Exhibit 4.3


 


ARRANGEMENT AGREEMENT


 


July 24, 2003


 


AMONG:


 


BAYTEX ENERGY LTD., a corporation incorporated under the laws of
Alberta (“Baytex”)


 


- and -


 


CREW ENERGY INC., a corporation incorporated under the laws of
Alberta (“Crew”)


 


- and -


 


BAYTEX ACQUISITION
CORP., a
corporation incorporated under the laws of Alberta (“AcquisitionCo”)


 


- and -


 


BAYTEX EXCHANGECO
LTD., a
corporation incorporated under the laws of Alberta (“ExchangeCo”)


 


- and -


 


BAYTEX RESOURCES LTD., a corporation incorporated under the laws of
Alberta (“Baytex Resources”)


 


- and -


 


BAYTEX EXPLORATION
LTD., a
corporation incorporated under the laws of Alberta (“Baytex Exploration”)


 


- and -


 


VALIANT TRUST COMPANY, a trust company incorporated under the laws
of Alberta with offices in Calgary, Alberta as trustee for and on behalf of BAYTEX ENERGY TRUST, a trust settled
pursuant to the laws of Alberta (the “Trust”)


 


Recitals


 


A.                            Baytex
wishes to propose an arrangement with Crew, AcquisitionCo, ExchangeCo, Baytex
Resources, Baytex Exploration and the Trust and with holders of securities of
Baytex in order to reorganize its affairs and therefore wishes to carry out
certain transactions on the basis hereinafter set forth; and


 


B.                            Each
of the parties to this Agreement has agreed to participate in the Arrangement.


 


The parties agree as
follows:


 

















 


ARTICLE 1

INTERPRETATION


 


1.1                           Definitions


 


In this
Agreement, the following terms have the following meanings:


 


“ABCA”
means the Business Corporations Act,
R.S.A. 2000, c. B-9, as amended, including the regulations promulgated
thereunder;


 


“AcquisitionCo”
means Baytex AcquisitionCorp., a corporation incorporated under the ABCA;


 


“AcquisitionCo
Arrangement Resolution” means the resolution of the AcquisitionCo
common shareholders approving the Arrangement;


 


“Agreement”,
“herein”, “hereof”, “hereto”,
“hereunder” and similar
expressions mean and refer to this arrangement agreement (including the
schedules hereto) as supplemented, modified or amended, and not to any
particular article, section, schedule or other portion hereof;


 


“AmalgamationCo”
means Baytex Energy Ltd., the corporation resulting from the amalgamation of
Baytex and AcquisitionCo pursuant to the Arrangement;


 


“Arrangement”
means the arrangement pursuant to section 193 of the ABCA set forth in the Plan
of Arrangement as supplemented, modified or amended;


 


“Articles
of Arrangement” means the articles of arrangement in respect of the
Arrangement required under subsection 193(10) of the ABCA to be filed with the
Registrar after the Final Order has been made to give effect to the
Arrangement;


 


“Baytex
Exploration” means Baytex Exploration Ltd., a corporation
incorporated under the ABCA;


 


“Baytex
Exploration Arrangement Resolution” means the resolution of Baytex
Exploration common shareholders approving the Arrangement;


 


“Baytex
Resources” means Baytex Resources Ltd., a corporation incorporated
under the ABCA;


 


“Baytex
Resources Arrangement Resolution” means the resolution of Baytex
Resources common shareholders approving the Arrangement;


 


“Baytex”
means Baytex Energy Ltd., a corporation incorporated under the ABCA;


 


“Baytex
Arrangement Resolution” means the special resolution to approve the
Arrangement to be presented to Common Shareholders and Optionholders at the
Meeting;


 


“Business
Day” means a day, other than a Saturday, Sunday or statutory
holiday, when banks are generally open in the city of Calgary, in the province
of Alberta, for the transaction of banking business;


 


“Certificate”
means the certificate or certificates or other confirmation of filing to be
issued by the Registrar pursuant to subsection 193(11) of the ABCA giving
effect to the Arrangement;


 


“Common
Shares” means the common shares in the capital of Baytex and “Common Shareholders” means the holders from
time to time of Common Shares;


 


“Court”
means the Court of Queen’s Bench of Alberta;


 


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“Crew”
means Crew Energy Inc., a corporation incorporated under the laws of Alberta;


 


“Crew
Arrangement Resolution” means the resolution of Crew common
shareholders approving the Arrangement;


 


“Crew
Common Shares” or “Crew Shares”
means common shares in the capital of Crew;


 


“Depositary”
means Valiant Trust Company;


 


“Effective
Date” means the date the Arrangement becomes effective under the
ABCA;


 


“Effective
Time” means the time at which the Articles of Arrangement are filed
with the Registrar on the Effective Date;


 


“Exchangeable
Share Provisions” means the rights, privileges, restrictions and
conditions attaching to the Exchangeable Shares substantially in the form set
out in Exhibit 2 hereto;


 


“Exchangeable
Shares” means the exchangeable shares in the capital of
AcquisitionCo;


 


“ExchangeCo”
means Baytex Exchangeco Ltd., a corporation incorporated under the ABCA;


 


“ExchangeCo
Arrangement Resolution” means the resolution of ExchangeCo common
shareholders approving the Arrangement;


 


“Final
Order” means the final order of the Court approving the Arrangement
pursuant to subsection 193(9) of the ABCA to be applied for following the
Meeting, as such order may be affirmed, amended or modified by any court of
competent jurisdiction;


 


“Information
Circular” means the information circular to be prepared by Baytex
and forwarded as part of the proxy solicitation materials to Common
Shareholders and Optionholders in respect of the Meeting;


 


“Interim
Order” means an interim order of the Court under subsection 193(4)
of the ABCA containing declarations and directions with respect to the
Arrangement, as such order may be affirmed, amended or modified by any court of
competent jurisdiction;


 


“ITA”
means the Income Tax Act (Canada),
as amended;


 


“Meeting”
means the special meeting of holders of Common Shares and Options to be held to
consider the Arrangement, and any adjournments thereof;


 


“Non-Resident”
means:  (i) a person who is not a
resident of Canada for the purposes of the ITA; or (ii) a partnership that is
not a Canadian partnership for the purposes of the ITA;


 


“Options”
means the outstanding stock options, whether or not vested, to acquire Common
Shares and “Optionholders” means
the holders from time to time of Options;


 


“Person”
means an individual, partnership, association, body corporate, trust,
unincorporated organization, government, regulatory authority, or other entity;


 


“Plan of
Arrangement” means the plan of arrangement attached hereto as
Exhibit 1;


 


“Registrar”
means the Registrar appointed under section 263 of the ABCA;


 


“subsidiary”
has the meaning ascribed to it in the ABCA;


 


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“Support
Agreement” means the support agreement to be entered into on the
Effective Date substantially in the form set out in Exhibit 3 hereto;


 


“Trust”
means Baytex Energy Trust, a trust duly settled under the laws of Alberta;


 


“Trust Unit”
means a unit of the Trust issued by the Trust; and


 


“TSX”
means the Toronto Stock Exchange;


 


“Voting and
Exchange Trust Agreement” means the voting and exchange trust
agreement to be entered into on the Effective Date substantially in the form
set out in Exhibit 4 hereto.


