage fees, finder’s fees, agent’s commissions or other similar forms of compensation to an intermediary in connection with the negotiation, execution or delivery of this Agreement or any agreement or transaction contemplated hereby.

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ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER

     Purchaser represents and warrants to Seller the following:

          Section 4.1. Existence and Qualification . Purchaser is a corporation organized, validly existing and in good standing under the laws of Delaware; and Purchaser is duly qualified to do business in every jurisdiction in which it is required to qualify in order to conduct its business except where the failure to so qualify would not have a material adverse effect on Purchaser or its properties.

          Section 4.2. Power . Purchaser has the corporate power to enter into and perform this Agreement (and all documents required to be executed and delivered by Purchaser at Closing) and to consummate the transactions contemplated by this Agreement (and such documents).

          Section 4.3. Authorization and Enforceability . The execution, delivery and performance of this Agreement (and all documents required to be executed and delivered by Purchaser at Closing), and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser (and all documents required to be executed and delivered by Purchaser at Closing will be duly executed and delivered by Purchaser) and this Agreement constitutes, and at the Closing such documents will constitute, the valid and binding obligations of Purchaser, enforceable in accordance with their terms except as such enforceability may be limited by applicable bankruptcy or other similar laws affecting the rights and remedies of creditors generally as well as to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

          Section 4.4. No Conflicts . The execution, delivery and performance of this Agreement by Purchaser, and the consummation of the transactions contemplated by this Agreement, will not (i) violate any provision of the certificate of incorporation or bylaws of Purchaser, (ii) result in a material default (with due notice or lapse of time or both) or the creation of any Encumbrance or give rise to any right of termination, cancellation or acceleration under any material note, bond, mortgage, indenture, license or agreement to which Purchaser is a party or by which it is bound, (iii) violate any judgment, order, ruling, or decree applicable to Purchaser as a party in interest or (iv) violate any Law applicable to Purchaser, except any matters described in clauses (ii), (iii) or (iv) above which would not have a material adverse effect on Purchaser or its properties.

          Section 4.5. Consents, Approvals or Waivers . The execution, delivery and performance of this Agreement by Purchaser will not be subject to any consent, approval or waiver from any Governmental Authority or other third Person except as set forth on Schedule 4.5.

          Section 4.6. Litigation . There are no actions, suits or proceedings pending, or to Purchaser’s knowledge, threatened in writing before any Governmental Authority or arbitrator against Purchaser or any subsidiary of Purchaser which are reasonably likely to impair materially

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Purchaser’s ability to perform its obligations under this Agreement.

          Section 4.7. Financing . Purchaser has sufficient cash, available lines of credit or other sources of immediately available funds (in United States dollars) to enable it to pay the Purchase Price to Seller at the Closing.

          Section 4.8. Liability for Brokers’ Fees . Neither Seller nor any of its Affiliates shall directly or indirectly have any responsibility, liability or expense, as a result of undertakings or agreements of Purchaser, for brokerage fees, finder’s fees, agent’s commissions or other similar forms of compensation to an intermediary in connection with the negotiation, execution or delivery of this Agreement or any agreement or transaction contemplated hereby.

ARTICLE 5. COVENANTS OF THE PARTIES

          Section 5.1. Access . Seller will give Purchaser and its representatives access to the Assets and access to and the right to copy, at Purchaser’s expense, the Records in Seller’s possession, for the purpose of conducting an investigation of the Assets, but only to the extent that Seller may do so without violating any obligations to any third Person and to the extent that Seller has authority to grant such access without breaching any restriction binding on Seller. Such access by Purchaser shall be limited to Seller’s normal business hours, and Purchaser’s investigation shall be conducted in a manner that minimizes interference with the operation of the Assets. Neither Purchaser nor its representatives shall be entitled to operate any Equipment or conduct any testing or sampling on or with respect to the Assets prior to Closing. All information obtained by Purchaser and its representatives under this Section shall be subject to the terms of the Confidentiality Agreement.

          Section 5.2. Notification of Breaches . Until the Closing,

          (a) Purchaser shall notify Seller promptly after Purchaser obtains actual knowledge that any representation or warranty of Seller contained in this Agreement is untrue in any material respect or will be untrue in any material respect as of the Closing Date or that any covenant or agreement to be performed or observed by Seller prior to or on the Closing Date has not been so performed or observed in any material respect.

          (b) Seller shall notify Purchaser promptly after Seller obtains actual knowledge that any representation or warranty of Purchaser contained in this Agreement is untrue in any material respect or will be untrue in any material respect as of the Closing Date or that any covenant or agreement to be performed or observed by Purchaser prior to or on the Closing Date has not been so performed or observed in a material respect.

If any of Purchaser’s or Seller’s representations or warranties is untrue or shall become untrue in any material respect between the date of execution of this Agreement and the Closing Date, or if any of Purchaser’s or Seller’s covenants or agreements to be performed or observed prior to or on the Closing Date shall not have been so performed or observed in any material respect, but if such breach of representation, warranty, covenant or agreement shall (if curable) be cured by the Closing (or, if the Closing does not occur, by the date set forth in Section 9.1), then such breach shall be considered not to have occurred for all purposes of this Agreement.

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          Section 5.3. Public Announcements . The Parties will consult with each other and will mutually agree upon any press releases or public announcements pertaining to this Agreement or the transactions contemplated hereby and shall not issue any such press releases or make any such public announcements prior to such consultation and agreement, except as may be required by applicable Law or by obligations pursuant to any listing agreement with any national securities exchange, in which case the Party proposing to issue such press release or make such public announcement shall use its commercially reasonable efforts to consult in good faith with the other Party before issuing any such press releases or making any such public announcements.

          Section 5.4. Operation of Business . Except as provided in the current approved work program and budget under the operating agreement covering the Contract Area, or as otherwise set forth on Schedule 3.2(i) or Schedule 5.4, until the Closing, Seller will cause the Company to:

               (i) operate its businesses in the ordinary course;

               (ii) not, without the prior written consent of Purchaser, which consent shall not be unreasonably withheld, commit to any operation reasonably anticipated to require future capital expenditures by the Company in excess of US$50,000, or terminate, materially amend, execute or extend any material Contracts affecting the Assets;

               (iii) use commercially reasonable efforts to maintain insurance coverage on the Assets in the amounts and of the types presently in force;

               (iv) use commercially reasonable efforts to maintain all material Hungarian Permits affecting the use, ownership, operation or maintenance of the Assets; and

               (v) not transfer, sell, hypothecate, encumber or otherwise dispose of any Assets, except for (i) sales and dispositions of Hydrocarbons and Equipment made in the ordinary course of business consistent with past practices, and (ii) individual sales and dispositions of Assets having a fair market value of US$50,000 or less.

     Purchaser’s approval of any action restricted by this Section 5.4 shall not be unreasonably withheld and shall be considered granted within ten (10) days (unless a shorter time is reasonably required by the circumstances and such shorter time is specified in the applicable notice) of notice to Purchaser requesting such consent unless Purchaser notifies Seller to the contrary during that period. In the event of an emergency, Seller may take such action as a prudent operator would take and shall notify Purchaser of such action promptly thereafter.

          Section 5.5. Conduct of the Company . Seller shall not permit the