Document:

Exhibit 10.5

UNITED
ONLINE, INC.

2001 SUPPLEMENTAL STOCK INCENTIVE PLAN

(As
Amended and Restated Effective September 26, 2001)

ARTICLE ONE

GENERAL PROVISIONS

I.              PURPOSE
OF THE PLAN

This Plan is intended to supplement the United Online,
Inc. 2001 Stock Incentive Plan thereby promoting the interests of the
Corporation, by providing eligible persons in the Corporation’s service with
the opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in
such service.

Capitalized terms shall have the meanings assigned to
such terms in the attached Appendix.

II.            STRUCTURE
OF THE PLAN

A.    The
Plan shall be divided into two separate equity incentive programs:

·      the
Discretionary Option Grant Program under which eligible persons may, at the
discretion of the Plan Administrator, be granted options to purchase shares of
Common Stock; and

·      the
Stock Issuance Program under which eligible persons may, at the discretion of
the Plan Administrator, be issued shares of Common Stock directly, either
through the immediate purchase of such shares or as a bonus for services
rendered the Corporation (or any Parent or Subsidiary).

B.    The
provisions of Articles One and Four shall apply to all equity programs under
the Plan and shall govern the interests of all persons under the Plan.

III.           ADMINISTRATION
OF THE PLAN

A.    The
Primary Committee and the Board shall have concurrent authority to administer
the Discretionary Option Grant and Stock Issuance Programs with respect to
Section 16 Insiders.  Administration of
the Discretionary Option Grant and Stock Issuance Programs with respect to all
other persons eligible to participate in those programs may, at the Board’s
discretion, be vested in the Primary Committee or a Secondary Committee, or the
Board may retain the power to administer those programs with respect to all
such persons.  Members of the Primary
Committee or any Secondary Committee shall serve for such period of time as the
Board may determine and may be removed by the Board at any time.  The Board may also at any time terminate the
functions of any Secondary Committee and reassume all powers and authority
previously delegated to such committee.

B.    Each
Plan Administrator shall, within the scope of its administrative functions
under the Plan, have full power and authority (subject to the provisions of the
Plan) to establish such rules and regulations as it may deem appropriate for
proper administration of the Discretionary Option Grant and Stock Issuance
Programs and to make such determinations under, and issue such interpretations
of, the provisions of those programs and any outstanding options or stock
issuances thereunder as it may deem necessary or advisable.  Decisions of the Plan Administrator within
the scope of its administrative functions under the Plan shall be final and
binding on all parties who have an interest in the Discretionary Option Grant
and Stock Issuance Programs under its jurisdiction or any option or stock
issuance thereunder.

C.    Service
on the Primary Committee or the Secondary Committee shall constitute service as
a Board member, and members of each such committee shall accordingly be
entitled to full indemnification and reimbursement as Board members for their
service on such committee.  No member of
the Primary Committee or the Secondary Committee shall be liable for any act or
omission made in good faith with respect to the Plan or any option grants or
stock issuances under the Plan.

IV.           ELIGIBILITY

A.    The
persons eligible to participate in the Discretionary Option Grant and Stock
Issuance Programs are as follows:

1.     Employees
other than Section 16 Insiders;

2.     independent
contractors who provide services to the Corporation (or any Parent or
Subsidiary); and

3.     any
other individuals (including Section 16 Insiders) who are to receive option
grants under this Plan solely in connection with their commencement of Employee
status, whether as a result of an acquisition of their former employer by the
Corporation or any Parent or Subsidiary or by reason of their initial hire by
the Corporation or such Parent or Subsidiary.

B.    Each
Plan Administrator shall, within the scope of its administrative jurisdiction
under the Plan, have full authority to determine, (i) with respect to the option
grants under the Discretionary Option Grant Program, which eligible persons are
to receive such grants, the time or times when those grants are to be made, the
number of shares to be covered by each such grant, the time or times when each
option is to become exercisable, the vesting schedule (if any) applicable to
the option shares and the maximum term for which the option is to remain
outstanding and (ii) with respect to stock issuances under the Stock
Issuance Program, which eligible persons are to receive such issuances, the
time or times when the issuances are to be made, the number of shares to be
issued to each Participant, the vesting schedule (if any) applicable to the
issued shares and the consideration for such shares.

C.    The
Plan Administrator shall have the absolute discretion either to grant options
in accordance with the Discretionary Option Grant Program or to effect stock
issuances in accordance with the Stock Issuance Program.

