EXHIBIT 4.1
DATED AUGUST 2, 1996 AND RESTATED NOVEMBER 6, 2002
PRIMEWEST ENERGY TRUST
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AMENDED AND RESTATED
DECLARATION OF TRUST
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PRIMEWEST ENERGY TRUST
AMENDED AND RESTATED
DECLARATION OF TRUST
ARTICLE 1
INTERPRETATION
1.1 Definitions ...................................................... 1
1.2 Meaning of "Outstanding" ......................................... 8
1.3 Headings ......................................................... 8
1.4 Construction of Terms ............................................ 8
1.5 References to Acts Performed by the Trust ........................ 9
1.6 Proposed Amendments to the Income Tax Act ........................ 9
ARTICLE 2
THE TRUST
2.1 Settlement of Trust .............................................. 9
2.2 Declaration of Trust ............................................. 9
2.3 Name ............................................................. 9
2.4 Nature of the Trust .............................................. 10
2.5 Rights of Unitholders ............................................ 10
2.6 Liability of Unitholders ......................................... 10
2.7 Contracts of the Trust ........................................... 11
2.8 Head Office of Trust ............................................. 11
ARTICLE 3
UNITS
3.1 Designation and Number of Units .................................. 11
3.2 Offerings of Units ............................................... 12
3.3 Ranking of Units ................................................. 12
3.4 Units Non-Assessable ............................................. 12
3.5 No Conversion, Retraction, Redemption or Pre-Emptive Rights ...... 12
3.6 No Fractional Units .............................................. 12
3.7 Transferability of Units ......................................... 12
3.8 Non-Resident Unitholders ......................................... 12
3.9 Re-Purchase of Initial Unit by Trust ............................. 13
3.10 Special Voting Units ............................................. 13
(i)
ARTICLE 4
INVESTMENT OF THE TRUST FUND
4.1 Investments ...................................................... 14
4.2 Short Term Investments ........................................... 14
4.3 Other Investment Restrictions .................................... 15
ARTICLE 5
DISTRIBUTIONS
5.1 Distributions .................................................... 15
5.2 Change of Distribution Date ...................................... 15
5.3 Net Income for Income Tax Purposes to Become Payable.............. 15
5.4 Payment of Amounts Payable ....................................... 16
5.5 Reinvestment of Distributions .................................... 16
ARTICLE 6
REDEMPTION OF UNITS
6.1 Right of Redemption .............................................. 17
6.2 Exercise of Redemption Right ..................................... 17
6.3 Cash Redemption .................................................. 17
6.4 No Cash Redemption in Certain Circumstances ...................... 18
6.5 In Specie Redemption ............................................. 19
6.6 Cancellation of Certificates for all Redeemed Units .............. 20
6.7 Deemed Cancellation of Units Tendered into a Take-Over Bid ....... 20
ARTICLE 7
APPOINTMENT, RESIGNATION AND REMOVAL OF THE TRUSTEE
7.1 Trustee's Term of Office ......................................... 20
7.2 Resignation of Trustee ........................................... 21
7.3 Removal of Trustee ............................................... 21
7.4 Appointment of Successor to Trustee .............................. 21
7.5 Failure to Appoint Successor ..................................... 22
7.6 Qualifications of Trustee ........................................ 22
ARTICLE 8
CONCERNING THE TRUSTEE
8.1 Powers of the Trustee and the Corporation ........................ 22
8.2 Specific Powers and Authorities .................................. 23
8.3 Banking .......................................................... 26
8.4 Standard of Care ................................................. 26
8.5 Fees and Expenses ................................................ 27
8.6 Limitations on Liability of Trustee .............................. 27
8.7 Indemnification of Trustee ....................................... 28
(ii)
8.8 Environmental Indemnity .......................................... 28
8.9 Apparent Authority ............................................... 29
8.10 Notice to Unitholders of Non-Eligibility for Deferred Income Plans 30
8.11 Declaration as to Beneficial Owner ............................... 30
8.12 Conditions Precedent to Trustee's Obligation to Act .............. 30
8.13 Survival of Indemnities .......................................... 31
8.14 Trustee May Have Other Interests ................................. 31
8.15 Documents Held by Trustee ........................................ 31
8.16 Limitations on Borrowing ......................................... 32
8.17 Credit Facilities Unaffected ..................................... 32
ARTICLE 9 MANAGEMENT OF THE TRUST
9.1 Delegation of Management ......................................... 33
9.2 Offerings ........................................................ 33
9.3 Power of Attorney ................................................ 34
9.4 Liability of Trustee ............................................. 34
9.5 Performance of Obligations ....................................... 34
ARTICLE 10
AMENDMENT
10.1 Amendment ........................................................ 34
10.2 Notification of Amendment ........................................ 35
ARTICLE 11
MEETINGS OF UNITHOLDERS
11.1 Meetings of Unitholders .......................................... 35
11.2 Notice of Meetings ............................................... 36
11.3 Quorum ........................................................... 36
11.4 Voting Rights of Unitholders ..................................... 36
11.5 Actions Requiring Ordinary Resolutions ........................... 37
11.6 Actions Requiring Special Resolutions ............................ 37
11.7 Meaning of "Special Resolution" .................................. 38
11.8 Record Date for Voting ........................................... 39
11.9 Binding Effect of Resolutions .................................... 39
11.10 Appointment of Inspector ......................................... 39
11.11 Solicitation of Proxies .......................................... 40
11.12 No Breach ........................................................ 40
ARTICLE 12
CERTIFICATES, REGISTRATION AND TRANSFER OF UNITS
12.1 Nature of Units .................................................. 40
12.2 Certificates ..................................................... 40
(iii)
12.3 Contents of Certificates ......................................... 41
12.4 Signing of Certificates .......................................... 42
12.5 Register of Unitholders .......................................... 42
12.6 Transfer of Units ................................................ 43
12.7 Units Held Jointly or in a Fiduciary Capacity .................... 43
12.8 Performance of Trust ............................................. 44
12.9 Lost Certificates ................................................ 44
12.10 Death of a Unitholder ............................................ 44
12.11 Unclaimed Interest or Distribution ............................... 45
12.12 Exchanges of Certificates ........................................ 45
ARTICLE 13
OFFERS FOR UNITS
13.1 Terminology ...................................................... 45
13.2 Offers for Units ................................................. 46
13.3 Compulsory Acquisition Rights .................................... 46
13.4 Trustee's Duties ................................................. 47
13.5 Restrictions ..................................................... 48
ARTICLE 14
POWER OF ATTORNEY
14.1 Power of Attorney ................................................ 48
ARTICLE 15
TERMINATION
15.1 Termination Date ................................................. 49
15.2 Termination by Resolution of Unitholders ......................... 49
15.3 Procedure Upon Termination ....................................... 49
15.4 Powers of the Trustee upon Termination ........................... 49
15.5 Sale of Investments .............................................. 49
15.6 Distribution of Proceeds ......................................... 50
15.7 Further Notice to Unitholders .................................... 50
15.8 Responsibility of Trustee after Sale and Conversion .............. 50
ARTICLE 16
SUPPLEMENTAL INDENTURES
16.1 Provision for Supplemental Indentures ............................ 50
ARTICLE 17
NOTICES TO UNITHOLDERS
17.1 Notices .......................................................... 51
17.2 Failure to Give Notice ........................................... 51
(iv)
17.3 Joint Holders .................................................... 51
17.4 Service of Notice ................................................ 51
ARTICLE 18
AUDITORS AND DIRECTORS
18.1 Qualification of Auditors ........................................ 52
18.2 Appointment of Auditors .......................................... 52
18.3 Change of Auditors ............................................... 52
18.4 Reports of Auditors .............................................. 52
18.5 Appointment and Removal of Directors ............................. 52
ARTICLE 19
ACCOUNTS, RECORDS AND FINANCIAL STATEMENTS
19.1 Records .......................................................... 53
19.2 Quarterly Reporting to Unitholders ............................... 53
19.3 Annual Reporting to Unitholders .................................. 53
19.4 Information Available to Unitholders ............................. 53
19.5 Income Tax: Obligations of the Trustee ........................... 54
19.6 Income Tax: Designations ......................................... 54
19.7 Income Tax: Deductions ........................................... 55
19.8 Fiscal Year ...................................................... 55
ARTICLE 20
MISCELLANEOUS
20.1 Continued Listing ................................................ 55
20.2 Successors and Assigns ........................................... 55
20.3 Counterparts ..................................................... 55
20.4 Severability ..................................................... 55
20.5 Day Not a Business Day ........................................... 56
20.6 Time of the Essence .............................................. 56
20.7 Governing Law .................................................... 56
20.8 Notices to Trustee and Corporation ............................... 56
20.9 References to Agreements ......................................... 58
(v)
AMENDED AND RESTATED
DECLARATION OF TRUST
THIS Amended and Restated Declaration of Trust is made August 2, 1996 and
restated November 6, 2002
Between
PRIMEWEST ENERGY INC.
a body corporate incorporated under the laws of the
Province of Alberta, with an office in the City of
Calgary, in the Province of Alberta (the "Corporation")
and
COMPUTERSHARE TRUST COMPANY OF CANADA
a trust company incorporated under the laws of
Canada, with offices in the City of Calgary, in the
Province of Alberta (the "Trustee")
WHEREAS the Trust has been created for the purpose of providing income
from oil and natural gas properties on a periodic basis to the beneficiaries of
the Trust; and
WHEREAS the Trustee has agreed to act as the trustee of the Trust on the
terms and conditions set forth in this Amended and Restated Declaration of
Trust;
IN CONSIDERATION of the premises and the mutual agreements contained
herein, the Corporation and the Trustee agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Declaration of Trust and in the Certificates, unless the context
otherwise requires, the following terms have the following meanings:
Affiliate has the meaning set forth in the Securities Act (Alberta), as
amended from time to time;
ARTC means royalty tax credit as defined in the Alberta Corporate Tax Act;
Associate has the meaning set forth in the Securities Act (Alberta), as
amended from time to time;
Auditors means the firm of chartered accountants appointed as auditors of
the Trust by or in accordance with Article 18;
Business Day means any day other than a Saturday, Sunday or statutory
holiday in Alberta;
Certificate means a certificate evidencing one or more Units;
Corporation means PrimeWest Energy Inc., its successors and assigns;
Counsel means a law firm (which may be counsel to the Corporation)
reasonably acceptable to the Trustee;
Date of Closing means the date on which an issue of Units pursuant to an
Offering is completed;
Debt Service Costs means, in respect of any period and without
duplication, on a consolidated basis:
(a) all interest, penalties, fees, indemnities, legal costs, and other
costs, expenses and disbursements for which the Trust, the
Corporation, and their respective subsidiaries are liable under
their respective credit facilities and which, in each case, accrue
during such period;
(b) plus all amounts payable during such period on account of principal
pursuant to such credit facilities including, without limitation,
scheduled, prepaid (voluntary or mandatory) and accelerated
principal and (subject to the provisos below) amounts required to be
paid on account of banker's acceptances and letters of credit (other
than fees described in (a) above);
(c) plus (if there is a net loss) or minus (if there is a net profit)
the net profit or loss from interest rate swaps which accrues during
such period;
provided that the difference between the face amount of a banker's
acceptance which is issued and accepted pursuant to such credit facilities
and its discount proceeds (such difference being the "imputed interest")
shall be treated as interest accruing at the times that it is considered
to accrue in accordance with generally accepted accounting principles and
provided that when the Trust, the Corporation or their respective
subsidiaries become liable under any credit facility to pay the face
amount of a banker's acceptance, the face amount less the amount of
imputed interest for such banker's acceptance shall be included in the
Debt Service Costs;
Deferred Purchase Price Obligation has the meaning attributed thereto in
the Royalty Agreement;
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Directors means the directors of the Corporation from time to time.
Discount Rate means an annual rate equal to the then current annual yield
of long-term (10 year) Government of Canada bonds plus 400 basis points,
subject to a maximum Discount Rate of 15%;
Distribution Date means a date on which the Trustee is required to make a
distribution of Distributable Income, which date shall be the 15th day
following a Record Date or, if such day is not a Business Day, the next
Business Day;
Distributable Income means, in respect of a Record Date, the amount
calculated as of the corresponding Distribution Date equal to the sum of:
(a) all amounts received by the Trust in respect of the Royalty on or
before such Distribution Date and after the immediately preceding
Distribution Date;
(b) all ARTC received by the Trust on or before such Distribution Date
and after the immediately preceding Distribution Date; and
(c) all other income received by the Trust on or before such
Distribution Date and after the immediately preceding Distribution
Date from investments of the Trust Fund;
less the sum of:
(d) all Trust Expenses incurred on or before such Distribution Date and
after the immediately preceding Distribution Date;
(e) any other amounts (including taxes) required by law or hereunder to
be deducted, withheld or paid by or in respect of the Trust on or
before such Distribution Date and after the immediately preceding
Distribution Date; and
(f) all Crown royalties and other Crown charges which are not deductible
for income tax purposes and that have been reimbursed by the Trust
to the Corporation by way of set-off or otherwise on or before such
Distribution Date and after the immediately preceding Distribution
Date;
except to the extent that any portion of such amount has become payable
under Section 5.3 before that Distribution Date; notwithstanding the
foregoing, for the purposes of calculating Distributable Income for the
first Distribution Date, the references above to "after the immediately
preceding Distribution Date" shall be deemed to be references to "on or
after the Date of Closing";
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Exchangeable Share means shares in the capital of the Corporation or an
Affiliate of the Corporation which are by their terms exchangeable into
Units of the Trust;
Income Tax Act means the Income Tax Act (Canada) and the Income Tax
Regulations and the Income Tax Application Rules applicable with respect
thereto, all as amended from time to time;
Indemnified Parties has the meaning thereto attributed in Section 8.7;
Initial Offering means the Offering pursuant to the Prospectus;
Initial Unitholder means D. Jeff van Steenbergen;
Issue Expenses means all expenses of an Offering payable by the Trust
including legal fees, translation fees, engineering fees, accounting fees
and printing expenses and all other fees and expenses which may be
described, whether generally or specifically, in any Offering Document
relating to the particular Offering, but excluding Underwriters' Fees;
Management Agreement means the agreement between the Manager and the
Trustee whereby the Manager was engaged to provide certain services to the
Trustee in connection with the management and administration of the Trust
and the Trust Fund;
Manager means PrimeWest Energy Inc., its successors and permitted assigns,
in its capacity as manager of the Trust in accordance with the provisions
of the Management Agreement and shall be deemed to include any replacement
or successor managers pursuant to such agreement;
Material Contracts means the Royalty Agreement and the Management
Agreement, as amended or replaced from time to time, and any Underwriting
Agreement;
Net Proceeds means the proceeds of an Offering after deduction of
Underwriters' Fees and Issue Expenses;
Offering means an offering of Units or any rights to acquire Units on a
public or private basis pursuant to an Offering Document in Canada or
elsewhere;
Offering Document means any one or more of a prospectus, information
memorandum, private placement memorandum and similar public or private
offering document, including the Prospectus;
Ordinary Resolution means a resolution approved at a meeting of
Unitholders by more than 50% of the votes cast in respect of the
resolution by or on behalf of Unitholders present in person or represented
by proxy at the meeting;
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Outstanding, in relation to Units, has the meaning attributed thereto in
Section 1.2;
Person means an individual, corporation, partnership, joint venture,
unincorporated association, trust or other entity including any
governmental entity, and pronouns have a similarly extended meaning;
Pro Rata Share of any particular amount in respect of a Unitholder at any
time shall be the product obtained by multiplying the particular amount by
the number obtained when the number of Units that are owned by that
Unitholder at that time is divided by the total number of Units
Outstanding at that time;
Properties means Canadian resource properties as defined in the Income Tax
Act;
Prospectus means the prospectus for the initial public offering of Units
dated October 3, 1996;
Quarter means a period of three consecutive calendar months ending March
31, June 30, September 30 or December 31 or such other dates selected by
the Trustee pursuant to Section 5.2;
Record Date means the last day of each calendar month in each Year or such
other dates selected by the Trustee pursuant to Section 5.2;
Reserve Value means the present worth of all of the estimated pre-tax net
cash flow from the proved reserves and 50% of the estimated pre-tax net
cash flow from the probable reserves shown in the most recent engineering
report relating thereto, discounted at the Discounted Rate and using
escalating price and cost assumptions;
Royalty means the royalty payable by the Corporation to the Trust pursuant
to the Royalty Agreement;
Royalty Agreement means the royalty agreement dated October 16, 1996 and
amended and restated November 6, 2002 between the Trust and the
Corporation providing for the acquisition by the Trust of a royalty in the
Properties of the Corporation as such royalty agreement may be amended
from time to time;
Settled Amount means the amount of $100.00 paid by the Initial Unitholder
to the Trustee for the purpose of settling the Trust;
Short Term Investments means:
(a) obligations issued or guaranteed by the government of Canada or any
province of Canada or any agency or instrumentality thereof;
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(b) term deposits, guaranteed investment certificates, certificates of
deposit or bankers' acceptances of or guaranteed by any Canadian
chartered bank or other financial institution (including the Trustee
and any Affiliate of the Trustee) the short-term debt or deposits of
which have been rated at least A or the equivalent by Standard &
Poor's, Moody's Canada Inc. or Dominion Bond Rating Service Limited;
and
(c) commercial paper rated at least A or the equivalent by Standard &
Poor's or Dominion Bond Rating Service Limited,
in each case maturing within 180 days after the date of acquisition;
provided that an investment of the type referred to in Section 4.3 shall
not be a Short Term Investment;
Special Resolution has the meaning set forth in Section 11.7;
Special Voting Unit means a voting right created and issued by the Trust
in conjunction with the issuance of Exchangeable Shares by the Corporation
or an Affiliate of the Corporation for the purpose of allowing holders of
such Exchangeable Shares to vote at meetings of Unitholders and having the
rights and subject to the limitations, restrictions and conditions set out
in Section 3.10;
Subsequent Investment has the meaning set forth in Section 4.1;
Transfer Agent means the Trustee in its capacity as transfer agent and
registrar for the Units or such other company as may from time to time be
appointed by the Trustee to act as transfer agent and registrar for the
Units together in either such case with any sub-transfer agent duly
appointed by the transfer agent;
Trust means the trust created pursuant to this Declaration of Trust;
Trust Expenses means all expenses incurred by the Trustee, the Corporation
or any third party, in each case for the account of the Trust, in
connection with this Declaration of Trust, the establishment and ongoing
management of the Trust and the ongoing administration of the Units,
including those amounts borrowed by the Trust which the Corporation has
elected to cause the Trust to repay or which the Trust has become
obligated to repay but excluding (a) Issue Expenses, and (b) any expenses
which are Production Costs (as defined in the Royalty Agreement);
Trust Fund means, at any time, such of the following assets as are at such
time held by the Trustee for the purposes of the Trust under this
Declaration of Trust:
(a) the Settled Amount;
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(b) all funds realized from the sale of Units;
(c) any Short Term Investments in which funds may from time to time be
invested;
(d) the Royalty;
(e) any Subsequent Investment;
(f) the proceeds of disposition of any of the foregoing assets; and
(g) all income, interest, profit, gains and accretions and additional
assets, rights and benefits of any kind or nature whatsoever arising
directly or indirectly from or in connection with or accruing to
such assets; and
(h) the Trust's rights in the Material Contracts and any other
agreements forming part of the Trust's assets;
Trustee means Montreal Trust Company of Canada from August 2, 1996 to July
19, 1999, The Trust Company of Bank of Montreal from July 19, 1999 to
October 26, 2001 and Computershare Trust Company of Canada in its capacity
as trustee of the Trust or its successor or successors for the period
commencing on October 26, 2001 and ending on the date Computershare Trust
Company of Canada resigns or is replaced in accordance with the terms
hereof;
Underwriters' Fees means the amount designated as underwriters' fees in an
Underwriting Agreement;
Underwriting Agreement means any underwriting, agency or similar agreement
entered into by the Trust and investment dealers and such other Persons,
as may be party thereto, relating to an Offering;
Unit means a unit of the Trust created and issued hereunder and for the
time being Outstanding and entitled to the benefits hereof, provided that
the term "Unit" shall not include the Special Voting Units except for the
purpose of the definition of "Unitholder" (but only for the limited
purposes specified therein), and where the term "Unit" is used in Article
11, "Unit" shall include those units of the Trust which are at such time
issuable upon the exchange of all Exchangeable Shares then outstanding for
the purposes of determining the number of Units outstanding at a
particular time, the number of votes to which a particular Unitholder is
entitled, and whether or not specified voting thresholds are attained;
Unitholders means the holders from time to time of one or more Units and,
for the purposes of Sections 10.1, 15.2, 17.1, 17.2 and 18.3, Article 11
and the
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definition of "Ordinary Resolution" contained herein only, Unitholders
shall also include the holders from time to time of one or more Special
Voting Units; and
Year means, initially, the period commencing on August 2, 1996 and ending
on December 31, 1996, and thereafter means a calendar year.
