"SURGE U.S." MEANS SURGE GLOBAL ENERGY, INC.;
(WW)
"TAX ACT" MEANS THE INCOME TAX ACT (CANADA), TOGETHER
WITH ANY AND ALL REGULATIONS, AS AMENDED FROM TIME TO TIME;
(XX)
"TO THE KNOWLEDGE" OR "TO THE BEST OF THE
KNOWLEDGE" OF THE CORPORATION (OR WORDS TO LIKE EFFECT IN THIS AGREEMENT), MEANS
THAT THE CORPORATION SHALL BE REQUIRED, IN ADDITION
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TO MAKING ANY OTHER REASONABLE INQUIRIES, TO MAKE INQUIRIES OF OFFICERS OF THE
CORPORATION;
(YY)
"TRUSTEE" MEANS VALIANT TRUST COMPANY, AND SUCH
SUCCESSOR TRUSTEE AS MAY BE APPOINTED FROM TIME TO TIME UNDER THE INDENTURE AND
THE SERIES I INDENTURE;
(ZZ)
"U.S. SECURITIES ACT" MEANS THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED; AND
(AAA)
"VOTING AGREEMENT" MEANS THE VOTING TRUST AGREEMENT
DATED NOVEMBER 15, 2005 AMONG SURGE U.S., NORTHERN AND DEEP ALTA WHICH PROVIDES
SURGE U.S. WITH VOTING PROXY OVER THE DEEP WELL SHARES UNTIL FEBRUARY 25, 2007.
"MISREPRESENTATION", "MATERIAL CHANGE" AND "MATERIAL FACT" SHALL HAVE THE
MEANINGS ASCRIBED THERETO UNDER THE APPLICABLE SECURITIES LAWS OF THE SELLING
JURISDICTIONS, "DISTRIBUTION" MEANS "DISTRIBUTION" OR "DISTRIBUTION TO THE
PUBLIC", AS THE CASE MAY BE, AS DEFINED UNDER THE APPLICABLE SECURITIES LAWS OF
THE SELLING JURISDICTIONS AND "DISTRIBUTE" HAS A CORRESPONDING MEANING.
IN THIS
AGREEMENT, WORDS IMPORTING THE SINGULAR INCLUDE THE PLURAL AND WORDS IMPORTING
GENDER INCLUDE ALL GENDERS.
SECTION 2
CORPORATION'S COVENANTS
The Corporation covenants and agrees:
(A)
THAT THE OFFERED SECURITIES WILL BE DULY
AND VALIDLY AUTHORIZED AND ISSUED PURSUANT TO THE TERMS OF THE SUBSCRIPTION
AGREEMENTS;
(B)
THE COMMON SHARES ISSUABLE UPON THE
CONVERSION OF THE DEBENTURES WILL BE RESERVED FOR ISSUANCE AT THE CLOSING TIME;
(C)
AS SOON AS REASONABLY POSSIBLE, AND IN ANY
EVENT BY THE CLOSING DATE, TO TAKE ALL SUCH STEPS AS MAY REASONABLY BE NECESSARY
TO ENABLE THE OFFERED SECURITIES TO BE OFFERED FOR SALE AND SOLD ON A PRIVATE
PLACEMENT BASIS TO SUBSCRIBERS IN THE SELLING JURISDICTIONS THROUGH THE AGENT OR
ANY OTHER INVESTMENT DEALERS OR BROKERS REGISTERED IN ANY OF THE SELLING
JURISDICTIONS BY WAY OF THE EXEMPTIONS UNDER APPLICABLE SECURITIES LAWS OF EACH
OF THE SELLING JURISDICTIONS, AND NOT TO TAKE ANY ACTION THAT WOULD PREVENT THE
CORPORATION AND THE AGENT FROM RELYING ON THE EXEMPTIONS FROM THE PROSPECTUS
REQUIREMENTS OF APPLICABLE SECURITIES LAWS AS CONTEMPLATED BY THE SUBSCRIPTION
AGREEMENTS;
(D)
TO DULY, PUNCTUALLY AND FAITHFULLY PERFORM
AND COMPLY WITH ALL THE OBLIGATIONS TO BE PERFORMED BY IT, AND ALL OF ITS
COVENANTS AND AGREEMENTS UNDER AND PURSUANT TO THIS AGREEMENT, THE SUBSCRIPTION
AGREEMENTS AND THE INDENTURE;
(E)
IT WILL FILE ALL NECESSARY FORMS AND
REPORTS WITH THE APPROPRIATE SECURITIES COMMISSIONS AND OTHER REGULATORY
AUTHORITIES IN CONNECTION WITH THE ISSUANCE OF THE OFFERED SECURITIES AND THE
AGENT'S WARRANTS;
(F)
THE CORPORATION WILL CARRY ON ITS
BUSINESS IN A PRUDENT MANNER IN ACCORDANCE WITH INDUSTRY STANDARDS AND GOOD
BUSINESS PRACTICE AND WILL KEEP OR CAUSE TO BE KEPT PROPER BOOKS OF ACCOUNTS IN
ACCORDANCE WITH APPLICABLE LAW;
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(G)
THE CORPORATION WILL NOT, FROM THE DATE
HEREOF UNTIL THE