EXHIBIT 10.2

 
VOTING AND EXCHANGE TRUST AGREEMENT (“Agreement”) made as of the 2nd day of
March, 2007.
 
BETWEEN:
 
SURGE GLOBAL ENERGY, INC., a corporation incorporated under the laws of Delaware
(hereinafter referred to as “Acquiror”)
 
- and -
 
COLD FLOW ENERGY ULC, an unlimited liability company incorporated under the laws
of Alberta
(hereinafter referred to as the “Corporation”)
 
- and -
 
OLYMPIA TRUST COMPANY, a trust company incorporated under the laws of Alberta
(hereinafter referred to as the “Trustee”)

 
WHEREAS:
 
A.
 
in connection with the Acquisition Agreement, the Corporation is required to
issue Exchangeable Shares to holders of Peace Shares in consideration, in part,
for the acquisition of their Peace Shares; and
 
B.
 
pursuant to the Acquisition Agreement, Acquiror has agreed to, and to cause the
Corporation to, execute this Agreement.
 

NOW THEREFORE in consideration of the respective covenants and agreements
provided in this Agreement and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties hereto
covenant and agree as follows:
 
INTERPRETATION
 
Section 1.1 Definitions
 
In this Agreement, unless the context otherwise requires, the following terms
shall have the following meanings respectively:

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“ABCA” has the meaning ascribed thereto in the Exchangeable Share Provisions;
 
“Acquiror Consent” has the meaning ascribed thereto in Section 4.2;
 
“Acquiror Control Transaction” has the meaning ascribed thereto in the
Exchangeable Share Provisions;
 
“Acquiror Meeting” has the meaning ascribed thereto in Section 4.2;
 
“Acquiror Shares” has the meaning provided in the Exchangeable Share Provisions;
 
“Acquiror Special Voting Share” means one share of preferred stock of Acquiror
to which that number of voting rights attach (each such voting right to be equal
to the voting rights attached to one Acquiror Share) equal to two times the
number of outstanding Exchangeable Shares held by Beneficiaries;
 
“Acquiror Successor” has the meaning ascribed thereto in Section 10.1(a);
 
“Acquisition Agreement” has the meaning ascribed thereto in the Exchangeable
Share Provisions;
 
“Affiliate” has the meaning ascribed thereto in the Exchangeable Share
Provisions;
 
“Automatic Exchange Rights” means the benefit of the obligation of Acquiror to
effect the automatic exchange of Exchangeable Shares for Acquiror Shares
pursuant to Section 5.12;
 
“Beneficiaries” means the registered holders from time to time of Exchangeable
Shares, other than Acquiror and its Affiliates;
 
“Beneficiary Votes” has the meaning ascribed thereto in Section 4.2;
 
“Business Day” has the meaning ascribed thereto in the Exchangeable Share
Provisions;
 
“Callco” means 1294697 Alberta Ltd., a corporation incorporated under the ABCA;
 
“Change of Law Call Right” has the meaning ascribed thereto in the Exchangeable
Share Provisions;
 
“Equivalent Vote Amount” means, with respect to any matter, proposition or
question on which holders of Acquiror Shares are entitled to vote, consent or
otherwise act, the number of votes to which a holder of two Acquiror Shares is
entitled with respect to such matter, proposition or question;

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“Exchange Right” has the meaning ascribed thereto in Section 5.1;
 
“Exchangeable Share Consideration” has the meaning ascribed thereto in the
Exchangeable Share Provisions;
 
“Exchangeable Share Price” has the meaning ascribed thereto in the Exchangeable
Share Provisions;
 
“Exchangeable Share Provisions” means the rights, privileges, restrictions and
conditions attaching to the Exchangeable Shares;
 
“Exchangeable Shares” means the non-voting exchangeable shares in the capital of
the Corporation, having the rights, privileges, restrictions and conditions set
out in the Exchangeable Share Provisions;
 
“Indemnified Parties” has the meaning ascribed thereto in Section 8.1;
 
“Insolvency Event” means (i) the institution by the Corporation of any
proceeding to be adjudicated a bankrupt or insolvent or to be wound up, or the
consent of the Corporation to the institution of bankruptcy, insolvency or
winding-up proceedings against it, or (ii) the filing of a petition, answer or
consent seeking dissolution or winding-up under any bankruptcy, insolvency or
analogous laws, including the Companies Creditors’ Arrangement Act (Canada) and
the Bankruptcy and Insolvency Act (Canada), and the failure by the Corporation
to contest in good faith any such proceedings commenced in respect of the
Corporation within 30 days of becoming aware thereof, or the consent by the
Corporation to the filing of any such petition or to the appointment of a
receiver, or (iii) the making by the Corporation of a general assignment for the
benefit of creditors, or the admission in writing by the Corporation of its
inability to pay its debts generally as they become due, or (iv) the Corporation
not being permitted, pursuant to solvency requirements of applicable law, to
redeem any Retracted Shares pursuant to Section 6.6 of the Exchangeable Share
Provisions;
 
“Liquidation Call Right” has the meaning ascribed thereto in the Exchangeable
Share Provisions;
 
“Liquidation Event” has the meaning ascribed thereto in Section 5.12(b);
 
“Liquidation Event Effective Time” has the meaning ascribed thereto in
Section 5.12(c);
 
“List” has the meaning ascribed thereto in Section 4.6;

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“Officer’s Certificate” means, with respect to Acquiror or the Corporation, as
the case may be, a certificate signed by any one of the authorized signatories
of Acquiror or the Corporation, as the case may be;
 
“Peace” means Peace Oil Corp., a corporation incorporated under the ABCA;
 
“Person” includes any individual, firm, partnership, joint venture, venture
capital fund, limited liability company, unlimited liability company,
association, trust, trustee, executor, administrator, legal personal
representative, estate, group, body corporate, corporation, unincorporated
association or organization, government body, syndicate or other entity, whether
or not having legal status;
 
“Redemption Date” has the meaning ascribed thereto in the Exchangeable Share
Provisions;
 
“Retracted Shares” has the meaning ascribed thereto in Section 5.7;
 
“Retraction Call Right” has the meaning ascribed thereto in the Exchangeable
Share Provisions;
 
“Support Agreement” means that certain support agreement made as of even date
herewith among the Corporation, Callco and Acquiror;
 
“Trust” means the trust created by this Agreement;
 
“Trust Estate” means the Acquiror Special Voting Share, any other securities,
the Exchange Right, the Automatic Exchange Rights and any money or other
property which may be held by the Trustee from time to time pursuant to this
Agreement; and
 
“Voting Rights” means the voting rights of the Acquiror Special Voting Share
held by the Trustee.
 
Section 1.2 Interpretation Not Affected By Headings, Etc.
 
The division of this Agreement into articles, sections and other portions and
the insertion of headings are for convenience of reference only and should not
affect the construction or interpretation hereof. Unless otherwise indicated,
all references to an “Article” or “Section” followed by a number refer to the
specified Article or Section of this Agreement. The terms “this Agreement,”
“hereof”, “herein” and “hereunder” and similar expressions refer to this
Agreement and not to any particular Article, Section or other portion hereof.

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Section 1.3 Rules of Construction
 
Unless otherwise specifically indicated or the context otherwise requires, (a)
all references to “dollars” or “$” mean United States dollars, (b) words
importing the singular shall include the plural and vice versa and words
importing any gender shall include all genders, and (c) “include,” “includes”
and “including” shall be deemed to be followed by the words “without
limitation.”
 
Section 1.4 Date for Any Action
 
In the event that any date on which any action is required to be taken hereunder
by any of the parties hereto is not a Business Day, such action shall be
required to be taken on the next succeeding day that is a Business Day.
 
Section 1.5 Payments
 
All payments to be made hereunder will be made without interest and less any tax
required by Canadian law to be deducted or withheld.
 
ARTICLE 2
PURPOSE OF AGREEMENT
 
Section 2.1 Establishment of Trust
 
The purpose of this Agreement is to create the Trust for the benefit of the
Beneficiaries and Acquiror, as herein provided. The Trustee will hold the
Acquiror Special Voting Share in order to enable the Trustee to exercise the
Voting Rights and will hold the Exchange Right and the Automatic Exchange Rights
in order to enable the Trustee to exercise such rights, in each case as trustee
for and on behalf of the Beneficiaries as provided in this Agreement. The
Trustee will hold the Acquiror Special Voting Share for and on behalf of
Acquiror for all other rights associated with such Acquiror Special Voting Share
other than the Voting Rights.
 
 
ARTICLE 3
ACQUIROR SPECIAL VOTING SHARE
 
Section 3.1 Issue and Ownership of the Acquiror Special Voting Share
 
Acquiror hereby agrees to issue to, and deposit with, the Trustee the Acquiror
Special Voting Share to be hereafter held of record by the Trustee as trustee
for and on behalf of, and for the use and benefit of, the Beneficiaries and in
accordance with the provisions of this Agreement. Acquiror hereby acknowledges
receipt from the Trustee as trustee for and on behalf of the Beneficiaries of
good and valuable consideration (and the adequacy thereof) for the issuance of
the Acquiror Special Voting Share by Acquiror to the Trustee. During the term of
the Trust and subject to the terms and conditions of this Agreement, the Trustee
shall possess and be vested with full legal ownership of such Acquiror Special
Voting Share and shall be entitled to exercise all of the rights and powers of
an owner with respect to such Acquiror Special Voting Share provided that the
Trustee shall:

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(a)
 
hold such Acquiror Special Voting Share and the legal title thereto as trustee
solely for the use and benefit of the Beneficiaries in accordance with the
provisions of this Agreement; and
 
(b)
 
except as specifically authorized by this Agreement, have no power or authority
to sell, transfer, vote or otherwise deal in or with such Acquiror Special
Voting Share and such Acquiror Special Voting Share shall not be used or
disposed of by the Trustee for any purpose other than the purposes for which
this Trust is created pursuant to this Agreement.
 

Section 3.2 Legended Share Certificates
 
The Corporation will cause each certificate representing Exchangeable Shares to
bear an appropriate legend notifying the Beneficiaries of their right to
instruct the Trustee with respect to the exercise of the portion of the Voting
Rights in respect of the Exchangeable Shares held by the Beneficiaries.
 
