<PAGE>

                                                                     EXHIBIT 4.4




                           FORDING CANADIAN COAL TRUST





                              DECLARATION OF TRUST





                                FEBRUARY 26, 2003









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                                TABLE OF CONTENTS


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ARTICLE 1
         THE TRUST AND DEFINITIONS...........................................  1
         1.1      Definitions................................................  1
         1.2      Certain Rules of Interpretation............................  7
         1.3      Initial Contribution.......................................  8
         1.4      Name.......................................................  9
         1.5      Use of Name................................................  9
         1.6      Office.....................................................  9
         1.7      Trust Auditors.............................................  9
         1.8      Change of Auditors.........................................  9
         1.9      Fiscal Year................................................  9
         1.10     Nature of the Trust........................................ 10
         1.11     Rights of Unitholders...................................... 10

ARTICLE 2
         TRUSTEES............................................................ 10
         2.1      Number..................................................... 10
         2.2      Term of Office............................................. 11
         2.3      Qualifications of Trustees................................. 11
         2.4      Election of Trustees....................................... 11
         2.5      Resignations, Removal and Death of Trustees................ 12
         2.6      Vacancies.................................................. 12
         2.7      Successor and Additional Trustees.......................... 12
         2.8      Compensation and Other Remuneration........................ 13

ARTICLE 3
         TRUSTEES' POWERS AND DUTIES......................................... 13
         3.1      General Powers............................................. 13
         3.2      Specific Powers and Authorities............................ 13
         3.3      Further Powers of the Trustees............................. 17
         3.4      Standard of Care........................................... 18
         3.5      Reliance Upon Trustees..................................... 18
         3.6      Determinations of Trustees Binding......................... 18
         3.7      Conflict of Interest....................................... 19
         3.8      Special Approval Matters................................... 21
         3.9      Restrictions on Trustees' Powers........................... 22

ARTICLE 4
         INVESTMENTS OF TRUST................................................ 23
         4.1      Investment Guidelines...................................... 23
         4.2      Other Investments.......................................... 24

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                                      -i-
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                                TABLE OF CONTENTS
                                   (continued)

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ARTICLE 5
         UNITS............................................................... 24
         5.1      Nature of Units............................................ 24
         5.2      Consolidation of Units..................................... 25
         5.3      Consideration for Units.................................... 25
         5.4      No Pre-Emptive Rights...................................... 25
         5.5      Fractional Units........................................... 25
         5.6      Legal Ownership of Assets of the Trust..................... 26
         5.7      Allotment and Issue........................................ 26
         5.8      Rights, Warrants, Options and Other Securities............. 26
         5.9      Commissions and Discounts.................................. 26
         5.10     Transferability............................................ 27
         5.11     Non-Resident Ownership Constraint.......................... 27
         5.12     Certificates............................................... 27
         5.13     Certificate Fee............................................ 28
         5.14     Form of Certificate........................................ 28
         5.15     Register................................................... 28
         5.16     Entry on Register.......................................... 28
         5.17     Successors in Interest to Unitholders...................... 28
         5.18     Units Held Jointly or in Fiduciary Capacity................ 29
         5.19     Recognition of Registered Owners........................... 29
         5.20     Lost Certificates.......................................... 29
         5.21     Death of a Unitholder...................................... 30
         5.22     Unclaimed Payments......................................... 30
         5.23     Redemption of Units........................................ 30
         5.24     Purchase of Units.......................................... 33
         5.25     Right to Acquire........................................... 33
         5.26     Dissenting Unitholders..................................... 36

ARTICLE 6
         MEETINGS OF UNITHOLDERS............................................. 37
         6.1      Annual Meeting............................................. 37
         6.2      Special Meetings........................................... 37
         6.3      Notice of Meeting of Unitholders........................... 38
         6.4      Quorum..................................................... 39
         6.5      Voting..................................................... 39
         6.6      Matters on which Unitholders Shall Vote.................... 39
         6.7      Record Dates............................................... 40
         6.8      Proxies.................................................... 40
         6.9      Personal Representatives................................... 41
         6.10     Attendance by Others....................................... 41
         6.11     Conduct of Meetings........................................ 41
         6.12     Binding Effect of Resolutions.............................. 41
         6.13     Resolution in Lieu of Meeting.............................. 41
         6.14     Actions by Unitholders..................................... 41
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                                      -ii-

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

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ARTICLE 7
         MEETINGS OF THE TRUSTEES............................................ 41
         7.1      Trustees May Act Without Meeting........................... 41
         7.2      Notice of Meeting.......................................... 42
         7.3      Quorum..................................................... 42
         7.4      Voting at Meetings......................................... 42
         7.5      Meeting by Telephone....................................... 42

ARTICLE 8
         DELEGATION OF POWERS................................................ 42
         8.1      General.................................................... 42
         8.2      Audit Committee............................................ 43
         8.3      Governance Committee....................................... 43
         8.4      Additional Committees...................................... 43
         8.5      Resident Canadians......................................... 44
         8.6      Management of the Trust.................................... 44

ARTICLE 9
         DISTRIBUTIONS....................................................... 44
         9.1      Distributions.............................................. 44
         9.2      Computation of Income and Net Realized Capital Gains....... 45
         9.3      Other Distributions........................................ 46
         9.4      Character of Distributions and Designations................ 47
         9.5      Enforceability of Right to Receive Distributions........... 47
         9.6      Method of Payment of Distributions......................... 47
         9.7      Withholding Taxes.......................................... 47
         9.8      Definitions................................................ 47
         9.9      Payments to Unitholders.................................... 48
         9.10     Distribution Reinvestment and Unit Purchase Plan........... 48

ARTICLE 10
         FEES AND EXPENSES................................................... 48
         10.1     Expenses................................................... 48

ARTICLE 11
         AMENDMENTS TO THE DECLARATION OF TRUST.............................. 49
         11.1     Amendments by the Trustees................................. 49
         11.2     Amendments by Unitholders.................................. 50
         11.3     No Termination............................................. 50

ARTICLE 12
         TERMINATION OF TRUST................................................ 50
         12.1     Duration of the Trust...................................... 50
         12.2     Termination by Unitholders................................. 50
         12.3     Effect of Termination...................................... 50
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                                      -iii-


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                                TABLE OF CONTENTS
                                   (continued)

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ARTICLE 13
         LIABILITIES OF THE TRUSTEES AND OTHERS.............................. 51
         13.1     Liability and Indemnification of the Trustees.............. 51
         13.2     Liability of the Trustees.................................. 51
         13.3     Reliance Upon Advice....................................... 51
         13.4     Liability of Unitholders and Others........................ 52
         13.5     Liability and Indemnification of the Unitholders........... 52
         13.6     Contracts of the Trust..................................... 52

ARTICLE 14
         GENERAL............................................................. 53
         14.1     Execution of Instruments................................... 53
         14.2     Cheques and Electronic Fund Transfers...................... 53
         14.3     Reports to Unitholders..................................... 53
         14.4     Taxation Information....................................... 53
         14.5     Tax Election............................................... 53
         14.6     Trust Property to be Kept Separate......................... 53
         14.7     Trust Records.............................................. 54
         14.8     Right to Inspect Documents................................. 54
         14.9     Consolidations............................................. 54

ARTICLE 15
         miscellaneous....................................................... 54
         15.1     Notices.................................................... 54
         15.2     Failure to Give Notice..................................... 55
         15.3     Severability............................................... 55
         15.4     Governing Law.............................................. 55
         15.5     Language................................................... 55
         15.6     Counterparts............................................... 56
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                                      -iv-


<PAGE>



                           FORDING CANADIAN COAL TRUST

                              DECLARATION OF TRUST


         THIS DECLARATION OF TRUST made in Calgary, Alberta, this 26th day of
February 2003.

         WHEREAS the Trust as herein provided is established for investment
purposes, as part of a plan of arrangement (the "Plan of Arrangement") which
provides for the reorganization of the business of Fording Inc. ("Old Fording")
under the Trust;

         AND WHEREAS, as part of the Plan of Arrangement, Fording Coal Limited
("FCL") will be wound up into Old Fording, and Old Fording will be wound up into
a former subsidiary of Old Fording, 4123212 Canada Ltd. ("Subco"). Subco,
subsequent to the commencement of the winding up of FCL and Old Fording, will be
referred to as "Fording";

         AND WHEREAS, for the purpose of settling the Trust hereunder, FCL (the
"Initial Holder") has transferred to the Initial Trustee all of the shares of
Subco (the "Initial Contribution") to be held in accordance with this
Declaration of Trust;

         AND WHEREAS the initial beneficiary of the Trust is FCL;

         AND WHEREAS it is intended as part of the Plan of Arrangement through a
series of steps that Units will be issued to participating shareholders of Old
Fording so that ultimately upon completion of the Plan of Arrangement the shares
of Fording will be wholly-owned by the Trust, and the unitholders of the Trust
at that time will be those former Old Fording shareholders who receive Units in
the Plan of Arrangement, and others who acquire Units as part of the Plan of
Arrangement;

         AND WHEREAS it is intended that the Trust qualify as a "mutual fund
trust" under the Tax Act;

         NOW THEREFORE, the undersigned Initial Trustee hereby confirms and
declares that the Initial Trustee holds in trust for the Initial Holder as
trustee the Initial Contribution and any and all other property, real, personal
or otherwise, tangible or intangible, which has been at the date hereof or is
hereafter transferred, conveyed or paid to or otherwise received by him as such
trustee or to which the Trust is otherwise entitled and all rents, income,
profits and gains therefrom for the benefit of the Unitholders hereunder in
accordance with and subject to the express provisions of this Declaration of
Trust, to wit:

                                   ARTICLE 1
                            THE TRUST AND DEFINITIONS

1.1      DEFINITIONS

         For the purposes of this Declaration of Trust, unless the context
otherwise requires, the following terms shall have the respective meanings set
out below:

<PAGE>

         "ADMINISTRATIVE SERVICES AGREEMENT" means the administrative services
         agreement to be entered into between the Trust and the Partnership,
         pursuant to which the Partnership will agree to provide or arrange for
         the provision of certain administrative and support services required
         for the administration of the Trust;

         "AFFILIATE" means, with respect to any Person (other than an
         individual), any other Person (other than an individual) directly or
         indirectly controlling, controlled by, or under direct or indirect
         common control with the first Person and with respect to any Principal
         Unitholder, includes any Person that is jointly controlled by that
         Principal Unitholder together with one or more other Principal
         Unitholders;

         "APPROVED OFFICERS" means the officers approved by the Trustees from
         time to time, which may include a Chief Executive Officer, President,
         Executive Vice-President, Chief Financial Officer, Treasurer,
         Controller or Corporate Secretary of the Trust;

         "ASSOCIATE" has the meaning given to it in the Securities Act;

         "AUDIT COMMITTEE" has the meaning ascribed to it in Section 8.2;

         "BUSINESS DAY" means a day which is not a Saturday, Sunday or a
         statutory holiday in the Province of Alberta or the Province of British
         Columbia, on which the principal commercial banks in downtown Calgary
         and Vancouver are generally open for the transaction of commercial
         banking business; and if the Trust distributes funds in the United
         States, business day also means a day which is not a Saturday, Sunday
         or a statutory holiday in New York, New York on which the principal
         commercial banks there are generally open for business;

         "CBCA" means the Canada Business Corporations Act, R.S.C. 1985, c.C-44,
         as amended;

         "CDS" means the Canadian Depository for Securities Limited and any
         successor;

         "CHAIR", "VICE-CHAIR", "PRESIDENT", "EXECUTIVE VICE-PRESIDENT", "CHIEF
         EXECUTIVE OFFICER", "CHIEF FINANCIAL OFFICER", "TREASURER",
         "CONTROLLER" and "SECRETARY" mean the Person(s) holding the respective
         offices from time to time if so appointed by the Trustees;

         "CLOSING TIME" means 7:00 a.m. (Mountain Standard Time) on the
         Effective Date or such other date and time as the Principal Unitholders
         shall agree;

         "COMBINATION AGREEMENT" means the combination agreement between Old
         Fording, Teck, Westshore, OTPP and Sherritt dated January 12, 2003;

         "CONSOL" means CONSOL Energy Inc., CONSOL Energy Canada Inc. and/or
         CONSOL of Canada Inc., as the case may be;

         "CONTROLLED BY" means: a Person is controlled by another Person or by
         two or more other Persons (i) if such Person or Persons hold voting
         securities of the first-mentioned Person carrying more than 50% of the
         votes that may be cast to elect the board of directors or other
         governing body of such first-mentioned Person, other than for the
         purpose of giving


                                       2
<PAGE>

         collateral for bona fide debt; and (ii) the votes attached to the
         securities in (i) are sufficient, if exercised, to elect a majority of
         the board of directors or other governing body of such first-mentioned
         Person. "CONTROL" and "CONTROLLING" have a corresponding meaning;

         "COURT" means the Alberta Court of Queen's Bench;

         "DECLARATION OF TRUST" means this declaration of trust as amended,
         supplemented or restated from time to time;

         "DEFERRED INCOME PLANS" means, collectively, trusts governed by
         registered retirement savings plans, registered retirement income plans
         and deferred profit sharing plans, each as defined in the Tax Act;

         "DIRECTOR" means a director of Fording from time to time;

         "DISSENTING OFFEREE" means, where a take-over bid is made for all of
         the Units other than those held by the offeror, a Unitholder who does
         not accept the take-over bid and includes a subsequent holder of those
         Units who acquires them from the first mentioned holder and, for the
         purposes of Section 5.25, includes a Dissenting Unitholder;

         "DISSENTING UNITHOLDER" has the meaning ascribed to it in Section 5.26;

         "DISTRIBUTABLE CASH" means in respect of each calendar year, (i) the
         cash received by the Trust from Fording; and (ii) any other net cash
         investment income from any other sources, including from the
         disposition of Trust assets; and (iii) any net cash remaining from a
         prior period that has not previously been distributed, less (x) costs,
         expenses and other obligations of the Trust that in the opinion of the
         Trustees are accrued and owing or otherwise have been or will be
         incurred by the Trust, including any tax liabilities of the Trust; and
         (y) any amounts paid in cash by the Trust in connection with the
         redemption of Units or other securities of the Trust;

         "DISTRIBUTION PAYMENT DATE" means in respect of a Distribution Period
         the 15th day of the month immediately following the month in which the
         corresponding Distribution Record Date occurs and, if such day is not a
         business day, the first business day after such date;

         "DISTRIBUTION PERIOD" means each calendar quarter of a calendar year,
         from and including the first day thereof, unless the Trustees
         unanimously determine to make distributions on a monthly basis, in
         which case this will be each calendar month of a calendar year, up to
         and including the last day thereof, provided that the initial
         Distribution Period shall commence on the Effective Date;

         "DISTRIBUTION RECORD DATE" means in respect of a Distribution Period
         the last business day of such Distribution Period;

         "EFFECTIVE DATE" means the date on which the Plan of Arrangement
         becomes effective as evidenced by the date on the Certificate of
         Arrangement to be issued pursuant to Section 192(7) of the CBCA;



                                       3
<PAGE>

         "EXCHANGE OPTION PLAN" has the meaning given to it in the Information
         Circular;

         "FCL" means Fording Coal Limited, a corporation existing under the laws
         of Canada;

         "FIRST SUPPLEMENT" means the supplement to the Information Circular
         dated December 8, 2002 and all appendices thereto;

         "FORDING" means Fording Inc., the successor corporation following the
         commencement of the winding-up of FCL into Old Fording, the
         commencement of the winding-up of Old Fording into Subco, and the
         renaming of Subco as "Fording Inc.", all of which will occur as part of
         the Plan of Arrangement;

         "FORDING COMMON SHARES" means the common shares in the capital of
         Fording;

         "FORDING PREFERRED SHARES" means the preferred shares in the capital of
         Fording;

         "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" means generally
         accepted accounting principles in Canada determined with reference to
         the Handbook of the Canadian Institute of Chartered Accountants as
         amended from time to time;

         "GOVERNANCE AGREEMENTS" means the four governance agreements to be
         entered into among the Trust and Fording and, separately, each of OTPP,
         Sherritt, Teck and Westshore;

         "GOVERNANCE COMMITTEE" has the meaning given to it in Section 8.3;

         "INCOME OF THE TRUST" has the meaning given to it in Section 9.2(a);

         "INDEPENDENT DIRECTOR" means a Director who:

         (a)      is not an insider of any of the Principal Unitholders or their
                  respective affiliates and, with respect to a Director
                  nominated by Sherritt and OTPP, is also not an insider of
                  Luscar or its affiliates, so long as Sherritt and OTPP,
                  jointly or severally, control Luscar;

         (b)      would qualify as an "unrelated director" (as defined in the
                  TSX Guidelines) of each of the Principal Unitholders, if the
                  Director was a director or trustee of each of the Principal
                  Unitholders; and

         (c)      would qualify as an "unrelated director" (as defined in the
                  TSX Guidelines) of Fording;

         "INDEPENDENT TRUSTEE" means a Trustee who:

         (a)      is not an insider of any of the Principal Unitholders or their
                  respective affiliates and, with respect to a Trustee nominated
                  by Sherritt and OTPP, is also not an insider of Luscar or its
                  affiliates, so long as Sherritt and OTPP, jointly or
                  severally, control Luscar;

         (b)      would qualify as an "unrelated director" (as defined in the
                  TSX Guidelines) of each of the Principal Unitholders, if the
                  Trustee was a director or trustee of each of the Principal
                  Unitholders; and

                                       4
<PAGE>

         (c)      would qualify as an "unrelated director" (as defined in the
                  TSX Guidelines) of the Trust;

         "INFORMATION CIRCULAR" means Old Fording's Notice of Special Meeting,
         Notice of Intention and Information Circular dated November 20, 2002,
         including all accompanying appendices thereto, as amended and
         supplemented by the First Supplement, Second Supplement and Third
         Supplement;

         "INITIAL CONTRIBUTION" has the meaning given to it in the recitals of
         this Declaration of Trust;

         "INITIAL HOLDER" has the meaning given to it in the recitals of this
         Declaration of Trust;

         "INITIAL TRUSTEE" means Michael Grandin;

         "INSIDER", in relation to a Principal Unitholder, means a director,
         trustee, officer or employee of that Principal Unitholder or any of its
         affiliates, or a director, trustee, officer or employee of any Person
         with a greater than 10% voting or economic interest in that Principal
         Unitholder or of any affiliates of that Person;

         "INTERNAL REORGANIZATION" means a reorganization of Fording or its
         assets provided that after such reorganization the Trust continues,
         directly or indirectly, to hold 100% of the economic and voting
         interests and 100% of the assets and liabilities of Fording or any
         successor thereto and for greater certainty, includes a continuance of
         Fording into another jurisdiction in Canada where the foregoing
         conditions apply;