 


1.2                           Currency


 


All sums of
money which are referred to in this Agreement are expressed in lawful money of
Canada unless otherwise specified.


 


1.3                           Interpretation Not Affected by Headings


 


The division
of this Agreement into articles, sections and schedules and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.


 


1.4                           Article
References


 


Unless
reference is specifically made to some other document or instrument, all
references herein to articles, sections and schedules are to articles, sections
and schedules of this Agreement.


 


1.5                           Incorporation of Schedules


 


The following
schedules are incorporated into and form an integral part of this Agreement:


 


Exhibit 1 - Plan of Arrangement


Exhibit 2 - Exchangeable Share Provisions to
be Included in the Articles of AcquisitionCo


Exhibit 3 - Support Agreement


Exhibit 4 - Voting and Exchange Trust
Agreement


 


1.6                           Extended Meanings


 


Unless the
context otherwise requires, words importing the singular number shall include
the plural and vice versa; words importing any gender shall include all
genders; and words importing persons shall include individuals, partnerships,
associations, bodies corporate, trusts, unincorporated organizations,
governments, regulatory authorities, and other entities.


 


1.7                           Date for any Action


 


In the event
that any date on which any action required to be taken hereunder by any of the
parties hereto is not a Business Day in the place where the action is required
to be taken, such action shall be required to be taken on the next succeeding
day which is a Business Day in such place.


 


1.8                           Entire Agreement


 


This
Agreement, together with the schedules attached hereto, constitutes the entire
agreement between the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, between the parties with respect to the subject matter
hereof.


 


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1.9                           Governing Law


 


This Agreement
shall be governed by and construed in accordance with the laws of Alberta and
the laws of Canada applicable in Alberta and shall be treated in all respects
as an Alberta contract.


 


ARTICLE 2

COVENANTS


 


2.1                           Covenants of Baytex


 


Baytex covenants
and agrees that it will:


 


(a)                                  take all actions necessary to give effect to the transactions
contemplated by this Agreement and the Arrangement;


 


(b)                                 use all reasonable efforts to obtain all necessary consents,
assignments, waivers and amendments to or terminations of any instruments and
take such measures as may be appropriate to fulfill its obligations hereunder
and to carry out the transactions contemplated hereby;


 


(c)                                  apply to the Court for the Interim Order;


 


(d)                                 solicit proxies to be voted at the Meeting in favour of the Baytex
Arrangement Resolution and prepare, in consultation and cooperation with
AcquisitionCo, ExchangeCo, Crew, Baytex Resources, Baytex Exploration and the
Trust, the Information Circular and proxy solicitation materials and any
amendments or supplements thereto as required by, and in compliance with, the
Interim Order, and applicable corporate and securities laws, and file and
distribute the same to the Common Shareholders and Optionholders in a timely
and expeditious manner in all jurisdictions where the same are required to be
filed and distributed;


 


(e)                                  convene the Meeting as ordered by the Interim Order and conduct such
Meeting in accordance with the Interim Order and as otherwise required by law;


 


(f)                                    until the Effective Date, conduct its operations and those of its
subsidiaries in the ordinary and normal course of business and in accordance
with applicable laws, generally accepted industry practice and any operating
and other agreements applicable to its properties and assets and those of its
subsidiaries;


 


(g)                                 use all reasonable efforts to cause each of the conditions precedent
set forth in Article 4 which are within its control to be satisfied on or
before the Effective Date;


 


(h)                                 subject to the approval of the Baytex Arrangement Resolution by the
Common Shareholders and by the Optionholders, voting as a class, submit the
Arrangement to the Court and apply, in conjunction with AcquisitionCo,
ExchangeCo, Crew, Baytex Resources, Baytex Exploration and the Trust, for the
Final Order;


 


(i)                                     upon issuance of the Final Order and subject to the conditions
precedent in Article 4, forthwith proceed to file the Articles of Arrangement,
the Final Order and all related documents with the Registrar pursuant to
subsection 193(9) of the ABCA;


 


(j)                                     until the Effective Date, except pursuant to the exercise of
outstanding Options in accordance with the terms thereof, not issue any
additional Common Shares or other securities or allow any of its subsidiaries
to issue any shares or securities;


 


(k)                                  until the Effective Date, not issue or enter into, or allow any of
its subsidiaries to issue or enter into, any agreement or agreements to issue
or grant options, warrants or rights to purchase any of its shares or other
securities or those of such subsidiaries;


 


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(l)                                     not, except in the ordinary course of business or as contemplated in
connection with the Arrangement, merge into or with, or consolidate with, any
other Person or, perform any act or enter into any transaction or negotiation
which might interfere or be inconsistent with the consummation of the
transactions contemplated by this Agreement;


 


(m)                               until the Effective Date, except as specifically provided for
hereunder, not alter or amend its articles or by-laws or those of its
subsidiaries as the same exist at the date of this Agreement; and


 


(n)                                 prior to the Effective Date, make application to list the Crew
Shares and the Trust Units (including Trust Units to be issued from time to
time upon exchange of the Exchangeable Shares) on the TSX.


 


2.2                           Covenants of Crew


 


Crew covenants
and agrees that it will:


 


(a)                                  take all action necessary to give effect to the transactions
contemplated by this Agreement and the Arrangement;


 


(b)                                 use all reasonable efforts to obtain all necessary consents,
assignments, waivers and amendments to or terminations of any instruments and
take such measures as may be appropriate to fulfill its obligations hereunder
and to carry out the transactions contemplated hereby;


 


(c)                                  cooperate with and support Baytex in its application for the Interim
Order;


 


(d)                                 take all steps necessary to ensure that the Crew Arrangement
Resolution is passed;


 


(e)                                  until the Effective Date, other than as contemplated herein or in
the Information Circular, not carry on any business, enter into any transaction
or effect any corporate act whatsoever other than as contemplated herein or in
the Information Circular without the prior written consent of Baytex, not to be
unreasonably withheld;


 


(f)                                    until the Effective Date, other than as contemplated herein or in
the Information Circular, not issue any securities or enter into any agreements
to issue or grant options, warrants or rights to purchase any of its
securities;


 


(g)                                 use all reasonable efforts to cause each of the conditions precedent
set forth in Article 4 which are within its control to be satisfied on or
before the Effective Date;


 


(h)                                 submit the Arrangement to the Court and apply, in conjunction with
Baytex, AcquisitionCo, ExchangeCo, Baytex Resources, Baytex Exploration and the
Trust, for the Final Order;


 


(i)                                     forthwith carry out the terms of the Final Order to the extent
applicable to Crew;


 


(j)                                     upon issuance of the Final Order and subject to the conditions
precedent in Article 4, forthwith proceed to file the Articles of Arrangement,
the Final Order and all related documents with the Registrar pursuant to
section 193(9) of the ABCA;


 


(k)                                  until the Effective Date, not disclose to any Person, other than its
officers, directors and key employees and professional advisors, any
confidential information relating to AcquisitionCo, ExchangeCo, Baytex
Resources, Baytex Exploration, the Trust or Baytex or its subsidiaries except
information disclosed in the Information Circular, required to be disclosed by
law, or otherwise publicly known; and


 


(l)                                     prior to the Effective Date, cooperate with Baytex in making the
application to list the Crew Shares on the TSX.