1.2 Meaning of "Outstanding"
Every Unit created and issued hereunder shall be deemed to be Outstanding
until it shall be cancelled or delivered to the Trustee for cancellation,
provided that:
(a) when a new Certificate has been issued in substitution for a
Certificate which has been lost, stolen, destroyed or mutilated,
only the Units represented by the new Certificate shall be counted
for the purpose of determining the number of Units Outstanding; and
(b) for the purpose (and only for such limited purpose) of any provision
of this Declaration of Trust or any Material Contract entitling
holders of Outstanding Units to vote, sign consents, requisitions or
other instruments or take any other action under this Declaration of
Trust or any Material Contract, Units owned directly or indirectly,
legally or equitably, by the Corporation or any Affiliate thereof
shall be disregarded, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such vote,
consent, requisition or other instrument or action, only the Units
which the Trustee knows are so owned shall be so disregarded.
1.3 Headings
The division of this Declaration of Trust into Articles and Sections, the
provision of a table of contents, and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation of this Declaration of Trust.
1.4 Construction of Terms
In this Declaration of Trust, words importing the singular number include
the plural and vice versa; words importing gender include the masculine,
feminine and neuter genders; references to dollar amounts refer to such amounts
in Canadian currency; references to "this Declaration of Trust", "hereto",
"herein", "hereof", "hereby", "hereunder" and similar expressions refer to this
Declaration of Trust, and not to any particular Article, Section or other
portion hereof, and include any and every instrument supplemental or ancillary
hereto or in implementation hereof; and the expressions "Article" and "Section"
followed by a number, letter, or combination of numbers and letters refer to the
specified Article or Section of this Declaration of Trust.
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1.5 References to Acts Performed by the Trust
Any reference in this Declaration of Trust to an act to be performed by
the Trust shall be construed and applied for all purposes as if it referred to
an act to be performed by the Trustee on behalf of the Trust or, to the extent
applicable, by the Corporation on behalf of the Trust pursuant to the Management
Agreement.
1.6 Proposed Amendments to the Income Tax Act
For the purposes of applying the provisions of this Declaration of Trust,
where there are proposals for amendments to the Income Tax Act which have not
been enacted into law or proclaimed into force by their proposed effective date,
the Trustees may take such proposals into consideration and apply the provisions
hereof as if such proposed amendments had already been enacted into law and
proclaimed into force.
ARTICLE 2
THE TRUST
2.1 Settlement of Trust
The Initial Unitholder paid concurrent with the execution of the
Declaration of Trust, the Settled Amount to the Trustee for the purpose of
settling the Trust, and the Trustee confirms that it has received the Settled
Amount and the Initial Unitholder was issued one initial Unit (the "Initial
Unit") in the Trust.
2.2 Declaration of Trust
The Trustee hereby agrees and declares that it holds the Trust Fund in
trust for the use and benefit of the Unitholders upon the trusts and subject to
the terms and conditions set forth in this Declaration of Trust.
2.3 Name
The name of the Trust shall be "PrimeWest Energy Trust" and, whenever
lawful and convenient, the affairs of the Trust shall be conducted and
transacted under that name. If the Trustee determines that the use of the name
"PrimeWest Energy Trust" is not practicable, legal or convenient, the Trustee
may use such other designation or may adopt such other name for the Trust as it
deems appropriate, and thereafter the Trust may conduct its activities under
such other designation or name. Without limiting the foregoing, the Trustee may
enter into agreements and other documents for and on behalf of the Trust under
the name "PrimeWest Energy Trust" and the Trustee hereby acknowledges and
confirms that any such agreement or other document so entered into under the
name "PrimeWest Energy Trust" shall for all purposes be and be deemed to have
been entered into by, and binding on, the Trustee, as trustee for and on behalf
of the Trust.
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2.4 Nature of the Trust
The Trust is an open-end unincorporated investment trust established for
the purpose of purchasing and holding the Royalty. The only undertaking of the
Trust is and will be investing the funds of the Trust in the Royalty, Short Term
Investments and Subsequent Investments. The Trust is not, is not intended to be,
shall not be deemed to be, and shall not be treated as a general partnership,
limited partnership, syndicate, association, joint venture company, corporation
or joint stock company, nor shall the Trustee or the Unitholders or any of them
or any Person be, or be deemed to be, treated in any way whatsoever as, or
liable or responsible hereunder as, partners or joint venturers. The Trustee
shall not be, or be deemed to be, an agent of the Unitholders. The relationship
of the Unitholders to the Trustee shall be solely that of beneficiaries of the
Trust and their rights shall be limited to those conferred upon them by this
Declaration of Trust.
2.5 Rights of Unitholders
No Unitholder or Unitholders shall be entitled to interfere with or give
any direction to the Trustee or the Corporation with respect to the affairs of
the Trust or in connection with the exercise of any powers or authorities
conferred upon the Trustee or the Corporation under this Declaration of Trust or
the Management Agreement. The legal ownership of the assets of the Trust and the
right to conduct the affairs of the Trust (subject to the limitations contained
herein) are vested exclusively in the Trustee, and the Unitholders shall have no
interest therein other than the rights specifically set forth in this
Declaration of Trust and shall have no right to compel or call for any
partition, division, dividend or distribution of the Trust Fund or any of the
assets of the Trust except as specifically provided herein. The Units shall be
personal property and shall confer upon the holders thereof only the interest
and rights specifically set forth in this Declaration of Trust. No Unitholder
has or is deemed to have any right of ownership in any of the assets of the
Trust.
2.6 Liability of Unitholders
No Unitholder shall incur or be subject to any liability in contract or in
tort or of any other kind to any Person in connection with the Trust Fund or the
obligations or the affairs of the Trust or with respect to any act performed by
the Trustee or by any other Person pursuant to this Declaration of Trust or with
respect to any act or omission of the Trustee or any other Person in the
performance or exercise, or purported performance or exercise, of any
obligation, power, discretion or authority conferred upon the Trustee or such
other Person hereunder or with respect to any transaction entered into by the
Trustee or by any other Person pursuant to this Declaration of Trust, and no
Unitholder shall be liable to indemnify the Trustee or any other Person with
respect to any such liability or liabilities incurred by the Trustee or by any
such other Person or Persons or with respect to any taxes payable by the Trust
or by the Trustee or
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any other Person on behalf of or in connection with the Trust; provided,
however, to the extent that, notwithstanding the foregoing, any Unitholders are
held by a court of competent jurisdiction to be subject to any such liability,
such liability shall be enforceable only against, and shall be satisfied only
out of, the Trust Fund.
2.7 Contracts of the Trust
Every contract entered into by or on behalf of the Trust, whether by the
Trustee, the Corporation or otherwise, shall (except as the Trustee or the
Corporation may otherwise expressly agree in writing with respect to their own
personal liability) include a provision substantially to the following effect:
The parties hereto acknowledge that the [Trustee] [Corporation] is
entering into this agreement solely [in its capacity as Trustee] [on
behalf] of the Trust and the obligations of the Trust hereunder shall not
be personally binding upon the [Trustee] [Corporation] or any of the
Unitholders of the Trust and that any recourse against the Trust [, the
Trustee] [, the Corporation] or any Unitholder in any manner in respect of
any indebtedness, obligation or liability of the Trust arising hereunder
or arising in connection herewith or from the matters to which this
agreement relates, if any, including without limitation claims based on
negligence or otherwise tortious behaviour, shall be limited to, and
satisfied only out of, the Trust Fund as defined in the Declaration of
Trust dated August 2, 1996 and restated November 6, 2002 as amended from
time to time.
The omission of such a provision from any such written instrument shall
not operate to impose personal liability on the Trustee, the Manager, the
Corporation or any Unitholder.
2.8 Head Office of Trust
The head office of the Trust shall be located at 4700, 150 - 6th Avenue
S.W., Calgary, Alberta T2P 3Y7, or at such other place as the Trustee may from
time to time designate.
ARTICLE 3
UNITS
3.1 Designation and Number of Units
The beneficial interests in the Trust shall be divided into interests of
one class, described and designated as Units, which shall be entitled to the
rights and subject to
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the limitations, restrictions and conditions set out herein. The aggregate
number of Units which may be authorized and issued hereunder is unlimited.
3.2 Offerings of Units
Units may be issued at the times, to the persons, for the consideration
and on the terms and conditions that the Corporation determines. Units,
including rights to acquire Units, may be offered pursuant to Offering Documents
or other agreements or arrangements on such terms and conditions and at such
time or times as the Corporation may determine.
3.3 Ranking of Units
Each Unit represents an equal fractional undivided beneficial interest in
the Trust Fund. All Units Outstanding from time to time shall be entitled to
equal shares in any distributions by the Trust and, in the event of termination
of the Trust, in the net assets of the Trust. All Units shall rank among
themselves equally and rateably without discrimination, preference or priority
whatever may be the actual date or terms of issue thereof.
3.4 Units Non-Assessable
Units shall be issued only when fully paid and the Unitholders shall not
thereafter be required to make any further contribution to the Trust with
respect to such Units; provided however notwithstanding the foregoing the Units
to be issued under an Offering may be issued for a consideration payable in
instalments and the Trust may take security over such Units to be issued under
any such Offering as security for unpaid instalments and may assign all or any
part of its interests in that security.
3.5 No Conversion, Retraction, Redemption or Pre-Emptive Rights
There are no conversion, retraction, redemption or pre-emptive rights
attaching to the Units, other than as set forth herein.
3.6 No Fractional Units
Fractions of Units shall not be issued.
3.7 Transferability of Units
The Units are transferable.
3.8 Non-Resident Unitholders
At no time may more than one-half of the Outstanding Units be held by
non-residents of Canada ("non-residents") within the meaning of the Income Tax
Act. If
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at any time the Trustee becomes aware, as a result of requiring declarations as
to beneficial ownership under Section 8.11 or otherwise, that the beneficial
owners of 49% of the Units then Outstanding are or may be non-residents or that
such a situation is imminent, the Trustee may make a public announcement thereof
and shall not accept a subscription for Units from or issue or register a
transfer of Units to a Person unless the Person provides a declaration pursuant
to Section 8.11 that the Person is not a non-resident. If, notwithstanding the
foregoing, the Trustee determines that a majority of the Units are held by
non-residents, the Trustee may send a notice to non-resident holders of Units,
chosen in inverse order to the order of acquisition or registration or in such
other manner as the Trustee may consider equitable and practicable, requiring
them to sell their Units or a specified portion thereof within a specified
period of not less than 60 days. If the Unitholders receiving such notice have
not within such period sold the specified number of Units or provided the
Trustee with satisfactory evidence that they are not non-residents, the Trustee
may on behalf of such Unitholders sell such Units and, in the interim, shall
suspend the voting and distribution rights attached to such Units. Any sale
shall be made on any stock exchange on which the Units are then listed and, upon
such sale, the affected holders shall cease to be holders of Units and their
rights shall be limited to receiving the net proceeds of sale upon surrender of
the Certificates representing such Units.
3.9 Re-Purchase of Initial Unit by Trust
Immediately after the closing of the Initial Offering, the Trust purchased
the Initial Unit from the Initial Unitholder, and the Initial Unitholder sold
the Initial Unit to the Trust for a purchase price of $100.00 and, on the
completion of that purchase and sale, the Initial Unit was cancelled and is no
longer outstanding for any of the purposes of this Declaration of Trust.
3.10 Special Voting Units
In addition to Units, the Trust is hereby empowered to issue Special
Voting Units having the rights and subject to the limitations, restrictions and
conditions set forth herein. The number of Special Voting Units that may be
issued shall be unlimited.
Subject to the proviso that Special Voting Units may only be issued by the
Trust in conjunction with the issuance by the Corporation or an Affiliate of the
Corporation of Exchangeable Shares, Special Voting Units may be issued at the
times, to the persons, for the consideration and on the terms and conditions
that the Corporation may determine.
Each Special Voting Unit shall entitle the holder thereof to attend and
vote at all meetings of Unitholders. The maximum number of votes attached to
each Special Voting Unit shall be that number of Units into which the
Exchangeable Shares issued in conjunction with the Special Voting Unit and at
that time outstanding are then exchangeable. Special Voting Units may be voted
by proxy on all matters that may
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properly come before the Unitholders of the Trust. Prior to delivering a Special
Voting Unit proxy, the holder of a Special Voting Unit shall be obligated to
determine, in a manner approved by the Corporation, the manner in which the
holders of the then outstanding Exchangeable Shares that were issued in
conjunction with that Special Voting Unit would vote on each matter put before
the Unitholders. The holder of the Special Voting Unit would then be obligated
to complete the Special Voting Unit proxy and record as votes in favour of the
matter that number of votes equal to the number of Units into which the
Exchangeable Shares which voted in favour of the matter are then exchangeable
and record as votes against the matter that number of votes equal to the number
of Units into which the Exchangeable Shares which voted against the matter are
then exchangeable. Votes attached to the Special Voting Unit may only be counted
to the extent of the number of Units into which the Exchangeable Shares issued
in connection with the Special Voting Unit and then outstanding have recorded a
vote on the matter.