         "LUSCAR" means Luscar Ltd., a corporation existing under the laws of
         Alberta;

         "MATERIAL AGREEMENTS" means the Note Indenture, Administrative Services
         Agreement, Governance Agreements and any other agreement expressly
         contemplated in the Information Circular or Combination Agreement and
         "MATERIAL AGREEMENT" means any one of them;

         "MONTHLY LIMIT" has the meaning given to it in Section 5.23(e)(i);

         "NET REALIZED CAPITAL GAINS OF THE TRUST" has the meaning given to it
         in Section 9.2(b);

         "NON-RESIDENT" means a Person who is not a resident or deemed not to be
         a resident of Canada for the purposes of the Tax Act;

         "NOTE INDENTURE" means the indenture by which the Subordinated Notes
         will be issued;

         "NYSE" means the New York Stock Exchange, Inc.;

         "OFFEREE" means a Person to whom a take-over bid is made;

         "OFFEROR" means a Person that makes, or two or more Persons acting
         jointly or in concert that make, a take-over bid;


                                       5
<PAGE>

         "OLD FORDING" has the meaning given to it in the recitals of this
         Declaration of Trust;

         "OTPP" means the Ontario Teachers' Pension Plan Board, a non-share
         capital corporation established under the laws of Ontario;

         "PARTNERSHIP" means Fording Coal Partnership, a general partnership
         formed under the laws of Alberta, the initial partners of which are
         FCL, Teck, Quintette Coal Partnership and Teck-Bullmoose Coal Inc.;

         "PARTNERSHIP AGREEMENT" means the partnership agreement dated the date
         hereof between FCL, Teck, Quintette Coal Partnership and Teck-Bullmoose
         Coal Inc., in respect of the Partnership;

         "PERSON" means an individual, sole proprietorship, body corporate,
         company, partnership, firm, entity, limited partnership, joint venture,
         trust or unincorporated organization, unincorporated syndicate,
         unincorporated trust, the Crown or any agency or instrumentality
         thereof and, where the context so requires, any of the foregoing when
         they are acting as trustee, executor, administrator or other legal
         representative;

         "PLAN OF ARRANGEMENT" has the meaning given to it in the recitals to
         this Declaration of Trust;

         "PRINCIPAL UNITHOLDERS" means Teck, Westshore, Sherritt and OTPP (and
         their respective affiliates that own Units);

         "REDEMPTION DATE" has the meaning set out in Section 5.23;

         "REDEMPTION PRICE" has the meaning set out in Section 5.23;

         "REGISTER" has the meaning set out in Section 5.15;

         "RESIDENT CANADIAN" means an individual who is a resident, or is deemed
         to be a resident, of Canada for purposes of the Tax Act;

         "SECOND SUPPLEMENT" means the supplement to the Information Circular
         dated December 30, 2002 and all appendices thereto;

         "SECURITIES ACT" means the Securities Act (Alberta), R.S.A. 2000, c.
         s-4;

         "SHERRITT" means Sherritt International Corporation, a corporation
         existing under the laws of New Brunswick;

         "SUBCO" means 4123212 Canada Ltd., a corporation existing under the
         CBCA into which Old Fording and FCL will wind-up as part of the Plan of
         Arrangement so that their respective assets and liabilities will be
         assigned and assumed by Subco, and which will change its name to
         "Fording Inc.";

         "SUBORDINATED NOTES" means the unsecured, subordinated promissory notes
         of Subco issuable pursuant to the Plan of Arrangement, the terms of
         which are governed by the Note Indenture;


                                       6
<PAGE>

         "SUBSIDIARY" means, with respect to a Person, any Person of which more
         than 50% of the outstanding voting interest ordinarily entitled to
         elect a majority of the board of directors thereof or equivalent Person
         (whether or not shares of any other class or classes shall or might be
         entitled to vote upon the happening of any event or contingency)is at
         the time owned directly or indirectly by such specified Person, and
         shall include any body corporate, partnership, joint venture or other
         entity over which it exercises direction or control or which is in a
         like relation to a subsidiary;

         "TAKE-OVER BID" has the meaning ascribed to it in the Securities Act;

         "TAX ACT" means the Income Tax Act (Canada), R.S.C. 1985, c.1 (5th
         Supplement);

         "TECK" means Teck Cominco Limited, a corporation existing under the
         laws of Canada;

         "THIRD SUPPLEMENT" means the supplement to the Information Circular
         dated January 27, 2003 and all appendices thereto;

         "TRUST" means the trust constituted hereunder but, for greater
         certainty, unless otherwise expressly provided, does not include any
         Subsidiaries or affiliates thereof;

         "TRUSTEES" means the trustees or trustee of the Trust from time to
         time;

         "TSX" means the Toronto Stock Exchange;

         "TSX GUIDELINES" means the corporate governance guidelines of the TSX,
         as amended from time to time;

         "UNITS" means the units of the Trust referred to in Section 5.1,
         authorized and issued hereunder;

         "UNITHOLDERS" means the registered holders from time to time of the
         Units; and

         "WESTSHORE" means Westshore Terminals Income Fund, an open-ended mutual
         fund trust existing under the laws of British Columbia.

1.2      CERTAIN RULES OF INTERPRETATION

         In this Declaration of Trust, unless otherwise expressly stated or the
context otherwise requires:

         (a)      references to "herein", "hereby", "hereunder", "hereof" and
                  similar expressions are references to this Declaration of
                  Trust and not to any particular Article or Section of this
                  Declaration of Trust;

         (b)      references to an "Article" or "Section" are references to an
                  Article or Section of this Declaration of Trust;

         (c)      words importing the singular shall include the plural and vice
                  versa, and words importing gender shall include the masculine,
                  feminine and neuter genders;


                                       7
<PAGE>

         (d)      the use of headings is for convenience of reference only and
                  shall not affect the construction or interpretation hereof;

         (e)      the words "includes" and "including", when following any
                  general term or statement, are not to be construed as limiting
                  the general term or statement to the specific items or matters
                  set forth or to similar items or matters, but rather as
                  referring to all other items or matters that could reasonably
                  fall within the broadest possible scope of the general term or
                  statement;

         (f)      for greater certainty, unless otherwise expressly provided
                  herein, where any reference is made in this Declaration of
                  Trust or in any resolution of Unitholders or Trustees to the
                  Trust as a party to any agreement or as an owner of property,
                  or to an act to be performed by or a covenant given by the
                  Trust, such reference shall be construed and applied for all
                  purposes as if it referred to the Trustees, in their capacity
                  as trustees of the Trust under this Declaration of Trust;

         (g)      unless otherwise specified, all references to money amounts
                  are to lawful currency of Canada;

         (h)      the language used in the Declaration of Trust is the language
                  chosen by the parties to express their mutual intent, and no
                  rule of strict construction shall be applied against any
                  party;

         (i)      a reference to a statute includes all regulations and rules
                  made pursuant to such statute and, unless otherwise specified,
                  the provisions of any statute or regulation which amends,
                  supplements or supersedes any such statute or any such
                  regulation;

         (j)      time is of the essence in the performance of the parties'
                  respective obligations; and

         (k)      wherever in this Declaration of Trust reference is made to a
                  calculation to be made or an action to be taken in accordance
                  with generally accepted accounting principles, such reference
                  will be deemed to be to GAAP applicable as at the date on
                  which such calculation or action is made or taken or required
                  to be made or taken.

1.3      INITIAL CONTRIBUTION

                  The Initial Holder has paid the Initial Contribution to the
Initial Trustee for the purpose of settling the Trust and the Initial Trustee
hereby acknowledges receipt of the Initial Contribution, and the Initial Holder
is hereby issued one Unit. The Initial Trustee agrees that he holds the Initial
Contribution in trust and any and all other property, real, personal or
otherwise, tangible or intangible, which has been at the date hereof or is
hereafter transferred, conveyed or paid to or otherwise received by him as such
trustee or to which the Trust is otherwise entitled and all rents, income,
profits and gains therefrom for the use and benefit of the Unitholders, their
assigns and personal representatives, upon the trusts and subject to the terms
and conditions set forth in this Declaration of Trust.


                                       8
<PAGE>

1.4      NAME

         The name of the Trust is Fording Canadian Coal Trust in its English
form and Fiducie houillere canadienne Fording in its French form. As far as
practicable and except as otherwise provided in this Declaration of Trust, the
Trustees shall conduct the affairs of the Trust, hold property, execute all
documents and take all legal proceedings under that name, in either its English
or French form.

1.5      USE OF NAME

         Should the Trustees determine that the use of the name Fording Canadian
Coal Trust in its English form or in its French form is not practicable, legal
or convenient, they may use such other designation, or they may adopt such other
name for the Trust, as they deem appropriate, and the Trust may hold property
and conduct its activities under such other designation or name.

1.6      OFFICE

         The principal office and centre of administration of the Trust shall be
at Suite 1000, 205-9th Avenue SE, Calgary, Alberta, T2G 0R4 or at such other
address in Canada as may be determined by the Trustees in their discretion. The
Trust may have such other offices or places for the conduct of its affairs as
the Trustees or management of the Trust or any of its Subsidiaries may from time
to time determine to be necessary or desirable.

1.7      TRUST AUDITORS

         The initial auditors of the Trust shall be PricewaterhouseCoopers LLP.
The auditors of the Trust shall be appointed at each annual meeting. If at any
time a vacancy occurs in the position of auditors of the Trust, the Trustees may
appoint a firm of chartered accountants qualified to practise in all provinces
of Canada (and if securities of the Trust are registered in the United States,
qualified to practice in front of the United States Securities & Exchange
Commission) to act as the auditors of the Trust until the next annual meeting of
Unitholders. The auditors of the Trust shall report to the Trustees and the
Unitholders on the annual financial statements of the Trust and shall fulfil
such other responsibilities as they may properly be called upon by the Trustees
to assume. The auditors shall have access to all records relating to the affairs
of the Trust. The auditors shall receive such remuneration as may be approved by
the Trustees.

1.8      CHANGE OF AUDITORS

         The auditors of the Trust may at any time be removed by the Trustees
with the approval of a majority of the votes cast by Unitholders, at a meeting
of Unitholders duly called for such purpose, and upon the resignation or removal
of the auditors of the Trust as aforesaid, the new auditors may be appointed by
a majority of votes cast by Unitholders at a meeting duly called for such
purpose or, in the absence of such meeting, by the Trustees.

1.9      FISCAL YEAR

         The fiscal year of the Trust shall end on December 31 in each year.


                                       9
<PAGE>

1.10     NATURE OF THE TRUST

         The Trust is an unincorporated open-ended investment trust. The Trust
shall be governed by the general law of trusts, except as such general law of
trusts has been or is from time to time modified, altered or abridged for
investment trusts or for the Trust by:

         (a)      applicable laws and regulations or other requirements imposed
                  by applicable securities or other regulatory authorities; and

         (b)      the terms, conditions and trusts set forth in this Declaration
                  of Trust.

         The beneficial interest and rights generally of a Unitholder in the
Trust shall be limited to the right to participate in distributions when and as
declared by the Trustees as contemplated by Article 9 and distributions upon the
termination of the Trust as contemplated in Article 12. The Trust is not and is
not intended to be, shall not be deemed to be and shall not be treated as a
general partnership, limited partnership, syndicate, association, joint venture,
company, corporation or joint stock company nor shall the Trustees or the
Unitholders or any of them for any purpose be, or be deemed to be treated in any
way whatsoever to be, liable or responsible hereunder as partners or joint
venturers. The Trustees are not intended to be and shall not be, or be deemed to
be, agents of the Unitholders. The relationship of the Unitholders to the
Trustees, to the Trust and to the property of the Trust shall be solely that of
beneficiaries in accordance with this Declaration of Trust.

1.11     RIGHTS OF UNITHOLDERS

         (a)      The rights of each Unitholder to call for a redemption of
                  Units or a distribution or division of assets, monies, funds,
                  income and capital gains held, received or realized by the
                  Trustees are limited to those contained herein.

         (b)      No Unitholder or Unitholders shall be entitled to interfere or
                  give any direction to the Trustees with respect to the affairs
                  of the Trust or in connection with the exercise of any powers
                  or authorities conferred upon the Trustees under this
                  Declaration of Trust, except as provided herein.

                                   ARTICLE 2
                                    TRUSTEES

2.1      NUMBER

         From and after the Closing Time there shall be no fewer than seven and
no more than nine Trustees. Prior to the Closing Time, the Initial Trustee shall
serve as trustee of the Trust to facilitate the establishment and organization
of the Trust and to take all advisable actions to permit its participation in
the Plan of Arrangement, as contemplated by the Combination Agreement and Plan
of Arrangement. From the Closing Time until changed in accordance with the
following paragraph, there shall be nine Trustees and such nine Trustees shall
be, without any further acts or approvals, the following individuals: Lloyd
Barber, Michael Grandin, Christoph Koether, Michael Parrett, Harry Schaefer,
William Stinson, Robert Wright, Peter Valentine and John Zaozirny.


                                       10
<PAGE>

         Subject to, and consistent with, Section 2.3 and the Governance
Agreements, the number of Trustees may be changed by the Trustees within such
limits and additional Trustees appointed by the Trustees, provided that the
Trustees may not, between meetings of Unitholders, appoint an additional Trustee
if, after such appointment, the total number of Trustees would be greater than
one and one-third times the number of Trustees in office immediately following
the last annual meeting of Unitholders. The number of Trustees may also be
changed by a resolution of the Unitholders.

2.2      TERM OF OFFICE

         The Trustees at the Closing Time shall hold office for a term expiring
at the close of the first annual meeting of Unitholders or until their
respective successors are elected or appointed and shall be eligible for
re-election. Thereafter, the Trustees shall be elected at each annual meeting of
Unitholders for a term expiring at the conclusion of the next annual meeting or
until their successors are elected or appointed and shall be eligible for
re-election. Trustees appointed by the Trustees between meetings of Unitholders
or to fill a vacancy, in each case in accordance with Sections 2.1 and 2.6,
shall be appointed for a term expiring at the time that is the earlier of the
conclusion of the next annual meeting of Unitholders and the election or
appointment of their successors and shall be eligible for election or
re-election. The first annual meeting of Unitholders shall be held prior to June
30, 2004 in respect of the financial year ending December 31, 2003.

2.3      QUALIFICATIONS OF TRUSTEES

         The following Persons are disqualified from being a Trustee: (i) anyone
who is less than 18 years of age; (ii) anyone who is of unsound mind and has
been so found by a court in Canada or elsewhere ("adjudicated incompetence");
(iii) a Person who is not an individual; (iv) a Person who has the status of
bankrupt; and (v) a Person who is an employee of the Partnership. A majority of
Trustees must be resident Canadians. In addition, a majority of the Trustees
must be Independent Trustees. If at any time a majority of Trustees are not
resident Canadians or a majority of the Trustees are not Independent Trustees,
by virtue of a resignation or otherwise, the remaining Trustees shall appoint,
consistent with Sections 2.1 and 2.6, a sufficient number of Trustees who are
resident Canadians and/or who are Independent Trustees to comply with these
requirements.

2.4      ELECTION OF TRUSTEES

         Except for the Initial Trustee and for the initial appointment of
Trustees at the Closing Time in accordance with this Declaration of Trust, the
Trustees shall be elected by the vote of Unitholders at a meeting of
Unitholders. Except in respect of the Trustees appointed at the Closing Time,
the appointment or election of any Trustee (other than an individual who is
serving as a Trustee immediately prior to such appointment or election) shall
not become effective unless and until such individual shall have in writing
accepted his appointment or election and agreed to be bound by the terms of this
Declaration of Trust. A quorum of the Trustees, as defined in Section 7.3, may
fill a vacancy in the Trustees, except a vacancy resulting from an increase in
the number of Trustees (other than as provided for in Section 2.1) or from a
failure of the Unitholders to elect the required number of Trustees at a meeting
of Unitholders. In the absence of a quorum of the Trustees, or if the vacancy
has arisen from a failure of the Unitholders to elect the required number of
Trustees at a meeting of Unitholders, the Trustees


                                       11
<PAGE>

shall forthwith call a special meeting of Unitholders to fill the vacancy. If
the Trustees fail to call such meeting or if there are no Trustees then in
office, notwithstanding Section 6.2, any Unitholder may call the meeting.

2.5      RESIGNATIONS, REMOVAL AND DEATH OF TRUSTEES

         A Trustee may resign at any time by an instrument in writing signed by
him and delivered or mailed to the Chair, President or Secretary of the Trust.
Such resignation shall take effect on the date such notice is received by the
Chair, President or Secretary of the Trust or at any later time specified in the
notice. A Trustee may be removed at any time with or without cause by a majority
of the votes cast at a meeting of Unitholders called for that purpose. The
vacancy created by such removal may be filled at the same meeting. Any removal
of a Trustee shall take effect immediately following the aforesaid vote, and any
Trustee so removed shall be so notified by the Chairman, Chief Executive Officer
or another officer of the Trust forthwith following such removal. Upon the
resignation or removal of any Trustee, or his otherwise ceasing to be a Trustee,
he shall: (i) cease to have the rights, privileges and powers of a Trustee
hereunder; (ii) execute and deliver such documents as the remaining Trustees
shall reasonably require for the conveyance of any Trust property held in his
name; (iii) account to the remaining Trustees as they may require for all
property which he holds as Trustee; and (iv) resign from all representative or
other positions held by him in the Trust, upon which he shall be discharged from
his obligations as Trustee. Upon the incapacity or death of any Trustee, his
legal representative shall execute and deliver on his behalf such documents as
the remaining Trustees may require as provided in this section. In the event
that a Trustee or his legal representative, as applicable, is unable or
unwilling to execute and deliver such required documents, each of the remaining
Trustees is hereby appointed as the attorney of such Trustee for the purpose of
executing and delivering such required documents.

2.6      VACANCIES

         The term of office of a Trustee shall terminate and a vacancy shall
occur in the event of the death, resignation, bankruptcy, adjudicated
incompetence or other incapacity to exercise the duties of the office, upon the
removal of such Trustee or upon the Trustee becoming employed by the
Partnership. No such vacancy shall operate to annul this Declaration of Trust or
affect the continuity of the Trust. Until vacancies are filled, the remaining
Trustee or Trustees (even if less than a quorum) may exercise the powers of the
Trustees hereunder.

2.7      SUCCESSOR AND ADDITIONAL TRUSTEES

         The right, title and interest of the Trustees in and to the property of
the Trust shall vest automatically in all Persons who may hereafter become
Trustees upon their due election or appointment and qualification without any
further act, except consenting in writing accepting such appointment and
agreeing to be bound by this Declaration of Trust and they shall thereupon have
all the rights, privileges, powers, obligations and immunities of Trustees
hereunder. Such right, title and interest shall vest in the Trustees whether or
not conveyancing documents have been executed and delivered pursuant to Section
2.5 or otherwise.