 


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2.3                           Covenants of AcquisitionCo


 


AcquisitionCo
covenants and agrees that it will:


 


(a)                                  take all action necessary to give effect to the transactions
contemplated by this Agreement and the Arrangement;


 


(b)                                 use all reasonable efforts to obtain all necessary consents,
assignments, waivers and amendments to or terminations of any instruments and
take such measures as may be appropriate to fulfill its obligations hereunder
and to carry out the transactions contemplated hereby;


 


(c)                                  cooperate with and support Baytex in its application for the Interim
Order;


 


(d)                                 take all steps necessary to ensure that the AcquisitionCo
Arrangement Resolution is passed;


 


(e)                                  until the Effective Date, not carry on any business, enter into any
transaction or effect any corporate act whatsoever other than as contemplated
herein or in the Information Circular without the prior written consent of
Baytex, not to be unreasonably withheld;


 


(f)                                    until the Effective Date, not issue any securities or enter into any
agreements to issue or grant options, warrants or rights to purchase any of its
securities;


 


(g)                                 use all reasonable efforts to cause each of the conditions precedent
set forth in Article 4 which are within its control to be satisfied on or
before the Effective Date;


 


(h)                                 submit the Arrangement to the Court and apply, in conjunction with
Baytex, Crew, ExchangeCo and the Trust, for the Final Order;


 


(i)                                     forthwith carry out the terms of the Final Order to the extent
applicable to AcquisitionCo;


 


(j)                                     upon issuance of the Final Order and subject to the conditions
precedent in Article 4, forthwith proceed to file the Articles of Arrangement,
the Final Order and all related documents with the Registrar pursuant to
section 193(9) of the ABCA; and


 


(k)                                  until the Effective Date, not disclose to any Person, other than its
officers, directors and key employees and professional advisors, any
confidential information relating to the Trust, Crew, ExchangeCo, Baytex
Resources, Baytex Exploration or Baytex or its subsidiaries except information
disclosed in the Information Circular, required to be disclosed by law, or
otherwise publicly known.


 


2.4                           Covenants of ExchangeCo


 


ExchangeCo
covenants and agrees that it will:


 


(a)                                  take all action necessary to give effect to the transactions
contemplated by this Agreement and the Arrangement;


 


(b)                                 use all reasonable efforts to obtain all necessary consents,
assignments, waivers and amendments to or terminations of any instruments and
take such measures as may be appropriate to fulfill its obligations hereunder
and to carry out the transactions contemplated hereby;


 


(c)                                  cooperate with and support Baytex in its application for the Interim
Order;


 


(d)                                 take all steps necessary to ensure that the ExchangeCo Arrangement
Resolution is passed;


 


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(e)                                  until the Effective Date, not carry on any business, enter into any
transaction or effect any corporate act whatsoever other than as contemplated
herein or in the Information Circular without the prior written consent of
Baytex, not to be unreasonably withheld;


 


(f)                                    until the Effective Date, not issue any securities or enter into any
agreements to issue or grant options, warrants or rights to purchase any of its
securities;


 


(g)                                 use all reasonable efforts to cause each of the conditions precedent
set forth in Article 4 which are within its control to be satisfied on or
before the Effective Date;


 


(h)                                 submit the Arrangement to the Court and apply, in conjunction with
Baytex, Crew and the Trust, for the Final Order;


 


(i)                                     forthwith carry out the terms of the Final Order to the extent applicable
to ExchangeCo;


 


(j)                                     upon issuance of the Final Order and subject to the conditions
precedent in Article 4, forthwith proceed to file the Articles of Arrangement,
the Final Order and all related documents with the Registrar pursuant to
section 193(9) of the ABCA; and


 


(k)                                  until the Effective Date, not disclose to any Person, other than its
officers, directors and key employees and professional advisors, any
confidential information relating to the Trust, Crew, AcquisitionCo, Baytex,
Baytex Resources, Baytex Exploration or its subsidiaries except information
disclosed in the Information Circular, required to be disclosed by law, or
otherwise publicly known.


 


2.5                           Covenants of Baytex Resources


 


Baytex
Resources covenants and agrees that it will:


 


(a)                                  take all action necessary to give effect to the transactions
contemplated by this Agreement and the Arrangement;


 


(b)                                 use all reasonable efforts to obtain all necessary consents,
assignments, waivers and amendments to or terminations of any instruments and take
such measures as may be appropriate to fulfill its obligations hereunder and to
carry out the transactions contemplated hereby;


 


(c)                                  cooperate with and support Baytex in its application for the Interim
Order;


 


(d)                                 take all steps necessary to ensure that the Baytex Resources
Arrangement Resolution is passed;


 


(e)                                  until the Effective Date, not carry on any business, enter into any
transaction or effect any corporate act whatsoever other than as contemplated
herein or in the Information Circular without the prior written consent of
Baytex, not to be unreasonably withheld;


 


(f)                                    until the Effective Date, not issue any securities or enter into any
agreements to issue or grant options, warrants or rights to purchase any of its
securities;


 


(g)                                 use all reasonable efforts to cause each of the conditions precedent
set forth in Article 4 which are within its control to be satisfied on or
before the Effective Date;


 


(h)                                 submit the Arrangement to the Court and apply, in conjunction with
Baytex, Crew and the Trust, for the Final Order;


 


(i)                                     forthwith carry out the terms of the Final Order to the extent
applicable to Baytex Resources;


 


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(j)                                     upon issuance of the Final Order and subject to the conditions
precedent in Article 4, forthwith proceed to file the Articles of Arrangement,
the Final Order and all related documents with the Registrar pursuant to
section 193(9) of the ABCA; and


 


(k)                                  until the Effective Date, not disclose to any Person, other than its
officers, directors and key employees and professional advisors, any
confidential information relating to the Trust, Crew, AcquisitionCo,
ExchangeCo, Baytex Exploration, Baytex or its subsidiaries except information
disclosed in the Information Circular, required to be disclosed by law, or
otherwise publicly known.