Special Voting Units shall have the rights granted above in respect of
voting at meetings of Unitholders and shall have no other rights in the Trust or
the Trust Fund and for greater certainty Special Voting Units do not represent a
beneficial interest in the Trust.
ARTICLE 4
INVESTMENT OF THE TRUST FUND
4.1 Investments
Any funds within the Trust Fund, including the Net Proceeds of Offerings
and any funds borrowed by the Trust shall be used by the Trust only to make the
Deferred Purchase Price Obligation, to acquire other royalties in respect of
Properties, investing in any other securities (including securities of the
Corporation or any affiliate of the Corporation) of an issuer which carries on
or intends to carry on the business of the acquisition, ownership or development
of petroleum or natural gas properties, royalties or securities relating thereto
or in any other property comprising or relating to the petroleum and natural gas
business approved by the Corporation or, subject to compliance with Section 4.3,
to make loan advances to the Corporation (collectively, "Subsequent
Investments"), and to pay costs, fees and expenses associated therewith or
incidental thereto.
4.2 Short Term Investments
Any funds within the Trust Fund that are not required to be invested as
provided in Section 4.1 shall be used by the Trust only to acquire Short Term
Investments or as permitted by Section 8.2(f) pending making distributions to
the Unitholders.
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4.3 Other Investment Restrictions
Without in any manner qualifying or limiting the restrictions imposed by
Sections 4.1 and 4.2, under no circumstances shall the Trust acquire any
investment which:
(a) would result in the Units becoming "foreign property" as defined
under the provisions of the Income Tax Act at the time such
investment was acquired; or
(b) would result in the Trust not being considered either a "unit trust"
or a "mutual fund trust" for purposes of the Income Tax Act at the
time such investment was acquired.
ARTICLE 5
DISTRIBUTIONS
5.1 Distributions
The first Distribution Date of the Trust shall be January 15, 1997.
Commencing January 15, 1997 the Trustee shall, subject to Section 5.2, on each
Distribution Date cause the Distributable Income of the Trust to be determined
in respect of the immediately preceding Record Date and shall, subject to any
limitations contained in any Offering Document, distribute all Distributable
Income to Unitholders of record as at the close of business on the immediately
preceding Record Date in accordance with the Pro Rata Share of each Unitholder
on that Record Date (provided that the Trustee may deduct or withhold amounts
required by law from any Unitholder's distributions). Each Unitholder shall have
the right to enforce the payment of its share of Distributable Income on any
Distribution Date.
5.2 Change of Distribution Date
The Trustee may change the Distribution Dates or any of them at any time
after October 15, 1997, subject to having given the Unitholders not less than 60
days' prior written notice, and may change the Record Date for any distribution
upon compliance with any requirements of applicable law or the rules of any
stock exchange.
5.3 Net Income for Income Tax Purposes to Become Payable
On December 31 of each fiscal year, an amount equal to the net income of
the Trust for such fiscal year determined in accordance with the Income Tax Act,
other than subsection 104(6) thereof, to the extent not otherwise payable
pursuant to Section 5.1 on any Record Date in the fiscal year (including
December 31 of that fiscal year) or deemed to have become payable for the
purposes of such Act pursuant to subsection 104(29) thereof, shall become
payable to Unitholders and a Unitholder shall be entitled to
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enforce payment thereof on that day. Each Unitholder's share thereof shall be
equal to the Pro Rata Share of such Unitholder. Notwithstanding the foregoing,
the amount of any Distributable Income of the Trust so determined for a fiscal
year that is determined by the Trustee to be required to be retained by the
Trust in order to pay any tax liability of the Trust in respect of that or any
prior fiscal year shall not be payable by the Trust to Unitholders.
5.4 Payment of Amounts Payable
Where any amount becomes payable to a Unitholder under Section 5.3, such
amount shall be paid to the Unitholder on the next Distribution Date unless any
Unitholder requests payment thereof prior to that Distribution Date, in which
case the amount shall be paid to each Unitholder to whom it became payable
forthwith.
5.5 Reinvestment of Distributions
(a) Subject to receipt of all regulatory approvals, the Trust shall make
available to Unitholders the opportunity to reinvest distributions
from the Trust in additional Units by participating in a
distribution reinvestment plan (the "Plan"). Upon a Unitholder
electing to be enrolled in the Plan, all distributions from the
Trust will automatically be reinvested on such Unitholder's behalf
pursuant to the Plan until such Unitholder terminates his enrolment
in the Plan or the Trust terminates the Plan.
(b) Distributions due to participants in the Plan will be paid to the
Trustee in its capacity as agent under the Plan (the "Plan Agent")
and be applied to the purchase of Units. The Plan Agent shall make
such purchases from the Trust at a discount to the prevailing market
price of 5%.
(c) The Plan Agent shall furnish to each participant after each
distribution a report of the Units purchased for the participant's
account in respect of such distribution and the cumulative total of
all Units purchased for that account. The Trust shall pay out of the
Trust Fund the Plan Agent's charges for administering the Plan.
Certificates representing Units purchased under the Plan will be
issued only upon request of the Unitholder, upon termination of the
Unitholder's participation in the Plan or upon termination of the
Plan. Distributions on fractional Units will be credited to each
participant's account. However, no certificates for fractional Units
will be issued. A cash adjustment for any fractional Units shall be
paid to such Unitholders, when necessary, by cheque or, with the
concurrence of the Plan Agent, as such Unitholder shall otherwise
direct.
(d) Unitholders may terminate their participation in the Plan by written
notice to the Plan Agent. Such notice, if actually received prior to
a Distribution Date, will be given effect to on that Distribution
Date.
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Thereafter, distributions to such Unitholders will be by cheque. The
Trust may terminate the Plan, in its sole discretion, upon not less
than 30 days' notice to the participants.
ARTICLE 6
REDEMPTION OF UNITS
6.1 Right of Redemption
Each Unitholder shall be entitled to require the Trust to redeem at any
time or from time to time at the demand of the Unitholder all or any part of the
Units registered in the name of the Unitholder at the prices determined and
payable in accordance with the conditions hereinafter provided.
6.2 Exercise of Redemption Right
To exercise a Unitholder's right to require redemption under this Article
6, a duly completed and properly executed notice requiring the Trust to redeem
Units, in a form approved by the Trust, shall be sent to the Trust at the head
office of the Trust, together with the Certificate or Certificates representing
the Units to be redeemed. No form or manner of completion or execution shall be
sufficient unless the same is in all respects satisfactory to the Trust and is
accompanied by any further evidence that the Trust may reasonably require with
respect to the identity, capacity or authority of the person giving such notice.
Upon receipt by the Trust of the notice to redeem Units, the Unitholder
shall thereafter cease to have any rights with respect to the Units tendered for
redemption (other than to receive the redemption payment therefor) including the
right to receive any distributions thereon which are declared payable to the
Unitholders of record on a date which is subsequent to the date of receipt by
the Trust of such notice. Units shall be considered to be tendered for
redemption on the date that the Trust has, to the satisfaction of the Trust,
received the notice, Certificates and other required documents or evidence as
aforesaid.
6.3 Cash Redemption
Subject to Section 6.4, upon receipt by the Trust of the notice to redeem
Units in accordance with Section 6.2, the holder of the Units tendered for
redemption shall be entitled to receive a price per Unit (hereinafter called the
"Cash Redemption Price") equal to the lesser of:
(a) 95% of the market price of the Units on the principal market on
which the Units are quoted for trading during the 10 trading day
period
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commencing immediately after the date on which the Units were
tendered to the Trust for redemption; and
(b) the closing market price on the principal market on which the Units
are quoted for trading, on the date that the Units were so tendered
for redemption.
For purposes of subsection 6.3(a), the market price shall be an amount
equal to the simple average of the closing price of the Units for each of the
trading days on which there was a closing price; provided that if the applicable
exchange or market does not provide a closing price but only provides the
highest and lowest prices of the Units traded on a particular day, the market
price shall be an amount equal to the simple average of the highest and lowest
prices for that trading day if there was a trade; and provided further that if
there was trading on the applicable exchange or market for fewer than five of
the ten trading days, the market price shall be the simple average of the
following prices established for each of the ten trading days: the average of
the bid and ask prices for each day on which there was no trading; the weighted
average trading price of the Units for each day that there was trading if the
exchange or market provides a weighted average trading price; and the average of
the highest and lowest prices of the Units for each day that there was trading,
if the market provides only the highest and lowest prices of Units traded on a
particular day. For purposes of subsection 6.3(b), the closing market price
shall be an amount equal to the closing price of the Units if there was a trade
on the date; an amount equal to the average of the highest and lowest prices of
Units if there was trading and the exchange or other market provides only the
highest and lowest prices of Units traded on a particular day; and the average
of the last bid and last ask prices if there was no trading on the date.
The Cash Redemption Price payable in respect of the Units tendered for
redemption during any month shall be paid by cheque, drawn on a Canadian
chartered bank or a trust company in lawful money of Canada, payable at par to
or to the order of the Unitholder who exercised the right of redemption on the
last day of the calendar month following the month in which the Units were
tendered for redemption. Payments made by the Trust of the Cash Redemption Price
are conclusively deemed to have been made upon the mailing of a cheque in a
postage prepaid envelope addressed to the former Unitholder unless such cheque
is dishonoured upon presentment. Upon such payment, the Trust shall be
discharged from all liability to the former Unitholder in respect of the Units
so redeemed.
6.4 No Cash Redemption in Certain Circumstances
Section 6.3 shall not be applicable to Units tendered for redemption by a
Unitholder, if:
(a) the total amount payable by the Trust pursuant to Section 6.3 in
respect of such Units and all other Units tendered for redemption in
the same
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calendar month exceeds $100,000 provided that the board of directors
of the Corporation may, in its sole discretion, waive such
limitation in respect of any calendar month;
(b) at the time the Units are tendered for redemption, the outstanding
Units are not listed for trading on the Toronto Stock Exchange and
are not traded or quoted on any other stock exchange or market which
the board of directors of the Corporation considers, in their sole
discretion, provides representative fair market value prices for the
Units; or
(c) the normal trading of the outstanding Units is suspended or halted
on any stock exchange on which the Units are listed for trading or,
if not so listed, on any market on which the Units are quoted for
trading, on the date that such Units tendered for redemption were
tendered to the Trust for redemption or for more than five trading
days during the ten day trading period commencing immediately after
the date on which such Units tendered for redemption were tendered
to the Trust for redemption.
6.5 In Specie Redemption
If, pursuant to Section 6.4, Section 6.3 is not applicable to Units
tendered for redemption by a Unitholder, such Unitholder shall, instead of the
Cash Redemption Price per Unit specified in Section 6.3, be entitled to receive
a price per Unit (hereinafter called the "In Specie Redemption Price") equal to
the fair market value thereof as determined by the board of directors of the
Corporation and in making such determination there shall be deducted from such
price otherwise determined the amount of the tax liability incurred by the Trust
as a result of such redemption (the "Redemption Tax Liability"). The In Specie
Redemption Price shall, subject to all necessary regulatory approvals, be paid
and satisfied by way of a distribution in specie of the assets of the Trust. No
fractional securities of the Trust shall be distributed and where the number of
any securities of the Trust to be received upon redemption by a Unitholder would
otherwise include a fraction, that number shall be rounded to the next lowest
whole number. The In Specie Redemption Price payable in respect of Units
tendered for redemption during any month shall be paid by the transfer, to or to
the order of the Unitholder who exercised the right of redemption, on the last
day (the "Transfer Date") of the calendar month following the month in which the
Units were tendered for redemption, of the assets of the Trust, determined as
aforesaid. The Fund shall be entitled to all interest paid or accrued and unpaid
on any securities of the Trust being transferred, and to all dividends on any
securities of the Trust being transferred which have been declared and paid or
have been declared payable on or before the Transfer Date and to similar
treatment in respect of distributions paid or payable and unpaid in respect of
any other securities of the Trust being transferred. Payments by the Trust of
the In Specie Redemption Price are conclusively deemed to have been made upon
the mailing of the assets of the Trust being transferred by registered mail in a
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postage prepaid envelope addressed to the former Unitholder. Upon such payment,
the Trust shall be discharged from all liability to the former Unitholder in
respect of the Units so redeemed.
6.6 Cancellation of Certificates for all Redeemed Units
All certificates representing Units which are redeemed under this Article
6 shall be cancelled and such Units shall no longer be outstanding and shall not
be reissued.
6.7 Deemed Cancellation of Units Tendered into a Take-Over Bid
Notwithstanding any other provisions of this Article 6, in the event any
person holding an option to purchase Units granted pursuant to an option plan,
compensation arrangement or other similar arrangement approved by the Trust or
Unitholders (as required by applicable law) exercises such option following the
commencement of a take-over bid (as defined in the Securities Act (Alberta))
which is not exempt from the take-over bid requirements of the Securities Act
(Alberta) and the optionee tenders the Units received on the exercise of such
option pursuant to the take-over bid, in the event any such Units so tendered
are not, for any reason, taken up and paid for by the Offeror pursuant to the
take-over bid then all such Units so purchased by the optionee shall be and
shall be deemed to be cancelled and returned to the Trust, and the Trust, upon
receiving a written confirmation that all such Units have been transferred back
to the Trust, shall refund to the optionee all consideration paid by him or her
in the initial purchase of the Units, excluding any commissions and other fees
paid in connection with such purchase.
ARTICLE 7
APPOINTMENT, RESIGNATION AND REMOVAL OF THE TRUSTEE
7.1 Trustee's Term of Office
Subject to Sections 7.2 and 7.3, Computershare Trust Company of Canada is
hereby appointed as trustee under this Declaration of Trust for an initial term
of office which shall expire at the conclusion of the sixth annual meeting of
Unitholders. A decision to reappoint, or to appoint a successor to, the Trustee
shall be made at the sixth annual meeting of Unitholders and thereafter at each
third annual meeting of Unitholders following the meeting at which any
reappointment or appointment is made. Any such reappointment or appointment
shall be made either by an Ordinary Resolution at such meeting of Unitholders or
in the manner set out in Section 7.4. Notwithstanding the foregoing, if the
Trustee is not reappointed at the meeting of Unitholders held immediately before
the term of office of the Trustee expires and if no successor to the Trustee is
appointed at that meeting, the Trustee shall continue to hold the office of
trustee under this Declaration of Trust until a successor has been appointed
under Section 7.4.
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7.2 Resignation of Trustee
The Trustee may resign from the office of trustee hereunder on giving not
less than 60 days' notice in writing to the Corporation, but no such resignation
shall be effective until:
(a) a new trustee has been appointed in the place of the Trustee in the
manner set out in Section 7.4; and
(b) the new trustee has accepted such appointment and has legally and
validly assumed all obligations of the Trustee related hereto.
7.3 Removal of Trustee
The Trustee shall be removed by notice in writing delivered by the
Corporation to the Trustee in the event that, at any time, the Trustee shall no
longer satisfy all of the requirements of Section 7.6 or shall be declared
bankrupt or insolvent or shall enter into liquidation, whether compulsory or
voluntary, and not being merely a voluntary liquidation for the purposes of
amalgamation or reconstruction, or if the assets of the Trustee shall otherwise
become liable to seizure or confiscation by any public or governmental
authority, or if the Trustee shall otherwise become incapable of performing or
shall fail in any material respect to perform its responsibilities under this
Declaration of Trust, or as a result of a material increase in the fees charged
by the Trustee.
No notice to remove the Trustee under this Section 7.3 shall become
effective until:
(a) the removal of the Trustee has been approved by an Ordinary
Resolution at a meeting of Unitholders duly called for that purpose;
(b) a new trustee has been appointed in the place of the Trustee in the
manner set out in Section 7.4; and
(c) the new trustee has accepted such appointment and has legally and
validly assumed all obligations of the Trustee related hereto.
7.4 Appointment of Successor to Trustee
A successor to a Trustee which has been removed under Section 7.3 or which
has given notice of resignation under Section 7.2 shall be appointed by an
Ordinary Resolution passed at a meeting of Unitholders duly called for that
purpose, provided the successor meets the requirements of Section 7.6.
Subject to Section 7.6, the Corporation may appoint a successor to any
Trustee which has been removed under Section 7.3, which has given a notice of
resignation
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under Section 7.2, or which has not been reappointed under Section 7.1, if the
Unitholders fail to do so at the relevant meeting.