                                       12


<PAGE>
2.8       COMPENSATION AND OTHER REMUNERATION

                  The Trustees shall be paid such reasonable compensation for
their services as the Trustees may from time to time determine. Trustees shall
also be reimbursed for their reasonable travel and other expenses properly
incurred in acting as a Trustee. Any compensation payable to the Trustees
pursuant to this Declaration of Trust may be paid in cash, Units, securities
that are equivalent to or convertible into Units, or such other securities of
the Trust as the Trustees may determine from time to time, provided that the
value of any non-cash compensation does not exceed the cash compensation which
would otherwise be payable. Nothing contained herein shall preclude any Trustee
from serving the Trust in any other capacity and receiving remuneration
therefor.

                                    ARTICLE 3
                           TRUSTEES' POWERS AND DUTIES

3.1       GENERAL POWERS

                  The Trustees, subject only to the specific limitations
contained in this Declaration of Trust, including Section 4.1, shall have,
without further or other authorization and free from any control or direction on
the part of the Unitholders, full, absolute and exclusive power, control and
authority over the assets of the Trust and over the affairs of the Trust to the
same extent as if the Trustees were the sole owners of such assets in their own
right, to do all such acts and things as in their sole judgment and discretion
are necessary or incidental to, or desirable for, the carrying out of any of the
purposes of the Trust or the conducting of the affairs of the Trust. In
construing the provisions of this Declaration of Trust, there shall be a
presumption in favour of the power and authority having been granted to the
Trustees. The enumeration of any specific power or authority herein shall not be
construed as limiting the general powers or authority or any other specified
power or authority conferred herein on the Trustees. Except as specifically
expressly stated in law not to be subject to waiver, the Trustees shall in
carrying out investment activities not be in any way restricted by the
provisions of the laws of any jurisdiction limiting or purporting to limit
investments which may be made by trustees. Without limiting the generality of
the foregoing, subject to Section 4.1, the Trustees may make any investments
without being required to adhere to all of, or any particular portion of, the
investment criteria or diversification requirements set forth in the Trustee Act
(Alberta), as amended from time to time, including investments in mutual funds,
common trust funds, unit trusts and similar types of investment vehicles, to
alter or vary such investments from time to time in a like manner, to retain
such investments for such length of time as the Trustees, in their discretion,
determine and to delegate management and authority to discretionary managers of
investment funds as the Trustees in their discretion determine appropriate.

3.2       SPECIFIC POWERS AND AUTHORITIES

                  Subject only to the express limitations contained in this
Declaration of Trust, including Sections 3.8, 3.9 and 4.1, and in addition to
any powers and authorities conferred by this Declaration of Trust or which the
Trustees may have by virtue of any present or future statute or law, the
Trustees, without any action or consent by the Unitholders, shall have and may
exercise, on behalf of the Trust, at any time and from time to time, the
following powers and authorities which may or may not be exercised by them in
their sole judgment and discretion and in such manner and upon such terms and
conditions as they may from time to time deem proper:


                                       13
<PAGE>

          (a)  to supervise the activities and investments and conduct the
               affairs of the Trust;

          (b)  to supervise the public disclosure of the Trust as a public
               reporting issuer in accordance with applicable laws, including
               reviewing the quality and integrity of annual and interim
               financial statements, reviewing its accounting policies and
               practices; retaining, directing and monitoring the independence
               of the auditors; and reviewing the adequacy and effectiveness of
               the Trust's system of internal controls and procedures;

          (c)  to identify and recommend nominees as Trustees, monitor Trustee
               performance, establish Trustee compensation and develop and
               monitor the Trust's approach to corporate governance issues;

          (d)  to vote on behalf of and to represent the Trust as a shareholder
               and noteholder of Fording, including from and after the date
               following Closing Time voting for directors of Fording in the
               manner directed by the Unitholders as provided for in Section
               3.9(a);

          (e)  to establish the Trust's distribution policy and to declare
               distributions from the Trust to Unitholders as provided for in
               Article 9;

          (f)  to monitor the distribution policy and practices of Fording;

          (g)  to oversee the administration of the Exchange Option Plan and any
               other compensation arrangement involving the issue of Units;

          (h)  to adopt a written disclosure policy and insider trading policy;

          (i)  to maintain records and provide reports to Unitholders;

          (j)  to open, operate and close accounts and make other similar
               credit, deposit and banking arrangements and to negotiate and
               sign banking and financing contracts and agreements;

          (k)  to borrow money upon the credit of the Trust and the assets of
               the Trust;

          (l)  to issue, reissue, sell or pledge debt obligations of the Trust
               and to make, accept, endorse, negotiate or otherwise deal with
               bonds, debentures, cheques, drafts, notes, orders for the payment
               of money, bills of exchange, bills of lading, acceptances and
               other financial instruments and obligations;

          (m)  to mortgage, hypothecate, pledge or otherwise create a security
               interest in all or any movable or personal, immovable or real or
               other property of the Trust, owned or subsequently acquired, to
               secure any obligation of the Trust;

          (n)  to obtain security, including encumbrances on assets, to secure
               the full payment of monies owed to the Trust and the performance
               of obligations in favour of the Trust, and to exercise all of the
               rights of the Trust, and to perform all of the obligations of the
               Trust, under such security;

                                       14

<PAGE>
          (o)  to exercise and enforce any and all rights of foreclosure, to bid
               on property on sale or foreclosure, to take a conveyance in lieu
               of foreclosure with or without paying a consideration therefor
               and to exercise and enforce in any action, suit or proceeding at
               law or in equity any rights or remedies with respect to any such
               security or guarantee;

          (p)  to renew or extend or participate in the renewal or extension of
               any security, upon such terms as may be deemed advisable, and to
               set or agree to a reduction in the rate of interest on any
               security or to any other modification or change in the terms of
               any security or of any guarantee pertaining thereto, in any
               manner and to any extent that they may deem advisable; and to
               waive any default whether in performance of any covenant or
               condition of any security, or in the performance of any guarantee
               or to enforce the rights in respect of any such default in such
               manner and to such extent that they may deem advisable;

          (q)  to establish places of business of the Trust;

          (r)  to manage the assets of the Trust;

          (s)  to grant broad discretion to officers, employees or a third party
               to administer and manage the day-to-day operations of the Trust
               and to make executive decisions which conform to the general
               policies and principles set forth in this Declaration of Trust or
               otherwise established by the Trustees from time to time,
               including but not limited to entering into the Administrative
               Services Agreement;

          (t)  to invest and hold shares, units, beneficial interests,
               indebtedness, partnership interests, joint venture interests or
               other interests in any Person;

          (u)  to cause title to any of the assets of the Trust to be drawn up
               in the name of such Person on behalf of the Trust or, to the
               extent permitted by applicable law, in the name of the Trust, as
               the Trustees shall determine;

          (v)  to enter into any agreement or instrument to create or provide
               for the issue of Units, to cause such Units to be issued for such
               consideration as the Trustees, in their sole discretion, may deem
               appropriate and to do such things and prepare and sign such
               documents to qualify such Units for sale in whatever
               jurisdictions in which they will be sold or offered for sale;

          (w)  to redeem Units in accordance with Section 5.23;

          (x)  to issue and deliver in specie distributions to Unitholders in
               accordance with Section 5.23(f);

          (y)  to make or cause to be made application for the listing or
               quotation on any stock exchange or market of any Units or other
               securities of the Trust, and to do all things which in the
               opinion of the Trustees may be necessary or desirable to effect
               or maintain such listing or listings or quotation;

                                       15

<PAGE>
          (z)  to determine conclusively the value of any or all of the assets
               of the Trust from time to time and, in determining such value, to
               consider such information and advice as the Trustees in their
               sole judgment may deem material and reliable;

          (aa) to collect, sue for and receive all sums of money due to the
               Trust;

          (bb) to invest funds of the Trust as provided in Article 4;

          (cc) where reasonably required, to engage or employ on behalf of the
               Trust any Persons as agents, representatives, employees or
               independent contractors (including investment advisors,
               registrars, underwriters, accountants, lawyers, appraisers,
               brokers or otherwise) in one or more capacities;

          (dd) except as prohibited by applicable law, to delegate any of the
               powers and duties of the Trustees to any one or more agents,
               representatives, officers, employees, independent contractors or
               other Persons, including Fording or the Partnership, without
               liability to the Trustees, except as provided in this Declaration
               of Trust;

          (ee) to engage in, intervene in, prosecute, join, defend, compromise,
               abandon or adjust, by arbitration or otherwise, any actions,
               suits, disputes, claims, demands or other litigation or
               proceedings, regulatory or judicial, relating to the Trust, the
               assets of the Trust or the Trust's affairs; to enter into
               agreements therefor, whether or not any suit or proceeding is
               commenced or claim asserted and, in advance of any controversy,
               to enter into agreements regarding the arbitration, adjudication
               or settlement thereof;

          (ff) to arrange for insurance contracts and policies insuring the
               Trust, its assets and/or any or all of the Trustees, officers,
               employees or agents of the Trust, in their capacity as such,
               including against any and all claims and liabilities of any
               nature asserted by any Person arising by reason of any action
               alleged to have been taken or omitted by the Trust or by the
               Trustees, officers, employees or agents of the Trust;

          (gg) in addition to the mandatory indemnification provided for in
               Sections 13.1 and 13.5, to the extent permitted by law, to
               indemnify, or enter into agreements with respect to the
               indemnification of, any Person with whom the Trust has dealings
               including the Trustees, CDS, officers or employees of the Trust,
               the Trust's registrar and transfer agent or escrow agent, to such
               extent as the Trustees shall determine;

          (hh) to cause legal title to any of the assets of the Trust to be held
               by and/or in the name of a Trustee or, except as prohibited by
               law, by and/or in the name of the Trust or any other custodian or
               Person, on such terms, in such manner, with such powers in such
               Person as the Trustees may determine and with or without
               disclosure that the Trust or the Trustee is interested therein;
               provided, however, that should legal title to any of the assets
               of the Trust be held by and/or in the name of any Person or
               Persons other than a Trustee or the Trust or a wholly-owned
               Subsidiary of the Trust, the Trustees shall require such Person
               or Persons

                                       16
<PAGE>


               to execute a trust agreement acknowledging that legal title to
               such assets is held in trust for the benefit of the Trust;

          (ii) to make, execute, acknowledge and deliver any and all deeds,
               contracts, waivers, releases or other documents of transfer and
               any and all other instruments in writing necessary or proper for
               the exercise of any of the powers herein granted, including under
               the Material Agreements;

          (jj) to make, execute, acknowledge and deliver the subordination
               agreement to be entered into at the Closing Time by Royal Bank of
               Canada as agent, the Trust, Computershare Trust Company of
               Canada, as trustee, and Fording;

          (kk) to establish systems to monitor the qualification of the Trust as
               a "mutual fund trust" pursuant to subsection 132(6) of the Tax
               Act and that Units are not considered "foreign property" for the
               purposes of the Tax Act;

          (ll) to pay all taxes or assessments, of whatever kind or nature,
               whether within or outside Canada, imposed upon or against the
               Trustees in connection with the assets of the Trust, undertaking
               or taxable income of the Trust, or imposed upon or against the
               assets of the Trust, undertaking or taxable income of the Trust,
               or any part thereof and to settle or compromise disputed tax
               liabilities and for the foregoing purposes to make such returns,
               take such deductions, and make such designations, elections and
               determinations in respect of the income of the Trust or Net
               Realized Capital Gains of the Trust distributed to Unitholders in
               the year and any other matter as shall be permitted under the Tax
               Act (provided that to the extent necessary the Trustees will seek
               the advice of the Trust's counsel or its auditor), and do all
               such other acts and things as may be deemed by the Trustees in
               their sole discretion to be necessary, desirable or convenient;
               and

          (mm) to do all such other acts and things as are incidental to the
               foregoing, and to exercise all powers which are necessary or
               useful to carry on the purpose and activities of the Trust, to
               promote any of the purposes for which the Trust is formed and to
               carry out the provisions of this Declaration of Trust.

3.3       FURTHER POWERS OF THE TRUSTEES

                  The Trustees shall have the power to prescribe any form
provided for or contemplated by this Declaration of Trust. The Trustees may
make, adopt, amend, or repeal regulations containing provisions relating to the
Trust, the conduct of its affairs, the rights or powers of the Trustees and the
rights or powers of the Unitholders or officers of the Trust, provided that such
regulations shall not be inconsistent with law or with this Declaration of Trust
and not, in the opinion of the Trustees, prejudicial to Unitholders. The
Trustees shall also be entitled to make any reasonable decisions, designations
or determinations not inconsistent with law or with this Declaration of Trust
that they may determine are necessary or desirable in interpreting, applying or
administering this Declaration of Trust or in administering, managing or
operating the Trust. To the extent of any inconsistency between this Declaration
of Trust and any regulation, decision, designation or determination made by the
Trustees, this Declaration of Trust shall prevail and such regulation, decision,
designation or determination shall be deemed to be modified to eliminate such
inconsistency. Any regulations, decisions, designations or

                                       17

<PAGE>
determinations made in accordance with this section shall be conclusive and
binding upon all Persons affected thereby.

                  Subject to any agreement between the Trust and any Trustee and
subject as otherwise herein provided, the Trustees may from time to time in
their discretion appoint, employ, invest in, contract or deal with any Person
including any affiliate of any of them and any Person in which any one or more
of them may be directly or indirectly interested and, without limiting the
generality of the foregoing, any Trustee may purchase, hold, sell, invest in or
otherwise deal with property of the same class and nature as may be held by the
Trustees as property of the Trust, whether for the Trustee's own account or for
the account of another (in a fiduciary capacity or otherwise), without being
liable to account therefor and without being in breach of his duties and
responsibilities hereunder.

3.4       STANDARD OF CARE

                  The exclusive standard of care required of the Trustees in
exercising their powers and carrying out their functions hereunder shall be that
they exercise their powers and discharge their duties hereunder as Trustees
honestly, in good faith and in the best interests of the Trust and the
Unitholders and in connection therewith, that they exercise the degree of care,
diligence and skill that a reasonably prudent Person would exercise in
comparable circumstances. Unless otherwise required by law, no Trustee shall be
required to give bond, surety or security in any jurisdiction for the
performance of any duties or obligations hereunder. The Trustees in their
capacity as Trustees shall not be required to devote their entire time to the
affairs of the Trust. It is intended that the standard of care and the duties of
the Trustees be equivalent to and interpreted as equivalent to those applicable
to a director of a corporation governed by the CBCA.

3.5       RELIANCE UPON TRUSTEES

                  Any Person dealing with the Trust in respect of any matters
pertaining to the assets of the Trust and any right, title or interest therein
or to securities of the Trust shall be entitled to rely on a certificate or
statutory declaration (including a certificate or statutory declaration as to
the passing of a resolution of the Trustees) executed by any single Trustee or,
without limiting the foregoing, such other Persons as may be authorized by the
Trustees as to the capacity, power and authority of the Trustees or any such
other Persons to act for and on behalf and in the name of the Trust. No Persons
dealing with the Trustees shall be bound to see to the application of any funds
or property passing into the hands or control of the Trustees. The receipt by or
on behalf of the Trustees for monies or other consideration shall be binding
upon the Trust.

3.6       DETERMINATIONS OF TRUSTEES BINDING

                  All determinations of the Trustees that are made in good faith
with respect to any matters relating to the Trust, including whether any
particular investment or disposition meets the requirements of this Declaration
of Trust, shall be final and conclusive and shall be binding upon the Trust and
all Unitholders (and, where the Unitholder is a Deferred Income Plan, registered
education savings plan or registered pension fund or plan as defined in the Tax
Act, or other similar fund or plan registered under the Tax Act, upon plan
beneficiaries and plan holders past, present and future), and Units shall be
issued and sold on the condition and understanding that any and all such
determinations shall be binding as aforesaid.


                                       18


<PAGE>
3.7       CONFLICT OF INTEREST

                  If a Trustee or an officer of the Trust: (i) is a party to a
material agreement or material transaction or proposed material agreement or
material transaction with the Trust or its Subsidiaries (including, for greater
certainty, the Partnership and any of its Subsidiaries); or (ii) is a director
or officer of, or otherwise has a material interest in, any Person who is a
party to a material agreement or material transaction or proposed material
agreement or material transaction with the Trust or its Subsidiaries (including,
for greater certainty, the Partnership and any of its Subsidiaries), such
Trustee or officer shall disclose in writing to the Trustees or request to have
entered into the minutes of meetings of the Trustees the nature and extent of
such interest as follows:

          (a)  The disclosure required in the case of a Trustee shall be made:

               (i)   at the meeting of Trustees at which a proposed contract or
                     transaction is first considered;

               (ii)  if the Trustee was not then interested in a proposed
                     contract or transaction, at the first such meeting of
                     Trustees after he becomes so interested;

               (iii) if the Trustee becomes interested after a contract is made
                     or a transaction is entered into, at the first meeting of
                     Trustees after he becomes so interested; or

               (iv)  if an individual who is interested in a contract or
                     transaction later becomes a Trustee, at the first such
                     meeting of Trustees after he becomes a Trustee.

          (b)  The disclosure required in the case of an officer of the Trust
               who is not a Trustee shall be made:

               (i)   immediately after such officer becomes aware that the
                     contract or transaction or proposed contract or transaction
                     is to be considered or has been considered at a meeting of
                     the Trustees;

               (ii)  if such officer becomes interested after a contract is made
                     or transaction is entered into, immediately after such
                     individual becomes aware that he has become so interested;
                     or

               (iii) if an individual who is interested in a contract or a
                     transaction later becomes an officer of the Trust,
                     immediately after he becomes an officer of the Trust.

          (c)  Notwithstanding Sections 3.7(a) and (b), where this Section
               applies to a Trustee or officer of the Trust in respect of a
               material agreement or transaction or proposed material agreement
               or transaction that, in the ordinary course of the affairs of the
               Trust, would not require approval by the Trustees or the
               Unitholders, such Trustee or officer of the Trust shall disclose
               in writing to the Trustees or request to have entered into the
               minutes of meetings of the Trustees the nature and

                                       19



<PAGE>
               extent of the interest of such Trustee or officer of the Trust
               immediately after he becomes aware of the contract or transaction
               or proposed contract or transaction.

          (d)  A Trustee referred to in this Section shall not vote on any
               resolution to approve the said contract or transaction unless the
               contract or transaction is:

               (i)  one relating primarily to his remuneration as a Trustee,
                    officer, employee or agent of the Trust or an affiliate; or

               (ii) one for indemnity under Section 13.1 hereof or the purchase
                    of liability insurance.