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V.            STOCK
SUBJECT TO THE PLAN

A.    The
stock issuable under the Plan shall be shares of authorized but unissued or
reacquired Common Stock, including shares repurchased by the Corporation on the
open market.  The number of shares of
Common Stock reserved for issuance over the term of the Plan shall not exceed
2,235,322 shares.  Such reserve shall
consist of (1) 1,135,322 shares, the number of shares that remain available for
issuance immediately prior to the Plan Effective Date pursuant to the
Predecessor Plans, including the shares subject to outstanding options under
those plans and (2) an 1,100,000 share increase approved by the Board on
September 26, 2001.

B.    The
number of shares of Common Stock available for issuance under the Plan shall
automatically increase on the first trading day of January each calendar year
during the term of the Plan, beginning with calendar year 2002, by an amount
equal to one-half percent (0.5%) of the total number of shares of Common Stock
outstanding on the last trading day in December of the immediately preceding
calendar year, but in no event shall any such annual increase exceed 142,800
shares.

C.    Officers
of the Corporation may not receive options, separately exercisable stock
appreciation rights and direct stock issuances under the Plan for more than
671,000 shares of Common Stock in the aggregate.

D.    Shares
of Common Stock subject to outstanding options (including options transferred
to this Plan from the Predecessor Plans) shall be available for subsequent
issuance under the Plan to the extent (1) those options expire or
terminate for any reason prior to exercise in full or (2) the options are
cancelled in accordance with the cancellation-regrant provisions of
Article Two.  Unvested shares issued
under the Plan and subsequently cancelled or repurchased by the Corporation at
the original issue price paid per share, pursuant to the Corporation’s
repurchase rights under the Plan shall be added back to the number of shares of
Common Stock reserved for issuance under the Plan and shall accordingly be
available for reissuance through one or more subsequent option grants or direct
stock issuances under the Plan.  However,
should the exercise price of an option under the Plan be paid with shares of
Common Stock or should shares of Common Stock otherwise issuable under the Plan
be withheld by the Corporation in satisfaction of the withholding taxes
incurred in connection with the exercise of an option or the vesting of a stock
issuance under the Plan, then the number of shares of Common Stock available
for issuance under the Plan shall be reduced by the gross number of shares for
which the option is exercised or which vest under the stock issuance, and not
by the net number of shares of Common Stock issued to the holder of such option
or stock issuance.  Shares of Common
Stock underlying one or more stock appreciation rights granted pursuant to the
Plan shall not be available for subsequent issuance
under the Plan if the stock appreciation right is exercised.

E.     If
any change is made to the Common Stock by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of shares or other
change affecting the outstanding Common Stock as a class without the
Corporation’s receipt of consideration, appropriate adjustments shall be made
by the Plan Administrator to (1) the maximum number and/or class of
securities issuable under the Plan, (2) the number and/or class of
securities and the exercise price per share in effect under each outstanding
option under the Plan (including options transferred to this Plan from the
Predecessor Plans), (3) the maximum

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number and/or class of securities for which officers of the Corporation
may be granted stock options, separately exercisable stock appreciation rights
and direct stock issuances under the Plan in the aggregate and (4) the maximum
number and/or class of securities by which the share reserve is to increase
automatically each calendar year pursuant to the provisions of Section V.B of
this Article One.  Such adjustments to
the outstanding options are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under such options.  The adjustments determined by the Plan
Administrator shall be final, binding and conclusive.

F.     Outstanding
awards granted pursuant to the Plan shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital
or business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.

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ARTICLE
TWO

DISCRETIONARY OPTION GRANT PROGRAM

I.              OPTION
TERMS

Each option shall be evidenced by one or more
documents in the form approved by the Plan Administrator; provided,
however, that each such document shall comply with the terms
specified below.  All options granted
under the Plan shall be Non-Statutory Options.

A.    Exercise Price.

1.     The
exercise price per share shall be fixed by the Plan Administrator.

2.     The
exercise price shall become immediately due upon exercise of the option and
shall, subject to the provisions of this Plan and the documents evidencing the
option, be payable in one or more of the forms specified below:

(a)   cash or check made payable
to the Corporation,

(b)   shares of Common Stock held
for the requisite period necessary to avoid a charge to the Corporation’s
earnings for financial reporting purposes and valued at Fair Market Value on
the Exercise Date, or

(c)   if the option is exercised
for vested shares, through a special sale and remittance procedure pursuant to
which the Optionee shall concurrently provide irrevocable instructions to
(i) a Corporation-designated brokerage firm to effect the immediate sale
of the purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld by the
Corporation by reason of such exercise and (ii) the Corporation to deliver
the certificates for the purchased shares directly to such brokerage firm in
order to complete the sale.

Except to the extent such sale and remittance
procedure is utilized, payment of the exercise price for the purchased shares
must be made on the Exercise Date.