Section 3.3 Safe Keeping of Certificate
 
The physical certificate representing the Acquiror Special Voting Share shall at
all times be held in safe keeping by the Trustee or its duly authorized agent.
 
 
ARTICLE 4
EXERCISE OF VOTING RIGHTS
 
Section 4.1 Voting Rights
 
The Trustee, as the holder of record of the Acquiror Special Voting Share
forming part of the Trust Estate, shall be entitled to all of the Voting Rights,
including the right to vote in person or by proxy the Acquiror Special Voting
Share held by the Trustee on any matter, question, proposal or proposition
whatsoever that may properly come before the shareholders of Acquiror at an
Acquiror Meeting or in connection with an Acquiror Consent. The Voting Rights
shall be and remain vested in and exercised by the Trustee. Subject to
Section 6.15 hereof:
 
(a)
 
the Trustee shall exercise the Voting Rights only on the basis of instructions
received pursuant to this Article 4 from Beneficiaries entitled to instruct the
Trustee as to the voting thereof at the time at which the Acquiror Meeting is
held or an Acquiror Consent is sought; and
 

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(b)
 
to the extent that no instructions are received from a Beneficiary with respect
to the Voting Rights to which such Beneficiary is entitled, the Trustee shall
not exercise or permit the exercise of such Voting Rights.
 

Section 4.2 Number of Votes
 
With respect to all meetings of shareholders of Acquiror at which holders of
Acquiror Shares are entitled to vote (each, an “Acquiror Meeting”) and with
respect to all written consents sought from Acquiror’s shareholders, including
the holders of Acquiror Shares (each, an “Acquiror Consent”), each Beneficiary
shall be entitled to instruct the Trustee to cast and exercise, in the manner
instructed, a number of votes equal to the Equivalent Vote Amount for each
Exchangeable Share owned of record by such Beneficiary on the record date
established by Acquiror or by applicable law for such Acquiror Meeting or
Acquiror Consent, as the case may be (collectively, the “Beneficiary Votes”), in
respect of each matter, question, proposal or proposition to be voted on at such
Acquiror Meeting or consented to in connection with such Acquiror Consent.
 
Any Beneficiary who chooses to attend an Acquiror Meeting in person will be
entitled to one vote on a show of hands.
 
Section 4.3 Mailings to Shareholders
 
With respect to each Acquiror Meeting and Acquiror Consent, the Trustee will use
its reasonable efforts promptly to mail or cause to be mailed (or otherwise
communicate in the same manner as Acquiror utilizes in communications to holders
of Acquiror Shares subject to applicable regulatory requirements and provided
such manner of communications is reasonably available to the Trustee) to each of
the Beneficiaries named in the List, such mailing or communication to commence
on the same day as the mailing or notice (or other communication) with respect
thereto is commenced by Acquiror to its shareholders:
 
(a)
 
a copy of such notice, together with any related materials, including any proxy
or information statement, to be provided to shareholders of Acquiror;
 
(b)
 
a statement that such Beneficiary is entitled to instruct the Trustee as to the
exercise of the Beneficiary Votes with respect to such Acquiror Meeting or
Acquiror Consent or, pursuant to Section 4.7, to attend such Acquiror Meeting
and to exercise personally thereat the Beneficiary Votes of such Beneficiary;
 

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(c)
 
a statement as to the manner in which such instructions may be given to the
Trustee, including an express indication that instructions may be given to the
Trustee to give:
 

 
(i)
 
a proxy to such Beneficiary or its designee to exercise personally the
Beneficiary Votes; or
 
(ii)
 
a proxy to a designated agent or other representative of the management of
Acquiror to exercise such Beneficiary Votes;
 

 
(d)
 
a statement that if no such instructions are received from the Beneficiary, the
Beneficiary Votes to which such Beneficiary is entitled will not be exercised;
 
(e)
 
a form of direction whereby the Beneficiary may so direct and instruct the
Trustee as contemplated herein; and 
 
(f)
 
a statement of the time and date by which such instructions must be received by
the Trustee in order to be binding upon it, which in the case of a Acquiror
Meeting shall not be earlier than the close of business on the second Business
Day prior to such meeting, and of the method for revoking or amending such
instructions.
 

For the purpose of determining Beneficiary Votes to which a Beneficiary is
entitled in respect of any Acquiror Meeting or Acquiror Consent, the number of
Exchangeable Shares owned of record by the Beneficiary shall be determined at
the close of business on the record date established by Acquiror or by
applicable law for purposes of determining shareholders entitled to vote at such
Acquiror Meeting or to give written consent in connection with such Acquiror
Consent. Acquiror will notify the Trustee of any decision of the Board of
Directors of Acquiror with respect to the calling of any Acquiror Meeting or the
seeking of any Acquiror Consent and shall provide all necessary information and
materials to the Trustee in each case promptly and in any event in sufficient
time to enable the Trustee to perform its obligations contemplated by this
Section 4.3.
 
The materials referred to in this Section 4.3 are to be provided to the Trustee
by Acquiror and the materials referred to in Section 4.3(c), Section 4.3(e) and
Section 4.3(f) shall be subject to reasonable comment by the Trustee in a timely
manner. Acquiror shall ensure that the materials to be provided to the Trustee
are provided in sufficient time to permit the Trustee to comment as aforesaid
and to send all materials to each Beneficiary at the same time as such materials
are first sent to holders of Acquiror Shares. Acquiror agrees not to communicate
with holders of Acquiror Shares with respect to the materials referred to in
this Section 4.3 otherwise than by mail unless such method of communication is
also reasonably available to the Trustee for communication with the
Beneficiaries. Notwithstanding the foregoing, Acquiror may at its option
exercise the duties of the Trustee to deliver copies of all materials to each
Beneficiary as required by this Section 4.3 so long as in each case Acquiror
delivers a certificate to the Trustee stating that Acquiror has undertaken to
perform the obligations set forth in this Section 4.3.
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Section 4.4 Copies of Shareholder Information
 
Acquiror will deliver to the Trustee copies of all proxy materials (including
notices of Acquiror Meetings but excluding proxies to vote Acquiror Shares),
information statements, reports (including all interim and annual financial
statements) and other written communications that, in each case, are to be
distributed from time to time to holders of Acquiror Shares in sufficient
quantities and in sufficient time so as to enable the Trustee to send those
materials to each Beneficiary, to the extent possible, at the same time as such
materials are first sent to holders of Acquiror Shares. The Trustee will mail or
otherwise send to each Beneficiary, at the expense of Acquiror, copies of all
such materials (and all materials specifically directed to the Beneficiaries or
to the Trustee for the benefit of the Beneficiaries by Acquiror) received by the
Trustee from Acquiror, to the extent possible, at the same time as such
materials are sent to holders of Acquiror Shares. The Trustee will make copies
of all such materials available for inspection by any Beneficiary at the
Trustee’s principal office in Calgary, Alberta. Notwithstanding the foregoing,
Acquiror at its option may exercise the duties of the Trustee to deliver copies
of all materials to each Beneficiary as required by this Section 4.4 so long as
in each case Acquiror delivers a certificate to the Trustee stating that
Acquiror has undertaken to perform the obligations set forth in this
Section 4.4.
 
Section 4.5 Other Materials
 
As soon as reasonably practicable after receipt by Acquiror or holders of
Acquiror Shares (if such receipt is known by Acquiror) of any material sent or
given by or on behalf of a third party to holders of Acquiror Shares generally,
including dissident proxy and information circulars (and related information and
material) and tender and exchange offer circulars (and related information and
material), Acquiror shall use its reasonable best efforts to obtain and deliver
to the Trustee copies thereof in sufficient quantities so as to enable the
Trustee to forward such material (unless the same has been provided directly to
Beneficiaries by such third party) to each Beneficiary as soon as possible
thereafter. As soon as reasonably practicable after receipt thereof, the Trustee
will mail or otherwise send to each Beneficiary, at the expense of Acquiror,
copies of all such materials received by the Trustee from Acquiror. The Trustee
will also make available for inspection by any Beneficiary at the Trustee’s
principal office in Calgary, Alberta, copies of all such materials.
Notwithstanding the foregoing, Acquiror at its option may exercise the duties of
the Trustee to deliver copies of all such materials to each Beneficiary as
required by this Section 4.5 so long as in each case Acquiror delivers a
certificate to the Trustee stating that Acquiror has undertaken to perform the
obligations set forth in this Section 4.5.
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Section 4.6 List of Persons Entitled to Vote
 
The Corporation shall, (a) prior to each annual and special Acquiror Meeting or
the seeking of any Acquiror Consent and (b) forthwith upon each request made at
any time by the Trustee in writing, prepare or cause to be prepared a list (a
“List”) of the names and addresses of the Beneficiaries arranged in alphabetical
order and showing the number of Exchangeable Shares held of record by each such
Beneficiary, in each case at the close of business on the date specified by the
Trustee in such request or, in the case of a List prepared in connection with an
Acquiror Meeting or an Acquiror Consent, at the close of business on the record
date established by Acquiror or pursuant to applicable law for determining the
holders of Acquiror Shares entitled to receive notice of and/or to vote at such
Acquiror Meeting or to give consent in connection with such Acquiror Consent.
Each such List shall be delivered to the Trustee promptly after receipt by the
Corporation of such request or the record date for such meeting or seeking of
consent, as the case may be, and in any event within sufficient time as to
permit the Trustee to perform its obligations under this Agreement. Acquiror
agrees to give the Corporation notice (with a copy to the Trustee) of the
calling of any Acquiror Meeting or the seeking of any Acquiror Consent by
Acquiror or its management, together with the record dates therefor,
sufficiently prior to the date of the calling of such meeting or seeking of such
consent so as to enable the Corporation to perform its obligations under this
Section 4.6.
 
Section 4.7 Entitlement to Direct Votes
 
Any Beneficiary named in a List prepared in connection with any Acquiror Meeting
or Acquiror Consent will be entitled (a) to instruct the Trustee in the manner
described in Section 4.3 with respect to the exercise of the Beneficiary Votes
to which such Beneficiary is entitled or (b) to attend such meeting and
personally exercise thereat (or to personally exercise with respect to any
Acquiror Consent), as the proxy of the Trustee, the Beneficiary Votes to which
such Beneficiary is entitled.
 