          (e)  For the purposes hereof, a general notice to the Trustees by a
               Trustee or an officer of the Trust disclosing that he is a
               director or officer of or has a material interest in a Person or
               that there has been a material change in the nature of the
               director's or officer's interest in a Person and such Trustee or
               officer of the Trust is to be regarded as interested in any
               contract made or any transaction entered into with that Person is
               a sufficient disclosure of interest in relation to any contract
               so made or transaction so entered into. In the event that a
               meeting of Unitholders is called to confirm or approve a contract
               or transaction which is the subject of a general notice to the
               Trustees, the nature and extent of the interest in the contract
               or transaction of the Person giving such general notice shall be
               disclosed in reasonable detail in the notice calling the said
               meeting of Unitholders or in any information circular required by
               this Declaration of Trust or by law.

          (f)  Where a material agreement is made or a material transaction is
               entered into between the Trust and a Trustee or an officer of the
               Trust, or between the Trust and another Person in which a Trustee
               or an officer of the Trust has a material interest:

               (i)  such Trustee or officer is not accountable to the Trust or
                    to the Unitholders for any profit or gain realized from the
                    contract or transaction; and

               (ii) the contract or transaction is not invalid by reason only of
                    that relationship or by reason only that such Trustee is
                    present at or is counted to determine the presence of a
                    quorum at the meeting of the Trustees that authorized the
                    contract or transaction;

               if such Trustee or officer disclosed his interest in accordance
               with this Section 3.7, and the contract or transaction was
               reasonable and fair to the Trust at the time it was so approved.

          (g)  Notwithstanding anything in this Section, but without limiting
               the effect of Section 3.7(f), a Trustee or an officer of the
               Trust, acting honestly and in good faith, is not accountable to
               the Trust or to the Unitholders for any profit or gain realized
               from any such contract or transaction by reason only of his
               holding such office or position, and the contract or transaction,
               if it was reasonable and fair to the Trust at the time it was
               approved, is not by reason only of such Trustee's or officer's
               interest therein invalid, where:

                                       20



<PAGE>
               (i)  the contract or transaction is confirmed or approved by
                    special resolution at a meeting of Unitholders duly called
                    for that purpose; and

               (ii) the nature and extent of such Trustee's or officer's
                    interest in the contract or transaction are disclosed in
                    reasonable detail in the notice calling the meeting or in
                    any information circular required by this Declaration of
                    Trust or by law.

          (h)  Subject to Sections 3.7(f) and 3.7(g), where a Trustee or an
               officer of the Trust fails to disclose his interest in a material
               agreement or transaction in accordance with this Declaration of
               Trust or otherwise fails to comply with this Section, the
               Trustees or any Unitholder, in addition to exercising any other
               rights or remedies in connection with such failure exercisable at
               law or in equity, may apply to a court for an order setting aside
               the contract or transaction and the court may set aside the
               contract or transaction on any terms that it thinks fit, or
               require that such Trustee or officer account to the Trust for any
               profit or gain realized on it, or do both those things.

          (i)  Notwithstanding anything in this Declaration of Trust, any
               contract or transaction between the Trust and its, directly and
               indirectly, wholly-owned Subsidiaries is not considered to give
               rise to the application of this Section. Further, the interest of
               an officer of the Trust or its Subsidiaries (who is also an
               officer or employee of the Partnership) in any transactions
               between the Partnership and the Trust or its Subsidiaries, whose
               only interest arises by virtue of being an officer or employee of
               the Partnership, is deemed to have been disclosed. For so long as
               Teck is a partner of the Partnership, the interest of any Trustee
               in any transactions between the Partnership and the Trust or its
               Subsidiaries whose only interest arises by virtue of such Trustee
               being a director, officer or employee of Teck or its affiliates
               is deemed to have been disclosed.

          (j)  Subject to applicable laws, nothing in this Declaration of Trust
               shall prevent a Trustee from purchasing, selling or holding Units
               in his personal capacity, nor shall anything herein create any
               personal liability for such Trustee to account to the Trust or
               the Unitholders for any profits from such purchasing, selling or
               holding of Units.

3.8       SPECIAL APPROVAL MATTERS

          (a)  Notwithstanding anything herein to the contrary, the approval of
               a majority of the Trustees other than the nominee of the
               Principal Unitholder in question shall be required with respect
               to any decision:

               (i)  to enter into any agreement or transaction in which that
                    Principal Unitholder has a material interest or make a
                    material change to any such agreement or transaction, except
                    to give effect to any transaction contemplated in the
                    Combination Agreement or any agreement referred to therein;
                    or

                                       21
<PAGE>

               (ii)  relating to a claim by or against or enforcement or waiver
                     of material rights in respect of that Principal Unitholder.

          (b)  Notwithstanding anything herein to the contrary, the approval of
               the Independent Trustees shall be required with respect to any
               decision to appoint a Person who is a director, officer or
               employee of Teck or its affiliates or the Partnership as an
               officer of the Trust.

3.9       RESTRICTIONS ON TRUSTEES' POWERS

                  Notwithstanding anything herein to the contrary, the following
restrictions shall apply to the Trustees:

          (a)  From and after the date following the Closing Time, the Trustees
               shall vote the Fording Common Shares in favour of the nominees to
               the Fording board of directors approved by, or in favour of
               removal of any director when such removal is approved by, more
               than 50% of the votes cast at a meeting of Unitholders called for
               such purpose provided that:

               (i)   none of the nominees is an employee of the Partnership;

               (ii)  a majority of the nominees are Independent Directors; and

               (iii) a majority of the nominees are not Trustees.

               In the event that the Unitholders approve nominees such that the
               election of such nominees would not comply with the foregoing,
               the Trustees may appoint such other Persons as Directors as is
               necessary to result in compliance.

          (b)  The Trustees shall not authorize:

               (i)   any combination, merger, amalgamation or arrangement of the
                     Trust or Fording with any other Person, except in
                     conjunction with an Internal Reorganization;

               (ii)  any disposition of all or substantially all of the assets
                     of the Trust or Fording, except in conjunction with an
                     Internal Reorganization;

               (iii) the disposition of any securities of Fording held by the
                     Trust, except in conjunction with (I) an Internal
                     Reorganization; or (II) pursuant to the redemption rights
                     of Unitholders as set out in Section 5.23 of this
                     Declaration of Trust;

               (iv)  the issuance of any shares in the capital of Fording, other
                     than to the Trust or another wholly-owned Subsidiary of the
                     Trust or except in connection with the satisfaction of the
                     redemption rights in respect of the Units;

               (v)   the amendment of the articles of Fording, except in
                     conjunction with an Internal Reorganization or except if
                     the Independent Trustees determine that there is no
                     prejudice to Unitholders from such amendment;


                                       22


<PAGE>
               (vi)  the liquidation or dissolution of Fording, except in
                     conjunction with an Internal Reorganization; or

               (vii) the voluntary termination, dissolution or winding up of the
                     Trust;

               without the authorization of at least 66 2/3% of the votes cast
               at a meeting of the Unitholders called for such purpose.

          (c)  For a period of five years from the Effective Date and provided
               that Luscar holds, directly or indirectly from the Closing Time,
               any Units, the Trustees shall not authorize the disposition by
               the Trust of more than 90% of the Fording Common Shares except:

               (i)   in conjunction with an Internal Reorganization such that
                     the Trust remains the sole direct or indirect holder of the
                     Fording Common Shares; or

               (ii)  pursuant to the redemption rights of Unitholders as set out
                     in this Declaration of Trust;

               without the authorization of at least 75% of the votes cast at a
               meeting of the Unitholders called for such purpose.

                                    ARTICLE 4
                              INVESTMENTS OF TRUST

4.1       INVESTMENT GUIDELINES

                  Subject to the terms and conditions of this Declaration of
Trust, the Trust is an open-ended trust and its operations and activities shall
be restricted to:

          (a)  investing in such securities as may be approved from time to time
               by the Trustees, including the Fording Common Shares, the Fording
               Preferred Shares and the Subordinated Notes and any other
               securities of Fording and otherwise lending funds to Fording and
               its affiliates and borrowing funds for any such purpose;

          (b)  issuing guarantees of the obligations and indebtedness of any of
               its directly or indirectly wholly-owned Subsidiaries and
               charging, pledging, hypothecating or granting any security
               interest, mortgage or encumbrance over or with respect to any or
               all of the Trust's assets in connection with any such guarantee;

          (c)  issuing Units;

          (d)  issuing debt securities or borrowing Funds (including by means of
               letters of credit, bank guarantees and bankers' acceptances);

          (e)  purchasing securities pursuant to any issuer bid made by the
               Trust;

          (f)  issuing rights and Units pursuant to any Unitholder rights plan
               adopted by the Trust;


                                       23

<PAGE>

(g)      satisfying obligations of the Trust;

(h)      disposing of any part of the assets of the Trust;

(i)      temporarily holding cash, short term investments and other investments
         for the purpose of paying the expenses and liabilities of the Trust,
         paying amounts payable by the Trust in connection with the redemption
         of any Units or other securities of the Trust and making distributions
         to Unitholders; and

(j)      undertaking such other activities as shall be approved by the Trustees
         from time to time or which are contemplated by this Declaration of
         Trust provided that such activity does not result in the Trust not
         being considered either a "unit trust" or a "mutual fund trust" for
         purposes of the Tax Act or in the Units being considered as "foreign
         property" for the purposes of Part XI of the Tax Act.

4.2      OTHER INVESTMENTS

                  To the extent that any monies or other property received by
the Trust or the Trustees are not to be immediately used by the Trustees for the
purpose of making distributions under Article 9 of this Declaration of Trust,
the Trustees are hereby authorized and, where prudent to do so, shall invest
such monies in: (i) debt obligations of or guaranteed by the Government of
Canada or a province of Canada; (ii) short term commercial paper obligations of
a corporation whose short term commercial paper is rated R-1 or higher by
Dominion Bond Rating Service Limited or A-1 or higher by Standard and Poor's
Corporation; or (iii) interest-bearing accounts and certificates of deposit
issued or guaranteed by a Canadian chartered bank or any other bank which lends
to the Trust or Fording. For the purpose hereof, "short term" shall mean having
a date of maturity or call for payment not more than 90 days from the date on
which the investment is made.

                                    ARTICLE 5
                                      UNITS

5.1      NATURE OF UNITS

         (a)      The beneficial interests in the Trust shall be divided into
                  Units, which shall be entitled to the rights and subject to
                  the limitations, restrictions and conditions set out herein,
                  and the interest of each Unitholder shall be determined by the
                  number of Units registered in the name of the Unitholder. The
                  aggregate number of Units which is authorized and may be
                  issued hereunder is unlimited.

         (b)      Any distribution from the Trust and any payment out of the net
                  assets of the Trust upon a termination or winding up of the
                  Trust shall be divided among and paid to Unitholders on a pro
                  rata basis. Each Unit represents the right to an equal
                  interest in the portion of any distributions or other amounts
                  payable to Unitholders. All Units shall rank among themselves
                  equally and rateably without discrimination, preference or
                  priority. Each Unit shall entitle the holder of record thereof
                  to one vote at all meetings of Unitholders or in respect of
                  any written resolution of Unitholders.



                                       24
<PAGE>

5.2      CONSOLIDATION OF UNITS

                  Unless the Trustees determine otherwise, immediately after any
pro rata distribution of additional Units to all Unitholders pursuant to Section
9.6, the number of the outstanding Units will automatically be consolidated such
that each such holder will hold after the consolidation the same number of Units
as such holder held before the distribution of additional Units. In this case,
each Unit certificate representing the number of Units prior to the distribution
of additional Units is deemed to represent the same number of Units after the
non-cash distribution of additional Units and the consolidation.

                  Notwithstanding the foregoing, where tax is required to be
withheld from a Unitholder's share of the distribution, the consolidation will
result in such Unitholder holding that number of Units equal to (i) the number
of Units held by such Unitholder prior to the distribution plus the number of
Units received by such Unitholder in connection with the distribution (net of
the number of whole and part units withheld on account of withholding taxes)
multiplied by (ii) the fraction obtained by dividing the aggregate number of
Units outstanding prior to the distribution by the aggregate number of Units
that would be outstanding following the distribution and before the
consolidation if no withholding were required in respect of any part of the
distribution payable to any Unitholder. Such Unitholder will be required to
surrender the Unit certificates, if any, representing such Unitholder's original
Units, in exchange for a Unit certificate representing such Unitholder's
post-consolidation Units.

5.3      CONSIDERATION FOR UNITS

                  A Unit shall not be fully paid until the consideration
therefor has been received in full by or on behalf of the Trust. The
consideration for any Unit shall be paid in money or in property (including an
obligation to pay consideration in instalments) or in past services received by
the Trust that are not less in value than the fair equivalent of the money that
the Trust would have received if the Unit had been issued for money. In
determining whether property or past services are the fair equivalent of
consideration paid in money, the Trustees may take into account reasonable
charges and expenses of organization and reorganization and payments for
property and past services reasonably expected to benefit the Trust.

5.4      NO PRE-EMPTIVE RIGHTS

                  No Person shall be entitled, as a matter of right, to
subscribe for or purchase any Units. There are no pre-emptive rights attaching
to the Units.

5.5      FRACTIONAL UNITS

                  If, as a result of any act of the Trustees hereunder, any
Person becomes entitled to a fraction of a Unit, such Person shall not be
entitled to receive a certificate therefor. Fractional Units shall not, except
to the extent that they may represent in the aggregate one or more whole Units,
entitle the holders thereof to notice of or to attend or to vote at meetings of
Unitholders. Subject to the foregoing, such fractional Units shall have attached
thereto the rights, restrictions, conditions and limitations attaching to whole
Units in the proportion that they bear to a whole Unit.



                                       25
<PAGE>

5.6      LEGAL OWNERSHIP OF ASSETS OF THE TRUST

                  The legal ownership of the assets of the Trust and the right
to conduct the affairs of the Trust are vested exclusively in the Trustees, and
the Unitholders shall have no interest therein other than the beneficial
interest in the Trust conferred by the Units issued hereunder as described in
Section 1.11. Unitholders shall have no right to compel any partition, division
or distribution of the Trust or any of the assets of the Trust, except pursuant
to Sections 5.23 and Article 12. The Units shall be personal property and shall
confer upon the holders thereof only the interest and rights, and impose upon
the holders thereof only those liabilities and obligations specifically set
forth in this Declaration of Trust. No Unitholder has or shall be deemed to have
any right of ownership in any of the assets of the Trust.

5.7      ALLOTMENT AND ISSUE

                  The Trustees may allot and issue Units at such time or times
and in such manner (including pursuant to any plan from time to time in effect
relating to reinvestment by Unitholders of distributions of the Trust in Units)
and to such Person, Persons or class of Persons as the Trustees in their sole
discretion shall determine. The price or the value of the consideration for
which Units may be issued and the terms and conditions of issuance of the Units
shall be determined by the Trustees in their sole discretion. In the event that
Units are issued in whole or in part for consideration other than money, the
resolution of the Trustees allotting and issuing such Units shall express the
fair equivalent in money of the other consideration received.

5.8      RIGHTS, WARRANTS, OPTIONS AND OTHER SECURITIES

                  The Trust may create and issue rights, warrants or options to
subscribe for fully paid Units, which rights, warrants or options may be
exercisable at such subscription price or prices and at such time or times as
the Trustees may determine. The rights, warrants or options so created may be
issued for such consideration or for no consideration, all as the Trustees may
determine. A right, warrant or option shall not be a Unit and a holder thereof
shall not be a Unitholder by virtue of holding such rights, warrants or options.

                  The Trustees may create and issue indebtedness of the Trust in
respect of which interest, premium or principal payable thereon may be paid, at
the option of the Trust or the holder, in fully paid Units, or which
indebtedness, by its terms, may be convertible into Units at such time and for
such prices as the Trustees may determine. Any indebtedness so created shall not
be a Unit, unless and until fully paid Units are issued in accordance with the
terms of such indebtedness.

5.9      COMMISSIONS AND DISCOUNTS

                  The Trustees may provide for the payment of commissions or may
allow discounts to Persons in consideration of their subscribing or agreeing to
subscribe, whether absolutely or conditionally, for Units or other securities of
the Trust or of their agreeing to produce subscriptions therefor, whether
absolute or conditional.



                                       26
<PAGE>

5.10     TRANSFERABILITY

                  Subject to the terms of this Declaration of Trust and to
applicable laws, the Units are freely transferable, and the Trustees may in
their discretion list the Units on such stock exchanges or quotation services as
they deem commercially reasonable.

5.11     NON-RESIDENT OWNERSHIP CONSTRAINT

                  At no time may more than 49% of the Units then outstanding (on
either a basic or fully-diluted basis) be held by or for the benefit of
Non-Residents ("Non-Resident Beneficiaries"). The Trustees may require
declarations as to the jurisdictions in which beneficial owners of Units are
resident or declarations from Unitholders as to whether such Units are held by
or for the benefit of Non-Resident Beneficiaries. If the Trustees become aware
that more than 49% of the Units then outstanding (on either a basic or
fully-diluted basis) are, or may be, held by or for the benefit of Non-Resident
Beneficiaries or that such a situation is imminent, the Trustees may make a
public announcement thereof and shall not accept a subscription for Units from
or issue or register a transfer of Units to a Person unless the Person provides
a declaration that the Person is not a Non-Resident (or, in the discretion of
the Trustees, that the Person is not a Non-Resident Beneficiary) and does not
hold his or its Units for a Non-Resident Beneficiary. If, notwithstanding the
foregoing, the Trustees determine that more than 49% of the Units (on either a
basic or fully-diluted basis) are held by or for the benefit of Non-Resident
Beneficiaries, the Trustees may send a notice to such Unitholders, chosen in
inverse order to the order of acquisition or registration or in such manner as
the Trustees may consider equitable and practicable, requiring them to sell
their Units or a portion thereof within a specified period of not more than 60
days. If the Unitholders receiving such notice have not sold the specified
number of Units or provided the Trustees with satisfactory evidence that they
are not Non-Residents and do not hold their Units for the benefit of
Non-Resident Beneficiaries within such period, the Trustees may sell such Units
on behalf of such Unitholders, and in the interim, the voting and distribution
rights attached to such Units shall be suspended. Upon such sale, the affected
holders shall cease to be Unitholders and their rights shall be limited to
receiving the net proceeds of sale. In any situation where it is unclear whether
Units are held for the benefit of Non-Resident Beneficiaries, the Trustees may
exercise their discretion in determining whether such Units are or are not so
held, and any such exercise by them of their discretion shall be binding for the
purposes of this Section 5.11.