B.    Exercise and Term of
Options.  Each option shall be
exercisable at such time or times, during such period and for such number of
shares as shall be determined by the Plan Administrator and set forth in the
documents evidencing the option.  However,
no option shall have a term in excess of ten (10) years measured from the
option grant date.

C.    Effect of Termination of
Service.

1.     The following provisions shall govern the exercise of any
options granted pursuant to the Discretionary Option Grant Program that are
outstanding at the time of the Optionee’s cessation of Service:

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(a)   Any
option outstanding at the time of the Optionee’s cessation of Service shall
remain exercisable for such period of time thereafter as shall be determined by
the Plan Administrator and set forth in the documents evidencing the option,
but no such option shall be exercisable after the expiration of the option
term.

(b)   Any
option outstanding at the time of the Optionee’s death and exercisable in whole
or in part at that time may be subsequently exercised by the personal
representative of the Optionee’s estate or by the person or persons to whom the
option is transferred pursuant to the Optionee’s will or the laws of
inheritance or by the Optionee’s designated beneficiary or beneficiaries of
that option.

(c)   Should
the Optionee’s Service be terminated for Misconduct or should the Optionee
otherwise engage in Misconduct while options granted pursuant to this
Article Two are outstanding, then all of those options shall terminate
immediately and cease to be outstanding.

(d)   During
the applicable post-Service exercise period, the option may not be exercised in
the aggregate for more than the number of vested shares for which the option is
exercisable on the date of the Optionee’s cessation of Service.  Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares for
which the option has not been exercised. 
However, the option shall, immediately upon the Optionee’s cessation of
Service, terminate and cease to be outstanding to the extent the option is not
otherwise at that time exercisable for vested shares.

2.     The Plan Administrator shall have complete discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:

(a)   extend
the period of time for which the option is to remain exercisable following the
Optionee’s cessation of Service from the limited exercise period otherwise in effect
for that option to such greater period of time as the Plan Administrator shall
deem appropriate, but in no event beyond the expiration of the option term,
and/or

(b)   permit
the option to be exercised, during the applicable post-Service exercise period,
not only with respect to the number of vested shares of Common Stock for which
such option is exercisable at the time of the Optionee’s cessation of Service
but also with respect to one or more additional installments in which the
Optionee would have vested had the Optionee continued in Service.

D.    Stockholder Rights.  The holder of an option shall have
no stockholder rights with respect to the shares subject to the option until
such person shall have exercised the option, paid the exercise price and become
a holder of record of the purchased shares.

E.     Repurchase Rights.  The Plan Administrator shall have
the discretion to grant options which are exercisable for unvested shares of
Common Stock.  Should the Optionee cease
Service while such shares are unvested, the Corporation shall have the right to
repurchase, at the exercise price paid per share, any or all of those unvested
shares.  The terms upon which

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such repurchase right shall be exercisable
(including the period and procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be established by the Plan
Administrator and set forth in the document evidencing such repurchase right.

F.     Limited Transferability of
Options.  During the lifetime
of the Optionee, Non-Statutory Options shall be exercisable only by the
Optionee and shall not be assignable or transferable other than by will or by
the laws of inheritance following the Optionee’s death.  However, the Plan Administrator may permit an
assignment, in whole or in part, during the Optionee’s lifetime, of a
Non-Statutory Option, if such assignment is in connection with the Optionee’s
estate plan and is to one or more members of the Optionee’s immediate family or
to a trust established exclusively for one or more such family members.  The assigned portion may only be exercised by
the person or persons who acquire a proprietary interest in the option pursuant
to the assignment.  The terms applicable
to the assigned portion shall be the same as those in effect for the option immediately
prior to such assignment and shall be set forth in such documents issued to the
assignee as the Plan Administrator may deem appropriate.  Notwithstanding the foregoing, the Optionee
may also designate one or more persons as the beneficiary or beneficiaries of
his or her outstanding options under this Article Two, and any outstanding
options shall, in accordance with such designation, automatically be
transferred to such beneficiary or beneficiaries upon the Optionee’s
death.  Such beneficiary or beneficiaries
shall take the transferred options subject to all the terms and conditions of
the applicable agreement evidencing each such transferred option, including
(without limitation) the limited time period during which the option may be
exercised following the Optionee’s death.