No appointment of any successor trustee shall be effective until such
successor trustee has accepted such appointment and has legally and validly
assumed all of the obligations of the Trustee related hereto.
7.5 Failure to Appoint Successor
In the event that no successor to a Trustee which has delivered a notice
of resignation in accordance with Section 7.2 or which has received notice of
removal in accordance with Section 7.3 has accepted an appointment within 60
days after the receipt by the Corporation of the notice of resignation or 60
days after the receipt by the Trustee of the notice of removal, the Trustee, the
Corporation or any Unitholder may apply to a court of competent jurisdiction for
the appointment of a successor to the Trustee. The appointment of such successor
by such court shall not require the approval of Unitholders.
7.6 Qualifications of Trustee
The Trustee and any successor to the Trustee or any new trustee appointed
under this Article 7 shall be a corporation incorporated under the laws of
Canada or of a province thereof and shall be a resident of Canada for the
purposes of the Income Tax Act. Such corporation must at all times when it is
the Trustee be registered under the laws of the Province of Alberta to carry on
the business of a trust corporation and must have undertaken in writing to
discharge all of the obligations and responsibilities of the Trustee under this
Declaration of Trust. With the exception of the initial Trustee, the Trustee
shall be a corporation which has reported in its audited consolidated financial
statements for its most recent completed fiscal year shareholders' equity of at
least $100 million or such other amount as the Board of Directors shall approve
or be an Affiliate of such a corporation, provided that all of the obligations
of such Affiliate are unconditionally guaranteed by such a corporation.
ARTICLE 8
CONCERNING THE TRUSTEE
8.1 Powers of the Trustee and the Corporation
(a) Subject to the terms and conditions of this Declaration of Trust and
any contracts or obligations of the Trust or the Trustee, the
Trustee may exercise from time to time in respect of the Trust Fund
any and all rights, powers and privileges that could be exercised by
a beneficial owner thereof, except as specifically designated in
subsection (b) below.
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(b) The Corporation may exercise from time to time any and all rights,
powers and privileges in relation to all matters relating to the
maximization of Unitholder value in the context of a response to an
offer for Trust Units or for all or substantially all of the assets
of the Trust or the Corporation or any subsidiary of the Corporation
or the Trust (an "Offer") including (i) any Unitholder rights
protection plan (or amendment or waiver thereof) either prior to or
during the course of any Offer; (ii) any defensive action either
prior to or during the course of any Offer; (iii) the preparation of
any "Directors' Circular" in response to any Offer; (iv)
consideration on behalf of Unitholders and recommendations to
Unitholders in response to any Offer; (v) any regulatory or court
action in respect of any related matters; and (vi) the carriage of
all related and ancillary matters; and the Corporation accepts such
responsibility and agrees that, in respect of such matters, it shall
carry out its functions honestly, in good faith and in the best
interests of the Trust and the Unitholders and, in connection
therewith, shall exercise that degree of care, diligence and skill
that a reasonably prudent Person would exercise in comparable
circumstances. The Corporation, may, and if directed by the
Corporation in writing, the Trustee shall, execute any agreements on
behalf of the Trust as the Corporation shall have authorized within
the scope of the exercise of any such rights, powers or privileges.
8.2 Specific Powers and Authorities
Subject only to the express provisions contained in this Declaration of
Trust, the Material Contracts, and any other contracts or obligations of the
Trust or of the Trustee in respect of the Trust, and in addition to any other
powers and authorities conferred by this Declaration of Trust or which the
Trustee may have by virtue of any present or future statute or rule of law, the
Trustee, without any action or consent by the Unitholders, shall have the
following powers and authorities which may be exercised by it from time to time
in its sole judgment and discretion and in such manner and upon such terms and
conditions as it may from time to time deem proper, provided that the exercise
of such powers and authorities does not adversely affect the status of the Trust
as a "unit trust" and a "mutual fund trust" for the purposes of the Income Tax
Act:
(a) to enter into, perform and enforce the Material Contracts of the
Trust;
(b) to maintain records and provide reports to Unitholders;
(c) to effect payment of distributions to the Unitholders;
(d) to apply for ARTC;
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(e) to cause the Trust, to the extent of the Trust Fund, to indemnify
the directors of the Corporation;
(f) to deposit funds of the Trust in interest-bearing accounts in banks
or trust companies, including the Trustee or an Affiliate of the
Trustee, whose short term obligations constitute Short Term
Investments, the same to be subject to withdrawal on such terms and
in such manner and by such Person or Persons (including any one or
more officers, agents or representatives) as the Trustee may
determine;
(g) to possess and exercise all the rights, powers and privileges
pertaining to the ownership of all or any part of the assets of the
Trust, to the same extent that an individual might, unless otherwise
limited herein, and, without limiting the generality of the
foregoing, to vote or give any consent, request or notice, or waive
any notice, either in person or by proxy or power of attorney, with
or without power of substitution, to one or more Persons, which
proxies and powers of attorney may be for meetings or actions
generally or for any particular meeting or action and may include
the exercise of discretionary power;
(h) when reasonably required, to engage or employ any Persons as agents,
representatives, employees or independent contractors (including,
without limitation, investment advisers, registrars, underwriters,
accountants, lawyers, appraisers, brokers or otherwise) in one or
more capacities;
(i) to collect, sue for and receive all sums of money coming due to the
Trust, and to engage in, intervene in, prosecute, join, defend,
compromise, abandon or adjust, by arbitration or otherwise, any
actions, suits, proceedings, disputes, claims, demands or other
litigation relating to the Trust, the assets of the Trust or the
Trust's affairs, to enter into agreements therefor, whether or not
any suit is commenced or claim accrued or asserted and, in advance
of any controversy, to enter into agreements regarding the
arbitration, adjudication or settlement thereof;
(j) to arrange for insurance contracts and policies insuring the assets
of the Trust against any and all risks and insuring the Trust and/or
any or all of the Trustee or the Unitholders against any and all
claims and liabilities of any nature asserted by any Person arising
by reason of any action alleged to have been taken or omitted by the
Trust or by the Trustee or Unitholders;
(k) to cause legal title to any of the assets of the Trust to be held by
and/or in the name of the Trustee or, except as prohibited by law,
by and/or in the name of the Trust or any other custodian or Person,
on such terms, in such
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manner, with such powers in such person as the Trustee may determine
and with or without disclosure that the Trust or the Trustee is
interested therein, provided however that should legal title to any
of the Trust's assets be held by and/or in the name of any Person or
Persons other than the Trustee or the Trust, the Trustee shall
require such Person or Persons to execute a trust agreement
acknowledging that legal title to those assets is held in trust for
the benefit of the Trust;
(l) to accept, hold, renew or extend or participate in the acceptance,
holding, renewal or extension of any security upon such terms as may
be deemed advisable, and to agree to a reduction in the rate of
interest on any security or to any other modification or change in
the terms of any security or of any guarantee pertaining thereto, in
any manner and to any extent that it may deem advisable; to waive
any default in the performance of any covenant or condition of any
security or in the performance of any guarantee, or to enforce the
rights in respect of any such default in such manner and to such
extent as it may deem advisable; to exercise and enforce any and all
rights of foreclosure, to bid on property on sale or foreclosure, to
take a conveyance in lieu of foreclosure with or without paying a
consideration therefor and in connection therewith to relieve the
obligation on the covenants secured by such security and to exercise
and enforce in any action, suit or proceeding at law or in equity
any rights or remedies with respect to any such security or
guarantee;
(m) to make, execute, acknowledge and deliver any and all deeds,
contracts, waivers, releases or other documents of transfer and any
and all other instruments in writing necessary or proper for the
accomplishment of any of the powers herein granted;
(n) to pay out of the Trust Fund the Trust Expenses;
(o) except as prohibited by law, to delegate any or all of the
management and administrative powers and duties of the Trustee to
the Corporation or any one or more agents, representatives,
officers, employees, independent contractors or other Persons
without liability to the Trustee except as provided in this
Declaration of Trust;
(p) to borrow and repay funds and incur and pay indebtedness and
guarantee the indebtedness of the Corporation and assign, charge,
pledge, hypothecate, grant a security interest in, mortgage and
encumber the Trust Fund as security for such borrowed funds,
indebtedness or guarantee;
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(q) to do all such other acts and things as are incidental to the
foregoing, and to exercise all powers which are necessary or useful
to carry on the business of the Trust, to promote any of the
purposes for which the Trust is formed and to carry out the
provisions of this Declaration of Trust;
(r) to issue additional Units from time to time in accordance with
Offering Documents, this Declaration of Trust or as directed by the
Corporation;
(s) to use reasonable efforts to ensure that the Trust complies with the
requirements of sections 108(2)(b) and 132(6) of the Income Tax Act,
as from time to time amended or replaced; and
(t) without limiting any of the provisions hereof, to pay out of the
Trust Fund:
(i) Underwriters' Fees;
(ii) the purchase price of the Royalty, Short Term Investments and
Subsequent Investments;
(iii) the Deferred Purchase Price Obligation;
(iv) Issue Expenses; and
(v) all structuring fees;
all as contemplated by the Offering Documents, this Declaration of
Trust or the Material Contracts.
8.3 Banking
The banking activities of the Trust, or any part thereof, shall be
transacted with such bank, trust company or other firm or corporation carrying
on a banking business (including the Trustee or an Affiliate of the Trustee) as
the Trustee may designate, appoint or authorize from time to time, and all such
banking activities, or any part thereof, shall be transacted on the Trust's
behalf by such one or more officers of the Trustee or other Persons (who may be
officers or employees of the Corporation) as the Trustee may designate, appoint
or authorize from time to time.
8.4 Standard of Care
Except as otherwise provided herein, the Trustee shall comply with any
agreements contemplated hereby which may be binding on the Trustee or the Trust
and shall exercise its powers and carry out its functions hereunder as trustee
honestly, in good faith and in the best interests of the Trust and the
Unitholders and, in connection therewith, shall exercise that degree of care,
diligence and skill that a reasonably
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prudent trustee would exercise in comparable circumstances. Unless otherwise
required by law, the Trustee shall not be required to give bond, surety or
security in any jurisdiction for the performance of any duties or obligations
hereunder. The Trustee, in its capacity as trustee, shall not be required to
devote its entire time to the affairs of the Trust.
8.5 Fees and Expenses
The Trustee shall be paid by the Corporation such fees as may be agreed
upon in writing from time to time by the Corporation and the Trustee, and if any
such fees are not paid by the Corporation within 30 days of the date of any
invoice in respect thereof, the Trustee shall be entitled to have such fees paid
out of the Trust Fund. As part of Trust Expenses, the Trustee may pay or cause
to be paid reasonable fees, costs and expenses incurred in connection with the
administration and management of the Trust, including fees of auditors, lawyers,
appraisers and other agents, consultants and professional advisers employed by
or on behalf of the Trust and the cost of reporting or giving notices to
Unitholders. All costs, charges and expenses (including any amounts payable to
the Trustee under Sections 8.7 and 8.8) properly incurred by the Trustee on
behalf of the Trust shall be payable by the Corporation, and if any such costs,
charges and expenses are not paid by the Corporation within 30 days of the date
of any invoice in respect thereof, the Trustee shall be entitled to have such
costs, charges and expenses paid out of the Trust Fund. The Trustee shall have a
lien on the Trust Fund (which shall have priority over the interests of the
Unitholders pursuant hereto) to enforce payment of the fees, costs, expenses and
other amounts payable or reimbursable by the Trust to the Trustee.
8.6 Limitations on Liability of Trustee
The Trustee, its directors, officers, employees, shareholders and agents
shall not be liable to any Unitholder or any other Person, in tort, contract or
otherwise, in connection with any matter pertaining to the Trust or the Trust
Fund, arising from the exercise by the Trustee of any powers, authorities or
discretion conferred under this Declaration of Trust, including, without
limitation, any action taken or not taken in good faith in reliance on any
documents that are, prima facie, properly executed, any depreciation of, or loss
to, the Trust Fund incurred by reason of the sale of any asset, any inaccuracy
in any evaluation provided by the Corporation or any other appropriately
qualified Person, any reliance on any such evaluation, any action or failure to
act of the Corporation or any other Person to whom the Trustee has, with the
consent of the Corporation, delegated any of its duties hereunder, or any other
action or failure to act (including failure to compel in any way any former
trustee to redress any breach of trust or any failure by the Corporation to
perform its duties under or delegated to it under this Declaration of Trust or
any Material Contract), unless such liabilities arise out of the Trustee's or
any such director's, officer's, employee's, shareholder's or agent's gross
negligence, wilful default or fraud. If the Trustee has
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retained an appropriate expert or adviser or Counsel with respect to any matter
connected with its duties under this Declaration of Trust or any Material
Contract, the Trustee may act or refuse to act based on the advice of such
expert, adviser or Counsel, and the Trustee shall not be liable for and shall be
fully protected from any loss or liability occasioned by any action or refusal
to act based on the advice of any such expert, adviser or Counsel. In the
exercise of the powers, authorities or discretion conferred upon the Trustee
under this Declaration of Trust, the Trustee is and shall be conclusively deemed
to be acting as trustee of the assets of the Trust and shall not be subject to
any personal liability for any debts, liabilities, obligations, claims, demands,
judgments, costs, charges or expenses against or with respect to the Trust or
the Trust Fund.
8.7 Indemnification of Trustee
The Trust (to the extent of the Trust Fund) is liable to, and shall
indemnify and save harmless the Trustee and each of its directors, officers,
employees, shareholders and agents and all of their successors and assigns
(collectively, the "Indemnified Parties") in respect of:
(a) any liability and all costs, charges and expenses sustained or
incurred in respect of any action, suit or proceeding that is
proposed or commenced against any Indemnified Party, as the case may
be, for or in respect of any act, omission or error in respect of
the Trust and the Trustee's execution of all duties and
responsibilities and exercise of all powers and authorities
pertaining thereto; and
(b) all other costs, charges, taxes, penalties and interest in respect
of unpaid taxes and all other expenses and liabilities sustained or
incurred by the Trustee in respect of the administration or
termination of the Trust;
unless any of the foregoing arises out of the Indemnified Party's gross
negligence, wilful default or fraud, in which case the provisions of this
Section 8.7 shall not apply.
8.8 Environmental Indemnity
The Trust (to the extent of the Trust Fund) is liable to, and shall
indemnify and save harmless, the Indemnified Parties against any loss, expense,
claim, liability or asserted liability (including strict liability and costs and
expenses of abatement and remediation of spills or releases of contaminants and
liabilities of the Indemnified Parties to third parties (including governmental
agencies) in respect of bodily injuries, property damage, damage to or
impairment of the environment or any other injury or damage and including
liabilities of the Indemnified Parties to third parties for the third parties'
foreseeable and unforeseeable consequential damages) incurred as a result of:
(a) the administration of the Trust created hereby; or
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(b) the exercise or performance by the Trustee of any rights or
obligations hereunder or under any of the Material Contracts;
and which result from or relate, directly or indirectly, to:
(c) the presence or release or threatened presence or release of any
contaminants, by any means or for any reason, on or in respect of
the Properties, whether or not such presence or release or
threatened presence or release of the contaminants was under the
control, care or management of the Trust or the Corporation, or of a
previous owner or operator of a Property;
(d) any contaminant present on or released from any property adjacent to
or in the proximate area of the Properties;
(e) the breach or alleged breach of any federal, provincial or municipal
environmental law, regulation, by-law, order, rule or permit by the
Trust or the Corporation or an owner or operator of a Property; or
(f) any misrepresentation or omission of a known fact or condition made
by the Corporation relating to any Property.
For purposes of this Section 8.8, "liability" shall include:
(i) liability of an Indemnified Party for costs and expenses of
abatement and remediation of spills and releases of
contaminants;
(ii) liability of an Indemnified Party to a third party to
reimburse the third party for bodily injuries, property damage
and other injuries or damages which the third party suffers,
including (to the extent, if any, that the Indemnified Party
is liable therefor) foreseeable and unforeseeable
consequential damages suffered by the third party; and
(iii) liability of the Indemnified Party for damage to or impairment
of the environment.
Notwithstanding the foregoing, the Trust shall not be liable to indemnify
an Indemnified Party against any loss, expense, claim, liability or asserted
liability to the extent such results from the gross negligence, wilful default
or fraud of the Indemnified Party.
8.9 Apparent Authority
No Person dealing with the Trustee or with any officer, employee or agent
of the Trustee shall be bound to make any inquiry concerning the validity of any
transaction
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purported to be made by the Trustee or by such officer, employee or agent or to
make any inquiry concerning, or be liable for, the application of money or
property paid, lent or delivered to or on the order of the Trustee or of such
officer, employee or agent. Any Person dealing with the Trustee in respect of
any matter pertaining to the Trust Fund and any right, title or interest therein
shall be entitled to rely on a certificate, statutory declaration or resolution
executed or certified on behalf of the Trustee as to the capacity, power and
authority of any officer, employee or any other Person to act for and on behalf
and in the name of the Trust.