5.12     CERTIFICATES

                  Subject to Section 5.13, each Unitholder or his duly
authorized agent is entitled to a certificate bearing an identifying serial
number in respect of the Units held by him, signed in the manner hereinafter
prescribed, but the Trust is not bound to issue more than one certificate in
respect of a Unit or Units held jointly or in common by two or more Persons and
delivery of a certificate to one of them shall be sufficient delivery to all. No
certificate shall be issued to evidence any fractional Units.

                  Except as otherwise provided below, the Units shall be
represented in the form of one or more fully registered Unit certificates and
Units shall be issued in fully registered form to holders or their nominees and
a purchaser of a Unit shall be entitled to a certificate or other instrument
from the Trust evidencing that purchaser's ownership thereof. If approved by the
Trustees, the Trust may adopt a book-based system whereby the Units shall be
represented in the



                                       27
<PAGE>

form of one or more fully registered global Unit certificates held by, or on
behalf of, CDS, as custodian of a global certificate for the participants of
CDS, registered in the name of CDS or its nominee, and registration of ownership
and transfers of the Units shall be effected only through the book-based system
administered by CDS.

5.13     CERTIFICATE FEE

                  The Trustees may establish a fee, not to exceed the amount
prescribed under the CBCA, to be charged for every certificate issued evidencing
the ownership of Units.

5.14     FORM OF CERTIFICATE

                  The form of certificate representing Units shall be in such
form as is from time to time authorized by the Trustees. Signatures of Trustees
or officers of the Trust required on Unit certificates may be printed or
otherwise mechanically reproduced thereon. If a Unit certificate contains a
printed or mechanically reproduced signature of a Person, the Trust may issue
the certificate even though the Person has ceased to be a Trustee or an officer
of the Trust and such certificate is as valid as if the Person were a Trustee or
an officer at the date of its issue.

5.15     REGISTER

                  A register (the "Register") shall be kept by, or on behalf and
under the direction of, the Trustees, which Register shall contain the names and
addresses of Unitholders, the respective numbers of Units held by them, the
certificate numbers of the certificates of such Units and a record of all
transfers thereof. The Trustees may appoint one or more chartered banks or trust
companies to act as transfer agent(s) and to act as registrar(s) for Units and
may provide for the transfer of Units in one or more places within Canada. In
the event of such appointment, such transfer agents and registrars shall keep
all necessary registers and other books (which may be kept on a computer or
similar device) for recording original issues and registering and transferring
the Units. If the Trustees have appointed a registrar and transfer agent, no
certificate for Units shall be valid unless countersigned by or on behalf of a
transfer agent and/or registrar. Only Unitholders whose Units are recorded on
the Register shall be entitled to vote or to receive distributions or otherwise
exercise or enjoy the rights of Unitholders.

5.16     ENTRY ON REGISTER

                  Subject to Sections 5.11 and 5.12, upon any issue of Units,
the name of the subscriber shall be promptly entered on the Register as the
owner of the number of Units issued to such subscriber, or if the subscriber is
already a Unitholder, the Register shall be amended to include his additional
Units.

5.17     SUCCESSORS IN INTEREST TO UNITHOLDERS

                  Any Person becoming entitled to any Units as a consequence of
the death, bankruptcy or incompetence of any Unitholder or otherwise by
operation of law shall be recorded in the Register as the holder of such Units,
but until such record is made, the Unitholder of record shall continue to be and
shall be deemed to be the holder of such Units for all purposes whether or not
the Trust, the Trustees or the transfer agent or registrar of the Trust shall
have



                                       28
<PAGE>

actual or other notice of such death, bankruptcy, incompetence or other event.
The Person becoming entitled to such Units shall be bound by every notice or
other document in respect of the Units which shall have been duly given to the
Unitholder from whom he derives his title to such Units.

5.18     UNITS HELD JOINTLY OR IN FIDUCIARY CAPACITY

                  The Trust may treat two or more Persons holding any Unit as
joint tenants of the entire interest therein unless the ownership is expressly
otherwise recorded on the Register, but no entry shall be made in the Register
or on any certificate that any Person is in any other manner entitled to any
future, limited or contingent interest in any Unit; provided, however, that any
Person recorded in the Register or on any certificate as a Unitholder may,
subject to the provisions herein contained, be described in the Register or on
any certificate as a fiduciary of any kind and any customary words may be added
to the description of the holder to identify the nature of such fiduciary
relationship.

5.19     RECOGNITION OF REGISTERED OWNERS

                  None of the Trustees, the officers of the Trust, Unitholders
or any transfer agent or other agent of the Trust or the Trustees shall have a
duty to inquire into any claim that a transfer of a Unit or other security of
the Trust was or would be wrongful or that a particular adverse Person is the
owner of or has an interest in the Unit or other security or any other adverse
claim, or be bound to see to the performance of any trust, express, implied or
constructive, or of any charge, pledge or equity to which any of the Units or
other securities or any interest therein are or may be subject, or to ascertain
or inquire whether any sale or transfer of any such Units or other securities or
interest therein by any such Unitholder or holder of such security or his
personal representatives is authorized by such trust, charge, pledge or equity,
or to recognize any Person as having any interest therein, except for the Person
recorded as Unitholder or holder of such security.

5.20     LOST CERTIFICATES

                  In the event that any certificate for Units is lost, stolen,
destroyed or mutilated, any Trustee or any Approved Officer of the Trust may
authorize the issuance of a new certificate for the same number of Units in lieu
thereof. Any Trustee or any Approved Officer of the Trust may in his discretion,
before the issuance of such new certificate, require the owner of the lost,
stolen, destroyed or mutilated certificate, or the legal representative of the
owner, to make such affidavit or statutory declaration, setting forth such facts
as to the loss, theft, destruction or mutilation, as the Trustee or the Approved
Officer of the Trust deems necessary and may require the applicant to supply to
the Trust a "lost certificate" or similar bond in such reasonable amount as the
Trustee or the Approved Officer of the Trust directs indemnifying the Trustees
or any officers of the Trust, the transfer agents and registrars for so doing.
Any Trustee or any Approved Officer of the Trust shall have the power to acquire
from an insurer or insurers a blanket lost security bond or bonds in respect of
the replacement of lost, stolen, destroyed or mutilated certificates. The Trust
shall pay all premiums and other sums of money payable for such purpose out of
the property of the Trust with such contribution, if any, by those insured as
may be determined by the Trustee or Approved Officer of the Trust. If such
blanket lost security bond is acquired, the Trustee or Approved Officer of the
Trust may authorize and direct (upon such terms and conditions as they may from
time to time impose) any registrar, transfer agent,



                                       29
<PAGE>

trustee, or others to whom the indemnity of such bond extends to take such
action to replace such lost, stolen, destroyed or mutilated certificates without
further action or approval by the Trustee or Approved Officer of the Trust.

5.21     DEATH OF A UNITHOLDER

                  The death of a Unitholder during the continuance of the Trust
shall not terminate the Trust or give the personal representatives or the heirs
of the estate of the deceased Unitholder a right to an accounting or to take any
action in the courts or otherwise against other Unitholders or the Trustees,
officers of the Trust or the property of the Trust, but shall only entitle the
personal representatives or the heirs of the estate of the deceased Unitholder
to succeed to all rights of the deceased Unitholder under this Declaration of
Trust.

5.22     UNCLAIMED PAYMENTS

                  In the event that the Trustees hold any amounts to be paid to
Unitholders under Article 9, Section 12.3 or otherwise because such amounts are
unclaimed or cannot be paid for any reason, neither the Trustees nor any
distribution disbursing agent shall be under any obligation to invest or
reinvest the same and shall only be obligated to hold the same in a current or
other non-interest bearing account with a chartered bank or trust company
pending payment to the Person or Persons entitled thereto. The Trustees shall,
as and when required by law, and may at any time prior to such required time,
pay all or part of such amounts so held to a court in the province where the
Trust has its principal office or to the Public Guardian and Trustee (or other
similar government official or agency) in the province where the Trust has its
principal office whose receipt shall be a fulfilment and discharge of the
obligations of the Trustees.

5.23     REDEMPTION OF UNITS

                  Each Unitholder shall be entitled to require the Trust to
redeem at any time at the demand of the Unitholder all or any part of the Units
registered in the name of the Unitholder at the prices determined and payable in
accordance with the following conditions:

         (a)      To exercise a Unitholder's right to require redemption under
                  this Section 5.23, a duly completed and properly executed
                  notice surrendering the Units for redemption and requiring the
                  Trust to redeem Units, in the form attached hereto as Appendix
                  A, until a substitute form is otherwise approved by the
                  Trustees, shall be delivered to the Trust at the head office
                  of the Trust (or as the Trustees may otherwise direct). No
                  form or manner of completion or execution shall be sufficient
                  unless the same is in all respects satisfactory to the
                  Trustees and is accompanied by any further evidence that the
                  Trustees may reasonably require with respect to the identity,
                  capacity or authority of the Person giving such notice.

         (b)      Upon receipt by the Trust of the notice to redeem Units, the
                  Unitholder shall thereafter cease to have any rights with
                  respect to the Units tendered for redemption (other than to
                  receive the redemption payment therefor), including the right
                  to receive any distributions thereon which are declared
                  payable to the holders of Units of record on a date which is
                  subsequent to the day of receipt by the Trust of such notice.
                  Units shall be considered to be tendered for redemption



                                       30
<PAGE>

                  on the date that the Trust has, to the satisfaction of the
                  Trustees, received the notice and other required documents or
                  evidence as aforesaid.

         (c)      Upon receipt by the Trust of the notice to redeem Units in
                  accordance with this Section 5.23, the holder of the Units
                  tendered for redemption shall be entitled to receive a price
                  per Unit (the "Redemption Price") equal to the lesser of:

                  (i)      90% of the "market price" of the Units on the
                           principal market on which the Units are quoted for
                           trading during the ten trading day period ending
                           immediately prior to the date on which the Units are
                           surrendered to the Trust for redemption (the
                           "Redemption Date"); and

                  (ii)     100% of the "closing market price" on the principal
                           market on which the Units are quoted for trading, on
                           the Redemption Date.

                  For the purposes of this calculation, the "market price" for
                  the Units will be an amount equal to the average of the
                  closing price of the Units for each of the trading days for
                  the ten trading days reference period on which there was a
                  closing price on the principal exchange or market on which the
                  Units are quoted for trading; provided that, if the applicable
                  exchange or market does not provide a closing price but only
                  provides the highest and lowest prices of the Units traded on
                  a particular day, the "market price" shall be an amount equal
                  to the average of the average of the highest and lowest prices
                  for each of the trading days on which there was a trade; and
                  provided further that if there was trading on the applicable
                  exchange or market for fewer than five of the ten trading days
                  in the reference period, the "market price" shall be the
                  average of the following prices established for each of the
                  ten trading days: (i) the average of the last bid and ask
                  prices for each day on which there was no trading; (ii) the
                  closing price of the Units for each day that there was trading
                  if the exchange or market provides a closing price; and (iii)
                  the average of the highest and lowest prices of the Units for
                  each day that there was trading, if the market provides only
                  the highest and lowest prices of Units traded on a particular
                  day.

                  For the purposes of this calculation, the "closing market
                  price" of the Units shall be an amount equal to the closing
                  price of the Units if there was a trade on the date and the
                  exchange or market provides a closing price; an amount equal
                  to the average of the highest and lowest prices of the Units
                  if there was trading and the exchange or other market provides
                  only the highest and lowest trading prices of Units traded on
                  a particular day; or the average of the last bid and last ask
                  price of the Units if there was no trading on the date.

                  If a Unitholder is not entitled to receive cash upon the
                  redemption of Units in circumstances in which Sections
                  5.23(e)(ii) or (iii) apply, then the Redemption Price shall be
                  equal to the fair market value of the Units as determined by
                  the Trustees.

         (d)      Subject to Sections 5.23(e) and 5.23(f), the Redemption Price
                  payable in respect of the Units tendered for redemption during
                  any month shall be paid by cheque, drawn on a Canadian
                  chartered bank or a trust company in lawful money of



                                       31
<PAGE>

                  Canada, payable at par to or to the order of the Unitholder
                  who exercised the right of redemption on or before the last
                  day of the calendar month following the month in which the
                  Units were tendered for redemption. Payments made by the Trust
                  of the Redemption Price are conclusively deemed to have been
                  made upon the mailing of a cheque in a postage prepaid
                  envelope addressed to the former holder of Units unless such
                  cheque is dishonoured upon presentment. Upon such payment, the
                  Trust shall be discharged from all liability to the former
                  Unitholder in respect of the Units so redeemed.

         (e)      Section 5.23(d) shall not be applicable to Units tendered for
                  redemption by a holder of Units, if:

                  (i)      the total amount payable by the Trust pursuant to
                           Section 5.23(c) in respect of such Units and all
                           other Units tendered for redemption prior thereto in
                           the same calendar month exceeds $50,000 (the "Monthly
                           Limit"); provided that the Trustees may, in their
                           sole discretion, waive such limitation in respect of
                           all Units tendered for redemption in any calendar
                           month;

                  (ii)     at the time the Units are tendered for redemption,
                           the outstanding Units are not listed for trading or
                           quoted on any stock exchange or market which the
                           Trustees consider, in their sole discretion, provides
                           representative fair market value prices for the
                           Units; or

                  (iii)    the normal trading of the outstanding Units is
                           suspended or halted on any stock exchange on which
                           the Units are listed (or, if not listed, on a stock
                           exchange, on any market on which the Units are quoted
                           for trading) on the Redemption Date or for more than
                           five trading days during the ten trading day period
                           ending on the Redemption Date.

         (f)      If, pursuant to Sections 5.23(e)(ii) or 5.23(e)(iii), Section
                  5.23(d) is not applicable to Units tendered for redemption by
                  a Unitholder, the Redemption Price per Unit specified in
                  Section 5.23(c) to which the Unitholder would otherwise be
                  entitled shall, subject to receipt of all necessary regulatory
                  approvals (which the Trust shall use commercially reasonable
                  efforts to obtain), be paid and satisfied by way of a
                  distribution in specie of securities of Fording held by the
                  Trust or other securities issued by Fording or the Trust
                  having a fair market value, as determined by the Trustees,
                  equal to the Redemption Price of the surrendered Units.

         (g)      If, pursuant to Section 5.23(e)(i), Section 5.23(d) is not
                  applicable to the Units tendered for redemption by a
                  Unitholder, the Redemption Price per Unit to which the
                  Unitholder would otherwise be entitled shall be paid and
                  satisfied as follows:

                  (i)      a portion of the Redemption Price per Unit equal to
                           the Monthly Limit divided by the number of Units
                           tendered for redemption in the month shall be paid
                           and satisfied in cash, in accordance with Section
                           5.23(d) applied mutatis mutandis; and



                                       32
<PAGE>

                  (ii)     subject to receipt of all necessary regulatory
                           approvals (which the Trust shall use commercially
                           reasonable efforts to obtain), the remainder of the
                           Redemption Price per Unit shall be paid and satisfied
                           by way of a distribution in specie to such Unitholder
                           of securities of Fording or the Trust, in accordance
                           with Section 5.23(f) applied mutatis mutandis.

                  Upon such payment, the Trust shall be discharged from all
                  liability to the former Unitholder in respect of the Units so
                  redeemed.

         (h)      All Units which are redeemed under this Section 5.23 shall be
                  cancelled and such Units shall no longer be outstanding and
                  shall not be reissued.

         (i)      The amount of any capital gains or income realized in a year
                  by the Trust as a result of any disposition of property by the
                  Trust undertaken to permit or facilitate the redemption of
                  Units pursuant to this Section 5.23 may, for purposes of
                  computing the net income of the Trust under the Tax Act or
                  other tax legislation, be treated as having been paid in the
                  year by the Trust to the Unitholders redeeming Units in such
                  year and having been designated as a taxable capital gain to
                  such Unitholder.

5.24     PURCHASE OF UNITS

                  The Trust shall be entitled to purchase for cancellation at
any time the whole or from time to time any part of the outstanding Units, at a
price per Unit and on a basis determined by the Trustees in compliance with all
applicable securities laws, regulations, rules, blanket orders, notices or
policies or the rules or applicable policies of any stock exchange.

5.25     RIGHT TO ACQUIRE

         (a)      If within 120 days after the date of a take-over bid for Units
                  the bid is accepted by the holders of not less than 90% of the
                  Units, other than Units held at the date of the take-over bid
                  by or on behalf of the offeror or an affiliate or associate of
                  the offeror, the offeror is entitled, on complying with this
                  Section 5.25, to acquire the Units held by the Dissenting
                  Offerees.

         (b)      An offeror may acquire Units held by a Dissenting Offeree by
                  sending by mail within 60 days after the date of termination
                  of the take-over bid and in any event within 180 days after
                  the date of the take-over bid, an offeror's notice to each
                  Dissenting Offeree stating that:

                  (i)      the offerees holding more than 90% of the Units to
                           which the bid relates accepted the take-over bid,
                           other than Units held at the date of the take-over
                           bid by or on behalf of the offeror or an affiliate or
                           associate of the offeror;

                  (ii)     the offeror is bound to take up and pay for or has
                           taken up and paid for the Units of the offerees who
                           accepted the take-over bid;

                  (iii)    a Dissenting Offeree is required to elect:



                                       33
<PAGE>

                           (A)      to transfer their Units to the offeror on
                                    the terms on which the offeror acquired the
                                    Units from the offerees who accepted the
                                    take-over bid, or

                           (B)      subject to Section 5.25(s), to demand
                                    payment of the fair value of the Units in
                                    accordance with Sections 5.25(i) to (r) by
                                    notifying the offeror within 20 days after
                                    receiving the offeror's notice;

                  (iv)     a Dissenting Offeree who does not notify the offeror
                           in accordance with Section 5.25(b)(iii)(B) is deemed
                           to have elected to transfer the Units to the offeror
                           on the same terms that the offeror acquired the Units
                           from the offerees who accepted the take-over bid; and

                  (v)      a Dissenting Offeree must send notice of the election
                           under Section 5.25(d)(ii) to the Trust within 20 days
                           after he receives the offeror's notice.

         (c)      Concurrently with sending the offeror's notice under Section
                  5.25(b), the offeror shall send to the Trust a notice
                  disclosing the name and address of the offeror and the name of
                  the Dissenting Offeree with respect to each Unit held by a
                  Dissenting Offeree.

         (d)      A Dissenting Offeree to whom an offeror's notice is sent under
                  Section 5.25(b) shall, within 20 days after receiving that
                  notice:

                  (i)      send the certificate(s) representing the Units to the
                           Trust; and

                  (ii)     elect:

                           (A)      to transfer the Units to the offeror on the
                                    terms on which the offeror acquired the
                                    Units from the offerees who accepted the
                                    take-over bid; or

                           (B)      to demand payment of the fair value of the
                                    Units in accordance with Section 5.25(i) to
                                    (r) by notifying the offeror.

