CORPORATION
AND ITS DIRECTORS AND OFFICERS IN THE DUE DILIGENCE SESSION HELD ON DECEMBER 19,
2005 WERE MADE IN GOOD FAITH, AND TO THE KNOWLEDGE OF SUCH PARTIES, WERE TRUE
AND CORRECT WHERE THEY RELATE TO MATTERS OF FACT.
WHERE THE RESPONSES REFLECT
THE OPINION OR VIEW OF THE CORPORATION OR ITS DIRECTORS OR OFFICERS, SUCH
OPINIONS OR VIEWS WERE HONESTLY HELD AT THE TIME THEY WERE GIVEN.
WHERE
12
ANY RESPONSES INCORPORATE FORWARD LOOKING INFORMATION, SUCH INFORMATION IS
INHERENTLY SUBJECT TO RISKS AND UNCERTAINTIES WHICH CANNOT BE WARRANTED;
(X)
OTHER THAN THE FARMOUT AGREEMENT, THE
CORPORATION IS NOT A PARTY TO ANY AGREEMENT OR ARRANGEMENT TO ACQUIRE ANY SHARES
OR OTHER INTERESTS IN ANY OTHER COMPANIES OR PERSONS AND IS NOT A PARTY TO ANY
AGREEMENT OR ARRANGEMENT TO ACQUIRE OR LEASE ANY OTHER BUSINESS OPERATIONS;
(Y)
EXCEPT FOR THE SURGE CANADA LIABILITIES (AS
DEFINED IN THE RELEASE AND INDEMNIFICATION AGREEMENT), THE CORPORATION DOES NOT
HAVE ANY LIABILITY OR OBLIGATION INCLUDING, WITHOUT LIMITATION, LIABILITIES FOR
TAXES, WHETHER ACCRUED, ABSOLUTE, CONTINGENT OR OTHERWISE, NOT REFLECTED IN THE
FINANCIAL STATEMENTS, EXCEPT LIABILITIES AND OBLIGATIONS INCURRED IN THE
ORDINARY COURSE OF BUSINESS, WHICH LIABILITIES AND OBLIGATIONS ARE NOT MATERIAL
IN THE AGGREGATE;
(Z)
OTHER THAN DYNAMO CLAIM, THE CLAIM MADE BY
GARY VANDERGRIFT AND THE CLAIM MADE BY STEPHEN SHARP, THERE ARE NO MATERIAL
ACTIONS, SUITS, PROCEEDINGS, INVESTIGATIONS OR OUTSTANDING CLAIMS OR DEMANDS,
WHETHER OR NOT PURPORTEDLY ON BEHALF OF THE CORPORATION OR, INSTITUTED, PENDING,
OR, TO THE KNOWLEDGE OF THE CORPORATION, THREATENED AGAINST OR AFFECTING THE
CORPORATION (OR ITS ASSETS OR PROPERTIES) AT LAW OR IN EQUITY OR BEFORE OR BY
ANY GOVERNMENTAL ENTITY, NOR IS THERE ANY MATERIAL JUDGMENT, ORDER, DECREE OR
AWARD OF ANY GOVERNMENTAL ENTITY HAVING JURISDICTION, OBTAINED, PENDING OR, TO
THE KNOWLEDGE OF THE CORPORATION, THREATENED AGAINST THE CORPORATION, AND
NEITHER THE CORPORATION NOR ITS ASSETS AND PROPERTIES, IS SUBJECT TO ANY
OUTSTANDING MATERIAL JUDGMENT, ORDER, WRIT, INJUNCTION OR DECREE;
(AA)
EACH CONTRACT OR AGREEMENT (INCLUDING THE
SERIES I INDENTURE, FARMOUT AGREEMENT AND FARMOUT ACKNOWLEDGEMENT AGREEMENT)
BETWEEN THE CORPORATION AND ANY OTHER PERSON WHICH IS MATERIAL TO THE OWNERSHIP,
USE OR OPERATION OF A MATERIAL PORTION OF THE BUSINESS, PROPERTIES OR ASSETS OF
THE CORPORATION, IS IN FULL FORCE AND EFFECT AND, TO THE BEST OF THE KNOWLEDGE
AND BELIEF OF THE CORPORATION IS VALID, BINDING AND ENFORCEABLE AGAINST EACH OF
THE PARTIES THERETO IN ACCORDANCE WITH ITS TERMS AND NO MATERIAL BREACH OR
DEFAULT EXISTS IN RESPECT THEREOF ON THE PART OF ANY PARTY THERETO AND NO EVENT
HAS OCCURRED WHICH, WITH THE GIVING OF NOTICE OR THE LAPSE OF TIME OR BOTH,
WOULD CONSTITUTE SUCH A MATERIAL BREACH OR DEFAULT;
(BB)
THE CORPORATION HAS RECEIVED ALL NECESSARY
AGREEMENTS AND DOCUMENTS, INCLUDING WITHOUT LIMITATION, DULY EXECUTED NOTICES OF
ASSIGNMENT, TO VALIDLY APPOINT THE CORPORATION AS THE OPERATOR OF THE FARMOUT
LANDS;
(CC)
SINCE INCORPORATION, THE CORPORATION HAS NOT:
(I) DECLARED OR PAID ANY DIVIDENDS OR MADE ANY DISTRIBUTION OF ITS PROPERTIES OR
ASSETS TO ITS