II.            CORPORATE TRANSACTION/CHANGE IN
CONTROL

A.    In the event of any Corporate Transaction, the shares of Common
Stock at the time subject to each outstanding option shall automatically vest
in full so that each such option shall, immediately prior to the effective date
of the Corporate Transaction, become exercisable for all the shares of Common
Stock at the time subject to such option and may be exercised for any or all of
those shares as fully vested shares of Common Stock.  However, an outstanding option shall not become vested on such an accelerated basis if and to the
extent:  (1) such option is, in
connection with the Corporate Transaction, to be assumed by the successor
corporation (or parent thereof) or (2) such option is to be replaced with
a cash incentive program of the successor corporation which preserves the
spread existing at the time of the Corporate Transaction on any shares for
which the option is not otherwise at that time exercisable and provides for
subsequent payout in accordance with the same exercise/vesting schedule
applicable to those option shares or (3) the acceleration of such option
is subject to other limitations imposed by the Plan Administrator at the time
of the option grant.

B.    All outstanding repurchase rights shall automatically terminate,
and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction, except to
the extent:  (1) those repurchase
rights are to be assigned to the successor corporation (or parent thereof) in
connection with such Corporate Transaction or (2) such accelerated vesting
is precluded by other limitations imposed by the Plan Administrator at the time
the repurchase right is issued.

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C.    Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).

D.    Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.  Appropriate adjustments to reflect such
Corporate Transaction shall also be made to (1) the exercise price payable
per share under each outstanding option, provided the aggregate exercise price
payable for such securities shall remain the same, (2) the maximum number
and/or class of securities available for issuance over the remaining term of
the Plan, (3) the maximum number and/or class of securities for which any
one person may be granted stock options, separately exercisable stock
appreciation rights and direct stock issuances under the Plan per calendar year
and (4) the maximum number and/or class of securities by which the share
reserve is to increase automatically each calendar year.  To the extent the holders of Common Stock
receive cash consideration for their Common Stock in consummation of the
Corporate Transaction, with the Plan Administrator’s consent the successor
corporation may, in connection with the assumption of the outstanding options,
substitute one or more shares of its own common stock with a fair market value
equivalent to the cash consideration paid per share of Common Stock in such
Corporate Transaction.

E.     Among its discretionary powers, the Plan Administrator shall have
the ability to structure an option (either at the time the option is granted or
at any time while the option remains outstanding) so that the option shall
become immediately exercisable and some or all of the shares subject to that
option shall automatically become vested (and some or all of the repurchase
rights of the Corporation with respect to the unvested shares subject to that
option shall immediately terminate) upon the occurrence of a Corporate
Transaction, a Change in Control, any other event or the Optionee’s Involuntary
Termination within a designated period of time following any of these events.

III.           CANCELLATION AND REGRANT OF OPTIONS

The Plan Administrator shall have the authority to
effect, at any time and from time to time, with the consent of the affected
option holders, the cancellation of any or all outstanding options under the
Discretionary Option Grant Program (including outstanding options incorporated
from the Predecessor Plans) and to grant in substitution new options covering the
same or different number of shares of Common Stock.

IV.           STOCK APPRECIATION RIGHTS

A.    The Plan Administrator shall have full power and authority to
grant to selected Optionees tandem stock appreciation rights.

B.    The following terms shall govern the grant and exercise of tandem
stock appreciation rights:

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1.     One or more Optionees may be granted the right, exercisable upon
such terms as the Plan Administrator may establish, to elect between the
exercise of the underlying option for shares of Common Stock and the surrender
of that option in exchange for a distribution from the Corporation in an amount
equal to the excess of (a) the Fair Market Value (on the option surrender date)
of the number of shares in which the Optionee is at the time vested under the surrendered
option (or surrendered portion thereof) over (b) the aggregate exercise price
payable for such shares.

2.     No such option surrender shall be effective unless it is
approved by the Plan Administrator, either at the time of the actual option
surrender or at any earlier time.  If the
surrender is so approved, then the distribution to which the Optionee shall be
entitled may be made in shares of Common Stock valued at Fair Market Value on
the option surrender date, in cash, or partly in shares and partly in cash, as
the Plan Administrator shall in its sole discretion deem appropriate.

3.     If the surrender of an option is not approved by the Plan
Administrator, then the Optionee shall retain whatever rights the Optionee had
under the surrendered option (or surrendered portion thereof) on the option
surrender date and may exercise such rights at any time prior to the later of (a) five (5) business days after the receipt of the
rejection notice or (b) the last day on which the option is otherwise
exercisable in accordance with the terms of the documents evidencing such
option, but in no event may such rights be exercised more than ten (10) years
after the option grant date.

 

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ARTICLE
THREE

STOCK ISSUANCE PROGRAM

I.              STOCK ISSUANCE TERMS

Shares of Common Stock may be issued under the Stock
Issuance Program through direct and immediate issuances without any intervening
option grants.  Each such stock issuance
shall be evidenced by a Stock Issuance Agreement which complies with the terms
specified below.  Shares of Common Stock
may also be issued under the Stock Issuance Program pursuant to share right
awards which entitle the recipients to receive those shares upon the attainment
of designated performance goals or the satisfaction of specified Service
requirements.