         (e)      A Dissenting Offeree who does not notify the offeror in
                  accordance with Section 5.25(d)(ii)(B) is deemed to have
                  elected to transfer the Units to the offeror on the same terms
                  on which the offeror acquired the Units from the offerees who
                  accepted the take-over bid.

         (f)      Within 20 days after the offeror sends an offeror's notice
                  under Section 5.25(b), the offeror shall pay or transfer to
                  the Trust the amount of money or other consideration that the
                  offeror would have had to pay or transfer to a Dissenting
                  Offeree if the Dissenting Offeree had elected to accept the
                  take-over bid under Section 5.25(d)(ii)(A).

         (g)      The Trust is deemed to hold in trust for the Dissenting
                  Offeree the money or other consideration it receives under
                  Section 5.25(f), and the Trust shall deposit the money in a
                  separate account in a Canadian chartered bank and shall place
                  the



                                       34
<PAGE>


                  other consideration in the custody of a Canadian chartered
                  bank or similar institution.

         (h)      Within 30 days after the offeror sends an offeror's notice
                  under Section 5.25(b), the Trust shall:

                  (i)      if the payment or transfer required by Section
                           5.25(f) is made, transfer to the offeror the Units
                           that were held by Dissenting Offerees;

                  (ii)     give to each Dissenting Offeree who elects to accept
                           the take-over bid terms under Section 5.25(d)(ii)(A)
                           and who transferred his Units as required under
                           Section 5.25(d) the money or other consideration to
                           which the offeree is entitled, disregarding
                           fractional Units, if any, which may be paid for in
                           money; and

                  (iii)    if the payment or transfer required by Section
                           5.25(f) is made and the money or other consideration
                           is deposited as required by Section 5.25(g), send to
                           each Dissenting Offeree who has not sent notice as
                           required under Section 5.25(d) a notice stating that:

                           (A)      the Dissenting Offeree's Units have been
                                    cancelled,

                           (B)      the Trust or some designated Person holds in
                                    trust for the Dissenting Offeree the money
                                    or other consideration to which the
                                    Dissenting Offeree is entitled as payment
                                    for or in exchange for the Units, and

                           (C)      the Trust will, subject to Sections 5.25(i)
                                    to 5.25(r), send that money or other
                                    consideration to that offeree without delay
                                    after receiving the certificate representing
                                    the Units.

         (i)      If a Dissenting Offeree has elected to demand payment of the
                  fair value of his Units under Section 5.25(d)(ii)(B), the
                  offeror may, within 20 days after it has paid the money or
                  transferred the other consideration under Section 5.25(f),
                  apply to the Court to fix the fair value of the Units of that
                  Dissenting Offeree.

         (j)      If an offeror fails to apply to the Court under Section
                  5.25(i), a Dissenting Offeree may apply to the Court for the
                  same purpose within a further period of 20 days.


         (k)      Where no application is made to the Court under Section
                  5.25(j) within the period set out in that Section, a
                  Dissenting Offeree is deemed to have elected to transfer their
                  Units to the offeror on the same terms that the offeror
                  acquired the Units from the offerees who accepted the
                  take-over bid.

         (l)      An application under Sections 5.25(i) or 5.25(j) shall be made
                  to the Court in Calgary, Alberta.

         (m)      A Dissenting Offeree is not required to give security for
                  costs in an application made under Section 5.25(i) or 5.25(j).



                                       35
<PAGE>

         (n)      On an application under Section 5.25(i) or 5.25(j):

                  (i)      all Dissenting Offerees referred to in Section
                           5.25(d)(ii)(B) whose Units have not been acquired by
                           the offeror shall be joined as parties and are bound
                           by the decision of the Court; and

                  (ii)     the offeror shall notify each affected Dissenting
                           Offeree of the date, place and consequences of the
                           application and of their right to appear and be heard
                           in person or by counsel.

         (o)      On an application to the Court under Sections 5.25(i) or
                  5.25(j), the Court may determine whether any other Person is a
                  Dissenting Offeree who should be joined as a party, and the
                  Court shall then fix a fair value for the Units of all
                  Dissenting Offerees.

         (p)      The Court may in its discretion appoint one or more appraisers
                  to assist the Court to fix a fair value for the Units of a
                  Dissenting Offeree.

         (q)      The final order of the Court shall be made against the offeror
                  in favour of each Dissenting Offeree and for the amount for
                  the Units as fixed by the Court.

         (r)      In connection with proceedings under this Section, the Court
                  may make any order it thinks fit, and without limiting the
                  generality of the foregoing, it may:

                  (i)      fix the amount of money or other consideration that
                           is required to be held in trust under Section
                           5.25(g);

                  (ii)     order that money or other consideration be held in
                           trust by a Person other than the Trust; and

                  (iii)    allow a reasonable rate of interest on the amount
                           payable to each Dissenting Offeree from the date they
                           send or deliver notice under Section 5.25(d) until
                           the date of payment.

         (s)      The acquisition of a Dissenting Offeree's Units shall be for
                  the fair value of such Units determined in accordance with
                  Sections 5.25(i) to (r) subject to any maximum as to the
                  amount of cash or securities that may be issued as
                  consideration for the acquisition of such Units as the offeror
                  for such securities may have specified as a condition of its
                  take-over bid, and such offeror shall not be required to pay
                  additional cash or issue further additional securities to the
                  extent that such caps have been met prior to the acquisition
                  of the Dissenting Offeree's Units.

5.26     DISSENTING UNITHOLDERS

         (a)      (i) In respect of any matter set out in Sections 3.9(b)(i) or
                  (ii) of this Declaration of Trust and (ii) in respect of
                  transactions by Fording, if such matter is a matter for which
                  such Unitholder would have been granted the right to dissent
                  under section 190 of the CBCA, if such Unitholder was a
                  shareholder of Fording and not a Unitholder of the Trust, the
                  Unitholder (herein the "Dissenting Unitholder")



                                       36
<PAGE>

                  may elect to demand payment of the fair value of its Units in
                  accordance with Sections 5.25(i) to (r) by: (x) sending to the
                  Trustees, at or before any meeting of the Unitholders to
                  approve the transaction or such other deadline before the
                  meeting as the Independent Trustees determine, a written
                  objection to approval of the transaction and (y) notifying the
                  Trustees within 20 days after the Dissenting Unitholder
                  receives notice from the proposed acquiror or the Trustees
                  that the transaction has been approved. A Unitholder who votes
                  for such transactions shall not be entitled to dissent. For
                  greater certainty, that right of dissent may only be exercised
                  by registered Unitholders.

         (b)      Section 5.26(a) shall not be applicable to a transaction in
                  which the Trust directly or indirectly transfers the
                  securities held by the Trust to Unitholders on a proportionate
                  basis.

                                   ARTICLE 6
                             MEETINGS OF UNITHOLDERS

6.1      ANNUAL MEETING

                  There shall be an annual meeting of the Unitholders, at such
time and place in Canada as the Trustees shall prescribe, or by electronic means
to the extent provided under applicable law, for the purpose of electing
Trustees, appointing or changing the auditors of the Trust, approving nominees
for election by the Trustees as directors of Fording and transacting such other
business as the Trustees may determine or as may properly be brought before the
meeting. The annual meeting of Unitholders shall be held after delivery to the
Unitholders of the information referred to in Section 14.3 and, in any event,
within 180 days after the end of each fiscal year of the Trust.

6.2      SPECIAL MEETINGS

                  The Trustees shall have power at any time to call special
meetings of the Unitholders, to be held at such time and place in Canada or by
electronic means as the Trustees may determine. Unitholders holding in the
aggregate not less than ten percent of the outstanding Units may requisition the
Trustees in writing to call a special meeting of the Unitholders for the
purposes stated in the requisition. The requisition must state in reasonable
detail the business proposed to be transacted at the meeting and shall be sent
to each of the Trustees and to the principal office of the Trust. Unitholders
have the right to obtain a list of Unitholders to the same extent and upon the
same conditions and limitations as those which apply to shareholders of a
corporation governed by the CBCA. Upon receiving the requisition, the Trustees
shall call a meeting of Unitholders to transact the business referred to in the
requisition, unless:

         (a)      a record date for a meeting of the Unitholders has been fixed
                  and notice thereof has been given to each stock exchange in
                  Canada on which the Units are listed for trading;

         (b)      the Trustees have called a meeting of the Unitholders and have
                  given notice thereof pursuant to Section 6.3;

         (c)      in connection with the business as stated in the requisition:



                                       37
<PAGE>

                  (i)      the proposal is not submitted at least 90 days before
                           the anniversary date of the notice of meeting that
                           was sent to Unitholders in connection with the
                           previous annual meeting of Unitholders;

                  (ii)     it clearly appears to the Trustees that the primary
                           purpose of the matter covered by the requisition as
                           submitted by the Unitholder is to enforce a personal
                           claim or to redress a personal grievance against the
                           Trust, the Trustees, the officers of the Trust or its
                           securityholders;

                  (iii)    it clearly appears to the Trustees that the matter
                           covered by the requisition does not relate in a
                           significant way to the business or affairs of the
                           Trust;

                  (iv)     the Trust, at the Unitholder's request, included a
                           matter covered by a requisition in an information
                           circular relating to a meeting of Unitholders held
                           within two years preceding the receipt of such
                           request, and the Unitholder failed to present the
                           matter, in person or by proxy, at the meeting;

                  (v)      substantially the same matter covered by the
                           requisition was submitted to Unitholders in an
                           information circular (including a dissident's
                           information circular) relating to a meeting of
                           Unitholders held within five years preceding the
                           receipt of the Unitholder's request and the matter
                           covered by the requisition did not receive the
                           prescribed minimum amount of support at the meeting;
                           or

                  (vi)     the rights conferred by this Section 6.2 are being
                           abused to secure publicity; or

         (d)      any other circumstance exists when, under the CBCA or at law,
                  directors of a corporation would not be required to call such
                  a meeting.

                  Subject to the foregoing, if the Trustees do not within 21
days after receiving the requisition call a meeting, any Unitholder who signed
the requisition may call the meeting in accordance with the provisions of
Sections 6.3 and 6.7. If there shall be no Trustees, the officers of the Trust
shall promptly call a special meeting of the Unitholders for the election of
successor Trustees. The phrase "meeting of the Unitholders" wherever it appears
in this Declaration of Trust shall mean and include both an annual meeting and
any other meeting of Unitholders.

6.3      NOTICE OF MEETING OF UNITHOLDERS

                  Notice of all meetings of the Unitholders shall be mailed,
delivered or transmitted by the Trustees to each Unitholder at his address
appearing in the Register, to each Trustee and to the auditors of the Trust not
less than 21 nor more than 60 days before the meeting. Notice of any meeting of
the Unitholders shall state the purposes of the meeting and the time and place
of the meeting.



                                       38
<PAGE>

6.4      QUORUM

                  A quorum for any meeting of Unitholders shall be individuals
present not being less than two in number and being Unitholders or representing
by proxy Unitholders who hold in the aggregate not less than 10% of the votes
attached to all outstanding Units, provided that if the Trust has only one
Unitholder the Unitholder present in person or by proxy constitutes a meeting
and a quorum for such meeting. In the event of such quorum not being present at
the appointed place on the date for which the meeting is called within 30
minutes after the time fixed for the holding of such meeting, the meeting, if
convened on the requisition of Unitholders, shall be dissolved, but in any other
case shall stand adjourned to such day being not less than ten days later and to
such place and time as may be appointed by the Chair of the meeting. If at such
adjourned meeting a quorum as above defined is not present, the Unitholders
present either personally or by proxy shall form a quorum, and any business may
be brought before or dealt with at such an adjourned meeting which might have
been brought before or dealt with at the original meeting in accordance with the
notice calling the same. The Chair or, if the Chair is not present, the
Vice-Chair, or any other Trustee determined by the Trustees, shall be the Chair
of any meeting of the Unitholders.

6.5      VOTING

                  Unitholders may attend and vote at all meetings of Unitholders
either in person or by proxy, or if the meeting is held by electronic means,
Unitholders may attend and vote at such meetings as if the Trust was a
corporation governed by the CBCA. Each Unit shall entitle the holder thereof to
one vote at all meetings of the Unitholders. Any action to be taken by the
Unitholders shall, except as otherwise required by this Declaration of Trust or
by law, be authorized when approved by a majority of the votes cast at a meeting
of the Unitholders. The Chair of any such meeting shall not have a second or
casting vote.

6.6      MATTERS ON WHICH UNITHOLDERS SHALL VOTE

                  In addition to the matters set forth in Section 3.9(b) and
(c), none of the following shall occur unless the same has been duly approved by
the Unitholders at a meeting duly called and held:

         (a)      except as provided in Sections 2.1, 2.5 or 2.6, the
                  appointment, election or removal of Trustees;

         (b)      except on the occurrence of a vacancy in the position of
                  auditors of the Trust, as provided in Section 1.7, the
                  appointment or removal of auditors of the Trust;

         (c)      any amendment to the Declaration of Trust (except as provided
                  in Section 11.1); or

         (d)      the termination of the Trust pursuant to Section 12.2.

                  Nothing in this Section 6.6, however, shall prevent the
Trustees from submitting to a vote of Unitholders any matter which they deem
appropriate. Except with respect to matters on which this Declaration of Trust
contemplates a vote of Unitholders, or submitted to a vote of



                                       39
<PAGE>

the Unitholders by the Trustees on the express basis that it be a binding vote,
no vote of the Unitholders shall in any way bind the Trustees.

6.7      RECORD DATES

                  For the purpose of determining the Unitholders who are
entitled to receive notice of and vote at any meeting or any adjournment(s) or
postponement(s) thereof or for the purpose of any other action, the Trustees may
from time to time, without notice to the Unitholders, close the transfer books
for such period, not exceeding 35 days, as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date not less than 21
days and not more than 60 days prior to the date of any meeting of the
Unitholders or other action as a record date for the determination of
Unitholders entitled to receive notice of and to vote at such meeting or any
adjournment(s) or postponement(s) thereof or to be treated as Unitholders of
record for purposes of such other action, and any Unitholder who was a
Unitholder at the time so fixed shall be entitled to receive notice of and vote
at such meeting or any adjournment(s) or postponement(s) thereof, even though it
has since that date disposed of its Units, and no Unitholder becoming such after
that date shall be entitled to receive notice of and vote at such meeting or any
adjournment(s) or postponement(s) thereof or to be treated as a Unitholder of
record for purposes of such other action, although this shall not preclude such
purchaser arranging to be a proxyholder or agreeing with the selling Unitholder
on how such Unitholder will vote at the discretion of such purchaser. If, in the
case of any meeting of Unitholders, no record date with respect to voting has
been fixed by the Trustees, the record date for voting shall be 5:00 p.m. on the
last business day before the meeting.

6.8      PROXIES

                  Whenever the vote or consent of Unitholders is required or
permitted under this Declaration of Trust, such vote or consent may be given
either directly by the Unitholder or by a proper form of proxy or, in the case
of a Unitholder that is other than an individual, by an individual authorized by
the board of directors or governing body of such Person to represent it at a
meeting of the Unitholders.

                  The Trustees may in their discretion from time to time make
determinations, adopt regulations or delegate decisions to officers relating to
the appointment of proxyholders, and the solicitation, execution, validity,
revocation and deposit of proxies.

                  An instrument of proxy executed in compliance with the
foregoing shall be valid unless challenged at the time of or prior to its
exercise, and the Person challenging the instrument shall have the burden of
proving, to the satisfaction of the Chair of the meeting at which the instrument
is proposed to be used, that the instrument of proxy is invalid. Any decision of
the Chair of the meeting in respect of the validity of an instrument of proxy
shall be final and binding upon all Persons. An instrument of proxy shall be
valid only at the meeting with respect to which it was solicited or any
adjournment(s) or postponement(s) thereof.

                  A vote cast in accordance with any proxy shall be valid
notwithstanding the death, incapacity, insolvency or bankruptcy of the
Unitholder giving the proxy or the revocation of the proxy unless written notice
of the death, incapacity, insolvency, bankruptcy or revocation of the proxy has
been received by the Chair of the meeting prior to the time when the vote is
cast.



                                       40
<PAGE>

6.9      PERSONAL REPRESENTATIVES

                  If a Unitholder is deceased, his personal representative, upon
filing with the secretary of the meeting such proof of his appointment as the
secretary considers sufficient, shall be entitled to exercise the same voting
rights at any meeting of Unitholders as the Unitholder would have been entitled
to exercise if he were living and for the purpose of the meeting shall be
considered to be a Unitholder. Subject to the provisions of the will of a
deceased Unitholder, if there is more than one personal representative, the
provisions of Section 5.18 relating to joint holders shall apply.

6.10     ATTENDANCE BY OTHERS

                  Any Trustee, officer of the Trust, representative of the
auditors of the Trust or other individual approved by the Trustees may attend
and speak at any meeting of Unitholders.

6.11     CONDUCT OF MEETINGS

                  To the extent that the rules and procedures for the conduct of
a meeting of Unitholders are not prescribed herein, the rules and procedures
shall be such reasonable rules and procedures as are determined by the Chair of
the meeting and such rules and procedures shall be binding upon all parties
participating in the meeting.

6.12     BINDING EFFECT OF RESOLUTIONS

                  Every resolution passed at a meeting in accordance with the
provisions of this Article 6 shall be binding upon all Unitholders, whether
present at or absent from the meeting. Subject to Section 6.6, no action taken
by Unitholders at any meeting of Unitholders shall in any way bind the Trust or
the Trustees without the approval of the Trustees.

6.13     RESOLUTION IN LIEU OF MEETING

                  Notwithstanding any other provision of this Declaration of
Trust, a resolution signed in writing by all of the Unitholders entitled to vote
on that resolution at a meeting of Unitholders is as valid as if it had been
passed at a meeting of Unitholders.

6.14     ACTIONS BY UNITHOLDERS

                  Any action, change, approval, decision or determination
required or permitted to be taken or made by the Unitholders hereunder shall be
effected by a resolution passed by the Unitholders at a duly constituted meeting
(or a special resolution in lieu thereof) in accordance with this Article 6.

                                   ARTICLE 7
                            MEETINGS OF THE TRUSTEES

7.1      TRUSTEES MAY ACT WITHOUT MEETING

                  The Trustees may act with or without a meeting. Any action of
the Trustees or any committee of the Trustees may be taken at a meeting by vote,
or without a meeting by



                                       41
<PAGE>

written consent signed by all, of the Trustees or the members of the applicable
committee, as the case may be.