Section 4.8 Voting by Trustee and Attendance of Trustee Representative at
Meeting
 
(a)
 
In connection with each Acquiror Meeting and Acquiror Consent, the Trustee shall
exercise, either in person or by proxy, in accordance with the instructions
received from a Beneficiary pursuant to Section 4.3, the Beneficiary Votes as to
which such Beneficiary is entitled to direct the vote (or any lesser number
thereof as may be set forth in the instructions); provided, however, that such
written instructions are received by the Trustee from the Beneficiary prior to
the time and date fixed by the Trustee for receipt of such instruction in the
notice given by the Trustee to the Beneficiary pursuant to Section 4.3.
 

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(b)
 
The Trustee shall cause a representative who is empowered by it to sign and
deliver, on behalf of the Trustee, proxies for Voting Rights to attend each
Acquiror Meeting. Upon submission by a Beneficiary (or its designee) of
identification satisfactory to the Trustee’s representative, and at the
Beneficiary’s request, such representative shall sign and deliver to such
Beneficiary (or its designee) a proxy to exercise personally the Beneficiary
Votes as to which such Beneficiary is otherwise entitled hereunder to direct the
vote, if such Beneficiary either (i) has not previously given the Trustee
instructions pursuant to Section 4.3 in respect of such meeting or (ii) submits
to such representative written revocation of any such previous instructions. At
such meeting, upon receipt of a proxy from the Trustee’s representative, the
Beneficiary exercising such Beneficiary Votes shall have the same rights as the
Trustee to speak at the meeting in respect of any matter, question, proposal or
proposition, to vote by way of ballot at the meeting in respect of any matter,
question, proposal or proposition, and to vote at such meeting by way of a show
of hands in respect of any matter, question or proposition.

 
Section 4.9 Distribution of Written Materials
 
Any written materials distributed by or on behalf of the Trustee pursuant to
this Agreement shall be sent by mail (or otherwise communicated in the same
manner as Acquiror utilizes in communications to holders of Acquiror Shares,
subject to applicable regulatory requirements and provided such manner of
communications is reasonably available to the Trustee) to each Beneficiary at
its address as shown on the books of the Corporation. Acquiror agrees not to
communicate with holders of Acquiror Shares with respect to such written
material otherwise than by mail unless such method of communication is also
reasonably available to the Trustee for communication with the Beneficiaries.
The Corporation shall provide or cause to be provided to the Trustee for
purposes of communication, on a timely basis and without charge or other
expense:
 
(a)
 
a current List; and
 
(b)
 
upon the request of the Trustee, mailing labels to enable the Trustee to carry
out its duties under this Agreement.
 

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The Corporation’s obligations under this Section 4.9 shall be deemed satisfied
to the extent Acquiror exercises its option to perform the duties of the Trustee
to deliver copies of materials to each Beneficiary and the Corporation provides
the required information and materials to Acquiror.
 
Section 4.10 Termination of Voting Rights
 
Except as otherwise provided herein or in the Exchangeable Share Provisions, all
of the rights of a Beneficiary with respect to the Beneficiary Votes exercisable
in respect of the Exchangeable Shares held by such Beneficiary, including the
right to instruct the Trustee as to the voting of or to vote personally such
Beneficiary Votes, shall be deemed to be surrendered by the Beneficiary to
Acquiror or Callco, as the case may be, and such Beneficiary Votes and the
Voting Rights represented thereby shall cease and be terminated immediately,
upon the delivery by such Beneficiary to the Trustee of the certificates
representing such Exchangeable Shares in connection with the exercise by the
Beneficiary of the Exchange Right or upon the occurrence of the automatic
exchange of Exchangeable Shares for Acquiror Shares, as specified in Article 5
(unless, in either case, Acquiror shall not have delivered the Exchangeable
Share Consideration deliverable in exchange therefor to the Trustee for delivery
to the Beneficiaries), or upon the redemption of Exchangeable Shares pursuant to
Article 6 or Article 7 of the Exchangeable Share Provisions, or upon the
effective date of the liquidation, dissolution or winding-up of the Corporation
pursuant to Article 5 of the Exchangeable Share Provisions or upon the purchase
of Exchangeable Shares from the holder thereof by Callco pursuant to the
exercise by Callco of the Retraction Call Right, Redemption Call Right or
Liquidation Call Right, or upon the purchase of Exchangeable Shares from the
holders thereof by Acquiror or Callco pursuant to the exercise by Acquiror or
Callco of the Change of Law Call Right.
 
 
ARTICLE 5
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
 
Section 5.1 Grant and Ownership of the Exchange Right
 
Acquiror hereby grants to the Trustee as trustee for and on behalf of, and for
the use and benefit of, the Beneficiaries the right (the “Exchange Right”), upon
the occurrence and during the continuance of an Insolvency Event, to require
Acquiror to purchase from each or any Beneficiary all or any part of the
Exchangeable Shares held by such Beneficiary and the Automatic Exchange Rights,
all in accordance with the provisions of this Agreement. Acquiror hereby
acknowledges receipt from the Trustee as trustee for and on behalf of the
Beneficiaries of good and valuable consideration (and the adequacy thereof) for
the grant of the Exchange Right and the Automatic Exchange Rights by Acquiror to
the Trustee. During the term of the Trust and subject to the terms and
conditions of this Agreement, the Trustee shall possess and be vested with full
legal ownership of the Exchange Right and the Automatic Exchange Rights and
shall be entitled to exercise all of the rights and powers of an owner with
respect to the Exchange Right and the Automatic Exchange Rights, provided that
the Trustee shall:
 
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(a)
 
hold the Exchange Right and the Automatic Exchange Rights and the legal title
thereto as trustee solely for the use and benefit of the Beneficiaries in
accordance with the provisions of this Agreement; and
 
(b)
 
except as specifically authorized by this Agreement, have no power or authority
to exercise or otherwise deal in or with the Exchange Right or the Automatic
Exchange Rights, and the Trustee shall not exercise any such rights for any
purpose other than the purposes for which the Trust is created pursuant to this
Agreement.
 

 
Section 5.2 Legended Share Certificates
 
The Corporation will cause each certificate representing Exchangeable Shares to
bear an appropriate legend notifying the Beneficiaries of:
 
(a)
 
their right to instruct the Trustee with respect to the exercise of the Exchange
Right in respect of the Exchangeable Shares held by a Beneficiary; and
 
(b)
 
the Automatic Exchange Rights.
 

Section 5.3 General Exercise of Exchange Right
 
The Exchange Right shall be and remain vested in and exercisable by the Trustee.
Subject to Section 6.15, the Trustee shall exercise the Exchange Right only on
the basis of instructions received pursuant to this Article 5 from Beneficiaries
entitled to instruct the Trustee as to the exercise thereof. To the extent that
no instructions are received from a Beneficiary with respect to the Exchange
Right, the Trustee shall not exercise or permit the exercise of the Exchange
Right.
 
Section 5.4 Purchase Price
 
The purchase price payable by Acquiror for each Exchangeable Share to be
purchased by Acquiror under the Exchange Right shall be an amount per share
equal to the Exchangeable Share Price on the last Business Day prior to the day
of closing of the purchase and sale of such Exchangeable Share under the
Exchange Right. In connection with each exercise of the Exchange Right, Acquiror
shall provide to the Trustee an Officer’s Certificate setting forth the
calculation of the Exchangeable Share Price for each Exchangeable Share. The
Exchangeable Share Price for each such Exchangeable Share so purchased may be
satisfied only by Acquiror delivering or causing to be delivered to the Trustee,
on behalf of the relevant Beneficiary, the Exchangeable Share Consideration
representing the total Exchangeable Share Price. Upon payment by Acquiror of
such purchase price to the Trustee for the benefit of the Beneficiary, the
relevant Beneficiary shall cease to have any right to be paid any amount in
respect of declared and unpaid dividends on each such Exchangeable Share by the
Corporation.

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Section 5.5 Exercise Instructions
 
Subject to the terms and conditions herein set forth, a Beneficiary shall be
entitled, upon the occurrence and during the continuance of an Insolvency Event,
to instruct the Trustee to exercise the Exchange Right with respect to all or
any part of the Exchangeable Shares registered in the name of such Beneficiary
on the books of the Corporation. To cause the exercise of the Exchange Right by
the Trustee, the Beneficiary shall deliver to the Trustee, in person or by
certified or registered mail, at its principal office in Calgary, Alberta or at
such other places in Canada as the Trustee may from time to time designate by
written notice to the Beneficiaries, the certificates representing the
Exchangeable Shares which such Beneficiary desires Acquiror to purchase, duly
endorsed in blank for transfer, and accompanied by such other documents and
instruments as may be required to effect a transfer of Exchangeable Shares under
the ABCA and the by-laws of the Corporation and such additional documents and
instruments as the Trustee, the Corporation and Acquiror may reasonably require
together with (a) a duly completed form of notice of exercise of the Exchange
Right, contained on the reverse of or attached to the Exchangeable Share
certificates, stating (i) that the Beneficiary thereby instructs the Trustee to
exercise the Exchange Right so as to require Acquiror to purchase from the
Beneficiary the number of Exchangeable Shares specified therein, (ii) that such
Beneficiary has good title to and owns all such Exchangeable Shares to be
acquired by Acquiror free and clear of all liens, claims, security interests and
encumbrances, (iii) the names in which the certificates representing Acquiror
Shares issuable in connection with the exercise of the Exchange Right are to be
issued and (iv) the names and addresses of the persons to whom such new
certificates should be delivered, and (b) payment (or evidence satisfactory to
the Trustee, the Corporation and Acquiror of payment) of the taxes (if any)
payable as contemplated by Section 5.8 of this Agreement. If only a part of the
Exchangeable Shares represented by any certificate or certificates delivered to
the Trustee are to be purchased by Acquiror under the Exchange Right, a new
certificate for the balance of such Exchangeable Shares shall be issued to the
holder at the expense of the Corporation.