A.    Purchase Price.

1.     The purchase price per share shall be fixed by the Plan
Administrator.

2.     Subject to the provisions of Section I of
Article Four, shares of Common Stock may be issued under the Stock
Issuance Program for any of the following items of consideration which the Plan
Administrator may deem appropriate in each individual instance:

(a)   cash
or check made payable to the Corporation, or

(b)   past
services rendered to the Corporation (or any Parent or Subsidiary).

B.    Vesting Provisions.

1.     Shares of Common Stock issued under the Stock Issuance Program
may, in the discretion of the Plan Administrator, be fully and immediately
vested upon issuance or may vest in one or more installments over the
Participant’s period of Service or upon attainment of specified performance
objectives.  The elements of the vesting
schedule applicable to any unvested shares of Common Stock issued under the
Stock Issuance Program shall be determined by the Plan Administrator and
incorporated into the Stock Issuance Agreement. 
Shares of Common Stock may also be issued under the Stock Issuance
Program pursuant to share right awards which entitle the recipients to receive
those shares upon the attainment of designated performance goals or the
satisfaction of specified Service requirements.

2.     Any new, substituted or additional securities or other property
(including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to the Participant’s
unvested shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation’s
receipt of consideration shall be issued subject to (a) the same vesting
requirements applicable to the Participant’s unvested shares of Common Stock
and (b) such escrow arrangements as the Plan Administrator shall deem appropriate.

3.     The Participant shall have full stockholder rights with respect
to any shares of Common Stock issued to the Participant under the Stock
Issuance Program, whether or

 10
 

not the Participant’s interest in those
shares is vested.  Accordingly, the Participant
shall have the right to vote such shares and to receive any regular cash
dividends paid on such shares.

4.     Should the Participant cease to remain in Service while one or
more shares of Common Stock issued under the Stock Issuance Program are unvested
or should the performance objectives not be attained with respect to one or
more such unvested shares of Common Stock, then those shares shall be
immediately surrendered to the Corporation for cancellation, and the
Participant shall have no further stockholder rights with respect to those
shares.  To the extent the surrendered
shares were previously issued to the Participant for consideration paid in cash
or cash equivalent (including the Participant’s purchase-money indebtedness),
the Corporation shall repay to the Participant the cash consideration paid for
the surrendered shares and shall cancel the unpaid principal balance of any
outstanding purchase money note of the Participant attributable to the
surrendered shares.

5.     The Plan Administrator may in its discretion waive the surrender
and cancellation of one or more unvested shares of Common Stock which would
otherwise occur upon the cessation of the Participant’s Service or the
non-attainment of the performance objectives applicable to those shares.  Such waiver shall result in the immediate
vesting of the Participant’s interest in the shares of Common Stock as to which
the waiver applies.  Such waiver may be
effected at any time, whether before or after the Participant’s cessation of
Service or the attainment or non-attainment of the applicable performance
objectives.

6.     Outstanding share right awards under the Stock Issuance Program
shall automatically terminate, and no shares of Common Stock shall actually be
issued in satisfaction of those awards, if the performance goals or Service
requirements established for such awards are not attained or satisfied.  The Plan Administrator, however, shall have
the discretionary authority to issue shares of Common Stock under one or more
outstanding share right awards as to which the designated performance goals or
Service requirements have not been attained or satisfied.

II.            CORPORATE TRANSACTION/CHANGE IN
CONTROL

A.    All of the Corporation’s outstanding repurchase rights under the
Stock Issuance Program shall terminate automatically, and all the shares of
Common Stock subject to those terminated rights shall immediately vest in full,
in the event of any Corporate Transaction, except to the extent (i) those
repurchase rights are to be assigned to the successor corporation (or parent
thereof) in connection with such Corporate Transaction or (ii) such
accelerated vesting is precluded by other limitations imposed in the Stock
Issuance Agreement.

B.    The Plan Administrator shall have the discretionary authority to
structure one or more of the Corporation’s repurchase rights under the Stock
Issuance Program so that those rights shall automatically terminate in whole or
in part, and the shares of Common Stock subject to those terminated rights
shall immediately vest, upon the occurrence of a Corporate Transaction, a
Change in Control, any other event or the Participant’s Involuntary Termination
within a designated period of time following any of these events.