8.10 Notice to Unitholders of Non-Eligibility for Deferred Income Plans
If the Trustee becomes aware that the Units have ceased to be qualified
investments for registered retirement savings plans, registered retirement
income funds and deferred profit sharing plans (all within the meaning of the
Income Tax Act) or any of such plans, the Trustee shall give notice to
Unitholders at their latest address as shown on the register of Unitholders that
Units have ceased to be qualified investments for such plans. The Trustee shall
not be liable to the Trust or to any Unitholder for any costs, expenses,
charges, penalties or taxes imposed upon a Unitholder as a result of or by
virtue of a Unit not being a qualified investment for any such plan,
notwithstanding any failure or omission of the Trustee to have given such
notice, provided the Trustee has complied with Section 8.4.
8.11 Declaration as to Beneficial Owner
The Trustee may require any Unitholder as shown on the register of
Unitholders to provide a declaration, in form prescribed by the Trustee, as to
the beneficial owner of Units registered in such Unitholder's name and as to the
jurisdiction in which such beneficial owner is resident.
8.12 Conditions Precedent to Trustee's Obligation to Act
The obligation of the Trustee to call any meeting pursuant to Article 11
or to commence to wind up the affairs of the Trust pursuant to Article 15 shall
be conditional upon the Corporation, Unitholders or any other Person furnishing
sufficient funds to commence or continue such act, action or proceeding and
furnishing an indemnity (to the extent sufficient funds for such purpose are not
available in the Trust Fund) reasonably satisfactory to the Trustee to protect
and hold harmless the Trustee against the costs, charges, expenses and
liabilities to be incurred thereby and any loss and damage it may suffer by
reason thereof, and the obligation of the Trustee to commence or continue any
other act, action or proceeding for the purpose of performing its duties under
this Declaration of Trust or enforcing the rights of the Trustee and of the
Unitholders shall, if required by notice in writing by the Trustee, be subject
to the same conditions as to funding and indemnity. None of the provisions
contained in this Declaration of Trust shall require the Trustee to expend or
risk its own funds or
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otherwise incur financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers unless it is indemnified as
aforesaid.
8.13 Survival of Indemnities
The indemnities provided in Sections 8.7 and 8.8 shall survive the
termination of this Declaration of Trust under Article 15 and the removal or
resignation of the Trustee under Article 7.
8.14 Trustee May Have Other Interests
Subject to applicable securities laws and the qualifications of the
Trustee provided in Section 7.6, and without affecting or limiting the duties
and responsibilities or the limitations and indemnities provided in this
Declaration of Trust, the Trustee is hereby expressly permitted to:
(a) be an Associate or an Affiliate of a Person from or to whom assets
of the Trust have been or are to be purchased or sold;
(b) be, or be an Associate or an Affiliate of, a Person with whom the
Trust or the Corporation contracts or deals or which supplies
services to the Trust or the Corporation;
(c) acquire, hold and dispose of, either for its own account or the
accounts of its customers, any assets not constituting part of the
Trust Fund, even if such assets are of a character which could be
held by the Trust, and exercise all rights of an owner of such
assets as if it were not a trustee;
(d) carry on its business as a trust company in the usual course while
it is the Trustee, including the rendering of trustee or other
services to other trusts and other Persons for gain; and
(e) derive direct or indirect benefit, profit or advantage from time to
time as a result of dealing with the Trust or the relationships,
matters, contracts, transactions, affiliations or other interests
stated in this Section 8.14 without being liable to the Trust or any
Unitholder for any such direct or indirect benefit, profit or
advantage.
Subject to applicable laws, none of the relationships, matters, contracts,
transactions, affiliations or other interests permitted above shall be, or shall
be deemed to be or to create, a material conflict of interest with the Trustee's
duties hereunder.
8.15 Documents Held by Trustee
Any securities, documents of title or other instruments that may at any
time be held by the Trustee subject to the trusts hereof may be placed in the
deposit vaults of
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the Trustee or of any chartered bank in Canada, including an Affiliate of the
Trustee, or deposited for safekeeping with any such bank.
8.16 Limitations on Borrowing
The Trust will not borrow, and will not permit the Corporation or any of
their respective subsidiaries to borrow, any funds from any third party (whether
by way of direct cash advances, requesting the issuance of bankers' acceptances
or letters of credit or otherwise), unless at the time of such borrowings and
after giving effect to such borrowings:
(a) the aggregate amount of all third party borrowings on a consolidated
basis outstanding are not greater than 40% of the Reserve Value of
all of the oil and gas properties (including any properties being
acquired with such borrowings) owned by the Trust, the Corporation
and their respective subsidiaries (without duplication) plus 40% of
the net asset value of all non-reserve based assets at that time;
and
(b) the Trust's bona fide estimate of the Debt Service Costs which will
accrue during the 12 month period thereafter will not exceed 30% of
the Trust's bona fide estimate of the aggregate of the following for
such period:
(i) the Trust's consolidated cashflow; plus
(ii) the Trust's consolidated interest expense.
8.17 Credit Facilities Unaffected
Notwithstanding the restrictions set out in Section 8.16:
(a) any liability or obligation of the Trust or the Corporation to a
Lender in respect of a borrowing that contravenes the borrowing
limitations contained in Section 8.16 shall not be affected, reduced
or impaired by such contravention; and
(b) the priority, validity, effectiveness and enforceability of any
security interest granted by the Trust or the Corporation to any
Lender and which contravenes the borrowing limitations contained in
Section 8.16 shall not be affected, prejudiced or impaired by such
contravention.
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ARTICLE 9 MANAGEMENT OF THE TRUST
9.1 Delegation of Management
Except as otherwise provided herein or as expressly prohibited by law, the
Trustee may grant or delegate to the Corporation such authority as the Trustee
may in its sole discretion deem necessary or desirable to effect the actual
administration of the duties of the Trustee under this Declaration of Trust,
without regard to whether such authority is normally granted or delegated by
trustees. The Trustee may grant broad discretion to the Corporation to
administer and manage the day-to-day operations of the Trust, to act as agent
for the Trust, to execute documents on behalf of the Trust and to make decisions
which conform to general policies and general principles set forth herein or
established by the Trustee. The Corporation shall have the powers and duties
expressly provided for herein and in the Management Agreement, including the
power to further delegate administration of the Trust, provided that no further
delegation shall be effective until the Corporation shall have notified the
Trustee of the name of the Person or Persons to whom such further delegation is
made and the terms and conditions thereof. The Trustee may enter into a contract
with the Corporation relating to the Corporation's authority, term of
appointment, compensation and any other matters deemed desirable by the Trustee.
9.2 Offerings
The Trustee hereby delegates to the Corporation responsibility for any and
all matters relating to an Offering including:
(a) ensuring compliance with all applicable laws;
(b) all matters relating to the content of any Offering Documents, the
accuracy of the disclosure contained therein, and the certification
thereof;
(c) all matters concerning the terms of the Material Contracts; and
(d) all matters concerning any Underwriting Agreement providing for the
sale of Units or rights to Units.
The Corporation accepts such delegation and agrees that, in respect of such
matters, it shall carry out its functions honestly, in good faith and in the
best interests of the Trust and the Unitholders and, in connection therewith,
shall exercise that degree of care, diligence and skill that a reasonably
prudent Person would exercise in comparable circumstances. The Corporation may,
and if directed by the Corporation in writing the Trustee shall, execute any
agreements on behalf of the Trust as the Corporation shall have authorized
within the scope of any authority delegated to it hereunder.
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9.3 Power of Attorney
Without limiting any of the other provisions of this Article 9, the
Trustee hereby irrevocably delegates to the Corporation from time to time the
full power and authority, and irrevocably constitutes the Corporation its true
and lawful attorney in fact, to sign on behalf of the Trust all prospectuses,
annual information forms, management proxy circulars, other Offering Documents
and any other documents ancillary or similar thereto or to complete the
transactions contemplated thereby that are required to be signed by the Trust
from time to time.
9.4 Liability of Trustee
The Trustee shall have no liability or responsibility for any matters
delegated to the Corporation hereunder or under any of the Material Contracts,
and the Trustee, in relying upon the Corporation and in entering into the
Material Contracts, shall be deemed to have complied with its obligations under
Section 8.4 and shall be entitled to the benefit of the indemnity provided in
Sections 8.7 and 8.8.
9.5 Performance of Obligations
In the event that the Corporation is unable or unwilling to perform its
obligations under the Management Agreement, the Trustee shall either perform all
obligations of the Corporation thereunder or shall be entitled to engage another
Person that is duly qualified to perform such obligations.
ARTICLE 10
AMENDMENT
10.1 Amendment
Except as otherwise specifically provided herein, the provisions of this
Declaration of Trust may only be amended by the Trustee with the consent of the
Unitholders by Special Resolution; provided that the provisions of this
Declaration of Trust and the Material Contracts may be amended by the Trustee at
any time or times, without the consent, approval or ratification of any of the
Unitholders:
(a) prior to closing the Initial Offering; or
(b) at any time for the purpose of:
(i) ensuring that the Trust will comply with any applicable laws
or requirements of any governmental agency or authority of
Canada or of any province;
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(ii) ensuring that the Trust will satisfy the provisions of each of
sections 108(2)(b) and 132(6) of the Income Tax Act, as from
time to time amended or replaced;
(iii) ensuring that such additional protection is provided for the
interests of Unitholders as the Trustee may consider
expedient;
(iv) removing or curing any conflicts or inconsistencies between
the provisions of this Declaration of Trust, any supplemental
indenture or the Royalty Agreement and any other agreement of
the Trust, any Offering Document with respect to the Trust, or
any applicable law or regulation of any jurisdiction, provided
that in the opinion of the Trustee the rights of the Trustee
and of the Unitholders are not materially prejudiced thereby;
and
(v) curing, correcting or rectifying any ambiguities, defective or
inconsistent provisions, errors, mistakes or omissions,
provided that in the opinion of the Trustee the rights of the
Trustee and of the Unitholders are not materially prejudiced
thereby.
Notwithstanding the foregoing, no amendment shall reduce the percentage of
votes required to be cast at a meeting of the Unitholders for the purpose of
amending this Section 10.1 without the consent of the holders of all of the
Units then Outstanding.
10.2 Notification of Amendment
As soon as shall be practicable after the making of any amendment pursuant
to this Article 10, the Trustee shall furnish written notification of the
substance of such amendment to each Unitholder.
ARTICLE 11
MEETINGS OF UNITHOLDERS
11.1 Meetings of Unitholders
Annual meetings of the Unitholders shall be called by the Trustee,
commencing in 1997, on a day, at a time and at a place to be set by the Trustee.
The business transacted at such meetings shall include the transaction of such
business as Unitholders may be entitled to vote upon as provided in this Article
11, or as the Trustee may determine. Special meetings of the Unitholders may be
called at any time by the Trustee and shall be called by the Trustee upon the
written request of Unitholders holding in the aggregate not less than 20% of the
Units then Outstanding, such request specifying the purpose or purposes for
which such meeting is to be called. Meetings of Unitholders shall be held in the
City of Calgary, or at such other place as
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the Trustee shall designate. The chairman of any annual or special meeting shall
be a Person designated by the Trustee for the purpose of such meeting except
that, on the motion of any Unitholder, any Person may be elected as chairman by
a majority of the votes cast at the meeting instead of such designated Person or
in the event that no Person shall be designated by the Trustee.
11.2 Notice of Meetings
Notice of all meetings of Unitholders shall be given by unregistered mail
postage prepaid addressed to each Unitholder at his registered address, mailed
at least 21 days and not more than 50 days before the meeting. Such notice shall
set out the time when, and the place where, such meeting is to be held and shall
specify the nature of the business to be transacted at such meeting in
sufficient detail to permit a Unitholder to form a reasoned judgment thereon,
together with the text of any special resolution in substantially final form
proposed to be passed. Any adjourned meeting may be held as adjourned without
further notice. The accidental omission to give notice to or the non-receipt of
such notice by the Unitholders shall not invalidate any resolution passed at any
such meeting.
11.3 Quorum
At any meeting of Unitholders, subject as hereinafter provided, a quorum
shall consist of two Persons either present in person or represented by proxy
and representing in the aggregate not less than 5% of the Outstanding Units. If
a quorum is not present at the appointed place on the date for which the meeting
is called within one-half hour after the time fixed for the holding of such
meeting, the meeting, if convened on the requisition of Unitholders, shall be
dissolved, but in any other case it shall stand adjourned to such day being not
less than 14 days later and to such place and time as may be appointed by the
chairman of the meeting. If at such adjourned meeting a quorum as above defined
is not present, the Unitholders present either personally or by proxy shall
constitute a quorum, and any business may be brought before or dealt with at
such an adjourned meeting which might have been brought before or dealt with at
the original meeting in accordance with the notice calling the same.
11.4 Voting Rights of Unitholders
Only Unitholders of record shall be entitled to vote and each Unit shall
entitle the holder or holders of that Unit to one vote at any meeting of
Unitholders. At any meeting of Unitholders, any holder of Units entitled to vote
thereat may vote by proxy and a proxy need not be a Unitholder, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Trustee, or with such agent of the Trustee as the Trustee may direct,
for verification at least 24 hours prior to the commencement of such meeting. If
approved by the Trustee, proxies may be solicited in the name of the Trustee.
When any Unit is held jointly by several Persons, any one of
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them may vote at any meeting in person or by proxy in respect of such Unit, but
if more than one of them shall be present at such meeting in person or by proxy,
and such joint owners or their proxies so present disagree as to any vote to be
cast, the joint owner present or represented whose name appears first in the
register maintained pursuant to Section 12.5 shall be entitled to cast such
vote.
11.5 Actions Requiring Ordinary Resolutions
The following actions by the Trustee or otherwise shall require the prior
approval of the Unitholders by means of an Ordinary Resolution and Unitholders
will be entitled to pass Ordinary Resolutions which will bind the Trustee with
respect to the following matters:
(a) appointing and removing the Trustee as provided for in Article 7;
(b) appointing and removing the Auditors as provided for in Article 18;
or
(c) appointing and removing Directors as provided for in Article 18.
11.6 Actions Requiring Special Resolutions
The following actions by the Trustee shall require the prior approval of
the Unitholders by means of a Special Resolution and Unitholders will be
entitled to pass Special Resolutions which will bind the Trustee with respect to
the following matters:
(a) amending this Declaration of Trust other than for the purposes
specified in Section 10.1 and Section 16.1 (other than Section
16.1(a));
(b) amending any of the Material Contracts (other than any Underwriting
Agreement) other than for the purposes specified in Section 10.1;
(c) subdividing or consolidating Units;
(d) terminating and winding-up the Trust as provided for in Section
15.2;
(e) appointing an inspector as provided for in Section 11.10;
(f) authorizing dispositions by the Corporation of oil and gas reserves
of the Corporation where the value of such reserves would constitute
more than 25% of the aggregate of the present worth of all of the
estimated pre-tax net cash flow from all of the proved reserves and
50% of the estimated pre-tax net cash flow from all of the probable
reserves of the Corporation, the Trust and their subsidiaries taken
as a whole as shown in the most recent engineering report relating
to such reserves;
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(g) approving any matter required by the provisions of any Material
Agreement to be approved by Special Resolution; or
(h) selling or agreeing to sell the property of the Trust as an entirety
or substantially as an entirety or assigning, transferring or
disposing of the Royalty in its entirety or substantially in its
entirety.
Except with respect to the matters set out in Section 11.5 and this
Section 11.6, no action taken by the Unitholders and no resolution of the
Unitholders at any meeting shall in any way bind the Trustee. Any action taken
or resolution passed in respect of any matter at a meeting of Unitholders shall
be by Special Resolution unless the contrary is otherwise expressly provided
under any specific provision of this Declaration of Trust.
11.7 Meaning of "Special Resolution"
The expression "Special Resolution" means a resolution proposed to be
passed as a special resolution at a meeting of Unitholders (including an
adjourned meeting) duly convened for the purpose and held in accordance with the
provisions of this Declaration of Trust at which two or more holders of at least
5% of the aggregate number of Units then Outstanding are present in person or
represented by proxy and passed by the affirmative votes of the holders of not
less than 66% of the Units represented at the meeting and voted on a poll upon
such resolution.