7.2      NOTICE OF MEETING

                  Meetings of the Trustees may be held from time to time upon
the giving of notice by any Trustee. Regular meetings of the Trustees may be
held without call or notice at a time and place in Canada fixed by the Trustees.
Notice of the time and place of any other meetings shall be mailed or otherwise
given not less than 48 hours before the meeting but may be waived in writing by
any Trustee either before or after such meeting. The attendance of a Trustee at
a meeting shall constitute a waiver of notice of such meeting except where a
Trustee attends a meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting has not been lawfully
called or convened.

7.3      QUORUM

                  A quorum for all meetings of the Trustees shall be at least a
majority of the Trustees present in person, a majority of whom shall be
Independent Trustees and a majority of whom shall be resident Canadians;
provided that if there is no quorum, the meeting may be adjourned to a business
day on notice to all of the Trustees, and at the reconvened meeting, the
presence of one-third of the Trustees is required in order to constitute a
quorum. A quorum for any committee of the Trustees shall be the majority of that
committee a majority of whom are Independent Trustees and a majority of whom
shall be resident Canadians.

7.4      VOTING AT MEETINGS

                  Unless otherwise expressly provided herein, all resolutions,
decisions or other questions arising at any meeting of the Trustees or of a
committee of Trustees shall be decided by a majority of the votes cast. In the
case of an equality of votes at any meeting of Trustees or of a committee of
Trustees, the Chair of the meeting shall not have a second or casting vote in
addition to his original vote.

7.5      MEETING BY TELEPHONE

                  Any Trustee may participate in a meeting of the Trustees or
any committee thereof by means of a conference telephone or other communications
equipment by means of which all Trustees participating in the meeting can hear
each other and a Trustee so participating shall be considered for the purposes
of this Declaration of Trust to be present in person at that meeting.

                                   ARTICLE 8
                              DELEGATION OF POWERS

8.1      GENERAL

                  The Trustees shall have the power to appoint, employ or
contract with any Person, including a Chief Executive Officer who is not a
director, officer or employee of Teck, its affiliates or the Partnership, for
any matter relating to the Trust or its assets or affairs. After the Closing
Time, the Chairman and Chief Executive Officer of the Trust will be selected by
the



                                       42
<PAGE>

Trustees from the Independent Trustees, provided however that for the purposes
of this provision only, a Person shall not be considered ineligible to be
appointed as Chairman and Chief Executive Officer by virtue of being an officer
of the Trust or Fording. For greater certainty, the Trustees may delegate to any
Person (including any one or more Approved Officers) the power to execute any
document or enter into any agreement on behalf of the Trust or exercise any
discretion or make any amendment in relation thereto. The Trustees may grant or
delegate such authority to an advisor as the Trustees may in their sole
discretion deem necessary or desirable without regard to whether such authority
is normally granted or delegated by Trustees. The Trustees shall have the power
to determine the term and compensation of an advisor or any other Person whom
they may employ or with whom they may contract. The Trustees shall have the
power to grant powers of attorney as required in connection with any financing
or security relating thereto.

8.2      AUDIT COMMITTEE

                  The Trustees shall appoint the Audit Committee consisting of
at least three Trustees, each of whom must be Independent Trustees. The Audit
Committee shall supervise the public disclosure of the Trust as a public
reporting issuer in accordance with applicable laws and the TSX Guidelines,
including reviewing the quality and integrity of annual and interim financial
statements, reviewing accounting policies and practices, retaining, directing
and monitoring the independence of the external auditors and reviewing the
adequacy and effectiveness of the Trust's system of internal controls and
procedures, and such other mandates or amendments to such mandate as may be
delegated to the Audit Committee from time to time.

8.3      GOVERNANCE COMMITTEE

                  The Trustees shall appoint the Governance Committee consisting
of at least three Trustees, each of whom must be Independent Trustees. Subject
to the Governance Agreements, the Governance Committee shall be responsible for
identifying and nominating Persons to act as Trustees (other than Trustees
entitled to be nominated by a Person who is one of the Principal Unitholders
pursuant to a Governance Agreement), monitoring Trustee performance,
establishing Trustee compensation and developing and monitoring the Trust's
approach to corporate governance issues, and such other mandates or amendments
to such mandate as may be delegated to the Governance Committee from time to
time.

8.4      ADDITIONAL COMMITTEES

                  The Trustees may create such additional committees as they, in
their discretion, determine to be necessary or desirable for the purposes of
properly governing the affairs of the Trust; provided that a majority of any
committee must be Independent Trustees. Further, the Trustees may not delegate
to any such additional committee any powers or authority in respect of which a
board of directors of a corporation governed by the CBCA may not delegate,
except for items expressly delegated to Independent Trustees or another group of
Trustees by this Declaration of Trust or by unanimous decision of the Trustees.

8.5      RESIDENT CANADIANS

                  Any committee of Trustees shall be comprised of a majority of
Trustees who are resident Canadians.



                                       43
<PAGE>

8.6      MANAGEMENT OF THE TRUST

         (a)      The Trustees may exercise broad discretion in hiring officers,
                  employees, agents and consultants or otherwise delegating the
                  ability to administer the Trust's day-to-day operations and
                  perform various activities related to the operations of the
                  Trust and the assets owned by the Trust, all subject to the
                  overriding authority of the Trustees over the management and
                  affairs generally of the Trust.

         (b)      The Chief Executive Officer shall, subject to any limitation
                  the Trustees may determine by resolution, have broad
                  discretion to administer and manage the day-to-day operations
                  of the Trust and to make executive decisions that conform to
                  the general policies and principles set forth in this
                  Declaration of Trust or otherwise established by the Trustees
                  from time to time and do all such other acts and things as are
                  incidental to the foregoing, and to exercise all powers which
                  are necessary or useful to carry on the purpose and activities
                  of the Trust, to promote any of the purposes for which the
                  Trust is formed and to carry out the provisions of this
                  Declaration of Trust.

         (c)      Any two Approved Officers shall, subject to any limitation the
                  Trustees may determine by resolution, have authority to renew
                  or extend or participate in the renewal or extension of any
                  security, upon such terms as may be deemed advisable, and to
                  agree to a reduction in the rate of interest on any security
                  or to any other modification or change in the terms of any
                  security or of any guarantee pertaining thereto, in any manner
                  and to any extent that they may deem advisable; and to waive
                  any default whether in the performance of any covenant or
                  condition of any security, or in the performance of any
                  guarantee or to enforce the rights in respect of any such
                  default in such manner and to such extent that they may deem
                  advisable.

                                   ARTICLE 9
                                  DISTRIBUTIONS

9.1      DISTRIBUTIONS

                  The Trustees will determine the distribution policy of the
Trust from time to time; provided that, notwithstanding any other provision of
this Declaration of Trust, there shall be payable, without action or declaration
by the Trustees, each year an amount necessary to ensure that the Trust shall
not be liable to pay income tax under Part I of the Tax Act for that taxation
year, and such payment shall be payable on December 31 of each year to Persons
who are Unitholders on the record date on December 31 of such year.

                  The distribution policy of the Trust unless and until changed
in the discretion of the Trustees acting unanimously will be to distribute all
of the Distributable Cash in respect of each calendar year, which will be
payable initially on a quarterly basis. Distributions may be adjusted for
amounts paid in prior periods if the actual Distributable Cash for the prior
periods is greater than or less than the Trustees' estimates for the prior
periods. Distributions shall be made in cash and may be invested in Units
pursuant to any distribution reinvestment plan or Unit purchase plan adopted by
the Trustees. Each year the Trust shall deduct in computing its income for
purposes of the Tax Act such portion of the amounts paid or payable to
Unitholders for the



                                       44
<PAGE>

year as is necessary to ensure that the Trust is not liable for income tax under
Part I of the Tax Act for that related taxation year.

                  Distributions for each Distribution Period will be payable to
Persons who are Unitholders on the corresponding Distribution Record Date and
payment for such distributions will be made on or before the corresponding
Distribution Payment Date.

                  For greater certainty, it is hereby expressly declared that a
Unitholder shall have the legal right to enforce payment of any amount that is
required to be distributed to a Unitholder hereunder as of December 31 of the
relevant year. This amount may be paid out of any available funds of the Trust.

9.2      COMPUTATION OF INCOME AND NET REALIZED CAPITAL GAINS

         (a)      The Income of the Trust for any taxation year of the Trust
                  shall be the net income for the year determined pursuant to
                  the provisions of the Tax Act having regard to the provisions
                  thereof which relate to the calculation of taxable income of a
                  trust, without reference to section 82(1)(b) (dividend gross
                  up) and section 104(6) (deduction for payments out of the
                  Trust) of the Tax Act (including any income realized by the
                  Trust on the redemption of Units in specie) and taking into
                  account such other adjustments as may be determined in the
                  discretion of the Trustees; provided, however, that capital
                  gains and capital losses shall be excluded from the
                  computation of net income.

         (b)      The Net Realized Capital Gains of the Trust for any taxation
                  year of the Trust shall be determined as the amount, if any,
                  by which the aggregate of the capital gains of the Trust,
                  calculated in accordance with the provisions of the Tax Act,
                  in the year exceeds the aggregate of (i) the aggregate of the
                  capital losses of the Trust, calculated in accordance with the
                  provisions of the Tax Act, in the year, (ii) any capital gains
                  which are realized by the Trust as a result of a redemption of
                  Units (including any income realized by the Trust on the
                  redemption of Units in specie) pursuant to Section 5.23, (iii)
                  the amount determined by the Trustees in respect of any net
                  capital losses realized in prior taxation years which the
                  Trust is permitted by the Tax Act to deduct in computing the
                  taxable income of the Trust for the year, and (iv) any amount
                  in respect of which the Trust is entitled to a capital gains
                  refund under the Tax Act, as determined by the Trustees;
                  provided that, at the discretion of the Trustees, the Net
                  Realized Capital Gains of the Trust for a year may be
                  calculated without subtracting the full amount of the net
                  capital losses for the year and/or without subtracting the
                  full amount of the net capital losses of the Trust carried
                  forward from previous years.

9.3      OTHER DISTRIBUTIONS

         (a)      In addition to the distributions which are made payable to
                  Unitholders pursuant to Section 9.1, the Trustees may declare
                  to be payable and make distributions, from time to time, out
                  of Income of the Trust, Net Realized Capital Gains of the
                  Trust, the capital of the Trust or otherwise, in any year, in
                  such amount or amounts, and on such dates as the Trustees may
                  determine, to Persons who are Unitholders at the record date
                  for such distribution.



                                       45
<PAGE>

         (b)      Having regard to the present intention of the Trustees to
                  allocate, distribute and make payable to Unitholders all of
                  the Income of the Trust, Net Realized Capital Gains of the
                  Trust and any other applicable amounts so that the Trust will
                  not have any liability for tax under Part I of the Tax Act in
                  any taxation year, the following amounts shall, without any
                  further actions on the part of the Trustees, be due and
                  payable to Unitholders of record on December 31 in each year:

                  (i)      the amount, if any, by which the Income of the Trust
                           for such year exceeds the aggregate of the portions,
                           if any, of each distribution made by the Trust
                           pursuant to Section 9.1 and Section 9.3(a) which have
                           been determined by the Trustees, pursuant to Section
                           9.4, to have been payable by the Trust out of Income
                           of the Trust for such year and the amount of income
                           treated as having been paid in the year pursuant to
                           Section 5.23(i); and

                  (ii)     the amount, if any, by which the Net Realized Capital
                           Gains of the Trust for such year exceeds the
                           aggregate of the portions, if any, of each
                           distribution made by the Trust pursuant to Section
                           9.1 and Section 9.3(a) which have been determined by
                           the Trustees, pursuant to Section 9.4, to have been
                           payable by the Trust out of Net Realized Capital
                           Gains of the Trust for such year and the amount of
                           taxable capital gain treated as having been paid in
                           the year pursuant to Section 5.23(i).

         (c)      The proportionate share per Unit of the amount of any
                  distribution made pursuant to either or both of Sections
                  9.3(a) and (b) shall be determined by dividing such amount by
                  the number of issued and outstanding Units on the applicable
                  record date in respect of a distribution pursuant to Section
                  9.3(a) and on December 31 in respect of a distribution
                  pursuant to Section 9.3(b). Subject to Section 9.6, amounts
                  which have been declared to be payable to Unitholders pursuant
                  to either Section 9.3(a) or (b) shall be paid in cash on the
                  Distribution Payment Date which immediately follows the
                  applicable record date in respect of a distribution pursuant
                  to Section 9.3(a) or December 31 in the applicable year in
                  respect of a distribution pursuant to Section 9.3(b).

         (d)      In addition to the distributions which are made payable to
                  Unitholders, the Trustees may designate and make payable any
                  income or capital gain realized by the Trust as a result of
                  the redemption of Units (including any income realized by the
                  Trust on the redemption of Units in specie) pursuant to
                  Section 5.23 to the redeeming Unitholders in accordance with
                  that Section.

9.4      CHARACTER OF DISTRIBUTIONS AND DESIGNATIONS

                  In accordance with and to the extent permitted by the Tax Act,
the Trustees in each year may make designations in respect of the amounts
payable or deemed to have been payable to or on behalf of Unitholders for such
amounts that the Trustees consider to be reasonable in all of the circumstances,
including designations relating to taxable dividends received or deemed to be
received by the Trust in the year on shares of taxable Canadian corporations,
net capital gains realized by the Trust in the year and foreign source income of
the Trust for the year, as well as elect under sections 104(13.1) and/or (13.2)
of the Tax Act that



                                       46
<PAGE>

income be taxed to the Trust, rather than to the Unitholders. Distributions
payable to Unitholders pursuant to this Article 9 shall be deemed to be
distributions of Income of the Trust, Net Realized Capital Gains of the Trust,
trust capital or other items in such amounts as the Trustees shall, in their
absolute discretion, determine and shall be allocated to Unitholders in the same
proportions as distributions received by Unitholders, subject to the discretion
of the Trustees to adopt an allocation method which the Trustees consider to be
more reasonable in the circumstances including pursuant to Section 9.3(d). For
greater certainty, it is hereby declared that any distribution of Net Realized
Capital Gains of the Trust shall include the non-taxable portion of the capital
gains of the Trust which are encompassed in such distribution.

9.5      ENFORCEABILITY OF RIGHT TO RECEIVE DISTRIBUTIONS

                  Subject to Section 13.4, for greater certainty, it is hereby
declared that each Unitholder shall have the legal right to enforce payment as
of the relevant Distribution Record Date of any amount payable to such
Unitholder as a result of any distribution which is payable to such Unitholder
as of the relevant Distribution Record Date.

9.6      METHOD OF PAYMENT OF DISTRIBUTIONS

                  Where the Trustees determine that the Trust does not have
available cash in an amount sufficient to make payment of the full amount of any
distribution which has been declared to be payable pursuant to this Article on
the due date for such payment, the payment may, at the option of the Trustees,
include the issuance of additional Units, or fractions of Units, if necessary,
having a fair market value as determined by the Trustees equal to the difference
between the amount of such distribution and the amount of cash which has been
determined by the Trustees to be available for the payment of such distribution.

9.7      WITHHOLDING TAXES

                  The Trustees shall deduct or withhold from distributions
payable to any Unitholder all amounts required by law to be withheld from such
distributions, whether such distributions are in the form of cash or additional
Units. In the event of a distribution in the form of additional Units, the
Trustees may sell Units of such Unitholder to pay such withholding taxes and the
Trustees shall have the power of attorney of such Unitholder to do so.

9.8      DEFINITIONS

                  Unless otherwise specified or the context otherwise requires,
any term in this Article which is defined in the Tax Act shall have for the
purposes of this Article the meaning that it has in the Tax Act.

9.9      PAYMENTS TO UNITHOLDERS

                  Any cash payment required hereunder to be made to a Unitholder
shall be paid in Canadian dollars by wire transfer, cheque or bank draft to the
order of the registered Unitholder and may be mailed by ordinary mail to the
last address appearing on the books of the Trust but may also be paid in such
other manner as the Unitholder has designated to the Trustees and the Trustees
have accepted or in such other currencies as the Trustees may determine. In the
case of joint registered Unitholders, any cash payment required hereunder to be
made to a Unitholder



                                      47
<PAGE>

shall be deemed to be required to be made to such Unitholders jointly and shall
be paid by cheque or bank draft but may also be paid in such other manner as the
joint registered Unitholders or any one of the joint registered Unitholders has
designated to the Trustees and the Trustees have accepted. For greater
certainty, a Unitholder or any one of the joint Unitholders may designate and
the Trustees may accept that any payment required to be made hereunder shall be
made by deposit to an account of such Unitholder or to a joint account of such
Unitholder and any other person or in the case of joint registered Unitholders
to an account of joint registered Unitholders or to an account of any one of the
joint registered Unitholders. A cheque or bank draft shall, unless the joint
registered Unitholders otherwise direct, be made payable to the order of all of
the said joint registered Unitholders, and if more than one address appears on
the books of the Trust in respect of such joint unitholding, the cheque or bank
draft or payment in other acceptable manner as aforesaid shall satisfy and
discharge all liability of the Trustees or the Trust for the amount so required
to be paid unless the cheque or bank draft is not paid at par on presentation at
Calgary, Alberta, or at any other place where it is by its terms payable. In the
event of non-receipt of any such cheque or bank draft by the Person to whom it
was mailed, on proof of the non-receipt and upon satisfactory indemnity being
given to it and to the Trust, the Trustees shall issue to the Person a
replacement cheque or bank draft for a like amount.

                  The receipt by the registered Unitholder in another acceptable
manner of any payment not mailed or paid in accordance with this Section 9.9
shall be a valid and binding discharge to the Trust and to the Trustees for any
payment made in respect of the registered Units and if several Persons are
registered as joint registered Unitholders or, in consequence of the death,
bankruptcy or incapacity of a Unitholder, one or several Persons are entitled so
to be registered in accordance with this Declaration of Trust, respectively,
receipt of payment by any one of them shall be a valid and binding discharge to
the Trust and to the Trustees for any such payment.

9.10     DISTRIBUTION REINVESTMENT AND UNIT PURCHASE PLAN

                  The Trustees may in their sole discretion establish a
distribution reinvestment plan and Unit purchase plan at any time.

                                   ARTICLE 10
                                FEES AND EXPENSES

10.1     EXPENSES

                  The Trust shall pay all expenses incurred in connection with
the administration and management of the Trust and its investments out of
property of the Trust, including:

         (a)      interest and other costs of borrowed money;

         (b)      fees and expenses of lawyers, accountants, auditors,
                  appraisers and other agents or consultants employed by or on
                  behalf of the Trust;

         (c)      compensation, remuneration and expenses of the Trustees;

         (d)      expenses in connection with the payment of distributions on
                  Units;



                                       48
<PAGE>

         (e)      expenses of changing or terminating the Trust;

         (f)      fees and charges of transfer agents, registrars, indenture
                  trustees and other trustees and custodians;

         (g)      all fees, expenses, taxes and other costs incurred in
                  connection with the issuance, distribution, transfer and
                  qualification for distribution to the public of Units and
                  other required governmental filings;

         (h)      all fees and expenses as agreed to under the Administrative
                  Services Agreement; and

         (i)      all costs and expenses in connection with the incorporation or
                  establishment, organization and maintenance of corporations
                  and other entities formed to hold property of the Trust.