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ARTICLE
FOUR

MISCELLANEOUS

I.              FINANCING

The Plan Administrator may permit any Optionee or
Participant to pay the option exercise price under the Discretionary Option
Grant Program or the purchase price of shares issued under the Stock Issuance
Program by delivering a full-recourse, interest bearing promissory note payable
in one or more installments.  The terms
of any such promissory note (including the interest rate and the terms of
repayment) shall be established by the Plan Administrator in its sole
discretion.  In no event may the maximum
credit available to the Optionee or Participant exceed the sum of (A) the
aggregate option exercise price or purchase price payable for the purchased
shares (less the par value of those shares) plus (B) any Federal, state
and local income and employment tax liability incurred by the Optionee or the
Participant in connection with the option exercise or share purchase.

II.            TAX WITHHOLDING

A.    The Corporation’s obligation to deliver shares of Common Stock
upon the exercise of options or the issuance or vesting of such shares under
the Plan shall be subject to the satisfaction of all applicable Federal, state
and local income and employment tax withholding requirements.

B.    The Plan Administrator may, in its discretion, provide any or all
holders (other than independent contractors) of Non-Statutory Options or
unvested shares of Common Stock under the Plan with the right to use shares of
Common Stock in satisfaction of all or part of the Withholding Taxes to which
such holders may become subject in connection with the exercise of their
options or the vesting of their shares. 
Such right may be provided to any such holder in either or both of the
following formats:

1.     Stock Withholding:  The election to have the
Corporation withhold, from the shares of Common Stock otherwise issuable upon
the exercise of such Non-Statutory Option or the vesting of such shares, a
portion of those shares with an aggregate Fair Market Value equal to the
percentage of the Withholding Taxes (not to exceed one hundred percent (100%))
designated by the holder.

2.     Stock Delivery:  The election to deliver to the
Corporation, at the time the Non-Statutory Option is exercised or the shares
vest, one or more shares of Common Stock previously acquired by such holder
(other than in connection with the option exercise or share vesting triggering
the Withholding Taxes) with an aggregate Fair Market Value equal to the
percentage of the Withholding Taxes (not to exceed one hundred percent (100%))
designated by the holder.

III.           SHARE ESCROW/LEGENDS

Unvested shares may, in the Plan Administrator’s
discretion, be held in escrow by the Corporation until the Participant’s or the
Optionee’s interest in such shares vests or may be

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issued directly to the Participant or the Optionee
with restrictive legends on the certificates evidencing those unvested shares.

IV.           EFFECTIVE DATE AND TERM OF THE PLAN

A.    The Plan shall become effective immediately on the Plan Effective
Date.

B.    The Plan shall serve as the successor to the Predecessor Plans,
and no further option grants or direct stock issuances shall be made under
those Predecessor Plans after the Plan Effective Date.  All options outstanding under the Predecessor
Plans on the Plan Effective Date shall be transferred to the Plan at that time
and shall be treated as outstanding options under the Plan.  However, each outstanding option so
incorporated shall continue to be governed solely by the terms of the documents
evidencing such option, and no provision of the Plan shall be deemed to affect
or otherwise modify the rights or obligations of the holders of such
incorporated options with respect to their acquisition of shares of Common
Stock.

C.    One or more provisions of the Plan, including (without
limitation) the option/vesting acceleration provisions of Article Two relating
to Corporate Transactions and Changes in Control, may, in the Plan
Administrator’s discretion, be extended to one or more options incorporated
from the Predecessor Plans which do not otherwise contain such provisions.

D.    Unless terminated by the Board prior to such time, the Plan shall
terminate upon the tenth anniversary of the Plan’s adoption by the Board.  Should the Plan terminate when options and/or
unvested shares are outstanding, such awards shall continue in effect in
accordance with the provisions of the documents evidencing such grants or
issuances.

V.            AMENDMENT OF THE PLAN

A.    The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects.  However, no such amendment or modification
shall adversely affect the rights and obligations with respect to stock options
or unvested stock issuances at the time outstanding under the Plan unless the
Optionee or the Participant consents to such amendment or modification.

B.    The Board amended and restated the Plan on September 26, 2001 to
reflect a 1,100,000-share increase in the share reserve.

VI.           USE OF PROCEEDS

Any cash proceeds received by the Corporation from the
sale of shares of Common Stock under the Plan shall be used for any corporate
purpose.

VII.         REGULATORY APPROVALS

A.    The implementation of the Plan, the granting of any stock option
under the Plan and the issuance of any shares of Common Stock (1) upon the
exercise of any granted option or (2) under the Stock Issuance Program
shall be subject to the Corporation’s procurement

 13
 

of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the stock options
granted under it and the shares of Common Stock issued pursuant to it.

B.    No shares of Common Stock or other assets shall be issued or
delivered under the Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing
requirements of any Stock Exchange (or the Nasdaq Stock Market, if applicable)
on which Common Stock is then listed for trading.