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Section 5.6 Delivery of Acquiror Shares; Effect of Exercise
 
Promptly after the receipt by the Trustee of the certificates representing the
Exchangeable Shares which the Beneficiary desires Acquiror to purchase under the
Exchange Right, together with such documents and instruments of transfer and a
duly completed form of notice of exercise of the Exchange Right (and payment of
taxes, if any payable as contemplated by Section 5.8 or evidence thereof), duly
endorsed for transfer to Acquiror, the Trustee shall notify Acquiror and the
Corporation of its receipt of the same, which notice to Acquiror and the
Corporation shall constitute exercise of the Exchange Right by the Trustee on
behalf of the Beneficiary in respect of such Exchangeable Shares, and Acquiror
shall promptly thereafter deliver or cause to be delivered to the Trustee, for
delivery to the Beneficiary in respect of such Exchangeable Shares (or to such
other persons, if any, properly designated by such Beneficiary) the Exchangeable
Share Consideration deliverable in connection with the exercise of the Exchange
Right; provided, however, that no such delivery shall be made unless and until
the Beneficiary requesting the same shall have paid (or provided evidence
satisfactory to the Trustee, the Corporation and Acquiror of the payment of) the
taxes (if any) payable as contemplated by Section 5.8 of this Agreement.
Immediately upon the giving of notice by the Trustee to Acquiror and the
Corporation of the exercise of the Exchange Right, as provided in this Section
5.6, the closing of the transaction of purchase and sale contemplated by the
Exchange Right shall be deemed to have occurred, and the Beneficiary of such
Exchangeable Shares shall be deemed to have transferred to Acquiror all of such
Beneficiary’s right, title and interest in and to such Exchangeable Shares and
in the related interest in the Trust Estate and shall cease to be a holder of
such Exchangeable Shares and shall not be entitled to exercise any of the rights
of a holder in respect thereof, other than the right to receive his
proportionate part of the total purchase price therefor, unless such
Exchangeable Share Consideration is not delivered by Acquiror to the Trustee for
delivery to such Beneficiary (or to such other person, if any, properly
designated by such Beneficiary) within five Business Days of the date of the
giving of such notice by the Trustee, in which case the rights of the
Beneficiary shall remain unaffected until such Exchangeable Share Consideration
is delivered by Acquiror and any cheque included therein is paid. Upon delivery
of such Exchangeable Share Consideration by Acquiror to the Trustee, the Trustee
shall deliver such Exchangeable Share Consideration to such Beneficiary (or to
such other person, if any, properly designated by such Beneficiary).
Concurrently with such Beneficiary ceasing to be a holder of Exchangeable
Shares, the Beneficiary shall be considered and deemed for all purposes to be
the holder of the Acquiror Shares delivered to it pursuant to the Exchange
Right.
 
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Section 5.7 Exercise of Exchange Right Subsequent to Retraction
 
In the event that a Beneficiary has exercised its right under Article 6 of the
Exchangeable Share Provisions to require the Corporation to redeem any or all of
the Exchangeable Shares held by the Beneficiary (the “Retracted Shares”) and is
notified by the Corporation pursuant to Section 6.6 of the Exchangeable Share
Provisions that the Corporation will not be permitted as a result of solvency
requirements of applicable law to redeem all such Retracted Shares, and provided
that Callco shall not have exercised the Retraction Call Right with respect to
the Retracted Shares and that the Beneficiary has not revoked the retraction
request delivered by the Beneficiary to the Corporation pursuant to Section 6.7
of the Exchangeable Share Provisions, and provided further that the Trustee has
received written notice of same from the Corporation or Acquiror, the retraction
request will constitute and will be deemed to constitute notice from the
Beneficiary to the Trustee instructing the Trustee to exercise the Exchange
Right with respect to those Retracted Shares that the Corporation is unable to
redeem. In any such event, the Corporation hereby agrees with the Trustee and in
favour of the Beneficiary promptly to forward or cause to be forwarded to the
Trustee all relevant materials delivered by the Beneficiary to the Corporation
or to the transfer agent of the Exchangeable Shares (including a copy of the
retraction request delivered pursuant to Section 6.1 of the Exchangeable Share
Provisions) in connection with such proposed redemption of the Retracted Shares
and the Trustee will thereupon exercise the Exchange Right with respect to the
Retracted Shares that the Corporation is not permitted to redeem and will
require Acquiror to purchase such shares in accordance with the provisions of
this Article 5.
 
Section 5.8 Stamp or Other Transfer Taxes
 
Upon any sale of Exchangeable Shares to Acquiror pursuant to the Exchange Right
or the Automatic Exchange Rights, the share certificate or certificates
representing Acquiror Shares to be delivered in connection with the payment of
the purchase price therefor shall be issued in the name of the Beneficiary in
respect of the Exchangeable Shares so sold or in such names as such Beneficiary
may otherwise direct in writing without charge to the holder of the Exchangeable
Shares so sold; provided, however, that such Beneficiary (a) shall pay (and none
of Acquiror, the Corporation or the Trustee shall be required to pay) any
documentary, stamp, transfer or other taxes that may be payable in respect of
any transfer involved in the issuance or delivery of such shares to a person
other than such Beneficiary or evidenced to the satisfaction of the such taxes,
if any, have been paid.
 
Section 5.9 Notice of Insolvency Event
 
As soon as practicable following the occurrence of an Insolvency Event or any
event that with the giving of notice or the passage of time or both would be an
Insolvency Event, the Corporation and Acquiror shall give written notice thereof
to the Trustee. As soon as practicable following the receipt of notice from the
Corporation and Acquiror of the occurrence of an Insolvency Event, or upon the
Trustee becoming aware of an Insolvency Event, the Trustee will mail to each
Beneficiary, at the expense of Acquiror (such funds to be received in advance),
a notice of such Insolvency Event in the form provided by Acquiror, which notice
shall contain a brief statement of the rights of the Beneficiaries with respect
to the Exchange Right.
 
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Section 5.10 Qualification of Acquiror Shares
 
Acquiror covenants that if any Acquiror Shares issuable pursuant to the Exchange
Right or the Automatic Exchange Rights require registration or qualification
with or approval of or the filing of any document, including any registration
statement, prospectus or similar document, or the taking of any proceeding with
or the obtaining of any order, ruling or consent from any governmental or
regulatory authority under any Canadian or United States federal, provincial,
territorial or state law or regulation or pursuant to the rules and regulations
of any regulatory authority or stock exchange or the fulfilment of any other
Canadian or United States federal, provincial, territorial or state legal
requirement before such shares may be issued and delivered by Acquiror to the
initial holder thereof or in order that such shares may be freely traded
thereafter (other than any restrictions of general application on transfer by
reason of a holder being a “control person” of Acquiror for purposes of Canadian
provincial securities law or an “affiliate” of Acquiror for purposes of United
States federal or state securities law), Acquiror will in good faith use its
reasonable best efforts to take all such actions and do all such things as are
necessary or desirable to cause such Acquiror Shares to be and remain duly
registered, qualified or approved under United States and/or Canadian law, as
the case may be, to the extent provided in the Acquisition Agreement. Acquiror
will use its reasonable best efforts and in good faith expeditiously take all
such actions and do all such things as are reasonably necessary or desirable to
cause all Acquiror Shares to be delivered pursuant to the Exchange Right or the
Automatic Exchange Rights to be listed, quoted or posted for trading on all
stock exchanges and quotation systems on which outstanding Acquiror Shares are
listed, quoted or posted for trading at such time.
 
Section 5.11 Acquiror Shares
 
Acquiror hereby represents, warrants and covenants that the Acquiror Shares
issuable to Beneficiaries as described herein will be duly authorized and
validly issued, fully paid and non-assessable and shall be free and clear of any
lien, claim or encumbrance.
 
Section 5.12 Automatic Exchange on Liquidation of Acquiror
 
(a)
 
Acquiror will give the Trustee written notice of each of the following events at
the time set forth below:
 

 
(i)
 
in the event of any determination by the Board of Directors of Acquiror to
institute voluntary liquidation, dissolution or winding-up proceedings with
respect to Acquiror or to effect any other distribution of assets of Acquiror
among its shareholders for the purpose of winding up its affairs, at least 60
days prior to the proposed effective date of such liquidation, dissolution,
winding-up or other distribution; and

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(ii)
 
promptly following the earlier of (A) receipt by Acquiror of notice of, and (B)
Acquiror otherwise becoming aware of, any threatened or instituted claim, suit,
petition or other proceedings with respect to the involuntary liquidation,
dissolution or winding-up of Acquiror or to effect any other distribution of
assets of Acquiror among its shareholders for the purpose of winding up its
affairs, in each case where Acquiror has failed to contest in good faith any
such proceeding commenced in respect of Acquiror within 30 days of becoming
aware thereof.

 
(b)
 
Promptly following receipt by the Trustee from Acquiror of notice of any event
(a “Liquidation Event”) contemplated by Section 5.12(a) above, the Trustee will
give notice thereof to the Beneficiaries. Such notice shall be provided to the
Trustee by Acquiror and shall include a brief description of rights of the
Beneficiaries with respect to the Automatic Exchange Rights provided for in
Section 5.12(c).
 
(c)
 
In order that the Beneficiaries will be able to participate on a pro rata basis
with the holders of Acquiror Shares in the distribution of assets of Acquiror in
connection with a Liquidation Event, immediately prior to the effective time
(the “Liquidation Event Effective Time”) of a Liquidation Event all of the then
outstanding Exchangeable Shares shall be automatically exchanged for Acquiror
Shares. To effect such automatic exchange, Acquiror shall purchase each
Exchangeable Share outstanding immediately prior to the Liquidation Event
Effective Time and held by Beneficiaries, and each Beneficiary shall sell the
Exchangeable Shares held by such Beneficiary at such time, for a purchase price
per share equal to the Exchangeable Share Price applicable at that time.
Acquiror shall provide the Trustee with an Officer’s Certificate in connection
with any automatic exchange setting forth the calculation of the Exchangeable
Share Price for each Exchangeable Share.
 

