ITS EXISTING INSURANCE COVERAGE AS AND WHEN SUCH
COVERAGE EXPIRES OR TO OBTAIN SIMILAR COVERAGE FROM SIMILAR INSURERS AS MAY BE
NECESSARY TO CONTINUE ITS BUSINESS AT A COST THAT WOULD NOT HAVE A MATERIAL
ADVERSE EFFECT ON THE CONDITION (FINANCIAL OR OTHERWISE) PROSPECTS, EARNINGS,
BUSINESS OR PROPERTIES OF THE CORPORATION;
(SS)
PURSUANT TO THE TERMS OF THE VOTING AGREEMENT,
THE DEEP WELL SHARES SHALL BE VOTED BY SURGE U.S. UNTIL FEBRUARY 25, 2007;
(TT)
THE CORPORATION HAS THE FULL CORPORATE
RIGHT, POWER AND AUTHORITY TO INCUR AND RENOUNCE TO THE SUBSCRIBERS FOR
FLOW-THROUGH SHARES, QUALIFYING EXPENDITURES IN AN AMOUNT EQUAL TO THE
COMMITMENT AMOUNT;
(UU)
THE INCURRING AND RENOUNCING OF QUALIFYING
EXPENDITURES TO THE SUBSCRIBERS FOR FLOW-THROUGH SHARES DOES NOT AND WILL NOT
CONSTITUTE A BREACH OF OR DEFAULT UNDER THE CONSTATING DOCUMENTS OF THE
CORPORATION OR ANY LAW, REGULATION, ORDER OR RULING APPLICABLE TO THE
CORPORATION OR ANY AGREEMENT, CONTRACT OR INDENTURE TO WHICH THE CORPORATION IS
A PARTY OR BY WHICH IT IS BOUND;
(VV)
THE CORPORATION IS, AND AT ALL MATERIAL TIMES WILL
BE, A PRINCIPAL BUSINESS CORPORATION THROUGHOUT THE EXPENDITURE PERIOD;
(WW)
SUBJECT TO ANY AGREEMENT RESPECTING THE FLOW-THROUGH
SHARES TO WHICH THE CORPORATION IS NOT A PARTY, UPON ISSUANCE PURSUANT TO THE
PROVISIONS HEREOF, THE FLOW-THROUGH SHARES WILL BE "FLOW-THROUGH SHARES" AS
DEFINED IN SUBSECTION 66(15) OF THE ACT AND WILL NOT CONSTITUTE "PRESCRIBED
SHARES" FOR THE PURPOSE OF REGULATION 6202.1 TO THE ACT;
17
(XX)
NEITHER THE CORPORATION NOR ANY CORPORATION
ASSOCIATED WITH IT (AS DEFINED IN THE ACT) IS PARTY TO ANY OTHER AGREEMENT FOR
THE ISSUANCE OF FLOW-THROUGH SHARES FOR WHICH THE REQUIRED EXPENDITURES HAVE NOT
BEEN RENOUNCED; AND
(YY)
THE REPRESENTATIONS AND WARRANTIES OF THE
CORPORATION IN THE SUBSCRIPTION AGREEMENTS ARE, OR WILL ON THE CLOSING DATE BE,
TRUE AND CORRECT.
SECTION 5
CONDITIONS
The obligations of the Agent hereunder shall be conditional upon the Agent
receiving, and the Agent shall have the right on the Closing Date on behalf of
Subscribers to withdraw all Subscription Agreements delivered and not previously
withdrawn by Subscribers unless the Agent receives, on the Closing Date:
(A)
LEGAL OPINIONS OF THE CORPORATION'S COUNSEL
ADDRESSED TO THE AGENT AND THE SUBSCRIBERS IN FORM AND SUBSTANCE SATISFACTORY TO
THE AGENT, AND THE AGENT'S COUNSEL, ACTING REASONABLY, RELATING TO THE
CORPORATION, THE OFFERING, THE ISSUANCE AND SALE OF THE FLOW-THROUGH SHARES, THE
DEBENTURES, THE AGENT'S WARRANTS AND THE UNDERLYING SECURITIES, INCLUDING,
WITHOUT LIMITATION, COMPLIANCE WITH APPLICABLE SECURITIES LAWS OF THE SELLING
JURISDICTIONS IN WHICH OFFERED SECURITIES WERE SOLD, IN ANY WAY CONNECTED WITH
THE OFFERING, ISSUANCE, SALE AND DELIVERY OF THE OFFERED SECURITIES AND THE
AGENT'S WARRANTS AS THE AGENT MAY REASONABLY REQUEST.
IT IS UNDERSTOOD THAT THE
RESPECTIVE COUNSEL MAY RELY ON, OR ARRANGE FOR SEPARATE DELIVERIES OF, THE
OPINIONS OF LOCAL COUNSEL ACCEPTABLE TO THEM AS TO MATTERS GOVERNED BY THE LAWS
OF JURISDICTIONS OTHER THAN ALBERTA AND ON CERTIFICATES OF OFFICERS OF THE
CORPORATION, AND THE AUDITORS OF THE CORPORATION AS TO RELEVANT