VIII.        NO EMPLOYMENT/SERVICE RIGHTS

Nothing in the Plan shall confer upon the Optionee or
the Participant any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Corporation (or any Parent or Subsidiary employing or retaining such person) or
of the Optionee or the Participant, which rights are hereby expressly reserved
by each, to terminate such person’s Service at any time for any reason, with or
without cause.

 

 14

APPENDIX

The following definitions shall be in effect under the
Plan:

A.            Board shall mean the Corporation’s Board of
Directors.

B.            Change in Control shall mean a change in
ownership or control of the Corporation effected through either of the
following transactions:

(i)            the acquisition, directly or
indirectly by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Corporation), of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation’s outstanding securities pursuant to a tender or exchange offer
made directly to the Corporation’s stockholders, or

(ii)           a change in the composition of the
Board over a period of thirty-six (36) consecutive months or less such that a
majority of the Board members ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who either
(A) have been Board members continuously since the beginning of such
period or (B) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members described in
clause (A) who were still in office at the time the Board approved such
election or nomination.

C.            Code shall mean the Internal Revenue Code
of 1986, as amended.

D.            Common Stock shall mean the Corporation’s
common stock.

E.             Corporate Transaction shall mean either of
the following stockholder approved transactions to which the Corporation is a
party:

(i)            a merger, consolidation or
reorganization approved by the Corporation’s stockholders, unless
securities representing more than fifty percent (50%) of the total combined
voting power of the voting securities of the successor corporation are
immediately thereafter beneficially owned, directly or indirectly and in
substantially the same proportion, by the persons who beneficially owned the
Corporation’s outstanding voting securities immediately prior to such
transaction, or

(ii)           any
stockholder-approved transfer or other disposition of all or substantially all
of the Corporation’s assets.

F.             Corporation shall mean United Online, Inc.,
a Delaware corporation, and any corporate successor to all or substantially all
of the assets or voting stock of United Online, Inc.  which has assumed the Plan.

G.            Discretionary Option Grant Program shall
mean the discretionary option grant program in effect under Article Two of
the Plan.

H.            Employee shall mean an individual who is in
the employ of the Corporation (or any Parent or Subsidiary), subject to the
control and direction of the employer entity as to both the work to be
performed and the manner and method of performance.

I.              Exercise Date shall mean the date on which
the Corporation shall have received written notice of the option exercise.

J.             Fair Market Value per share of Common Stock
on any relevant date shall be determined in accordance with the following
provisions:

(i)            If the Common Stock is at the time
traded on the Nasdaq Stock Market, then the Fair Market Value shall be the
closing selling price per share of Common Stock on the date in question, as
such price is reported by the National Association of Securities Dealers on the
Nasdaq Stock Market.  If there is no
closing selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last preceding date
for which such quotation exists.

(ii)           If the Common Stock is at the time
listed on any Stock Exchange, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange.  If there
is no closing selling price for the Common Stock on the date in question, then
the Fair Market Value shall be the closing selling price on the last preceding
date for which such quotation exists.

K.            Involuntary Termination shall mean, except
as otherwise determined by the Plan Administrator, the termination of the
Service of any individual which occurs by reason of:

(i)            such individual’s involuntary
dismissal or discharge by the Corporation (or any Parent or Subsidiary) for
reasons other than Misconduct, or

(ii)           such individual’s voluntary
resignation following (A) a material reduction in the scope of his or her
day-to-day responsibilities at the Corporation (or any Parent or Subsidiary),
it being understood that a change in such individual’s title shall not, in and
of itself, be deemed a material reduction, (B) a reduction in his or her
base salary or (C) a relocation of such individual’s place of employment
by more than fifty (50) miles, provided and only if such change, reduction or
relocation is effected by the Corporation (or any Parent or Subsidiary) without
the individual’s consent.

L.             Misconduct shall mean the commission of any
act of fraud, embezzlement or dishonesty by the Optionee or Participant, any
unauthorized use or disclosure by such person of confidential information or
trade secrets of the Corporation (or any Parent or Subsidiary), or any other
intentional misconduct by such person adversely affecting the business or
affairs of the Corporation (or any Parent or Subsidiary) in a material
manner.  The foregoing definition shall
not be deemed to be inclusive of all the acts or omissions which the
Corporation (or any Parent 

 A-2
 

or Subsidiary) may consider as grounds for the dismissal or discharge
of any Optionee, Participant or other person in the Service of the Corporation
(or any Parent or Subsidiary).