 


2.6                           Covenants of Baytex Exploration


 


Baytex
Exploration covenants and agrees that it will:


 


(a)                                  take all action necessary to give effect to the transactions
contemplated by this Agreement and the Arrangement;


 


(b)                                 use all reasonable efforts to obtain all necessary consents,
assignments, waivers and amendments to or terminations of any instruments and
take such measures as may be appropriate to fulfill its obligations hereunder
and to carry out the transactions contemplated hereby;


 


(c)                                  cooperate with and support Baytex in its application for the Interim
Order;


 


(d)                                 take all steps necessary to ensure that the Baytex Exploration
Arrangement Resolution is passed;


 


(e)                                  until the Effective Date, not carry on any business, enter into any
transaction or effect any corporate act whatsoever other than as contemplated
herein or in the Information Circular without the prior written consent of
Baytex, not to be unreasonably withheld;


 


(f)                                    until the Effective Date, not issue any securities or enter into any
agreements to issue or grant options, warrants or rights to purchase any of its
securities;


 


(g)                                 use all reasonable efforts to cause each of the conditions precedent
set forth in Article 4 which are within its control to be satisfied on or
before the Effective Date;


 


(h)                                 submit the Arrangement to the Court and apply, in conjunction with
Baytex, Crew and the Trust, for the Final Order;


 


(i)                                     forthwith carry out the terms of the Final Order to the extent
applicable to Baytex Exploration;


 


(j)                                     upon issuance of the Final Order and subject to the conditions
precedent in Article 4, forthwith proceed to file the Articles of Arrangement,
the Final Order and all related documents with the Registrar pursuant to
section 193(9) of the ABCA; and


 


(k)                                  until the Effective Date, not disclose to any Person, other than its
officers, directors and key employees and professional advisors, any
confidential information relating to the Trust, Crew, AcquisitionCo,
ExchangeCo, Baytex Resources, Baytex or its subsidiaries except information
disclosed in the Information Circular, required to be disclosed by law, or
otherwise publicly known.


 


2.7                           Covenants of the Trust


 


The Trust
covenants and agrees that it will:


 


(a)                                  take all action necessary to give effect to the transactions
contemplated by this Agreement and the Arrangement;


 


9

















 


(b)                                 use all reasonable efforts to obtain all necessary consents,
assignments, waivers and amendments to or terminations of any instruments and
take such measures as may be appropriate to fulfill its obligations hereunder
and to carry out the transactions contemplated hereby;


 


(c)                                  cooperate with and support Baytex in its application for the Interim
Order;


 


(d)                                 until the Effective Date, not carry on any activity or effect any
act whatsoever other than as contemplated herein or in the Information
Circular;


 


(e)                                  use all reasonable efforts to cause each of the conditions precedent
set forth in Article 4 which are within its control to be satisfied on or
before the Effective Date;


 


(f)                                    until the Effective Date, not disclose to any Person, other than
officers, directors and key employees and professional advisors, any
confidential information relating to AcquisitionCo, Crew, ExchangeCo, Baytex
Resources, Baytex Exploration or Baytex or its subsidiaries except information
disclosed in the Information Circular, required to be disclosed by law, or
otherwise publicly known;


 


(g)                                 until the Effective Date, except as specifically provided for hereunder,
not alter or amend its governing fund documents as the same exist at the date
of this Agreement without the prior consent of Baytex;


 


(h)                                 prior to the Effective Date, cooperate with Baytex in making the
application to list the Trust Units (including Trust Units to be issued from
time to time upon exchange of the Exchangeable Shares) on the TSX; and


 


(i)                                     reserve and authorize for issuance the Trust Units which are to be
issued from time to time upon exchange of the Exchangeable Shares.


 


2.8                           Additional Covenants


 


Each of the
Trust, AcquisitionCo and ExchangeCo further covenants and agrees as follows:


 


(a)                                  on the Effective Date, the Trust, AcquisitionCo and ExchangeCo shall
execute and deliver the Support Agreement containing the terms and conditions
set forth in Exhibit 3, together with such other terms and conditions as may be
agreed to by the parties acting reasonably; and


 


(b)                                 on the Effective Date, the Trust, AcquisitionCo and ExchangeCo shall
execute and deliver the Voting and Exchange Trust Agreement containing the
terms and conditions set forth in Exhibit 4, together with such other terms and
conditions as may be agreed to by the parties acting reasonably.


 


ARTICLE 3

REPRESENTATIONS AND WARRANTIES


 


3.1                           Representations and Warranties of Baytex


 


Baytex
represents and warrants to and in favour of Crew, AcquisitionCo, ExchangeCo,
Baytex Resources and the Trust as follows, and acknowledges that Crew,
AcquisitionCo, ExchangeCo, Baytex Resources and the Trust are relying upon such
representations and warranties:


 


(a)                                  Baytex is a corporation duly incorporated and validly existing under
the laws of Alberta and has the corporate power and capacity to own or lease
its property and assets, to carry on its business as now conducted by it, to
enter into this Agreement, and to perform its obligations hereunder;


 


(b)                                 the authorized capital of Baytex consists of an unlimited number of
Common Shares of which a total of 53,611,083 Common Shares are issued and
outstanding as at July 23, 2003; and all of such issued and outstanding
Common Shares are fully paid and non-assessable;


 


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(c)                                  as at July 23, 2003, up to a maximum of 4,426,103 Common Shares
may be issued under the terms of the Options;


 


(d)                                 the execution and delivery of this Agreement and all documents to be
delivered pursuant hereto and the completion of the transactions contemplated
hereby:


 


(i)                                     do not and will not result in the breach of, or violate any term or
provision of, the articles or by-laws of Baytex;


 


(ii)                                  except as previously disclosed in writing to AcquisitionCo or the
Trust, do not, and will not as of the Effective Date, conflict with, result in
the breach of, constitute a default under, or accelerate or permit the
acceleration of the performance required by, any agreement, instrument,
license, permit or authority to which Baytex is a party or by which it is bound
and which is material to Baytex or to which any material property of Baytex is
subject, or result in the creation of any encumbrance upon any of the assets of
Baytex under any such agreement, instrument, license, permit or authority, or
give to any Person any interest or right, including rights of purchase,
termination, cancellation or acceleration, under any such agreement,
instrument, license, permit or authority; and


 


(iii)                               do not, and will not as of the Effective Date, violate any provision
of law or administrative regulation or any judicial or administrative order,
award, judgment or decree applicable and known to Baytex, the breach of which
would have a material adverse effect on Baytex;


 


(e)                                  except as disclosed to AcquisitionCo and the Trust or as set out in
the Information Circular, there are no actions, suits, proceedings, claims or
investigations commenced or, to the knowledge of Baytex, contemplated or
threatened against or affecting Baytex in law or in equity before or by any
domestic or foreign government department, commission, board, bureau, court,
agency, arbitrator, or instrumentality of any kind, nor, to the knowledge of
Baytex, are there any facts which may reasonably be expected to be a proper
basis for any actions, suits, proceedings or investigations (other than in
connection with the exercise of rights of dissent referred to in the
Arrangement) which in any case would prevent or hinder the completion of the
transactions contemplated by this Agreement or which can reasonably be expected
to have a material adverse effect on the business, operations, properties,
assets or affairs, financial or otherwise, of Baytex and its subsidiaries taken
as a whole;


 


(f)                                    the execution and delivery of this Agreement and the completion of
the transactions contemplated hereby have been duly approved by the board of
directors of Baytex and this Agreement constitutes a valid and binding
obligation of Baytex enforceable against it in accordance with its terms;


 


(g)                                 Baytex is under no obligation, contractual or otherwise, to issue
any securities, except for securities to be issued pursuant to the exercise of
Options or as disclosed in the Information Circular;


 


(h)                                 as of the dates as of which the information is given, such
information set forth in the Information Circular regarding Baytex and its
subsidiaries shall be true and complete in all material respects and shall not
contain any misrepresentation as defined in applicable securities legislation
and there shall have been no material adverse changes to such information to
the date hereof; and


 


(i)                                     as of the date hereof, the Board of Directors of Baytex has
determined unanimously that:


 


(i)                                     the Arrangement is fair to the Common Shareholders and the
Optionholders and is in the best interest of Baytex; and


 


(ii)                                  the Board of Directors of Baytex has recommended that Common
Shareholders and Optionholders vote in favour of the Arrangement.