                                   ARTICLE 11
                     AMENDMENTS TO THE DECLARATION OF TRUST

11.1     AMENDMENTS BY THE TRUSTEES

                  The Trustees, if also approved by the Independent Trustees,
may, without the approval of the Unitholders, make certain amendments to this
Declaration of Trust, including amendments:

         (a)      for the purpose of ensuring continuing compliance with
                  applicable laws (including the Tax Act), regulations,
                  requirements or policies of any governmental or other
                  authority having jurisdiction over the Trustees or over the
                  Trust;

         (b)      deemed necessary or advisable to ensure that the Trust has not
                  been established nor maintained primarily for the benefit of
                  Non-Residents;

         (c)      which, in the opinion of the Trustees, provide additional
                  protection or benefit for the Unitholders;

         (d)      to remove any conflicts or inconsistencies in this Declaration
                  of Trust or to make corrections, including the correction or
                  rectification of any ambiguities, defective provisions,
                  errors, mistakes or omissions, which are, in the opinion of
                  the Trustees, necessary or desirable and not prejudicial to
                  the Unitholders; and

         (e)      which, in the opinion of the Trustees, are necessary or
                  desirable as a result of changes in taxation or other laws or
                  the administration or enforcement thereof;

         provided that, notwithstanding the foregoing, the Trustees may not
         amend the Declaration of Trust in accordance with this Section if such
         amendment would (i) amend this Article 11; (ii) amend the Unitholders'
         voting rights; or (iii) cause the Trust to fail to qualify as a "mutual
         fund trust" under the Tax Act or cause the Units to constitute "foreign
         property" under the Tax Act.



                                       49
<PAGE>

11.2     AMENDMENTS BY UNITHOLDERS

                  Subject to Section 11.1, this Declaration of Trust may be
amended only by the vote of a two-thirds majority of the votes cast at a meeting
of Unitholders called for that purpose.

11.3     NO TERMINATION

                  No amendment to or amendment and restatement of this
Declaration of Trust, whether pursuant to this Article 11 or otherwise, shall be
construed as a termination of the Trust and the settlement or establishment of a
new trust. The Trust shall notify Unitholders of changes to the Declaration of
Trust effected under this Section, which notification may be made under Section
15.1, in the public disclosure record of the Trust or by posting the current
version of this Declaration of Trust on the Trust's website.

                                   ARTICLE 12
                              TERMINATION OF TRUST

12.1     DURATION OF THE TRUST

                  Unless the Trust is sooner terminated as otherwise provided
herein, the Trust shall continue in full force and effect so long as any
property of the Trust is held by the Trustees, and the Trustees shall have all
the powers and discretions, expressed and implied, conferred upon them by law or
by this Declaration of Trust.

12.2     TERMINATION BY UNITHOLDERS

                  The Trust may be terminated by the vote of at least two-thirds
of the votes cast at a meeting of Unitholders called for that purpose.

12.3     EFFECT OF TERMINATION

                  Upon the authorization of the termination of the Trust, the
liabilities of the Trust shall be discharged with due speed and the net assets
of the Trust shall be liquidated and the proceeds distributed proportionately to
the Unitholders, such that any distributions from the Trust and any payment out
of the net assets of the Trust upon a termination or winding up of the Trust
shall be divided among and paid to Unitholders on a pro rata basis. Such
distribution may be made in cash or in kind or partly in each, all as the
Trustees in their sole discretion may determine. The Trust shall terminate upon
the final distribution to Unitholders unless the Trustees determine otherwise
but in any case shall otherwise terminate when no property of the Trust
continues to be held by the Trustees.

                                   ARTICLE 13
                     LIABILITIES OF THE TRUSTEES AND OTHERS

13.1     LIABILITY AND INDEMNIFICATION OF THE TRUSTEES

                  The Trustees (including, for greater certainty, any former
Trustees) shall at all times be indemnified and saved harmless out of the
property of the Trust from and against all liabilities, damages, losses, debts
and claims whatsoever, including costs, charges and expenses in connection
therewith, sustained, incurred, brought, commenced or prosecuted against them
for



                                       50
<PAGE>

or in respect of any act, deed, matter or thing whatsoever made, done,
acquiesced in or omitted in or about or in relation to the execution of their
duties as Trustees and also from and against all other liabilities, damages,
losses, debts, claims, costs, charges, and expenses (including legal fees and
disbursements on a solicitor-and-his-own-client basis) which they sustain or
incur in or about or in relation to the affairs of the Trust. Further, the
Trustees shall not be liable to the Trust or to any Unitholder for any loss or
damages relating to any matter regarding the Trust, including any loss or
diminution in the value of the Trust or its assets. The foregoing provisions of
this Section 13.1 in favour of any Trustee do not apply unless:

         (a)      the Trustee acted honestly and in good faith with a view to
                  the best interests of the Trust and the Unitholders; and

         (b)      in the case of a criminal or administrative action or
                  proceeding that is enforced by a monetary penalty, the Trustee
                  had reasonable grounds for believing his conduct was lawful.

13.2      LIABILITY OF THE TRUSTEES

                  The Trustees (including, for greater certainty, any former
Trustees) shall not be liable to the Trust or to any Unitholder, annuitant or
any other Person for the acts, omissions, receipts, neglects or defaults of any
Person, firm or corporation employed or engaged by them as permitted hereunder,
or for joining in any receipt or act of conformity or for any loss, damage or
expense caused to the Trust through the insufficiency or deficiency of any
security in or upon which any of the monies of or belonging to the Trust shall
be paid out or invested, or for any loss or damage arising from the bankruptcy,
insolvency or tortious act of any Person, firm or corporation with whom or which
any monies, securities or property of the Trust shall be lodged or deposited, or
for any loss occasioned by error in judgment or oversight on the part of the
Trustees, or for any other loss, damage or misfortune which may happen in the
execution by the Trustees of their duties hereunder, except to the extent the
Trustees have not acted in accordance with Sections 13.1(a) and 13.1(b).

13.3      RELIANCE UPON ADVICE

                  The Trustees may rely and act upon any statement, report or
opinion prepared by or any advice received from the auditors, lawyers or other
professional advisors of the Trust and shall not be responsible or held liable
for any loss or damage resulting from so relying or acting.

13.4      LIABILITY OF UNITHOLDERS AND OTHERS

                  Notwithstanding any other provision of this Declaration of
Trust, no Unitholder shall be held to have any personal liability as such, and
no resort shall be had to, nor shall recourse or satisfaction be sought from,
the private property of any Unitholder for any liability whatsoever, in tort,
contract or otherwise, to any Person in connection with the Trust property or
the affairs of the Trust, including for satisfaction of any obligation or claim
arising out of or in connection with any contract or obligation of the Trust or
of the Trustees or any obligation which a Unitholder would otherwise have to
indemnify a Trustee for any personal liability incurred by the Trustee as such;
only the assets of the Trust are intended to be liable and subject to levy or
execution for satisfaction of such liability. Each Unitholder shall be entitled
to be reimbursed out


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<PAGE>

of the assets of the Trust in respect of any payment of a Trust obligation made
by such Unitholder.

13.5      LIABILITY AND INDEMNIFICATION OF THE UNITHOLDERS

                  No Unitholder will be subject to any liabilities in connection
with the Trust or its obligations and affairs, and in the event that a court
determines that Unitholders are subject to any such liabilities, the liabilities
will be enforceable only against, and will be satisfied only out of, the
Unitholders' share of the Trust's assets. The Unitholders shall at all times be
indemnified and saved harmless out of the property of the Trust from and against
any costs, damages, liabilities, expenses, charges and losses suffered by a
Unitholder resulting from or arising out of such Unitholder not having such
limited liability which they sustain or incur in or about or in relation to the
affairs of the Trust.

13.6      CONTRACTS OF THE TRUST

                  The Trustees and the Trust will make all reasonable efforts to
include a provision substantially to the following effect in every contract
entered into by or on behalf of the Trust:

                  The parties hereto acknowledge that the Trustees are entering
                  into this agreement solely in their capacity as Trustees on
                  behalf of the Trust and the obligations of the Trust hereunder
                  shall not be personally binding upon the Trustees or any of
                  the Unitholders of the Trust and that any recourse against the
                  Trust, the Trustees or any Unitholder in any manner in respect
                  of any indebtedness, obligation or liability of the Trust
                  arising hereunder or arising in connection herewith or from
                  the matters to which this agreement relates, if any, including
                  without limitation claims based on negligence or otherwise
                  tortious behaviour, shall be limited to, and satisfied only
                  out of, the Trust's assets.

For greater certainty, the omission from a contract of a provision to the
foregoing effect does not affect the validity of effect of such contract, and
neither the Trustees nor the Unitholders shall have any liability in connection
with any such omission.

                                   ARTICLE 14
                                     GENERAL

14.1      EXECUTION OF INSTRUMENTS

                  All instruments and documents of whatsoever kind may be signed
on behalf of the Trust by any two of the Trustees or Approved Officers.
Notwithstanding the foregoing, the Trustees may from time to time, by
resolution, determine the manner in which and the Person or Persons by whom any
particular instrument or document or class of instruments or documents may or
shall be signed, including the use of facsimile reproduction of any or all
signatures and the use of the corporate seal or a facsimile reproduction
thereof.

14.2      CHEQUES AND ELECTRONIC FUND TRANSFERS

                  All cheques and electronic fund transfers upon the bank or
banks where the funds of the Trust are kept shall be drawn payable to the order
of the party entitled to the payment to be


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<PAGE>

made, which cheques and electronic fund transfers, notwithstanding Section 14.1,
shall be authorized by hand, facsimile or electronic signature of any two of the
Trustees, any two of the Approved Officers or by any two other Persons that any
two of the Trustees or Approved Officers may direct the bank or banks in
writing, from time to time, to accept as authorized signers or countersigners
for cheques or electronic fund transfers of the Trust.

14.3      REPORTS TO UNITHOLDERS

                  Prior to each meeting of Unitholders, the Trust shall provide
the Unitholders (along with notice of such meeting) information similar to that
required to be provided to shareholders of a public corporation governed by the
CBCA and as required by applicable tax and securities laws.

14.4      TAXATION INFORMATION

                  On or before March 15 in each year, the Trust will provide
Unitholders who received distributions from the Trust in the prior calendar
year, such information regarding the Trust required by Canadian law to be
submitted to Unitholders for income tax purposes to enable Unitholders to
complete their tax returns in respect of the prior calendar year.

14.5      TAX ELECTION

                  In respect of the first taxation year of the Trust, the Trust
will file an election pursuant to subsection 132(6.1) of the Tax Act that the
Trust be deemed to be a mutual fund trust for the entire year.

14.6      TRUST PROPERTY TO BE KEPT SEPARATE

                  The Trustees shall maintain the property of the Trust separate
from all other property in their possession.

14.7      TRUST RECORDS

                  The Trust shall prepare and maintain, at its principal office
or at any other place in Canada designated by the Trustees, records containing:
(i) the Declaration of Trust; and (ii) minutes of meetings and resolutions of
Unitholders. The Trust shall also prepare and maintain adequate accounting
records and records containing minutes of meetings and resolutions of the
Trustees and any committee thereof. Such records shall be kept at the principal
office of the Trust or at such other place as the Trustees think fit and shall
at all reasonable times be open to inspection by the Trustees.

14.8      RIGHT TO INSPECT DOCUMENTS

                  A Unitholder and any agent, consultant or creditor of the
Trust shall have the right to examine the Declaration of Trust, the minutes of
meetings and resolutions of Unitholders, and any other documents or records
which the Trustees determine should be available for inspection by such Person,
during normal business hours at the principal office of the Trust. Unitholders
and creditors of the Trust shall have the right to obtain or make or cause to be
made a list of all or any of the registered Unitholders, to the same extent and
upon the same conditions as those which apply to shareholders and creditors of a
corporation governed by the CBCA.


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<PAGE>

14.9      CONSOLIDATIONS

                  Any one or more Trustees or Approved Officers may prepare
consolidated copies of the Declaration of Trust as it may from time to time be
amended or amended and restated and may certify the same to be a true
consolidated copy of the Declaration of Trust, as amended or amended and
restated.

                                   ARTICLE 15
                                  MISCELLANEOUS

15.1      NOTICES

         (a)      Any notice, communication or document ("notice") to be given,
                  sent, delivered or served pursuant to this Declaration of
                  Trust or otherwise to or on a Unitholder, Trustee, officer,
                  auditor or member of a committee shall be sufficiently given,
                  sent, delivered or served if delivered (whether in person, by
                  courier service or other personal method of delivery) to the
                  Person to whom it is to be given or if delivered to such
                  Person's latest address, as shown in the securities register
                  or in the records of the Trust, as the case may be, or if
                  mailed to such Person, at such address by prepaid ordinary or
                  air mail or, subject to the applicable laws regarding
                  electronic delivery of documents, if sent to such Person at
                  such address by any means of prepaid transmitted, electronic
                  or recorded communication, except where applicable laws
                  require a notice to be sent by registered mail.

                  A notice so delivered by prepaid mail or delivered personally
                  is deemed to be received at the time it would have been
                  delivered in the ordinary course of mail unless there are
                  reasonable grounds for believing that the recipient did not
                  receive the notice or document at that time or at all.

                  Subject to applicable laws, as amended from time to time, a
                  notice so delivered by prepaid transmitted, electronic or
                  recorded communication is deemed to have been provided when it
                  leaves an information system within the control of the
                  originator or another person who sent it on behalf of the
                  originator and is deemed to be received when it enters the
                  information system designated by the addressee or, if the
                  notice is posted on or made available through a generally
                  accessible electronic source, when it is accessed by the
                  addressee.

                  Any Approved Officer of the Trust may change or cause to be
                  changed the recorded address of any Unitholder, Trustee,
                  officer, auditor or member of a committee in accordance with
                  any information believed by such Approved Officer to be
                  reliable.

         (b)      Any written notice or written communication to the Trust shall
                  be addressed to the Trustees at the head office of the Trust
                  designated in this Declaration of Trust.

15.2      FAILURE TO GIVE NOTICE

                  The failure by the Trustees, by accident or omission or
otherwise unintentionally, to give any Unitholder, any Trustee or the auditors
of the Trust any notice provided for herein


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<PAGE>

shall not affect the validity, effect, taking effect or time of taking effect of
any action referred to in such notice, and the Trustees shall not be liable to
any Unitholder for any such failure.

15.3      SEVERABILITY

                  The provisions of this Declaration of Trust are severable and
if, in any jurisdiction, any provision is restricted, prohibited or
unenforceable, such provision shall, as to such jurisdiction, be ineffective
only to the extent of such restriction, prohibition or unenforceability without
invalidating the remaining provisions and without affecting the validity or
enforceability of such provision in any other jurisdiction.

15.4      GOVERNING LAW

                  This Declaration of Trust shall be interpreted and governed by
and take effect exclusively in accordance with the laws of the Province of
Alberta and the federal laws of Canada applicable in that province. Any and all
disputes arising under this Declaration of Trust, whether as to interpretation,
performance or otherwise, shall be subject to the exclusive jurisdiction of the
courts of the Province of Alberta and each of the Trustees hereby irrevocably
attorns, and each Unitholder shall be deemed to hereby irrevocably attorn, to
the exclusive jurisdiction of the courts of such province.

15.5      LANGUAGE

         Les parties aux presentes ont exiges que la presente convention ainsi
que tous les documents et avis qui s'y rattachent et/ou qui en decouleront
soient rediges en la langue anglaise. The parties hereto have required that this
Declaration of Trust and all documents and notices resulting herefrom be drawn
up in English.

15.6      COUNTERPARTS

                  This Declaration of Trust may be executed in several
counterparts, each of which when so executed shall be deemed to be an original
and such counterparts together shall constitute one and the same instrument,
which shall be sufficiently evidenced by any such original counterpart.


                                       55
<PAGE>




                  IN WITNESS WHEREOF the Trustee appearing below, having been
duly authorized to execute and deliver this Declaration of Trust, has caused
these presents to be signed as of the date first above written.



SIGNED & DELIVERED In the presence of:




-------------------------------------  -----------------------------------------
Witness                                Michael Grandin - Initial Trustee






<PAGE>


                                   APPENDIX A

                            FORM OF REDEMPTION NOTICE


TO: FORDING CANADIAN COAL TRUST (the "Trust")


NOTICE is given that ______________________ (the "Unitholder") elects to have
__________ units of the Trust ("Units") registered in the name of the Unitholder
redeemed in accordance with Section 5.23 of the Trust's Declaration of Trust.

The Unitholder acknowledges that the redemption will be completed on the date
(the "Redemption Date") on which the Trust has, to the satisfaction of the
Trustees of the Trust, received this Notice of Redemption and any other required
documents or evidence that the Trustees of the Trust may reasonably require with
respect to the identity, capacity or authority of the Unitholder.

The Unitholder further acknowledges that the instructions given in this Notice
of Redemption are irrevocable and that all rights with respect to the Units
tendered for redemption shall cease (other than the right to receive the
redemption payment therefor) including the right to receive any distributions
thereon which are declared payable to the holders of Units of record on a date
which is subsequent to the Redemption Date.

If this Notice of Redemption is executed by a person other than the registered
owner(s) of the Units, such signature must be guaranteed by an Eligible
Institution (as defined below), or in some other manner satisfactory to the
Trustees on behalf of the Trust (except that no guarantee is required if the
signature is that of an Eligible Institution).

An "Eligible Institution" means a Canadian Schedule I chartered bank, a major
trust company in Canada, a commercial bank or trust company in the United
States, a member of the Securities Transfer Association Medallion Program
(STAMP), a member of the Stock Exchange Medallion Program (SEMP) or a member of
the New York Stock Exchange Inc. Medallion Signature Program (MSP). Members of
these programs are usually members of or participating organizations in a
recognized stock exchange in Canada and/or the United States, members of the
Investment Dealers Association of Canada, members of the National Association of
Securities Dealers or banks and trust companies in Canada or the United States.



<PAGE>



Signature guaranteed by                  Dated: ________________________________
(if required as explained above):


--------------------------------------   ---------------------------------------
          Authorized Signature                    Authorized Signature


--------------------------------------   ---------------------------------------
           Name of Guarantor                       Name of Unitholder
         (please print or type)                  (please print or type)

--------------------------------------   ---------------------------------------
     Address (please print or type)          Address (please print or type)


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