Notwithstanding Section 11.3, if, at any such meeting, the holders of 5%
of the aggregate number of Units Outstanding are not present in person or
represented by proxy within one-half hour after the time appointed for the
meeting, then the meeting, if convened by or on the requisition of Unitholders,
shall be dissolved; but in any other case it shall stand adjourned to such date,
being not less than 21 nor more than 60 days later, and to such place and time
as may be appointed by the chairman. Not less than ten days' prior notice shall
be given of the time and place of such adjourned meeting in the manner provided
in Section 11.2. Such notice shall state that at the adjourned meeting the
Unitholders present in person or represented by proxy shall form a quorum but it
shall not be necessary to set forth the purposes for which the meeting was
originally called or any other particulars. At the adjourned meeting, the
Unitholders present in person or represented by proxy shall constitute a quorum
and may transact the business for which the meeting was originally convened, and
a resolution proposed at such adjourned meeting and passed by the requisite vote
as provided in this Section 11.7 shall be a Special Resolution within the
meaning of this Declaration of Trust, notwithstanding that the holders of less
than 5% of the aggregate number of Units then outstanding are present in person
or represented by proxy at such adjourned meeting.
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Votes on any Special Resolution shall always be given on a poll and no
demand for a poll on any Special Resolution shall be necessary. No Special
Resolution changing or amending any provision hereof relating to or affecting:
(a) the Trustee, including the qualification, powers, authorities,
appointment, removal or resignation thereof;
(b) the Royalty Agreement; or
(c) the provisions of Article 10, Article 11 or Article 15;
shall be effective prior to 60 days from the adoption thereof in accordance with
the provisions hereof.
11.8 Record Date for Voting
For the purpose of determining the Unitholders who are entitled to receive
notice of and vote or act at any meeting or any adjournment thereof, the Trustee
may fix a date not more than 50 days and not less than 21 days prior to the date
of any meeting of Unitholders as a record date for the determination of
Unitholders entitled to receive notice of and vote at such meeting or any
adjournment thereof, and any Unitholder who was a Unitholder at the time so
fixed shall be entitled to receive notice of and vote at such meeting or any
adjournment thereof even though he has since that time disposed of his Units,
and no Unitholder becoming such after that time shall be entitled to receive
notice of or vote at such meeting or any adjournment thereof. In the event that
the Trustee does not fix a record date for any meeting of Unitholders, the
record date for such meeting shall be the Business Day immediately preceding the
date upon which notice of the meeting is given as provided under Section 11.2.
11.9 Binding Effect of Resolutions
Every Ordinary Resolution and every Special Resolution passed in
accordance with the provisions of this Declaration of Trust at a meeting of
Unitholders shall be binding upon all the Unitholders, whether present at or
absent from such meeting, and each Unitholder shall be bound to give effect
accordingly to every such Ordinary Resolution and Special Resolution.
11.10 Appointment of Inspector
The Trustee shall call a meeting of Unitholders upon the written request
of Unitholders holding in the aggregate not less than 20% of the Units then
outstanding for the purpose of considering the appointment of an inspector to
investigate the performance by the Trustee of any of its responsibilities. The
inspector shall have such powers not inconsistent herewith as may be conferred
upon him at the meeting when
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he is appointed, but in all events shall not have any powers to act in any
capacity as the Trustee hereunder or in place or in stead of the Trustee in any
manner hereunder.
11.11 Solicitation of Proxies
A Unitholder shall have the right to appoint a proxy to attend and act for
the Unitholder at any meeting of Unitholders. The Trustee shall solicit proxies
from Unitholders in connection with all meetings of Unitholders. In connection
therewith, the Trustee shall comply, to the extent possible, with all provisions
of the Business Corporations Act (Alberta) and the requirements of Canadian
securities legislation applicable to the solicitation of proxies.
11.12 No Breach
Notwithstanding any provision of this Declaration of Trust, Unitholders
shall have no power to effect any amendment hereto which would require the
Trustee to take any action or conduct the affairs of the Trust in a manner which
would constitute a breach or default by the Trust or the Trustee under any
agreement binding on or obligation of the Trust or the Trustee.
ARTICLE 12
CERTIFICATES, REGISTRATION AND TRANSFER OF UNITS
12.1 Nature of Units
The nature of a Unit and the relationship of a Unitholder to the Trustee
and the relationship of one Unitholder to another is as described in Section
2.4. The provisions of this Article 12 shall not in any way alter the nature of
Units or the relationship of a Unitholder to the Trustee and of one Unitholder
to another, but are intended only to facilitate the issuance of certificates
evidencing the ownership of Units and the recording of all such transactions
whether by the Trust, securities dealers, stock exchanges, transfer agents,
registrars or other Persons.
12.2 Certificates
Certificates shall, subject to the provisions hereof, be substantially in
the form annexed hereto as Schedule A or such other form as is authorized from
time to time by the Corporation for and on behalf of the Trustee. Certificates
are issuable only in fully registered form. The definitive form of the
Certificates shall:
(a) be in both English and French languages;
(b) be dated as of the date of issue thereof; and
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(c) contain such distinguishing letters and numbers as the Trustee shall
prescribe.
In the event that any provision of the Certificates in the French language
shall be susceptible of an interpretation different from the equivalent
provision in the English language, the interpretation of such provision in the
English language shall be determinative.
12.3 Contents of Certificates
Until otherwise determined by the Trustee, each Certificate shall legibly
set forth on the face thereof, inter alia, the following:
(a) the name of the Trust and the words "a trust created under the laws
of the Province of Alberta by a Declaration of Trust dated August 2,
1996 as amended and restated from time to time" or words of like
effect;
(b) the name of the Person to whom the Certificate is issued as
Unitholder;
(c) the number of Units represented thereby;
(d) that the Units represented thereby are transferable;
(e) "The Trust Units represented by this certificate are issued upon the
terms and subject to the conditions of a declaration of trust (which
declaration of trust together with all instruments supplemental or
ancillary thereto is herein referred to as the "Declaration of
Trust") dated August 2, 1996 as amended and restated from time to
time, between PrimeWest Energy Inc. (the "Corporation") and
Computershare Trust Company of Canada (the "Trustee"), the
provisions of which Declaration of Trust are binding upon all
holders of Trust Units (the "Unitholders"), and to all of which
provisions the holder of this certificate, by acceptance of this
certificate, assents" or words of like effect;
(f) "The Declaration of Trust provides that no Unitholder shall incur or
be subject to any personal liability whatsoever, in tort, contract
or otherwise, to any person in connection with the assets of the
Trust or the obligations or the affairs of the Trust or with respect
to any act performed by the Trustee or by any other person pursuant
to the Declaration of Trust, and all persons shall look solely to
the assets of the Trust for satisfaction of claims of any nature
arising out of or in connection therewith and the assets of the
Trust only shall be subject to levy or execution" or words of like
effect.
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The Certificates may be engraved, printed or lithographed, or partly in one form
and partly in another, as the Trustee may determine.
12.4 Signing of Certificates
Each Certificate shall bear an identifying serial number and shall be
signed by the Corporation on behalf of the Trust and shall be countersigned and
registered by the Transfer Agent. Any signature by or on behalf of the
Corporation appearing on a Certificate may be printed, lithographed or otherwise
mechanically reproduced thereon, and any Certificate so signed shall be as valid
as if it had been signed manually. Any Certificate so signed, countersigned and
registered shall be valid notwithstanding that one or more of the Persons whose
signature is printed, lithographed or mechanically reproduced no longer holds
office at the date of issuance of such Certificate. Certificates may be
engraved, printed or lithographed, or partly in one form and partly in another,
as the Trustee may determine.
12.5 Register of Unitholders
A register shall be maintained at the principal corporate trust office of
the Transfer Agent in the City of Calgary, which register shall contain the
names and addresses of the Unitholders, the respective numbers of Units held by
them, the numbers of the Certificates representing such Units, and a record of
all transfers thereof. Branch transfer registers shall be maintained in the City
of Toronto and at such other offices of the Transfer Agent as the Trustee may
from time to time designate. Except in the case of the register required to be
maintained at the City of Calgary, the Trustee shall have the power at any time
to close any register of transfers and in that event shall transfer the records
thereof to another existing register or to a new register.
Only Unitholders whose Units are recorded in the register shall be
entitled to receive distributions or to exercise or enjoy the rights of
Unitholders hereunder. The Trustee shall have the right to treat the Persons
registered as Unitholders on the register of the Trust as the owners of such
Units for all purposes, including, without limitation, payment of any
distribution, giving notice to Unitholders and determining the right to attend
and vote at meetings of Unitholders, and the Trustee shall not be bound to
recognize any transfer, pledge or other disposition of a Unit or any attempt to
transfer, pledge or dispose of a Unit, or any beneficial interest or equitable
or other right or claim with respect thereto, whether or not the Trustee shall
have actual or other notice thereof, until such Unit shall have been transferred
on the register of the Trust as herein provided.
The register and branch transfer registers referred to in this Section
12.5 shall at all reasonable times be open for inspection by the Unitholders,
the Corporation and the Trustee.
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12.6 Transfer of Units
Subject to the provisions of this Article 12, the Units shall be fully
transferable without charge as between Persons, but no transfer of Units shall
be effective as against the Trustee or shall be in any way binding upon the
Trustee until the transfer has been recorded on the register or one of the
branch transfer registers maintained by the Transfer Agent. No transfer of a
Unit shall be recognized unless such transfer is of a whole number of Units.
Subject to the provisions of this Article 12, Units shall be transferable
on the register or one of the branch transfer registers only by the Unitholders
of record thereof or their executors, administrators or other legal
representatives or by their agents duly authorized in writing, and only upon
delivery to the Trustee or to the Transfer Agent of the Certificate therefor,
properly endorsed or accompanied by a duly executed instrument of transfer and
accompanied by all necessary transfer or other taxes imposed by law, together
with such evidence of the genuineness of such endorsement, execution and
authorization and other matters as may reasonably be required by the Trustee.
Upon such delivery the transfer shall be recorded on the register of Unitholders
and a new Certificate for the residue thereof (if any) shall be issued to the
transferor.
Any Person becoming entitled to any Units as a consequence of the death,
bankruptcy or incompetence of any Unitholder or otherwise by operation of law
shall be recorded as the holder of such Units and shall receive a new
Certificate therefor only upon production of evidence satisfactory to the
Trustee thereof and delivery of the existing Certificate to the Trustee, and
until such record is made the Unitholder of record shall continue to be and be
deemed to be the holder of such Units for all purposes whether or not the
Trustee shall have actual or other notice of such death or other event.
12.7 Units Held Jointly or in a Fiduciary Capacity
The Trustee may treat two or more Persons holding any Units as joint
owners of the entire interest therein unless their ownership is expressly
otherwise recorded on the register of the Trust, but no entry shall be made in
the register or on any Certificate that any Person is in any other manner
entitled to any future, limited or contingent interest in any Units; provided,
however, that any Person recorded as a Unitholder may, subject to the provisions
hereinafter contained, be described in the register or on any Certificate as a
fiduciary of any kind and any customary words may be added to the description of
the holder to identify the nature of such fiduciary relationship. If any
Certificate is registered in more than one name, the distributions in respect
thereof may be paid to the order of all such holders failing written instruction
from them to the contrary, and such payment shall be a valid discharge to the
Trustee and any Transfer Agent. In the case of the death of one of more joint
holders, the distributions in respect of any Units
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may be paid to the survivor or survivors of such holders, and such payment shall
be a valid discharge to the Trustee and any Transfer Agent.
12.8 Performance of Trust
The Trustee, the Unitholders and any director, officer, employee or agent
of the Trustee shall not be bound to be responsible for or otherwise inquire
into or ensure the performance of any trust, express, implied or constructive,
or of any charge, pledge or equity to which any of the Units or any interest
therein are or may be subject, or to ascertain or enquire whether any transfer
of any such Units or interests therein by any such Unitholder or by his personal
representatives is authorized by such trust, charge, pledge or equity, or to
recognize any Person as having any interest therein except for the Person
recorded as a Unitholder.
12.9 Lost Certificates
In the event that any Certificate is lost, stolen, destroyed or mutilated,
the Trustee may authorize the issuance of a new Certificate for the same number
of Units in lieu thereof. The Trustee may in its discretion, before the issuance
of such new Certificate, require the owner of the lost, stolen, destroyed or
mutilated Certificate, or the legal representative of the owner, to make an
affidavit or statutory declaration setting forth such facts as to the loss,
theft, destruction or mutilation as the Trustee may deem necessary, to surrender
any mutilated Certificate, and to supply to the Trustee a "lost certificate
bond" or a similar bond in such reasonable sum as the Trustee may direct
indemnifying the Trustee and its agent for so doing. The Trustee shall have the
power to require from an insurer or insurers a blanket lost security bond or
bonds in respect of the replacement of lost, stolen, destroyed or mutilated
Certificates. The Trustee shall pay all premiums and other funds of money
payable for such purpose out of the Trust Fund with such contribution, if any,
by those insured as may be determined by the Trustee in its sole discretion. If
such blanket lost security bond is required, the Trustee may authorize and
direct (upon such terms and conditions as the Trustee may from time to time
impose) any agent to whom the indemnity of such bond extends to take such action
to replace any lost, stolen, destroyed or mutilated Certificate without further
action or approval by the Trustee.
12.10 Death of a Unitholder
The death of a Unitholder during the continuance of the Trust shall not
terminate the Trust or any of the mutual or respective rights and obligations
created by or arising under this Declaration of Trust, nor give such
Unitholder's personal representative a right to an accounting or to take any
action in court or otherwise against other Unitholders, the Trust, the Trustee
or the Trust Fund, but shall entitle the personal representatives of the
deceased Unitholder to demand and receive, pursuant to the provisions hereof, a
new Certificate for Units in place of the Certificate held by the
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deceased Unitholder, and upon the acceptance thereof such personal
representatives shall succeed to all rights of the deceased Unitholder under
this Declaration of Trust.
12.11 Unclaimed Interest or Distribution
In the event that the Trustee shall hold any amount of interest or other
distributable amount which is unclaimed or which cannot be paid for any reason,
the Trustee shall be under no obligation to invest or reinvest the same, but
shall only be obliged to hold the same in a current interest-bearing account
pending payment to the Person or Persons entitled thereto. The Trustee shall, as
and when required by law, and may at any time prior to such required time, pay
all or part of such interest or other distributable amount so held to the Public
Trustee (or other appropriate government official or agency) whose receipt shall
be a good discharge and release of the Trustee.
12.12 Exchanges of Certificates
Certificates representing any number of Units may be exchanged without
charge for Certificates representing an equivalent number of Units in the
aggregate. Any exchange of Certificates may be made at the offices of the
Trustee or at the offices of any Transfer Agent where registers are maintained
for the Certificates pursuant to the provisions of this Article 12. Any
Certificates tendered for exchange shall be surrendered to the Trustee or
appropriate Transfer Agent and shall be cancelled.
ARTICLE 13
OFFERS FOR UNITS
13.1 Terminology
In this Article 13:
Dissenting Unitholder means a Unitholder who does not accept an Offer
referred to in Section 13.2 and includes any assignee of the Unit of a
Unitholder to whom such an Offer is made, whether or not such assignee is
recognized under this Declaration of Trust;
Offer means an offer to acquire outstanding Units which is open for
acceptance for a period of not less than 45 days and where, as of the date
of the offer to acquire, the Units that are subject to the offer to
acquire, together with the Offeror's Units, constitute in the aggregate
20% or more of all outstanding Units;
offer to acquire includes an acceptance of an offer to sell;
Offeror means a Person, or two or more Persons acting jointly or in
concert, who make an Offer;
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Offeror's Notice means the notice described in Section 13.3; and
Offeror's Units means Units beneficially owned, or over which control or
direction is exercised, on the date of an Offer by the Offeror, any
Affiliate or Associate of the Offeror or any Person or company acting
jointly or in concert with the Offeror.
13.2 Offers for Units
If an Offer for all of the outstanding Units (other than Units held by or
on behalf of the Offeror or an Affiliate or Associate of the Offeror) is made
and by such Offer, the Offeror agrees to be bound by the provisions of this
Article 13 and:
(a) within the time provided in the Offer for its acceptance or within
120 days after the date the Offer is made, whichever period is the
shorter, the Offer is accepted by Unitholders representing at least
90% of the outstanding Units, other than the Offeror's Units;
(b) the Offeror is bound to take up and pay for, or has taken up and
paid for the Units of the Unitholders who accepted the Offer; and
(c) the Offeror complies with the provisions of Section 13.3 to the
extent applicable to the Offeror;
the Offeror is entitled to acquire, and the Dissenting Unitholders are required
to sell to the Offeror, the Units held by the Dissenting Unitholders for the
same consideration per Unit payable or paid, as the case may be, under the
Offer.
13.3 Compulsory Acquisition Rights
Where an Offeror is entitled to acquire Units held by Dissenting
Unitholders pursuant to Section 13.2, and the Offeror wishes to exercise such
right, the Offeror shall send by registered mail within 30 days after the date
of termination of the Offer a notice (the "Offeror's Notice") to each Dissenting
Unitholder stating that:
(a) Unitholders holding at least 90% of the Units of all Unitholders,
other than Offeror's Units, have accepted the Offer;
(b) the Offeror is bound to take up and pay for, or has taken up and
paid for, the Units of the Unitholders who accepted the Offer;
(c) Dissenting Unitholders must transfer their respective Units to the
Offeror on the terms on which the Offeror acquired the Units of the
Unitholders who accepted the Offer within 21 days after the date of
the sending of the Offeror's Notice; and
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(d) Dissenting Unitholders must send their respective Unit
Certificate(s) to the Trust within 21 days after the date of the
sending of the Offeror's Notice.