 


11

















 


3.2                           Representations and Warranties of Crew


 


Crew
represents and warrants to and in favour of Baytex, AcquisitionCo, ExchangeCo,
Baytex Resources and the Trust as follows, and acknowledges that Baytex,
AcquisitionCo, ExchangeCo, Baytex Resources and the Trust are relying upon such
representations and warranties:


 


(a)                                  Crew is duly incorporated and validly existing under the laws of
Alberta and has the corporate power and capacity to own or lease its property
and assets, to carry on its business as now conducted by it, to enter into this
Agreement, and to perform its obligations hereunder;


 


(b)                                 the execution and delivery of this Agreement and all documents to be
delivered pursuant hereto and the completion of the transactions contemplated
hereby:


 


(i)                                     do not and will not result in the breach of, or violate any term or
provision of, the articles or by-laws of Crew;


 


(ii)                                  except as previously disclosed in writing to AcquisitionCo and the
Trust, do not, and will not as of the Effective Date, conflict with, result in
the breach of, constitute a default under, or accelerate or permit the
acceleration of the performance required by, any agreement, instrument,
license, permit or authority to which Crew is a party or by which it is bound
and which is material to Crew or to which any material property of Crew is
subject, or result in the creation of any encumbrance upon any of the assets of
Crew under any such agreement, instrument, license, permit or authority, or
give to any Person any interest or right, including rights of purchase,
termination, cancellation or acceleration, under any such agreement,
instrument, license, permit or authority; and


 


(iii)                               do not, and will not as of the Effective Date, violate any provision
of law or administrative regulation or any judicial or administrative order,
award, judgment or decree applicable and known to Crew, the breach of which
would have a material adverse effect on Crew;


 


(c)                                  there are no actions, suits, proceedings, claims or investigations
commenced or, to the knowledge of Crew, contemplated or threatened against or
affecting Crew in law or in equity before or by any domestic or foreign
government department, commission, board, bureau, court, agency, arbitrator, or
instrumentality of any kind, nor, to the knowledge of Crew, are there any facts
which may reasonably be expected to be a proper basis for any actions, suits,
proceedings or investigations;


 


(d)                                 the execution and delivery of this Agreement and the completion of
the transactions contemplated hereby have been duly approved by the board of
directors of Crew and this Agreement constitutes a valid and binding obligation
of Crew enforceable in accordance with its terms;


 


(e)                                  Crew is under no obligation, contractual or otherwise, to issue any
Crew Shares or other securities, except as required pursuant to this Agreement;
and


 


(f)                                    Crew has not carried on any business since its incorporation other
than as provided for herein or as contemplated in the Information Circular.


 


3.3                           Representations and Warranties of
AcquisitionCo


 


AcquisitionCo
represents and warrants to and in favour of Baytex, ExchangeCo, Crew, Baytex
Resources and the Trust as follows, and acknowledges that Baytex, ExchangeCo,
Crew, Baytex Resources and the Trust are relying upon such representations and
warranties:


 


(a)                                  AcquisitionCo is duly incorporated and validly existing under the
laws of Alberta and has the corporate power and capacity to own or lease its
property and assets, to carry on its business as now conducted by it, to enter
into this Agreement, and to perform its obligations hereunder;


 


12

















 


(b)                                 the authorized capital of AcquisitionCo consists, or will consist as
of the Effective Date, of an unlimited number of common shares and an unlimited
number of Exchangeable Shares having the terms and conditions substantially as
set forth in Exhibit 2, of which as at the date hereof only 100 common shares
and are issued and outstanding, all of which are owned legally and beneficially
by the Trust and are fully paid and non-assessable;


 


(c)                                  the execution and delivery of this Agreement and all documents to be
delivered pursuant hereto and the completion of the transactions contemplated
hereby:


 


(i)                                     do not and will not result in the breach of, or violate any term or
provision of, the articles or by-laws of AcquisitionCo;


 


(ii)                                  except as previously disclosed in writing to Baytex and Crew, do
not, and will not as of the Effective Date, conflict with, result in the breach
of, constitute a default under, or accelerate or permit the acceleration of the
performance required by, any agreement, instrument, license, permit or
authority to which AcquisitionCo is a party or by which it is bound and which
is material to AcquisitionCo or to which any material property of AcquisitionCo
is subject, or result in the creation of any encumbrance upon any of the assets
of AcquisitionCo under any such agreement, instrument, license, permit or
authority, or give to any Person any interest or right, including rights of
purchase, termination, cancellation or acceleration, under any such agreement,
instrument, license, permit or authority; and


 


(iii)                               do not, and will not as of the Effective Date, violate any provision
of law or administrative regulation or any judicial or administrative order,
award, judgment or decree applicable and known to AcquisitionCo, the breach of
which would have a material adverse effect on AcquisitionCo;


 


(d)                                 there are no actions, suits, proceedings, claims or investigations
commenced or, to the knowledge of AcquisitionCo, contemplated or threatened
against or affecting AcquisitionCo in law or in equity before or by any
domestic or foreign government department, commission, board, bureau, court,
agency, arbitrator, or instrumentality of any kind, nor, to the knowledge of
AcquisitionCo, are there any facts which may reasonably be expected to be a
proper basis for any actions, suits, proceedings or investigations;


 


(e)                                  the execution and delivery of this Agreement and the completion of
the transactions contemplated hereby have been duly approved by the board of
directors of AcquisitionCo and this Agreement constitutes a valid and binding
obligation of AcquisitionCo enforceable in accordance with its terms;


 


(f)                                    AcquisitionCo is under no obligation, contractual or otherwise, to
issue any AcquisitionCo shares or other securities, except as required pursuant
to this Agreement; and


 


(g)                                 AcquisitionCo has not carried on any business since its
incorporation other than as provided for herein or as contemplated in the
Information Circular.