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(d)
 
The closing of the transaction of purchase and sale contemplated by the
automatic exchange of Exchangeable Shares for Acquiror Shares shall be deemed to
have occurred immediately prior to the Liquidation Event Effective Time, and
each Beneficiary shall be deemed to have transferred to Acquiror all of the
Beneficiary’s right, title and interest in and to such Beneficiary’s
Exchangeable Shares and the related interest in the Trust Estate. Any right of
each such Beneficiary to receive declared and unpaid dividends from the
Corporation shall be deemed to be satisfied and discharged and each such
Beneficiary shall cease to be a holder of such Exchangeable Shares and Acquiror
shall deliver to the Beneficiary the Exchangeable Share Consideration
deliverable upon the automatic exchange of Exchangeable Shares. Concurrently
with such Beneficiary ceasing to be a holder of Exchangeable Shares, the
Beneficiary shall be considered and deemed for all purposes to be the holder of
the Acquiror Shares issued pursuant to the automatic exchange of Exchangeable
Shares for Acquiror Shares and the certificates held by the Beneficiary
previously representing the Exchangeable Shares exchanged by the Beneficiary
with Acquiror pursuant to such automatic exchange shall thereafter be deemed to
represent Acquiror Shares issued to the Beneficiary by Acquiror pursuant to such
automatic exchange. Upon the request of a Beneficiary and the surrender by the
Beneficiary of Exchangeable Share certificates deemed to represent Acquiror
Shares, duly endorsed in blank and accompanied by such instruments of transfer
as Acquiror may reasonably require, Acquiror shall deliver or cause to be
delivered to the Beneficiary certificates representing Acquiror Shares of which
the Beneficiary is the holder.
 

Section 5.13 Withholding Rights
 
Acquiror, the Corporation and the Trustee shall be entitled to deduct and
withhold from any consideration otherwise payable under this Agreement to any
holder of Exchangeable Shares or Acquiror Shares such amounts as Acquiror, the
Corporation or the Trustee is required to deduct and withhold with respect to
such payment under the Income Tax Act (Canada), the United States Internal
Revenue Code of 1986 or any provision of federal, provincial, state, local or
foreign tax law, in each case as amended or succeeded. The Trustee may act on
the advice of counsel with respect to such matters. To the extent that amounts
are so withheld, such withheld amounts shall be treated for all purposes as
having been paid to the holder of the shares in respect of which such deduction
and withholding was made, provided that such withheld amounts are actually
remitted to the appropriate taxing authority. To the extent that the amount so
required to be deducted or withheld from any payment to a holder exceeds the
cash portion of the consideration otherwise payable to the holder, Acquiror, the
Corporation and the Trustee are hereby authorized to sell or otherwise dispose
of such portion of the consideration as is necessary to provide sufficient funds
to Acquiror, the Corporation or the Trustee, as the case may be, to enable it to
comply with such deduction or withholding requirement and Acquiror, the
Corporation or the Trustee shall notify the holder thereof and remit to such
holder any unapplied balance of the net proceeds of such sale.

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ARTICLE 6
CONCERNING THE TRUSTEE
 
Section 6.1 Powers and Duties of the Trustee
 
The rights, powers, duties and authorities of the Trustee under this Agreement,
in its capacity as trustee of the Trust, shall include:
 
(a)
 
receipt and deposit of the Acquiror Special Voting Share from Acquiror as
trustee for and on behalf of the Beneficiaries in accordance with the provisions
of this Agreement;
 
(b)
 
granting proxies and distributing materials to Beneficiaries as provided in this
Agreement;
 
(c)
 
casting and exercising the Beneficiary Votes in accordance with the provisions
of this Agreement;
 
(d)
 
receiving the grant of the Exchange Right and the Automatic Exchange Rights from
Acquiror as trustee for and on behalf of the Beneficiaries in accordance with
the provisions of this Agreement;
 
(e)
 
exercising the Exchange Right and enforcing the benefit of the Automatic
Exchange Rights, in each case in accordance with the provisions of this
Agreement, and in connection therewith receiving from Beneficiaries Exchangeable
Shares and other requisite documents and distributing to such Beneficiaries
Acquiror Shares and cheques, if any, to which such Beneficiaries are entitled
upon the exercise of the Exchange Right or pursuant to the Automatic Exchange
Rights, as the case may be;
 
(f)
 
holding title to the Trust Estate;
 
(g)
 
investing any moneys forming, from time to time, a part of the Trust Estate as
provided in this Agreement;
 
(h)
 
taking action on its own initiative or at the direction of a Beneficiary or
Beneficiaries to enforce the obligations of Acquiror and the Corporation under
this Agreement; and
 

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(i)
 
taking such other actions and doing such other things as are specifically
provided in this Agreement.
 

 
In the exercise of such rights, powers, duties and authorities, the Trustee
shall have (and is granted) such incidental and additional rights, powers,
duties and authority not in conflict with any of the provisions of this
Agreement as the Trustee, acting in good faith and in the reasonable exercise of
its discretion, may deem necessary, appropriate or desirable to effect the
purpose of the Trust. Any exercise of such discretionary rights, powers, duties
and authorities by the Trustee shall be final, conclusive and binding upon all
persons.
 
The Trustee in exercising its rights, powers, duties and authorities hereunder
shall act honestly and in good faith and with a view to the best interests of
the Beneficiaries and shall exercise the care, diligence and skill that a
reasonably prudent trustee would exercise in comparable circumstances.
 
The Trustee shall not be bound to give notice or do or take any act, action or
proceeding by virtue of the powers conferred on it hereby unless and until it
shall be specifically required to do so under the terms hereof, nor shall the
Trustee be required to take any notice of, or to do, or to take any act, action
or proceeding as a result of any default or breach of any provision hereunder,
unless and until notified in writing of such default or breach, which notices
shall distinctly specify the default or breach desired to be brought to the
attention of the Trustee, and in the absence of such notice the Trustee may for
all purposes of this Agreement conclusively assume that no default or breach has
been made in the observance or performance of any of the representations,
warranties, covenants, agreements or conditions contained herein.
 
Section 6.2 No Conflict of Interest
 
The Trustee represents to Acquiror and the Corporation that at the date of
execution and delivery of this Agreement there exists no material conflict of
interest in the role of the Trustee as a fiduciary hereunder and the role of the
Trustee in any other capacity. The Trustee shall, within 90 days after it
becomes aware that such material conflict of interest exists, either eliminate
such material conflict of interest or resign in the manner and with the effect
specified in Article 10. If, notwithstanding the foregoing provisions of this
Section 6.2, the Trustee has such a material conflict of interest, the validity
and enforceability of this Agreement shall not be affected in any manner
whatsoever by reason only of the existence of such material conflict of
interest. If the Trustee contravenes the foregoing provisions of this
Section 6.2, any interested party may apply to a court of competent jurisdiction
for an order that the Trustee be replaced as trustee hereunder.

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Section 6.3 Dealings with Transfer Agents, Registrars, etc.
 
Acquiror and the Corporation irrevocably authorize the Trustee, from time to
time, to:
 
(a)
 
consult, communicate and otherwise deal with the respective registrars and
transfer agents, and with any such subsequent registrar or transfer agent, of
the Exchangeable Shares and Acquiror Shares; and
 
(b)
 
requisition, from time to time, (i) from any such registrar or transfer agent
any information readily available from the records maintained by it which the
Trustee may reasonably require for the discharge of its duties and
responsibilities under this Agreement and (ii) from the transfer agent of
Acquiror Shares, and any subsequent transfer agent of such shares, the share
certificates issuable upon the exercise from time to time of the Exchange Right
and pursuant to the Automatic Exchange Rights.
 

Acquiror and the Corporation irrevocably authorize their respective registrars
and transfer agents to comply with all such requests. Acquiror covenants that it
will supply its transfer agent with duly executed share certificates for the
purpose of completing the exercise from time to time of the Exchange Right and
the Automatic Exchange Rights.
 
Section 6.4 Books and Records
 
The Trustee shall keep available for inspection by Acquiror and the Corporation
at the Trustee’s principal office in Calgary, Alberta correct and complete books
and records of account relating to the Trust created by this Agreement,
including all relevant data relating to mailings and instructions to and from
Beneficiaries and all transactions pursuant to the Exchange Right and the
Automatic Exchange Rights. On or before January 15 in every year, so long as any
Acquiror Shares are on deposit with the Trustee, the Trustee shall transmit to
Acquiror and the Corporation a brief report, dated as of the preceding December
31, with respect to:
 
(a)
 
the property and funds comprising the Trust Estate as of that date;
 
(b)
 
the number of exercises of the Exchange Right, if any, and the aggregate number
of Exchangeable Shares received by the Trustee on behalf of Beneficiaries in
consideration of the issuance by Acquiror of Acquiror Shares in connection with
the Exchange Right, during the calendar year ended on such December 31; and
 
(c)
 
any action taken by the Trustee in the performance of its duties under this
Agreement which it had not previously reported and which, in the Trustee’s
opinion, materially affects the Trust Estate.
 

 
Section 6.5 Income Tax Returns and Reports
 
The Trustee shall, to the extent necessary, prepare and file on behalf of the
Trust appropriate United States and Canadian income tax returns and any other
returns or reports as may be required by applicable law or pursuant to the rules
and regulations of any securities exchange or other trading system through which
the Exchangeable Shares are traded. In connection therewith, the Trustee may
obtain the advice and assistance of such experts or advisors as the Trustee
reasonably considers necessary or advisable (who may be experts or advisors to
Acquiror or the Corporation). If requested by the Trustee, Acquiror or the
Corporation shall retain qualified experts or advisors for the purpose of
providing such tax advice or assistance.
 
Section 6.6 Indemnification Prior to Certain Actions by Trustee
 
The Trustee shall exercise any or all of the rights, duties, powers or
authorities vested in it by this Agreement at the request, order or direction of
any Beneficiary upon such Beneficiary furnishing to the Trustee reasonable
funding, security or indemnity against the costs, expenses and liabilities which
may be incurred by the Trustee therein or thereby, provided that no Beneficiary
shall be obligated to furnish to the Trustee any such security or indemnity in
connection with the exercise by the Trustee of any of its rights, duties, powers
and authorities with respect to the Acquiror Special Voting Share held by the
Trustee pursuant to Article 4, subject to Section 6.15, with respect to the
Exchange Right pursuant to Article 5, subject to Section 6.15, and with respect
to the Automatic Exchange Rights pursuant to Article 5, subject to Section 6.15.
 