A Dissenting Unitholder to whom an Offeror's Notice is sent pursuant to
this Section 13.3 shall, within 21 days after the sending of the Offeror's
Notice, send his or her Certificate(s) to the Trust, duly endorsed for transfer.
Within 21 days after the Offeror sends an Offeror's Notice pursuant to
this Section 13.3, the Offeror shall pay or transfer to the Trustee, or to such
other Person as the Trustee may direct, the cash or other consideration that is
payable to Dissenting Unitholders pursuant to Section 13.2.
The Trustee, or the Person directed by the Trustee, shall hold in trust
for the Dissenting Unitholders the cash or other consideration they or it
receives under this Section 13.3. The Trustee, or such Person, shall deposit
cash in a separate account in a Canadian chartered bank, and shall place other
consideration in the custody of a Canadian chartered bank or similar institution
for safekeeping.
13.4 Trustee's Duties
Within 30 days after the date of the sending of an Offeror's Notice
pursuant to Section 13.3, the Trustee, if the Offeror has complied with the
provisions of Section 13.3 applicable to the Offeror, shall:
(a) do all acts and things and execute and cause to be executed all
instruments as in the Trustee's opinion may be necessary or
desirable to cause the transfer of the Units of the Dissenting
Unitholders to the Offeror;
(b) send to each Dissenting Unitholder who has complied with the
provisions of Section 13.3 applicable to Dissenting Unitholders the
consideration to which such Dissenting Unitholder is entitled under
Section 13.3; and
(c) send to each Dissenting Unitholder who has not complied with the
provisions of Section 13.3 applicable to Dissenting Unitholders a
notice stating that:
(i) his or her Units have been transferred to the Offeror;
(ii) the Trustee or such other Person designated in such notice is
holding in trust the consideration for such Units; and
(iii) the Trustee, or such other Person, will send the consideration
to such Dissenting Unitholder as soon as practicable after
receiving
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such Dissenting Unitholders Certificate(s) or such other
documents as the Trustee or such other Person may require in
lieu thereof;
and the Trustee is hereby appointed the agent and attorney of the Dissenting
Unitholders for the purposes of giving effect to the foregoing provisions.
13.5 Restrictions
Subject to applicable law, an Offeror cannot make an Offer for Units
unless, concurrent with the communication of the Offer to any Unitholder, a copy
of the Offer is provided to the Trust.
ARTICLE 14
POWER OF ATTORNEY
14.1 Power of Attorney
Each Unitholder hereby grants to the Trustee, its successors and assigns,
a power of attorney constituting the Trustee, with full power of substitution,
as his or her true and lawful attorney to act on his or her behalf, with full
power and authority in his or her name, place and stead, and to execute, under
seal or otherwise, swear to, acknowledge, deliver, make or file or record when,
as and where required:
(a) this Declaration of Trust, any amendment to this Declaration of
Trust and any other instrument required or desirable to qualify,
continue and keep in good standing the Trust as a mutual fund trust;
(b) any instrument, deed, agreement or document in connection with
carrying on the activities and affairs of the Trust as authorized in
this Declaration of Trust;
(c) all conveyances and other documents required in connection with the
dissolution or liquidation of the Trust in accordance with the terms
of this Declaration of Trust; and
(d) any and all elections, determinations or designations whether
jointly with third parties or otherwise, under the Income Tax Act or
any other taxation or other legislation or similar laws of Canada or
of any other jurisdiction in respect of the affairs of the Trust or
of a Unitholder's interest in the Trust.
The Power of Attorney granted herein is irrevocable and will survive the death,
disability or bankruptcy of the Unitholder or the assignment by the Unitholder
of all or part of his or her interest in the Trust and will extend to and bind
the heirs, executors,
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administrators and other legal representatives and successors and assigns of the
Unitholder.
ARTICLE 15
TERMINATION
15.1 Termination Date
Unless the Trust is terminated or extended earlier, the Trustee shall
commence to wind up the affairs of the Trust on December 31, 2095.
15.2 Termination by Resolution of Unitholders
The Unitholders may vote by Special Resolution to terminate the Trust at
any meeting of Unitholders duly called for such purpose, whereupon the Trustee
shall commence to wind up the affairs of the Trust.
15.3 Procedure Upon Termination
Forthwith upon being required to commence to wind up the affairs of the
Trust, the Trustee shall give notice thereof to the Unitholders, which notice
shall designate the time or times at which Unitholders may surrender their Units
for cancellation and the date at which the register of the Trust shall be
closed.
15.4 Powers of the Trustee upon Termination
After the date on which the Trustee is required to commence to wind up the
affairs of the Trust, the Trustee shall carry on no activities except for the
purpose of winding up the affairs of the Trust as herein provided and, for this
purpose, the Trustee shall continue to be vested with and may exercise all or
any of the powers conferred upon the Trustee under this Declaration of Trust.
15.5 Sale of Investments
After the date referred to in Section 15.4, the Trustee shall proceed to
wind up the affairs of the Trust as soon as may be reasonably practicable, and
for such purpose shall, subject to the terms of any agreements binding on or
obligations of the Trust and the Trustee, sell and convert into money the
Royalty and other assets comprising the Trust Fund in one transaction or in a
series of transactions at public or private sale and do all other acts
appropriate to liquidate the Trust Fund, and shall in all respects act in
accordance with the directions, if any, of the Unitholders. Notwithstanding
anything herein contained, in no event shall the Trust be wound up until the
Royalty shall have been sold.
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15.6 Distribution of Proceeds
After paying, retiring or discharging or making provision for the payment,
retirement or discharge of all known liabilities and obligations of the Trust
and providing for indemnity against any other outstanding liabilities and
obligations, the Trustee shall distribute the remaining part of the proceeds of
the sale of the Royalty and other assets together with any cash forming part of
the Trust Fund among the Unitholders in accordance with their Pro Rata Shares.
15.7 Further Notice to Unitholders
If all of the Unitholders shall not have surrendered their Units for
cancellation within 6 months after the time specified in the notice referred to
in Section 15.3, the Units that have not been surrendered shall be deemed to be
cancelled without prejudice to the rights of the holders of such Units to
receive their Pro Rata Shares of the amounts referred to in Section 15.6, and
the Trustee may either take appropriate steps, or appoint an agent to take
appropriate steps, to contact such Unitholders (deducting all expenses thereby
incurred from the amounts to which such Unitholders are entitled as aforesaid)
or, in the discretion of the Trustee, may pay such amounts into court.
15.8 Responsibility of Trustee after Sale and Conversion
The Trustee shall be under no obligation to invest the proceeds of any
sale of the Royalty or other assets or cash forming part of the Trust Fund after
the date referred to in Section 15.4, and after such sale the sole obligation of
the Trustee under this Declaration of Trust shall be to hold such proceeds in
trust for distribution under Section 15.6.
ARTICLE 16
SUPPLEMENTAL INDENTURES
16.1 Provision for Supplemental Indentures
From time to time the Trustee and the Corporation may, and they shall when
so directed in accordance with the provisions hereof, execute and deliver by
their proper officers indentures or instruments supplemental hereto, which
thereafter shall form part hereof, for any one or more or all of the following
purposes:
(a) giving effect to any Special Resolution;
(b) making such modifications not inconsistent with this Declaration of
Trust as may be necessary or desirable with respect to matters or
questions arising hereunder, provided that such modifications are
not, in the opinion of the Trustee, prejudicial to the interests of
the Unitholders; and
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(c) making any modification in the form of Certificate which does not
materially affect the substance thereof;
provided that the Trustee may in its sole discretion decline to enter into any
such supplemental indenture which in its opinion may not afford adequate
protection to the Trustee when the same shall become operative.
ARTICLE 17
NOTICES TO UNITHOLDERS
17.1 Notices
Any notice required to be given under this Declaration of Trust to the
Unitholders shall be given by letter or circular sent through ordinary post
addressed to each registered Unitholder at his last address appearing on the
register; provided that if there is a general discontinuance of postal service
due to strike, lockout or otherwise, such notice may be given by publication
twice in the National Edition of The Globe and Mail or any other newspaper
having national circulation in Canada; provided further that if there is no
newspaper having national circulation, then notice shall be given by publishing
twice in a newspaper in each city where the register or a branch transfer
register is maintained by the Transfer Agent. Any notice so given shall be
deemed to have been given on the day on which the letter or circular was posted
or, in the case of notice being given by publication, the day of the second
publication in the designated newspaper or newspapers. In proving notice was
posted, it shall be sufficient to prove that such letter or circular was
properly addressed, stamped and posted.
17.2 Failure to Give Notice
The failure by the Trustee, by accident or omission or otherwise
unintentionally, to give Unitholders any notice provided for herein shall not
affect the validity or effect of any action referred to in such notice, and the
Trustee shall not be liable to any Unitholder for any such failure.
17.3 Joint Holders
Service of a notice or document on any one of several joint holders of
Units shall be deemed effective service on the other joint holders.
17.4 Service of Notice
Any notice or document sent to the address of a Unitholder pursuant to
this Article 17 shall, notwithstanding the death or bankruptcy of such
Unitholder, and whether or not the Trustee has notice of such death or
bankruptcy, be deemed to have been fully served, and such service shall be
deemed sufficient service on all Persons interested in the Units concerned.
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ARTICLE 18
AUDITORS AND DIRECTORS
18.1 Qualification of Auditors
The Auditors shall be an independent recognized firm of chartered
accountants which has an office in Calgary, Alberta.
18.2 Appointment of Auditors
Coopers & Lybrand, Chartered Accountants, shall be the initial auditors of
the Trust, to hold such office until the first annual meeting of Unitholders at
such remuneration as may be approved by the Trustee from time to time. The
Auditors will be selected by Ordinary Resolution at each annual meeting of
Unitholders.
18.3 Change of Auditors
The Auditors may at any time be removed by the Trustee with the approval
of the Unitholders by means of an Ordinary Resolution at a meeting of
Unitholders duly called for that purpose, and upon the resignation or the
removal of the Auditors, new auditors may be appointed by the Trustee with the
approval of the Unitholders by means of an Ordinary Resolution at a meeting duly
called for the purpose.
18.4 Reports of Auditors
The Auditors shall audit the accounts of the Trust at least once in each
Year, and a report of the Auditors with respect to the annual financial
statements of the Trust shall be provided to each Unitholder as set out in
Section 19.3.
18.5 Appointment and Removal of Directors
Provided that the Trustee, in its capacity as trustee of the Trust, is the
registered owner of voting shares in the capital of the Corporation:
(a) the Trustee shall, immediately following each annual meeting of
Unitholders, vote such shares to resolve to elect as Directors those
persons selected to sit as directors of the Corporation by Ordinary
Resolution at each annual meeting of Unitholders; and
(b) the Trustee may vote such shares to resolve to remove any Director
as a director of the Corporation with the approval of the
Unitholders by means of an Ordinary Resolution at a meeting of
Unitholders duly called for that purpose.
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ARTICLE 19
ACCOUNTS, RECORDS AND FINANCIAL STATEMENTS
19.1 Records
The Trustee shall keep such books, records and accounts as are necessary
and appropriate to document the Trust Fund and each transaction of the Trust.
Without limiting the generality of the foregoing, the Trustee will, at its
principal office in Calgary, Alberta, keep records of all transactions of the
Trust, a list of the Royalty and other assets of the Trust Fund from time to
time, and a copy of this Declaration of Trust and the Material Contracts with
any amendments thereto.
19.2 Quarterly Reporting to Unitholders
The Trustee will mail to each Unitholder, within 60 days after the end of
each Quarter unaudited financial statements of the Trust for the most recent
Quarter. The Corporation will review any forecast provided in any Offering
Document and, if necessary, will provide the Trustee with a quarterly update.
The Trustee will mail any such update to Unitholders.
19.3 Annual Reporting to Unitholders
The Trustee will mail:
(a) to each Unitholder, within 140 days after the end of each Year, the
audited financial statements of the Trust for the most recent
completed Year together with the report of the Auditors thereon; and
(b) to each Person who received a distribution from the Trust during a
Year, within 90 days after the end of such Year, the tax reporting
information relating to such Year prescribed by the Income Tax Act.
19.4 Information Available to Unitholders
The following information will be made available to Unitholders on the
following terms:
(a) each Unitholder shall have the right to obtain, on demand and on
payment of reasonable reproduction costs, from the head office of
the Trust, a copy of this Declaration of Trust and any indenture
supplemental hereto or any Material Contract;
(b) each Unitholder, upon payment of a reasonable fee and upon sending
to the Trustee the affidavit referred to in Section 19.4(d), may
upon application require the Trustee to provide, within 10 days from
the receipt of the affidavit, a list (the "basic list") made up to a
date not more than 10
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days before the date of receipt of the affidavit setting out the
names of the Unitholders, the number of Units owned by each
Unitholder and the address of each Unitholder as shown on the
records of the Trustee;
(c) a Person requiring the Trustee to provide a basic list may, if he
states in the affidavit referred to in Section 19.4(d) that he
requires supplemental lists, require the Trustee, upon payment of a
reasonable fee, to provide supplemental lists setting out any
changes from the basic list in the names or addresses of the
Unitholders and the number of Units owned by each Unitholder for
each Business Day following the day to which the basic list is made
up;
(d) the affidavit referred to in Section 19.4(b) shall state:
(i) the name and address of the applicant,
(ii) the name and address for service of the body corporate if the
applicant is a body corporate, and
(iii) that the basic list and any supplemental lists will not be
used except as permitted under Section 19.4(e); and
(e) a list of Unitholders obtained under this Section 19.4 shall not be
used by any Person except in connection with:
(i) an effort to influence the voting of Unitholders,
(ii) an offer to acquire Units, or
(iii) any other matter relating to the affairs of the Trust.
19.5 Income Tax: Obligations of the Trustee
The Trustee shall satisfy, perform and discharge all obligations and
responsibilities of the Trustee under the Income Tax Act or any similar
provincial legislation, and neither the Trust nor the Trustee shall be
accountable or liable to any Unitholder by reason of any act or acts of the
Trustee consistent with any such obligations or responsibilities.
19.6 Income Tax: Designations
In the return of its income under Part I of the Income Tax Act for each
Year, the Trust shall make such designations, including designations with
respect to any amounts distributed or payable to Unitholders in the Year,
designations with respect to reimbursed Crown charges which are deemed to become
payable to beneficiaries and designations with respect to any taxable capital
gains realized and distributed to
- 54 -
Unitholders by the Trust in the Year and any interest payable to Unitholders in
the Year, as shall be permitted under the provisions of the Income Tax Act and
as the Trustee in its sole discretion shall deem to be reasonable and equitable.
In respect of the first Year, in filing a return of income for the Trust, the
Trust shall elect pursuant to subsection 132(6) of the Income Tax Act that the
Trust be deemed to be a mutual fund trust for the entire Year.
19.7 Income Tax: Deductions
The Corporation shall determine the tax deductions to be claimed by the
Trust in any Year, and the Trustee shall claim such deductions for the purposes
of computing the income of the Trust pursuant to the provisions of the Income
Tax Act.
19.8 Fiscal Year
The fiscal year of the Trust shall end on December 31.
ARTICLE 20
MISCELLANEOUS
20.1 Continued Listing
The Trustee hereby appoints the Corporation as its agent, and the
Corporation hereby covenants to the Trustee and agrees that it shall, at the
cost and expense of the Trust, take all steps and actions and do all things that
may be required, to obtain and maintain the listing and posting for trading of
the Units on the Toronto Stock Exchange and to maintain the Trust's status as a
"reporting issuer" not in default of the securities legislation and regulations
of each of the provinces of Canada.
20.2 Successors and Assigns
The provisions of this Declaration of Trust shall enure to the benefit of,
and be binding upon, the parties hereto and their successors and assigns.
20.3 Counterparts
This Declaration of Trust may be executed in several counterparts, each of
which when so executed shall be deemed to be an original, and such counterparts
together shall constitute one and the same instrument which shall be
sufficiently evidenced by any such original counterparts.
20.4 Severability
If any provision of this Declaration of Trust shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to
- 55 -
such provision in such jurisdiction and shall not in any manner affect or render
invalid or unenforceable such provision in any other jurisdiction or any other
provision of this Declaration of Trust in any jurisdiction.
20.5 Day Not a Business Day
In the event that any day on or before which any amount is to be
determined or any action is required to be taken hereunder is not a Business
Day, then such amount shall be determined or such action shall be required to be
taken at or before the requisite time on the next succeeding day that is a
Business Day.