 


3.4                           Representations and Warranties of
ExchangeCo


 


ExchangeCo
represents and warrants to and in favour of Baytex, AcquisitionCo, Crew, Baytex
Resources and the Trust as follows, and acknowledges that Baytex, AcquisitionCo,
Crew, Baytex Resources and the Trust are relying upon such representations and
warranties:


 


(a)                                  ExchangeCo is duly incorporated and validly existing under the laws
of Alberta and has the corporate power and capacity to own or lease its
property and assets, to carry on its business as now conducted by it, to enter
into this Agreement, and to perform its obligations hereunder;


 


(b)                                 the authorized capital of ExchangeCo consists, or will consist as of
the Effective Date, of an unlimited number of common shares of which as at the
date hereof only 100 common shares and are issued and


 


13

















 


outstanding, all of which are owned legally
and beneficially by the Trust and are fully paid and non-assessable;


 


(c)                                  the execution and delivery of this Agreement and all documents to be
delivered pursuant hereto and the completion of the transactions contemplated
hereby:


 


(i)                                     do not and will not result in the breach of, or violate any term or
provision of, the articles or by-laws of ExchangeCo;


 


(ii)                                  except as previously disclosed in writing to Baytex and Crew, do
not, and will not as of the Effective Date, conflict with, result in the breach
of, constitute a default under, or accelerate or permit the acceleration of the
performance required by, any agreement, instrument, license, permit or
authority to which ExchangeCo is a party or by which it is bound and which is
material to ExchangeCo or to which any material property of ExchangeCo is
subject, or result in the creation of any encumbrance upon any of the assets of
ExchangeCo under any such agreement, instrument, license, permit or authority,
or give to any Person any interest or right, including rights of purchase,
termination, cancellation or acceleration, under any such agreement,
instrument, license, permit or authority; and


 


(iii)                               do not, and will not as of the Effective Date, violate any provision
of law or administrative regulation or any judicial or administrative order,
award, judgment or decree applicable and known to ExchangeCo, the breach of
which would have a material adverse effect on ExchangeCo;


 


(d)                                 there are no actions, suits, proceedings, claims or investigations
commenced or, to the knowledge of ExchangeCo, contemplated or threatened
against or affecting ExchangeCo in law or in equity before or by any domestic
or foreign government department, commission, board, bureau, court, agency,
arbitrator, or instrumentality of any kind, nor, to the knowledge of
ExchangeCo, are there any facts which may reasonably be expected to be a proper
basis for any actions, suits, proceedings or investigations;


 


(e)                                  the execution and delivery of this Agreement and the completion of
the transactions contemplated hereby have been duly approved by the board of
directors of ExchangeCo and this Agreement constitutes a valid and binding
obligation of ExchangeCo enforceable in accordance with its terms;


 


(f)                                    ExchangeCo is under no obligation, contractual or otherwise, to
issue any ExchangeCo shares or other securities, except as required pursuant to
this Agreement; and


 


(g)                                 ExchangeCo has not carried on any business since its incorporation
other than as provided for herein or as contemplated in the Information
Circular.


 


3.5                           Representations and Warranties of Baytex
Resources


 


Baytex Resources
represents and warrants to and in favour of Baytex, Crew, AcquisitionCo,
ExchangeCo and the Trust, as follows, and acknowledges that Baytex, Crew,
AcquisitionCo, ExchangeCo and the Trust are relying upon such representations
and warranties:


 


(a)                                  Baytex Resources is duly incorporated and validly existing under the
laws of Alberta and has the corporate power and capacity to own or lease its
property and assets, to carry on its business as now conducted by it, to enter
into this Agreement, and to perform its obligations hereunder;


 


(b)                                 the execution and delivery of this Agreement and all documents to be
delivered pursuant hereto and the completion of the transactions contemplated
hereby:


 


(i)                                     do not and will not result in the breach of, or violate any term or
provision of, the articles or by-laws of Baytex Resources;


 


14

















 


(ii)                                  except as previously disclosed in writing to Baytex and Crew, do
not, and will not as of the Effective Date, conflict with, result in the breach
of, constitute a default under, or accelerate or permit the acceleration of the
performance required by, any agreement, instrument, license, permit or
authority to which Baytex Resources is a party or by which it is bound and
which is material to Baytex Resources or to which any material property of
Baytex Resources is subject, or result in the creation of any encumbrance upon
any of the assets of Baytex Resources under any such agreement, instrument,
license, permit or authority, or give to any Person any interest or right,
including rights of purchase, termination, cancellation or acceleration, under
any such agreement, instrument, license, permit or authority; and


 


(iii)                               do not, and will not as of the Effective Date, violate any provision
of law or administrative regulation or any judicial or administrative order,
award, judgment or decree applicable and known to Baytex Resources, the breach
of which would have a material adverse effect on Baytex Resources;


 


(c)                                  there are no actions, suits, proceedings, claims or investigations
commenced or, to the knowledge of Baytex Resources, contemplated or threatened
against or affecting Baytex Resources in law or in equity before or by any
domestic or foreign government department, commission, board, bureau, court,
agency, arbitrator, or instrumentality of any kind, nor, to the knowledge of
Baytex Resources, are there any facts which may reasonably be expected to be a
proper basis for any actions, suits, proceedings or investigations;


 


(d)                                 the execution and delivery of this Agreement and the completion of
the transactions contemplated hereby have been duly approved by the board of
directors of Baytex Resources and this Agreement constitutes a valid and
binding obligation of Baytex Resources enforceable in accordance with its
terms; and


 


(e)                                  Baytex Resources is under no obligation, contractual or otherwise,
to issue any Baytex Resources shares or other securities, except as required
pursuant to this Agreement.


 


3.6                           Representations and Warranties of Baytex
Exploration


 


Baytex
Exploration represents and warrants to and in favour of Baytex, Crew,
AcquisitionCo, ExchangeCo and the Trust, as follows, and acknowledges that
Baytex, Crew, AcquisitionCo, ExchangeCo and the Trust are relying upon such
representations and warranties:


 


(a)                                  Baytex Exploration is duly incorporated and validly existing under
the laws of Alberta and has the corporate power and capacity to own or lease
its property and assets, to carry on its business as now conducted by it, to
enter into this Agreement, and to perform its obligations hereunder;


 


(b)                                 the execution and delivery of this Agreement and all documents to be
delivered pursuant hereto and the completion of the transactions contemplated
hereby:


 


(i)                                     do not and will not result in the breach of, or violate any term or
provision of, the articles or by-laws of Baytex Exploration;


 


(ii)                                  except as previously disclosed in writing to Baytex and Crew, do
not, and will not as of the Effective Date, conflict with, result in the breach
of, constitute a default under, or accelerate or permit the acceleration of the
performance required by, any agreement, instrument, license, permit or
authority to which Baytex Exploration is a party or by which it is bound and
which is material to Baytex Exploration or to which any material property of
Baytex Exploration is subject, or result in the creation of any encumbrance
upon any of the assets of Baytex Exploration under any such agreement,
instrument, license, permit or authority, or give to any Person any interest or
right, including rights of purchase, termination, cancellation or acceleration,
under any such agreement, instrument, license, permit or authority; and


 


15

















 


(iii)                               do not, and will not as of the Effective Date, violate any provision
of law or administrative regulation or any judicial or administrative order,
award, judgment or decree applicable and known to Baytex Exploration, the
breach of which would have a material adverse effect on Baytex Exploration;


 


(c)                                  there are no actions, suits, proceedings, claims or investigations
commenced or, to the knowledge of Baytex Exploration, contemplated or
threatened against or affecting Baytex Exploration in law or in equity before
or by any domestic or foreign government department, commission, board, bureau,
court, agency, arbitrator, or instrumentality of any kind, nor, to the
knowledge of Baytex Exploration, are there any facts which may reasonably be
expected to be a proper basis for any actions, suits, proceedings or
investigations;


 


(d)                                 the execution and delivery of this Agreement and the completion of
the transactions contemplated hereby have been duly approved by the board of
directors of Baytex Exploration and this Agreement constitutes a valid and
binding obligation of Baytex Exploration enforceable in accordance with its
terms; and


 


(e)                                  Baytex Exploration is under no obligation, contractual or otherwise,
to issue any Baytex Exploration shares or other securities, except as required
pursuant to this Agreement.