None of the provisions contained in this Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
exercise of any of its rights, powers, duties, or authorities unless funded,
given security or indemnified as aforesaid.
 
Section 6.7 Action of Beneficiaries
 
No Beneficiary shall have the right to institute any action, suit or proceeding
or to exercise any other remedy authorized by this Agreement for the purpose of
enforcing any of its rights or for the execution of any trust or power hereunder
unless the Beneficiary has requested the Trustee to take or institute such
action, suit or proceeding and furnished the Trustee with the funding, security
or indemnity required by Section 6.6 and the Trustee shall have failed to act
within a reasonable time thereafter. In such case, but not otherwise, the
Beneficiary shall be entitled to take proceedings in any court of competent
jurisdiction such as the Trustee might have taken; it being understood and
intended that no one or more Beneficiaries shall have any right in any manner
whatsoever to affect, disturb or prejudice the rights hereby created by any such
action, or to enforce any right hereunder or the Voting Rights, the Exchange
Rights or the Automatic Exchange Rights except subject to the conditions and in
the manner herein provided, and that all powers and trusts hereunder shall be
exercised and all proceedings at law shall be instituted, had and maintained by
the Trustee, except only as herein provided, and in any event for the equal
benefit of all Beneficiaries.
 
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Section 6.8 Reliance Upon Declarations
 
The Trustee shall not be considered to be in contravention of any of its rights,
powers, duties and authorities hereunder if, when required, it acts and relies
in good faith upon statutory declarations, certificates, opinions, Lists,
reports or other papers or documents furnished pursuant to the provisions hereof
or required by the Trustee to be furnished to it in the exercise of its rights,
powers, duties and authorities hereunder if such statutory declarations,
certificates, opinions, Lists, reports or other papers or documents comply with
the provisions of Section 6.9, if applicable, and with any other applicable
provisions of this Agreement.
 
Section 6.9 Evidence and Authority to Trustee
 
Acquiror and/or the Corporation shall furnish to the Trustee evidence of
compliance with the conditions provided for in this Agreement relating to any
action or step required or permitted to be taken by Acquiror and/or the
Corporation or the Trustee under this Agreement or as a result of any obligation
imposed under this Agreement, including in respect of the Voting Rights or the
Exchange Right or the Automatic Exchange Rights and the taking of any other
action to be taken by the Trustee at the request of or on the application of
Acquiror and/or the Corporation promptly if and when:
 
(a)
 
such evidence is required by any other section of this Agreement to be furnished
to the Trustee in accordance with the terms of this Section 6.9; or
 
(b)
 
the Trustee, in the exercise of its rights, powers, duties and authorities under
this Agreement, gives Acquiror and/or the Corporation written notice requiring
it to furnish such evidence in relation to any particular action or obligation
specified in such notice.
 

 
Such evidence shall consist of an officer’s Certificate of Acquiror and/or the
Corporation or a statutory declaration or a certificate made by persons entitled
to sign an Officer’s Certificate stating that any such condition has been
complied with in accordance with the terms of this Agreement.

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Whenever such evidence relates to a matter other than the Voting Rights or the
Exchange Right or the Automatic Exchange Rights or the taking of any other
action to be taken by the Trustee at the request or on the application of
Acquiror and/or the Corporation, and except as otherwise specifically provided
herein, such evidence may consist of a report or opinion of any solicitor,
attorney, auditor, accountant, appraiser, valuer, engineer or other expert or
any other person whose qualifications give authority to a statement made by him,
provided that if such report or opinion is furnished by a director, officer or
employee of Acquiror and/or the Corporation it shall be in the form of an
Officer’s Certificate or a statutory declaration.
 
Each statutory declaration, Officer’s Certificate, opinion or report furnished
to the Trustee as evidence of compliance with a condition provided for in this
Agreement shall include a statement by the person giving the evidence:
 
(c)
 
declaring that such person has read and understands the provisions of this
Agreement relating to the condition in question;
 
(d)
 
describing the nature and scope of the examination or investigation upon which
such person based the statutory declaration, certificate, statement or opinion;
and
 
(e)
 
declaring that such person has made such examination or investigation as such
person believes is necessary to enable such person to make the statements or
give the opinions contained or expressed therein.
 

Section 6.10 Experts, Advisers and Agents
 
The Trustee may:
 
(a)
 
in relation to these presents act and rely on the opinion or advice of or
information obtained from any solicitor, attorney, auditor, accountant,
appraiser, valuer, engineer or other expert, whether retained by the Trustee or
by Acquiror and/or the Corporation or otherwise, and may retain or employ such
assistants as may be necessary to the proper discharge of its powers and duties
and determination of its rights hereunder and may pay proper and reasonable
compensation for all such legal and other advice or assistance as aforesaid; and
 
(b)
 
employ such agents and other assistants as it may reasonably require for the
proper determination and discharge of its powers and duties hereunder, and may
pay reasonable remuneration for all services performed for it (and shall be
entitled to receive reasonable remuneration for all services performed by it) in
the discharge of the trusts hereof and compensation for all disbursements, costs
and expenses made or incurred by it in the discharge of its duties hereunder and
in the management of the Trust.
 

 
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Section 6.11 Investment of Moneys Held by Trustee
 
Unless otherwise provided in this Agreement, any moneys held by or on behalf of
the Trustee which under the terms of this Agreement may or ought to be invested
or which may be on deposit with the Trustee or which may be in the hands of the
Trustee may be invested and reinvested in the name or under the control of the
Trustee, in trust for the Corporation, in securities in which, under the laws of
the Province of Alberta, trustees are authorized to invest trust moneys,
provided that such securities are stated to mature within two years after their
purchase by the Trustee, and the Trustee shall so invest such moneys on the
written direction of the Corporation. Pending the investment of any moneys as
hereinbefore provided, such moneys may be deposited in the name of the Trustee
in any chartered bank in Canada or, with the consent of the Corporation, in the
deposit department of the Trustee or any other loan or trust company authorized
to accept deposits under the laws of Canada or any province thereof at the rate
of interest then current on similar deposits.
 
Section 6.12 Trustee Not Required to Give Security
 
The Trustee shall not be required to give any bond or security in respect of the
execution of the trusts, rights, duties, powers and authorities of this
Agreement or otherwise in respect of the premises.
 
Section 6.13 Trustee Not Bound to Act on Request
 
Except as in this Agreement otherwise specifically provided, the Trustee shall
not be bound to act in accordance with any direction or request of Acquiror
and/or the Corporation or of the directors thereof until a duly authenticated
copy of the instrument or resolution containing such direction or request shall
have been delivered to the Trustee, and the Trustee shall be empowered to act
and rely upon any such copy purporting to be authenticated and believed by the
Trustee to be genuine.
 
Section 6.14 Authority to Carry on Business
 
The Trustee represents to Acquiror and the Corporation that at the date of
execution and delivery by it of this Agreement it is authorized to carry on the
business of a trust company in each of the Provinces of Canada but if,
notwithstanding the provisions of this Section 6.14, it ceases to be so
authorized to carry on business, the validity and enforceability of this
Agreement and the Voting Rights, the Exchange Right and the Automatic Exchange
Rights shall not be affected in any manner whatsoever by reason only of such
event but the Trustee shall, within 90 days after ceasing to be authorized to
carry on the business of a trust company in any province of Canada, either
become so authorized or resign in the manner and with the effect specified in
Article 10.

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Section 6.15 Conflicting Claims
 
If conflicting claims or demands are made or asserted with respect to any
interest of any Beneficiary in any Exchangeable Shares, including any
disagreement between the heirs, representatives, successors or assigns
succeeding to all or any part of the interest of any Beneficiary in any
Exchangeable Shares, resulting in conflicting claims or demands being made in
connection with such interest, then the Trustee shall be entitled, at its sole
discretion, to refuse to recognize or to comply with any such claims or demands.
In so refusing, the Trustee may elect not to exercise any Voting Rights,
Exchange Right or Automatic Exchange Rights subject to such conflicting claims
or demands and, in so doing, the Trustee shall not be or become liable to any
person on account of such election or its failure or refusal to comply with any
such conflicting claims or demands. The Trustee shall be entitled to continue to
refrain from acting and to refuse to act until:
 
(a)
 
the rights of all adverse claimants with respect to the Voting Rights, Exchange
Right or Automatic Exchange Rights subject to such conflicting claims or demands
have been adjudicated by a final judgment of a court of competent jurisdiction
and all rights of appeal have expired; or
 
(b)
 
all differences with respect to the Voting Rights, Exchange Right or Automatic
Exchange Rights subject to such conflicting claims or demands have been
conclusively settled by a valid written agreement binding on all such adverse
claimants, and the Trustee shall have been furnished with an executed copy of
such agreement certified to be in full force and effect.
 

 
If the Trustee elects to recognize any claim or comply with any demand made by
any such adverse claimant, it may in its discretion require such claimant to
furnish such surety bond or other security satisfactory to the Trustee as it
shall deem appropriate to fully indemnify it as between all conflicting claims
or demands.
 
Section 6.16 Acceptance of Trust
 
The Trustee hereby accepts the Trust created and provided for by and in this
Agreement and agrees to perform the same upon the terms and conditions herein
set forth and to hold all rights, privileges and benefits conferred hereby and
by law in trust for the various persons who shall from time to time be
Beneficiaries, subject to all the terms and conditions herein set forth.

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Section 6.17 Maintenance of Office or Agency
 
Acquiror will maintain in Calgary, Alberta an office or agency where
certificates representing Exchangeable Shares may be presented or surrendered
for exchange by Beneficiaries and where notices and demands to or upon Acquiror
or the Corporation in respect of the Exchangeable Shares may be served. Acquiror
will give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time Acquiror shall fail to
maintain any such office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
served at the Corporate Trust Office of the Trustee, and Acquiror and the
Corporation hereby appoint the Trustee as their agent to receive all such
presentations, surrenders, notices and demands. Furthermore, copies of all
Acquiror proxy materials will be made available for inspection by any
Beneficiary at such office or agency.
 