20.6 Time of the Essence
Time shall be of the essence in this Declaration of Trust.
20.7 Governing Law
This Declaration of Trust and the Certificates shall be governed by and
construed in accordance with the laws of the Province of Alberta and the laws of
Canada applicable therein and shall be treated in all respects as Alberta
contracts. The parties hereto hereby irrevocably submit to the jurisdiction of
the courts of the Province of Alberta.
20.8 Notices to Trustee and Corporation
Any notice or other communication to the Trustee or to the Corporation
under this Declaration of Trust shall be in writing and shall be valid and
effective if delivered by prepaid courier or if given by registered letter,
postage prepaid, or if transmitted by electronic or telecommunications device,
addressed as follows:
if to the Trustee:
Computershare Trust Company of Canada
Suite 600
530 - 8th Avenue S.W.
Calgary, Alberta
T2P 3S8
Attention: Corporate Trust Manager
Fax: (403) 267-6598
- 56 -
if to the Corporation:
PrimeWest Energy Inc.
Suite 4700
150 - 6th Avenue S.W.
Calgary, Alberta
T2P 3Y7
Attention: Chief Executive Officer
Fax: (403) 234-6670
Any such notice or other communication shall be deemed to have been given
on the date of delivery or transmission or, if mailed, on the fifth day after
deposit in the Canadian mail.
The Corporation or the Trustee may from time to time notify the other in
writing of a change of address which thereafter, until changed by like notice,
shall be the address of the Corporation or the Trustee for all purposes of this
Declaration of Trust.
If, by reason of a strike, lockout or other work stoppages actual or
threatened, involving postal employees, any notice to be given by mail hereunder
could reasonably be considered unlikely to reach its destination, such notice
shall be valid and effective only if it is delivered at the appropriate address
provided in this Section 20.8 by prepaid courier or by cable, telegram,
electronic or telecommunications device or other means of prepaid, transmitted
and recorded communication.
- 57 -
20.9 References to Agreements
Any reference herein to any agreement, contract or obligation shall refer
to such agreement, contract or obligation as the same may be amended from time
to time.
IN WITNESS WHEREOF each of the parties has caused this Declaration of
Trust to be duly executed.
PRIMEWEST ENERGY INC.
Per: /s/
------------------------------------------------
Per: /s/
------------------------------------------------
COMPUTERSHARE TRUST
COMPANY OF CANADA
Per: /s/
------------------------------------------------
Per: /s/
------------------------------------------------
- 58 -
SCHEDULE A
To the annexed declaration of trust dated August 2, 1996 and restated
November 6,
2002
between
PRIMEWEST ENERGY INC.,
and
COMPUTERSHARE TRUST COMPANY OF CANADA
(Form of Certificate in the English Language)
TRUST UNITS
PRIMEWEST ENERGY TRUST
(a trust created under the laws of Alberta
by a Declaration of Trust dated August 2, 1996 and as amended and restated from
time to time)
No.
Trust Units
CUSIP
THIS CERTIFIES THAT
is the registered holder of _______________ fully paid Trust Units issued by
PRIMEWEST ENERGY TRUST (the "Trust") transferable only on the books of the Trust
by the registered holder hereof in person or by attorney duly authorized upon
surrender of this certificate properly endorsed.
The Trust Units represented by this certificate are issued upon the terms
and subject to the conditions of a declaration of trust (which declaration of
trust together with all instruments supplemental or ancillary thereto is herein
referred to as the "Declaration of Trust") dated August 2, 1996 as amended and
restated from time to time, between PrimeWest Energy Inc. (the "Corporation")
and Computershare Trust Company of Canada (the "Trustee"), the provisions of
which Declaration of Trust are binding upon all holders of Trust Units (the
"Unitholders"), and to all of which provisions the holder of this certificate,
by acceptance of this certificate, assents.
A copy of the Declaration of Trust pursuant to which this certificate and
the Trust Units represented hereby are issued may be obtained by any Unitholder
on demand and on payment of reasonable reproduction costs from the head office
of the Trust.
The Trust Units represented by this certificate may be transferred, upon
compliance with the conditions prescribed in the Declaration of Trust, on the
register kept at the office of the Transfer Agent and Registrar for the Trust
Units in the City of Calgary, the City of Toronto and at such other place or
places, if any, as the Trustee may designate, by the registered holder hereof or
his executors or administrators or other legal representatives or his or their
attorney duly appointed by an instrument in writing in form and execution
satisfactory to the Trustee, and upon compliance with such reasonable
requirements as the Trustee may prescribe.
The Declaration of Trust contains provisions for the holding of meetings
of Unitholders and rendering resolutions passed at such meetings binding upon
all Unitholders.
The Declaration of Trust provides that no Unitholder shall incur or be
subject to any personal liability whatsoever, in tort, contract or otherwise, to
any person in connection with the assets of the Trust or the obligations or the
affairs of the Trust or with respect to any act performed by the Trustee or by
any other person pursuant to the Declaration of Trust, and all persons shall
look solely to the assets of the Trust for satisfaction of claims of any nature
arising out of or in connection therewith and the assets of the Trust only shall
be subject to levy or execution.
- 2 -
This certificate shall not be valid for any purpose until it shall have
been countersigned and registered by the Transfer Agent and Registrar for the
Trust Units.
IN WITNESS WHEREOF the Corporation has caused this certificate to be
signed by its duly authorized officers.
DATED _________________________________
PRIMEWEST ENERGY INC.
On behalf of the Trust
By: __________________________________________________
Authorized Officer
By: __________________________________________________
Authorized Officer
Countersigned and Registered
COMPUTERSHARE TRUST
COMPANY OF CANADA, Transfer
Agent and Registrar
By: __________________________________________________
Authorized Officer
TRANSFER FORM
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
(please print or typewrite name and address of assignee)
__________ Trust Units of PrimeWest Energy Trust represented by this certificate
and hereby irrevocably constitutes and appoints ________________________
attorney to transfer the said Trust Units on the registers of the Trust for the
said purpose, with full power of substitution in the premises.
Dated __________________________________
The signature of the registered holder
of the within certificate to the
foregoing assignment must be guaranteed
by a chartered bank, by a trust company,
or by a member firm of the Toronto Stock
Exchange. (SIGNATURE OF TRANSFEROR)
________________________________________
Signature Guaranteed
AMENDED AND RESTATED DECLARATION OF TRUST
FIRST SUPPLEMENTAL AMENDING AGREEMENT
This Amended and Restated Declaration of Trust First Supplemental Amending
Agreement is made effective the 6th day of May, 2004:
Between
PRIMEWEST ENERGY INC.
a body corporate amalgamated under the laws of the
Province of Alberta, with an office in the City of Calgary, in
the Province of Alberta (the "Corporation")
and
COMPUTERSHARE TRUST COMPANY OF CANADA
a trust company incorporated under the laws of Canada,
with offices in the City of Calgary, in the Province of Alberta
(the "Trustee")
WHEREAS:
A. By declaration of trust dated August 2, 1996 (the "Declaration of Trust")
among the Corporation, Montreal Trust Company of Canada (the "Initial
Trustee") and the Initial Unitholder, the Initial Unitholder settled the
Trust upon the terms set forth in the Declaration of Trust;
B. The Declaration of Trust has subsequently been amended and restated
November 6, 2002 (the "Amended and Restated Declaration of Trust") and the
Initial Trustee replaced with the Trustee;
C. The Amended and Restated Declaration of Trust provides that the Amended
and Restated Declaration of Trust may be amended by the Trustee with the
consent of the Unitholders by Special Resolution;
D. The Unitholders, by Special Resolution passed at the Annual General and
Special Meeting of Unitholders held on May 6, 2004 (the "Meeting"),
approved certain amendments to the Amended and Restated Declaration of
Trust; and
E. The Corporation and the Trustee propose to enter into this Amended and
Restated Declaration of Trust First Supplemental Amending Agreement (the
"Supplemental Amending Agreement") to effect the amendments so approved by
Unitholders at the Meeting.
- 2 -
NOW THEREFORE THIS AMENDED AND RESTATED DECLARATION OF TRUST FIRST SUPPLEMENTAL
AMENDING AGREEMENT WITNESSETH that the Corporation and the Trustee agree as
follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Supplemental Amending Agreement, unless the context otherwise
requires, words and phrases used herein and which are defined in the Amended and
Restated Declaration of Trust shall have the meaning herein which are given to
such words and phrases in the Amended and Restated Declaration of Trust.
1.2 Headings
The division of this Supplemental Amending Agreement into Articles and
Sections, the provision of a table of contents, and the insertion of headings
are for convenience of reference only and shall not affect the construction or
interpretation of this Supplemental Amending Agreement.
1.3 Construction of Terms
In this Supplemental Amending Agreement, words importing the singular
number include the plural and vice versa; words importing gender include the
masculine, feminine and neuter genders; references to dollar amounts refer to
such amounts in Canadian currency; references to "this Supplemental Amending
Agreement", "hereto", "herein", "hereof", "hereby", "hereunder" and similar
expressions refer to this Supplemental Amending Agreement, and not to any
particular Article, Section or other portion hereof, and include any and every
instrument supplemental or ancillary hereto or in implementation hereof; and the
expressions "Article" and "Section" followed by a number, letter, or combination
of numbers and letters refer to the specified Article or Section of this
Supplemental Amending Agreement.
ARTICLE 2
AMENDMENTS TO AMENDED AND RESTATED DECLARATION OF TRUST
2.1 Replacement of Section 3.8
The Amended and Restated Declaration of Trust is hereby amended as of the
date hereof by deleting Section 3.8 in its entirety and replacing it with the
following:
- 3 -
"3.8 Non-Resident Unitholders
It is in the best interest of Unitholders that the Trust always qualify as
a "mutual fund trust" under the Income Tax Act. Accordingly, in order to ensure
the maintenance of such status:
(a) The Corporation shall:
(i) prior to the completion of any transaction involving the
acquisition by the Trust of any Subsequent Investment;
(ii) prior to any material modification to the Trust Fund other
than as contemplated by paragraph (i);
(iii) promptly following any proposed amendment to paragraph
132(7)(a) of the Income Tax Act or the publication of any
administrative bulletin or other notice of interpretation
relating to the interpretation or application of such section;
or
(iv) otherwise at any time requested by the Trustee,
obtain an opinion of Counsel confirming whether the Trust is, at the
date thereof and following such transaction or event (which in the
case of paragraph (iii) shall mean the coming into effect of the
amendment or change of interpretation), entitled to rely on
paragraph 132(7)(a) of the Income Tax Act (or any successor
provision thereto) for purposes of qualifying as a "mutual fund
trust" under the Income Tax Act.
(b) If at any time the board of directors of the Corporation determines,
in its sole discretion, or becomes aware, pursuant to Section 3.8(a)
or otherwise, that the Trust's ability to continue to rely on
paragraph 132(7)(a) of the Income Tax Act (or any successor
provision thereto) for purposes of qualifying as a "mutual fund
trust" thereunder is in jeopardy, then forthwith after such
determination:
(i) it shall be the sole responsibility of the Corporation to
monitor the holdings by Non-Residents; and
(ii) the Corporation shall take such steps as are necessary or
desirable to ensure that the Trust is not maintained
- 4 -
primarily for the benefit of non-residents of Canada (within
the meaning of the Income Tax Act) or that the Trust is
otherwise able to continue to qualify as a mutual fund trust.
(c) The Corporation may, at any time and from time to time, in its sole
discretion, request that the Trustee make reasonable efforts, as
practicable in the circumstances, to obtain declarations as to
beneficial ownership under Section 8.11, perform residency searches
of unitholder and beneficial unitholder mailing address lists and
take such other steps specified by the Corporation, at the cost of
the Trust, to determine or estimate as best possible the residence
of the beneficial owners of Trust Units.
(d) If at any time the board of directors of the Corporation, in its
sole discretion, determines that it is in the best interest of the
Trust, the Corporation, notwithstanding the ability of the Trust to
continue to rely on paragraph 132(7)(a) of the Income Tax Act for
the purpose of qualifying as a "mutual fund trust" under the Income
Tax Act, may:
(i) require the Trustee to refuse to accept a subscription for
Trust Units from, or issue or register a transfer of Trust
Units to, a person unless the person provides a declaration to
the Corporation pursuant to Section 8.11 that the Trust Units
to be issued or transferred to such person will not when
issued or transferred be beneficially owned by a non-resident
of Canada;
(ii) to the extent practicable in the circumstances, send a notice
to registered holders of Trust Units which are beneficially
owned by non-residents of Canada, chosen in inverse order to
the order of acquisition or registration of such Trust Units
beneficially owned by non-residents of Canada or in such other
manner as the Corporation may consider equitable and
practicable, requiring them to sell their Trust Units which
are beneficially owned by non-residents of Canada or a
specified portion thereof within a specified period of not
less than 60 days. If the Unitholders receiving such notice
have not sold the specified number of such Trust Units or
provided the Corporation with satisfactory evidence that such
- 5 -
Trust Units are not beneficially owned by non-residents within
such period, the Corporation may, on behalf of such registered
Unitholder, sell such Trust Units and, in the interim, suspend
the voting and distribution rights attached to such Trust
Units and make any distribution in respect of such Trust Units
by depositing such amount in a separate bank account in a
Canadian chartered bank (net of any applicable taxes). Any
sale shall be made on any stock exchange on which the Trust
Units are then listed and, upon such sale, the affected
holders shall cease to be holders of Trust Units so disposed
of and their rights shall be limited to receiving the net
proceeds of sale, and any distribution in respect thereof
deposited as aforesaid, net of applicable taxes and costs of
sale, upon surrender of the Certificates representing such
Trust Units;
(iii) delist the Trust Units from any non-Canadian stock exchange;
and
(iv) take such other actions as the board of directors of the
Corporation determines, in its sole discretion, are
appropriate in the circumstances that will reduce or limit the
number of Trust Units held by non-resident Unitholders to
ensure that the Trust is not maintained primarily for the
benefit of non-residents of Canada.
(e) The Trustee shall have no liability for amounts received pursuant to
sales of Trust Units made pursuant to Section 3.8(d)(ii). Except as
specifically set out herein, the Trustee shall not be bound to do or
take any proceeding or action with respect to this Section 3.8 by
virtue of the powers conferred on it under this Declaration of
Trust. The Trustee shall not be deemed to have notice of any
violation of this Section 3.8 unless and until it has been given
written notice of such violation and shall be required to act only
as required by this Declaration of Trust and upon an indemnity
satisfactory to the Trustee being provided by the Trust. The Trustee
shall not be required to actively monitor the non-resident holdings
of the Trust. It is acknowledged that the Trustee cannot monitor the
non-resident holders of the Trust Units given that many of the Trust
Units are registered in the name of depositories and other
non-beneficial holders.
- 6 -
The Trustee shall not be liable for any violation of the
non-resident ownership restriction in this Section 3.8 which may
occur during the term of the Trust.
(f) Notwithstanding any other provision of this Declaration of Trust,
non-resident Unitholders, whether registered holders or beneficial
holders of Trust Units, shall not be entitled to vote in respect of
any Special Resolutions to amend this Section 3.8."
ARTICLE 3
MISCELLANEOUS
3.1 Confirmation of Amended and Restated Declaration of Trust
The Amended and Restated Declaration of Trust as amended by this
Supplemental Amending Agreement is hereby ratified and confirmed.
3.2 Successors and Assigns
The provisions of this Supplemental Amending Agreement shall enure to the
benefit of, and be binding upon, the parties hereto and their successors and
assigns.
3.3 Counterparts
This Supplemental Amending Agreement may be executed in several
counterparts, each of which when so executed shall be deemed to be an original,
and such counterparts together shall constitute one and the same instrument
which shall be sufficiently evidenced by any such original counterparts.
3.4 Severability
If any provision of this Supplemental Amending Agreement shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and
shall not in any manner affect or render invalid or unenforceable such provision
in any other jurisdiction or any other provision of this Supplemental Amending
Agreement in any jurisdiction.
3.5 Time of the Essence
Time shall be of the essence in this Supplemental Amending Agreement.
- 7 -
3.6 Governing Law
This Supplemental Amending Agreement shall be governed by and construed in
accordance with the laws of the Province of Alberta and the laws of Canada
applicable therein and shall be treated in all respects as Alberta contracts.
The parties hereto hereby irrevocably submit to the jurisdiction of the courts
of the Province of Alberta.
IN WITNESS WHEREOF each of the parties hereto has caused this Supplemental
Amending Agreement to be duly executed.
PRIMEWEST ENERGY INC.
Per: /s/
-----------------------------------
Per: /s/
-----------------------------------
COMPUTERSHARE TRUST COMPANY OF CANADA
Per: /s/
-----------------------------------
Per: /s/
-----------------------------------