 


3.7                           Representations and Warranties of the Trust


 


The Trust
represents and warrants to and in favour of Baytex, AcquisitionCo, ExchangeCo,
Crew, Baytex Resources and Baytex Exploration as follows, and acknowledges that
Baytex, AcquisitionCo, ExchangeCo, Crew, Baytex Resources and Baytex
Exploration are relying upon such representations and warranties:


 


(a)                                  the Trust is a trust duly settled and validly existing under the
laws of Alberta and has the power and capacity to enter into this Agreement,
and to perform its obligations hereunder;


 


(b)                                 the execution and delivery of this Agreement and all documents to be
delivered pursuant hereto and the completion of the transactions contemplated
hereby:


 


(i)                                     do not and will not result in the breach of, or violate any term or
provision of, the governing documents of the Trust;


 


(ii)                                  except as previously disclosed in writing to Baytex or Crew, do not,
and will not as of the Effective Date, conflict with, result in the breach of,
constitute a default under, or accelerate or permit the acceleration of the
performance required by, any agreement, instrument, license, permit or
authority to which the Trust is a party or by which it is bound and which is
material to the Trust or to which any material property of the Trust is subject,
or result in the creation of any encumbrance upon any of the assets of the
Trust under any such agreement, instrument, license, permit or authority, or
give to any Person any interest or right, including rights of purchase,
termination, cancellation or acceleration, under any such agreement,
instrument, license, permit or authority; and


 


(iii)                               do not, and will not as of the Effective Date, violate any provision
of law or administrative regulation or any judicial or administrative order,
award, judgment or decree applicable and known to the Trust, the breach of
which would have a material adverse effect on the Trust;


 


(c)                                  there are no actions, suits, proceedings, claims or investigations
commenced or, to the knowledge of the Trust, contemplated or threatened against
or affecting the Trust in law or in equity before or by any domestic or foreign
government department, commission, board, bureau, court, agency, arbitrator, or
instrumentality of any kind, nor, to the knowledge of the Trust, are there any
facts which may reasonably be expected to be a proper basis for any actions,
suits, proceedings or investigations;


 


(d)                                 the Trust has no subsidiaries other than AcquisitionCo and
ExchangeCo, and the Trust owns all issued and outstanding shares of AcquisitionCo
and ExchangeCo;


 


16

















 


(e)                                  the execution and delivery of this Agreement and the completion of
the transactions contemplated hereby have been duly approved by the board of
trustees of the Trust and this Agreement constitutes a valid and binding
obligation of the Trust enforceable in accordance with its terms;


 


(f)                                    a total of one (1) Trust Unit is issued and outstanding and, except
as contemplated by this Agreement, the Trust is under no obligation, contractual
or otherwise, to issue any Trust Units or other securities; and


 


(g)                                 the Trust has not carried on any activity since it was settled other
than as provided for herein.


 


ARTICLE 4

CONDITIONS PRECEDENT


 


4.1                           Mutual Conditions Precedent


 


The respective
obligations of Baytex, Crew, AcquisitionCo, ExchangeCo, Baytex Resources,
Baytex Exploration and the Trust to complete the transactions contemplated by
this Agreement shall be subject to the fulfilment or satisfaction, on or before
the Effective Date, of each of the following conditions, any of which may be
waived collectively by them without prejudice to their right to rely on any
other condition:


 


(a)                                  the Interim Order shall have been granted in form and substance
satisfactory to Baytex, Crew, AcquisitionCo, ExchangeCo, Baytex Resources,
Baytex Exploration and the Trust, acting reasonably, not later than
July 30, 2003 or such later date as the parties hereto may agree and shall
not have been set aside or modified in a manner unacceptable to such parties on
appeal or otherwise;


 


(b)                                 the Baytex Arrangement Resolution shall have been approved by the
requisite number of votes cast by the Common Shareholders and the Optionholders
at the Meeting in accordance with the provisions of the Interim Order and any
applicable regulatory requirements;


 


(c)                                  the Final Order shall have been granted in form and substance
satisfactory to Baytex, Crew, AcquisitionCo, ExchangeCo, Baytex Resources,
Baytex Exploration and the Trust acting reasonably not later than
October 31, 2003 or such later date as the parties hereto may agree;


 


(d)                                 the Articles of Arrangement and all necessary related documents, in
form and substance satisfactory to Baytex, Crew, AcquisitionCo, ExchangeCo,
Baytex Resources, Baytex Exploration and the Trust, acting reasonably, shall
have been accepted for filing by the Registrar together with the Final Order in
accordance with subsection 193(9) of the ABCA;


 


(e)                                  there shall not be in force any order or decree of a court of
competent jurisdiction or of any federal, provincial, municipal or other
governmental department, commission, board, agency or regulatory body
restraining, interfering with or enjoining the consummation of the transactions
contemplated by this Agreement;


 


(f)                                    all necessary third party and regulatory and similar reviews,
consents and approvals with respect to the transactions contemplated hereby
shall have been completed or obtained including, without limitation, consents
and approvals from Baytex’s principal lenders;


 


(g)                                 there shall not, as of the Effective Date, be holders of Common
Shares or holders of Options that hold, in aggregate, in excess of 5% of all
Common Shares and Options, that have validly exercised their rights of dissent
under the ABCA and the Interim Order; and


 


(h)                                 the approval of the TSX of the listing of the Trust Units and Crew
Shares to be issued pursuant to the Arrangement and the Initial Private
Placement shall be obtained, subject only to the filing of required documents
which cannot be filed prior to the Effective Date.


 


17

















 


4.2                           Additional Conditions to Obligations of
Baytex and Crew


 


In addition to
the conditions contained in Section 4.1, the obligation of Baytex and Crew to
complete the transactions contemplated by this Agreement is subject to the
fulfillment or satisfaction, on or before the Effective Date, of each of the
following conditions, any of which may be waived by them without prejudice to
their right to rely on any other condition:


 


(a)                                  each of the covenants, acts and undertakings of AcquisitionCo and
the Trust to be performed or complied with on or before the Effective Date
pursuant to the terms of this Agreement shall have been duly performed or
complied with;


 


(b)                                 the representations and warranties of AcquisitionCo and the Trust
contained in Article 3 shall be true in all material respects with the same
effect as if made at and as of the Effective Date; and


 


(c)                                  the board of directors of Baytex shall not have determined in its
sole and absolute discretion that to proceed with the Arrangement would not be
in the best interests of the Common Shareholders and the Optionholders.