 
ARTICLE 7
COMPENSATION
 
Section 7.1 Fees and Expenses of the Trustee
 
Acquiror and the Corporation jointly and severally agree to pay the Trustee
reasonable compensation for all of the services rendered by it under this
Agreement and will reimburse the Trustee for all reasonable expenses (including
taxes other than taxes based on the net income of the Trustee, fees paid to
legal counsel and other experts and advisors and travel expenses) and
disbursements, including the cost and expense of any suit or litigation of any
character and any proceedings before any governmental agency reasonably incurred
by the Trustee in connection with its duties under this Agreement; provided that
Acquiror and the Corporation shall have no obligation to reimburse the Trustee
for any expenses or disbursements paid, incurred or suffered by the Trustee in
any suit or litigation in which the Trustee is determined to have acted in bad
faith or with negligence, recklessness or wilful misconduct.
 
 
ARTICLE 8
INDEMNIFICATION AND LIMITATION OF LIABILITY
 
Section 8.1 Indemnification of the Trustee
 
Acquiror and the Corporation jointly and severally agree to indemnify and hold
harmless the Trustee and each of its directors, officers, employees and agents
appointed and acting in accordance with this Agreement (collectively, the
“Indemnified Parties”) against all claims, losses, damages, reasonable costs,
penalties, fines and reasonable expenses (including reasonable expenses of the
Trustee’s legal counsel) which, without fraud, negligence, recklessness, wilful
misconduct or bad faith on the part of such Indemnified Party, may be paid,
incurred or suffered by the Indemnified Party by reason or as a result of the
Trustee’s acceptance or administration of the Trust, its compliance with its
duties set forth in this Agreement, or any written or oral instruction delivered
to the Trustee by Acquiror or the Corporation pursuant hereto.

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In no case shall Acquiror or the Corporation be liable under this indemnity for
any claim against any of the Indemnified Parties unless Acquiror and the
Corporation shall be notified by the Trustee of the written assertion of a claim
or of any action commenced against the Indemnified Parties, promptly after any
of the Indemnified Parties shall have received any such written assertion of a
claim or shall have been served with a summons or other first legal process
giving information as to the nature and basis of the claim. Subject to (ii)
below, Acquiror and the Corporation shall be entitled to participate at their
own expense in the defense and, if Acquiror and the Corporation so elect at any
time after receipt of such notice, either of them may assume the defense of any
suit brought to enforce any such claim. The Trustee shall have the right to
employ separate counsel in any such suit and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of the Trustee
unless: (i) the employment of such counsel has been authorized by Acquiror or
the Corporation; or (ii) the named parties to any such suit include both the
Trustee and Acquiror or the Corporation and the Trustee shall have been advised
by counsel acceptable to Acquiror or the Corporation that there may be one or
more legal defenses available to the Trustee that are different from or in
addition to those available to Acquiror or the Corporation and that, in the
judgment of such counsel, would present a conflict of interest were a joint
representation to be undertaken (in which case Acquiror and the Corporation
shall not have the right to assume the defense of such suit on behalf of the
Trustee but shall be liable to pay the reasonable fees and expenses of counsel
for the Trustee). This indemnity shall survive the termination of this Agreement
and the resignation or removal of the Trustee.
 
Section 8.2 Limitation of Liability
 
The Trustee shall not be held liable for any loss which may occur by reason of
depreciation of the value of any part of the Trust Estate or any loss incurred
on any investment of funds pursuant to this Agreement, except to the extent that
such loss is attributable to the fraud, negligence, recklessness, wilful
misconduct or bad faith on the part of the Trustee.

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ARTICLE 9
CHANGE OF TRUSTEE
 
Section 9.1 Resignation
 
The Trustee, or any trustee hereafter appointed, may at any time resign by
giving written notice of such resignation to Acquiror and the Corporation
specifying the date on which it desires to resign, provided that such notice
shall not be given less than thirty (30) days before such desired resignation
date unless Acquiror and the Corporation otherwise agree and provided further
that such resignation shall not take effect until the date of the appointment of
a successor trustee and the acceptance of such appointment by the successor
trustee. Upon receiving such notice of resignation, Acquiror and the Corporation
shall promptly appoint a successor trustee, which shall be a corporation
organized and existing under the laws of Canada or any Province thereof, by
written instrument in duplicate, one copy of which shall be delivered to the
resigning trustee and one copy to the successor trustee. Failing the appointment
and acceptance of a successor trustee, a successor trustee may be appointed by
order of a court of competent jurisdiction upon application of one or more of
the parties to this Agreement. If the retiring trustee is the party initiating
an application for the appointment of a successor trustee by order of a court of
competent jurisdiction, Acquiror and the Corporation shall be jointly and
severally liable to reimburse the retiring trustee for its legal costs and
expenses in connection with same.
 
Section 9.2 Removal
 
The Trustee, or any trustee hereafter appointed, may (provided a successor
trustee is appointed) be removed at any time on not less than 30 days’ prior
notice by written instrument executed by Acquiror and the Corporation, in
duplicate, one copy of which shall be delivered to the trustee so removed and
one copy to the successor trustee.
 
Section 9.3 Successor Trustee
 
Any successor trustee appointed as provided under this Agreement shall execute,
acknowledge and deliver to Acquiror and the Corporation and to its predecessor
trustee an instrument accepting such appointment. Thereupon the resignation or
removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligations of its predecessor under this
Agreement, with the like effect as if originally named as trustee in this
Agreement. However, on the written request of Acquiror and the Corporation or of
the successor trustee, the trustee ceasing to act shall, upon payment of any
amounts then due it pursuant to the provisions of this Agreement, execute and
deliver an instrument transferring to such successor trustee all the rights and
powers of the trustee so ceasing to act. Upon the request of any such successor
trustee, Acquiror, the Corporation and such predecessor trustee shall execute
any and all instruments in writing for more fully and certainly vesting in and
confirming to such successor trustee all such rights and powers.

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Section 9.4 Notice of Successor Trustee
 
Upon acceptance of appointment by a successor trustee as provided herein,
Acquiror and the Corporation shall cause to be mailed notice of the succession
of such trustee hereunder to each Beneficiary specified in a List. If Acquiror
or the Corporation shall fail to cause such notice to be mailed within 10 days
after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of Acquiror and the
Corporation.
 
ARTICLE 10
ACQUIROR SUCCESSORS
 
Section 10.1 Certain Requirements in Respect of Combination, etc.
 
Acquiror shall not consummate any transaction (whether by way of reconstruction,
reorganization, consolidation, merger, transfer, sale, lease or otherwise)
whereby all or substantially all of its undertaking, property and assets would
become the property of any other person or, in the case of a merger, of the
continuing corporation resulting therefrom, but may do so if:
 
(a)
 
such other person or continuing corporation (herein called the “Acquiror
Successor”), by operation of law, becomes, without more, bound by the terms and
provisions of this Agreement or, if not so bound, executes, prior to or
contemporaneously with the consummation of such transaction, a trust agreement
supplemental hereto and such other instruments (if any) as are satisfactory to
the Trustee, acting reasonably, and in the opinion of legal counsel to the
Trustee are reasonably necessary or advisable to evidence the assumption by the
Acquiror Successor of liability for all moneys payable and property deliverable
hereunder (including without limitation one or more voting securities of such
Acquiror Successor to allow Beneficiaries to exercise voting rights in respect
of the Acquiror Successor substantially similar to those provided for in this
Agreement in respect of Acquiror) and the covenant of such Acquiror Successor to
pay and deliver or cause to be delivered the same and its agreement to observe
and perform all the covenants and obligations of Acquiror under this Agreement;
and
 

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(b)
 
such transaction shall be upon such terms and conditions as substantially to
preserve and not to impair in any material respect any of the rights, duties,
powers and authorities of the Trustee or of the Beneficiaries hereunder.
 

Section 10.2 Vesting of Powers in Successor
 
Whenever the conditions of Section 10.1 have been duly observed and performed,
the Trustee, Acquiror Successor and the Corporation shall, if required by
Section 10.1, execute and deliver the supplemental trust agreement provided for
in Article 11 and thereupon Acquiror Successor shall possess and from time to
time may exercise each and every right and power of Acquiror under this
Agreement in the name of Acquiror or otherwise and any act or proceeding by any
provision of this Agreement required to be done or performed by the Board of
Directors of Acquiror or any officers of Acquiror may be done and performed with
like force and effect by the directors or officers of such Acquiror Successor.
 
Section 10.3 Wholly-Owned Subsidiaries
 
Nothing herein shall be construed as preventing the amalgamation or merger of
any wholly-owned direct or indirect subsidiary of Acquiror with or into Acquiror
or the winding-up, liquidation or dissolution of any wholly-owned subsidiary of
Acquiror provided that all of the assets of such subsidiary are transferred to
Acquiror or another wholly-owned direct or indirect subsidiary of Acquiror and
any such transactions are expressly permitted by this Article 10.
 
Section 10.4 Successorship Transaction
 
Notwithstanding the foregoing provisions of this Article 10, in the event of an
Acquiror Control Transaction:
 
(a)
 
in which Acquiror merges or amalgamates with, or in which all or substantially
all of the then outstanding Acquiror Shares are acquired by, one or more other
corporations to which Acquiror is, immediately before such merger, amalgamation
or acquisition, “related” within the meaning of the Income Tax Act (Canada)
(otherwise than by virtue of a right referred to in paragraph 251(5)(b)
thereof);
 
(b)
 
which does not result in an acceleration of the Redemption Date in accordance
with paragraph (b) of that definition; and
 
(c)
 
in which all or substantially all of the then outstanding Acquiror Shares are
converted into or exchanged for shares or rights to receive such shares (the
“Other Shares”) of another corporation (the “Other Corporation”) that,
immediately after such Acquiror Control Transaction, owns or controls, directly
or indirectly, Acquiror;
 

 
then (i) all references herein to “Acquiror” shall thereafter be and be deemed
to be references to “Other Corporation” and all references herein to “Acquiror
Shares” shall thereafter be and be deemed to be references to “Other Shares”
(with appropriate adjustments, if any, as are required to result in a holder of
Exchangeable Shares on the exchange, redemption or retraction of such shares
pursuant to the Exchangeable Share Provisions or exchange of such shares
pursuant to this Agreement immediately subsequent to the Acquiror Control
Transaction being entitled to receive that number of Other Shares equal to the
number of Other Shares such holder of Exchangeable Shares would have received if
the exchange, redemption or retraction of such shares pursuant to the
Exchangeable Share Provisions or exchange of such shares pursuant to this
Agreement had occurred immediately prior to the Acquiror Control Transaction and
the Acquiror Control Transaction was completed) without any need to amend the
terms and conditions of this Agreement and without any further action required;
and (ii) Acquiror shall cause the Other Corporation to deposit one or more
voting securities of such Other Corporation to allow Beneficiaries to exercise
voting rights in respect of the Other Corporation substantially similar to those
provided for in this Agreement.
 
