FROM LETTER AGREEMENTS (WHICH WERE NOT SIGNED BY SURGE U.S.) WHEREIN
DYNAMO ENERGY CORPORATION REQUESTED SURGE U.S. TO PAY A 2.5% CASH FINDER'S FEE
ON THE ACQUISITION COST OF THE FARMOUT LANDS AND A 5% GROSS OVERRIDING ROYALTY
ON THE FARMOUT LANDS;
(T)
"ENVIRONMENTAL LAWS" HAS THE MEANING
ASCRIBED TO SUCH TERM IN SECTION 4(LL);
(U)
"EXPENDITURE PERIOD" MEANS THE PERIOD
COMMENCING ON THE CLOSING DATE AND ENDING ON THE EARLIER OF:
(I)
THE DATE ON WHICH THE COMMITMENT AMOUNT
HAS BEEN FULLY EXPENDED IN ACCORDANCE WITH THE TERMS HEREOF AND THE SUBSCRIPTION
AGREEMENTS FOR FLOW-THROUGH SHARES; AND
(II)
DECEMBER 31, 2006;
(V)
"FARMOUT ACKNOWLEDGMENT AGREEMENT" MEANS THE
FARMOUT ACKNOWLEDGMENT AGREEMENT DATED NOVEMBER 15, 2005 BETWEEN SURGE U.S., THE
CORPORATION, DEEP WELL, NORTHERN, DEEP ALTA AND THE AGENT, WHEREBY THE PARTIES
CONFIRMED THE VALIDITY, ENFORCEABILITY AND CONTINUED EXISTENCE OF THE FARMOUT
AGREEMENT;
(W)
"FARMOUT AGREEMENT" MEANS THE FARMOUT
AGREEMENT DATED FEBRUARY 25, 2005 (AS AMENDED) BETWEEN SURGE U.S., THE
CORPORATION, DEEP WELL AND NORTHERN, WHEREBY THE CORPORATION HAS A RIGHT TO EARN
A 40% WORKING INTEREST IN THE FARMOUT LANDS;
(X)
"FARMOUT LANDS" MEANS THE LANDS SHOWN
UNDER THE HEADING "FARMOUT LANDS" IN SCHEDULE "A" TO THE FARMOUT AGREEMENT,
PROVIDED THAT THE "FARMOUT LANDS" SHALL NOT
3
INCLUDE THE 6.5 SECTION BLOCK (AS DEFINED IN THE FARMOUT AGREEMENT) UNLESS OR
UNTIL DEEP WELL OR NORTHERN ACQUIRE A LEGAL OR BENEFICIAL INTEREST IN THE TITLE
DOCUMENTS (AS DEFINED IN THE FARMOUT AGREEMENT) THAT COMPRISE THE 6.5
SECTION BLOCK;
(Y)
"GOVERNMENTAL ENTITY" MEANS ANY (I) FEDERAL,
PROVINCIAL, TERRITORIAL, STATE, REGIONAL, MUNICIPAL, LOCAL OR OTHER GOVERNMENT,
GOVERNMENTAL OR PUBLIC DEPARTMENT, CENTRAL BANK, COURT, TRIBUNAL, ARBITRAL BODY,
COMMISSION, BOARD, BUREAU OR AGENCY, DOMESTIC OR FOREIGN, (II) SUBDIVISION,
AGENT, COMMISSION, BOARD, OR AUTHORITY OF ANY OF THE FOREGOING, OR
(III) QUASI-GOVERNMENTAL OR PRIVATE BODY EXERCISING ANY REGULATORY,
EXPROPRIATION OR TAXING AUTHORITY UNDER, OR FOR THE ACCOUNT OF, ANY OF THE
FOREGOING;
(Z)
"INDENTURE" MEANS THE TRUST INDENTURE TO
BE DATED ON OR ABOUT THE CLOSING DATE BETWEEN THE CORPORATION AND THE TRUSTEE,
AS TRUSTEE, GOVERNING THE TERMS AND CONDITIONS OF THE DEBENTURES;
(AA)
"JURISDICTION" MEANS ONE OF THE JURISDICTIONS
LISTED IN APPENDIX B TO NI 45-102;
(BB)
"LAWS" MEANS ALL STATUTES, REGULATIONS, STATUTORY
RULES, ORDERS, JUDGMENTS, DECREES AND TERMS AND CONDITIONS OF ANY GRANT OF
APPROVAL, PERMISSION, AUTHORITY, PERMIT OR LICENSE OF ANY COURT, GOVERNMENTAL
ENTITY, STATUTORY BODY OR SELF-REGULATORY AUTHORITY;
(CC)
"MANAGEMENT GROUP" MEANS MESSRS. KELLY AND
CASSIDY;
(DD)
"MANAGEMENT SHARES" MEANS AN AGGREGATE OF
5,100,000 COMMON SHARES ISSUED TO MESSRS. KELLY, CASSIDY (FOR HIMSELF AND IN
TRUST FOR ISSUANCE TO OTHERS) AND PEREZ;
(EE)
"MATERIAL ADVERSE EFFECT", WHEN USED IN
CONNECTION WITH THE CORPORATION, MEANS ANY CHANGE, EFFECT, EVENT OR OCCURRENCE
WITH RESPECT TO ITS CONDITION (FINANCIAL OR OTHERWISE), PROPERTIES, ASSETS,
LIABILITIES, OBLIGATIONS (WHETHER ABSOLUTE, ACCRUED, CONDITIONAL OR OTHERWISE),
BUSINESSES, PROSPECTS, OPERATIONS OR RESULTS OF OPERATIONS OR THOSE OF ITS
SUBSIDIARIES, THAT IS, OR WOULD BE REASONABLY EXPECTED TO BE, MATERIAL AND
ADVERSE TO THE CURRENT OR FUTURE BUSINESS, OPERATIONS, REGULATORY STATUS,