 


4.3                           Additional Conditions to Obligations of
AcquisitionCo and the Trust


 


In addition to
the conditions contained in Section 4.1, the obligation of AcquisitionCo and
the Trust to complete the transactions contemplated by this Agreement is
subject to the fulfillment or satisfaction, on or before the Effective Date, of
the following conditions, any of which may be waived by AcquisitionCo and the
Trust without prejudice to their right to rely on any other condition:


 


(a)                                  each of the covenants, acts and undertakings of Baytex and Crew to
be performed or complied with on or before the Effective Date pursuant to the
terms of this Agreement shall have been duly performed or complied with;


 


(b)                                 except as affected by the transactions contemplated by this
Agreement, the representations and warranties of Baytex and Crew contained in
Article 3 shall be true in all material respects on the Effective Date, with the
same effect as if made at and as of such date; and


 


(c)                                  prior to the Effective Date, there shall have been no material
adverse change in the affairs, operations, financial condition or business of
Crew or Baytex or any of its subsidiaries from that reflected in the
Information Circular.


 


ARTICLE 5

NOTICES


 


5.1                           Notices


 


All notices
which may or are required to be given pursuant to any provision of this
Agreement shall be given or made in writing and shall be served personally, and
in the case of:


 


(a)                                  Baytex, Baytex Resources and Baytex Exploration, addressed to:


 


Baytex Energy Ltd.


2200, 205 – 5th
Avenue S.W.


Calgary, AB T2P 2V7


Attention: President and Chief
Executive Officer


 


18

















 


(b)                                 Crew, addressed to:


 


Crew Energy Inc.


1920, 205 – 5th
Avenue S.W.


Calgary, AB T2P 2V7


Attention: President and Chief
Executive Officer


 


(c)                                  ExchangeCo, addressed to:


 


Baytex Exchangeco Ltd.


2200, 205 – 5th
Avenue S.W.


Calgary, AB T2P 2V7


Attention:  President and Chief Executive Officer


 


(d)                                 AcquisitionCo, addressed to:


 


Baytex Acquisition Corp.


2200, 205 – 5th
Avenue S.W.


Calgary, AB T2P 2V7


Attention: President and Chief
Executive Officer


 


(e)                                  the Trust, addressed to:


 


Baytex Energy Trust


2200, 205 – 5th
Avenue S.W.


Calgary, AB T2P 2V7


Attention: President and Chief
Executive Officer


 


ARTICLE 6

AMENDMENT


 


6.1                           Amendments


 


This Agreement
may, at any time and from time to time before or after the Meeting, be amended
in any respect whatsoever by written agreement of the parties hereto without
further notice to or authorization on the part of their respective
securityholders; provided that any such amendment is brought to the attention
of the Court before court approval of the Final Order.


 


6.2                           Termination


 


This Agreement
shall be terminated in each of the following circumstances:


 


(a)                                  an agreement to terminate it is executed and delivered by all
parties; and


 


(b)                                 on November 1, 2003, if the Certificate is not issued on or
before October 31, 2003, unless such dates are otherwise extended by
agreement among all of the parties hereto.


 


6.3                           Exclusivity


 


None of the
covenants of Baytex contained herein shall prevent the board of directors of
Baytex from responding as required by law to any unsolicited submission or
proposal regarding any acquisition or disposition of assets or any unsolicited
proposal to amalgamate, merge or effect an arrangement or any unsolicited
acquisition proposal generally or make any disclosure to its shareholders with
respect thereto which in the judgement of the board of directors of Baytex
acting upon the written advice of outside counsel is required under applicable
law.


 


19

















 


ARTICLE 7

GENERAL


 


7.1                           Binding Effect


 


This Agreement
shall be binding upon and enure to the benefit of the parties hereto and their
respective successors and permitted assigns.


 


7.2                           No Assignment


 


No party may
assign its rights or obligations under this Agreement.


 


7.3                           Equitable Remedies


 


All covenants
herein and opinions to be given hereunder as to enforceability in accordance
with the terms of any covenant, agreement or document shall be qualified as to
applicable bankruptcy and other laws affecting the enforcement of creditors’
rights generally and to the effect that specific performance, being an
equitable remedy, may only be ordered at the discretion of the court.


 


7.4                           Survival of Representations and Warranties


 


The
representations and warranties contained herein shall survive the performance
by the parties of their respective obligations hereunder for a period of one
year.


 


7.5                           Severability


 


If anyone or
more of the provisions or parts thereof contained in this Agreement should be
or become invalid, illegal or unenforceable in any respect in any jurisdiction,
the remaining provisions or parts thereof contained herein shall be and shall
be conclusively deemed to be, as to such jurisdiction, severable therefrom and:


 


(a)                                  the validity, legality or enforceability of such remaining
provisions or parts thereof shall not in any way be affected or impaired by the
severance of the provisions or parts thereof severed; and


 


(b)                                 the invalidity, illegality or unenforceability of any provision or
part thereof contained in this Agreement in any jurisdiction shall not affect
or impair such provision or part thereof or any other provisions of this
Agreement in any other jurisdiction.


 


7.6                           Time of Essence


 


Time shall be
of the essence.


 


7.7                           Liability of the Trust


 


The parties
hereto acknowledge that the trustee of the Trust (the “Trustee”) is entering
into this agreement solely in its capacity as Trustee on behalf of the Trust
and the obligations of the Trust hereunder shall not be personally binding upon
the Trustee or any holder of Trust Units and that any recourse against the
Trust or any holder of Trust Units in any manner in respect of any
indebtedness, obligation or liability of the Trust arising hereunder or arising
in connection herewith or from the matters to which this agreement relates, if
any, including without limitation claims based on negligence or otherwise
tortious behaviour, shall be limited to, and satisfied only out of, the Trust
Fund as defined in the Trust Indenture dated as of July 24, 2003 as amended
from time to time.


 


20

















 


IN WITNESS
WHEREOF this Agreement has been executed and delivered by the parties hereto
effective as of the date first above written.


 


	
   

  	
  BAYTEX ENERGY LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  “Raymond T. Chan”

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  “Dale O. Shwed”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREW ENERGY INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  “Raymond T. Chan”

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  “Dale O. Shwed”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BAYTEX ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  “Raymond T. Chan”

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  “Dale O. Shwed”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BAYTEX EXCHANGECO LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  “Raymond T. Chan”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  “Dale O. Shwed”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BAYTEX RESOURCES LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  “Raymond T. Chan”

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  “Dale O. Shwed”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BAYTEX EXPLORATION LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  “Raymond T. Chan”

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  “Dale O. Shwed”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VALIANT TRUST COMPANY as trustee for and on behalf of BAYTEX ENERGY TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  “Zinat Damji”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  “Jenny Hart”

  



 


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