 
ARTICLE 11
AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
 
Section 11.1 Amendments, Modifications, etc.
 
This Agreement may not be amended or modified except by an agreement in writing
executed by Acquiror, the Corporation and the Trustee and approved by the
Beneficiaries in accordance with Section 10.2 of the Exchangeable Share
Provisions.
 
Section 11.2 Ministerial Amendments
 
Notwithstanding the provisions of Section 11.1, the parties to this Agreement
may in writing, at any time and from time to time, without the approval of the
Beneficiaries, amend or modify this Agreement for the purposes of
 
(a)
 
adding to the covenants of any or all parties hereto for the protection of the
Beneficiaries hereunder provided that the Board of Directors of each of the
Corporation and Acquiror shall be of the good faith opinion that such additions
will not be prejudicial to the rights or interests of the Beneficiaries;
 

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(b)
 
making such amendments or modifications not inconsistent with this Agreement as
may be necessary or desirable with respect to matters or questions which, in the
good faith opinion of the Board of Directors of each of Acquiror and the
Corporation and in the opinion of the Trustee, having in mind the best interests
of the Beneficiaries it may be expedient to make, provided that such Boards of
Directors and the Trustee, acting on the advice of counsel, shall be of the
opinion that such amendments and modifications will not be prejudicial to the
interests of the Beneficiaries; or
 
(c)
 
making such changes or corrections which, on the advice of counsel to Acquiror,
the Corporation and the Trustee, are required for the purpose of curing or
correcting any ambiguity or defect or inconsistent provision or clerical
omission or mistake or manifest error, provided that the Trustee, acting on the
advice of counsel, and the Board of Directors of each of Acquiror and the
Corporation shall be of the opinion that such changes or corrections will not be
prejudicial to the rights and interests of the Beneficiaries.

 
Section 11.3 Meeting to Consider Amendments
 
The Corporation, at the request of Acquiror, shall call a meeting or meetings of
the Beneficiaries for the purpose of considering any proposed amendment or
modification requiring approval pursuant hereto. Any such meeting or meetings
shall be called and held in accordance with the by-laws of the Corporation, the
Exchangeable Share Provisions and all applicable laws; provided that any such
meeting shall only be called for a bona fide business purpose and not for the
principal purpose of causing a Redemption Date to occur or transpire.
 
Section 11.4 Changes in Capital of Acquiror and the Corporation
 
At all times after the occurrence of any event contemplated pursuant to Section
2.7 or 2.8 of the Support Agreement or otherwise, as a result of which either
Acquiror Shares or the Exchangeable Shares or both are in any way changed, this
Agreement shall forthwith be deemed amended and modified as necessary in order
that it shall apply with full force and effect, mutatis mutandis, to all new
securities into which Acquiror Shares or the Exchangeable Shares or both are so
changed.
 
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Section 11.5 Execution of Supplemental Trust Agreements
 
No amendment to or modification or waiver of any of the provisions of this
Agreement otherwise permitted hereunder shall be effective unless made in
writing and signed by all of the parties hereto. From time to time the
Corporation, Acquiror and the Trustee may, subject to the provisions of these
presents, and they shall, when so directed by these presents, execute and
deliver by their proper officers, trust agreements or other instruments
supplemental hereto, which thereafter shall form part hereof, for any one or
more of the following purposes:
 
(a)
 
evidencing the succession of Acquiror Successors and the covenants of and
obligations assumed by each such Acquiror Successor in accordance with the
provisions of Article 10 and the successors of any successor trustee in
accordance with the provisions of Article 9;
 
(b)
 
making any additions to, deletions from or alterations of the provisions of this
Agreement or the Voting Rights, the Exchange Right or the Automatic Exchange
Rights which, in the opinion of the Trustee, will not be prejudicial to the
interests of the Beneficiaries or are, in the opinion of counsel to the Trustee,
necessary or advisable in order to incorporate, reflect or comply with any
legislation the provisions of which apply to Acquiror, the Corporation, the
Trustee or this Agreement; and
 
(c)
 
for any other purposes not inconsistent with the provisions of this Agreement,
including to make or evidence any amendment or modification to this Agreement as
contemplated hereby, provided that, in the opinion of the Trustee, the rights of
the Trustee and Beneficiaries will not be prejudiced thereby.
 

 
 
ARTICLE 12
TERMINATION
 
Section 12.1 Term
 
The Trust created by this Agreement shall continue until the earliest to occur
of the following events:
 
(a)
 
no outstanding Exchangeable Shares are held by a Beneficiary;
 
(b)
 
each of Acquiror and the Corporation elects in writing to terminate the Trust
and such termination is approved by the Beneficiaries in accordance with Section
10.2 of the Exchangeable Share Provisions; and
 
(c)
 
21 years after the death of the last survivor of the descendants of His Majesty
King George VI of Canada and the United Kingdom of Great Britain and Northern
Ireland living on the date of the creation of the Trust.
 

 
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Section 12.2 Survival of Agreement
 
This Agreement shall survive any termination of the Trust and shall continue
until there are no Exchangeable Shares outstanding held by a Beneficiary;
provided, however, that the provisions of Article 7 and Article 8 shall survive
any such termination of this Agreement.
 
ARTICLE 13
GENERAL
 
Section 13.1 Severability
 
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
 
Section 13.2 Assignment
 
No party hereto may assign this Agreement or any of its rights, interests or
obligations under this Agreement (whether by operation of law or otherwise)
except that the Corporation may assign in its sole discretion, any or all of its
rights, interests and obligations hereunder to any wholly-owned subsidiary of
Acquiror.
 
Section 13.3 Binding Effect
 
Subject to Section 13.2, this Agreement and the Arrangement shall be binding
upon, enure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns and to the benefit of the Beneficiaries.
 
Section 13.4 Notices to Parties
 
All notices and other communications hereunder shall be in writing and shall be
deemed given when delivered personally, telecopied (which is confirmed) or
dispatched (postage prepaid) to a nationally recognized overnight courier
service with overnight delivery instructions, in each case addressed to the
particular party at:
 
(a)
if to Acquiror or the Corporation, at:

c/o Surge Global Energy, Inc.
12220 El Camino Real, Suite 410
San Diego, California 92130

 
Attention: CEO and Chairman
Telecopier Number: (858) 704-5011
 
With copies to:
 
Greenberg Traurig, LLP
650 Town Center Drive, 17th Floor
Costa Mesa, California 92626

 
Attention: Steven Anapoell
Telecopier Number: (714) 708-6501
 
And:
 
Stikeman Elliott LLP
4300, 888 - 3rd Street S.W.
Calgary, Alberta T2P 5C5

 
Attention: Keith R. Chatwin
Telecopier Number: (403) 266-9034
 
(b)
if to the Trustee, at:

Olympia Trust Company
2300, 125 - 9th Avenue S.E.
Calgary, Alberta
T2G 0P6
 
Attention: Manager, Corporate and Shareholder Services
Telecopier Number: (403) 265-1455
 
or at such other address of which any party may, from time to time, advise the
other parties by notice in writing given in accordance with the foregoing.
 
Section 13.5 Notice to Beneficiaries
 
Any and all notices to be given and any documents to be sent to any
Beneficiaries may be given or sent to the address of such Beneficiary shown on
the register of holders of Exchangeable Shares in any manner permitted by the
by-laws of the Corporation from time to time in force in respect of notices to
shareholders and shall be deemed to be received (if given or sent in such
manner) at the time specified in such by-laws, the provisions of which by-laws
shall apply mutatis mutandis to notices or documents as aforesaid sent to such
Beneficiaries.
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Section 13.6 Counterparts
 
This Agreement may be executed in counterparts, each of which shall be deemed to
be an original but all of which together shall constitute one and the same
instrument.
 
Section 13.7 Governing Laws; Consent to Jurisdiction
 
This Agreement shall be governed by and construed in accordance with the laws of
Alberta. Each party hereby irrevocably attorns to the jurisdiction of the courts
of Alberta in respect of all matters arising under or in relation to this
Agreement and Acquiror hereby appoints Stikeman Elliott LLP as its registered
office in Alberta as attorney for service of process.
 
Section 13.8 United States Tax Characterization
 
The parties hereto recognize and intend that, for United States federal, state
and local income, franchise and similar tax purposes, the Trust will be
disregarded as an entity separate from Acquiror pursuant to Treas. Reg.
301.7701-3(b), and no party shall take any position on any tax return or
otherwise that is inconsistent with such treatment.
 

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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
 
SURGE GLOBAL ENERGY, INC.
 
By:
/s/ David Perez

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Name: David Perez
 
Title: CEO & Chairman
       
By:
/s/ William Greene

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Name: William Greene
Title: CFO
 
 
 
 
 
COLD FLOW ENERGY ULC
 
By:
/s/ David Perez

--------------------------------------------------------------------------------

Name: David Perez
Title: CEO and Chairman
 
 
 
 
By:

--------------------------------------------------------------------------------

Name:
Title:
 
 
 
 
 
OLYMPIA TRUST COMPANY
 
By:
/s/ Randy C. Gregory

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Name: Randy C. Gregory
Title: Vice President
 
 
 
 
By:
/s/ W. Anne DeWaele

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Name: W. Anne DeWaele
Title: Senior Trust Officer
 
 
 
 

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