M.           1934 Act shall mean the Securities Exchange
Act of 1934, as amended.

N.            Non-Statutory Option shall mean an option
not intended to satisfy the requirements of Code Section 422.

O.            Optionee shall mean any person to whom an
option is granted under the Discretionary Option Grant Program.

P.             Parent shall mean any corporation (other
than the Corporation) in an unbroken chain of corporations ending with the
Corporation, provided each corporation in the unbroken chain (other than the
Corporation) owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

Q.            Participant shall mean any person who is
issued shares of Common Stock under the Stock Issuance Program.

R.            Permanent Disability or Permanently Disabled
shall mean the inability of the Optionee or the Participant to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or has lasted or
can be expected to last for a continuous period of twelve (12) months or more.

S.             Plan shall mean the United Online, Inc.
2001 Supplemental Stock Incentive Plan, as set forth in this document.

T.            Plan Administrator shall mean the
particular entity, whether the Primary Committee, the Board or the Secondary
Committee, which is authorized to administer the Discretionary Option Grant and
Stock Issuance Programs with respect to one or more classes of eligible
persons, to the extent such entity is carrying out its administrative functions
under those programs with respect to the persons under its jurisdiction.

U.            Plan Effective Date shall mean the date the
merger of NetZero, Inc. and NZ Acquisition Corp. and the merger of Juno Online
Services, Inc. and JO Acquisition Corp. become effective as contemplated by the
Agreement and Plan of Merger, by and among NetZero, Inc., Juno Online Services,
Inc., United Online, Inc. and the other parties thereto, dated as of June 7,
2001.

V.            Predecessor Plans shall mean the Juno
Online Services, Inc. 2001 Supplemental Stock Incentive Plan and the NetZero,
Inc. 2001 Non-Executive Stock Incentive Plan.

W.           Primary Committee shall mean the committee
of two or more non-employee Board members appointed by the Board to administer
the Discretionary Option Grant and Stock Issuance Programs with respect to
Section 16 Insiders.

 A-3
 

X.            Secondary Committee shall mean a committee
of one or more Board members appointed by the Board to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to eligible
persons other than Section 16 Insiders.

Y.            Section 16 Insider shall mean an
officer or director of the Corporation subject to the short-swing profit
liabilities of Section 16 of the 1934 Act.

Z.            Service shall mean the performance of
services for the Corporation (or any Parent or Subsidiary) by a person in the
capacity of an Employee, a non-employee member of the board of directors, or an
independent contractor, except to the extent otherwise specifically provided in
the documents evidencing the option grant or stock issuance.

AA.        Stock Exchange shall mean either the
American Stock Exchange or the New York Stock Exchange.

BB.          Stock Issuance Agreement shall mean the
agreement entered into by the Corporation and the Participant at the time of
issuance of shares of Common Stock under the Stock Issuance Program.

CC.          Stock Issuance Program shall mean the stock
issuance program in effect under Article Three of the Plan.

DD.         Subsidiary shall mean any corporation
(other than the Corporation) in an unbroken chain of corporations beginning
with the Corporation, provided each corporation (other than the last
corporation) in the unbroken chain owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

EE.          Withholding Taxes shall mean the Federal,
state and local income and employment withholding taxes to which the holder of
Non-Statutory Options or unvested shares of Common Stock may become subject in
connection with the exercise of those options or the vesting of those shares.

 A-4Exhibit 4.1

Amended and Restated as of June 30, 2006

PENN WEST ENERGY TRUST

	
  TRUST INDENTURE

  

Burnet, Duckworth & Palmer LLP

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE 1
  INTERPRETATION

  	
   

  	
  1

  
	
   

  	
  1.1

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
  1.2

  	
  Meaning of “Outstanding”

  	
   

  	
  6

  
	
   

  	
  1.3

  	
  Income Tax Act

  	
   

  	
  6

  
	
   

  	
  1.4

  	
  Headings

  	
   

  	
  7

  
	
   

  	
  1.5

  	
  Construction of Terms

  	
   

  	
  7

  
	
   

  	
  1.6

  	
  References to Acts Performed by the Trust

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2 DECLARATION
  OF TRUST

  	
   

  	
  7

  
	
   

  	
  2.1

  	
  Settlement of Trust

  	
   

  	
  7

  
	
   

  	
  2.2

  	
  Declaration of Trust

  	
   

  	
  7

  
	
   

  	
  2.3

  	
  Name

  	
   

  	
  7

  
	
   

  	
  2.4

  	
  Nature of the Trust

  	
   

  	
  7

  
	
   

  	
  2.5

  	
  Legal Entitlements and Restrictions on Unitholders

  	
   

  	
  8

  
	
   

  	
  2.6

  	
  Liability of Unitholders

  	
   

  	
  8

  
	
   

  	
  2.7

  	
  Contracts of the Trust

  	
   

  	
  8

  
	
   

  	
  2.8

  	
  Head Office of Trust

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3 ISSUE AND
  SALE OF TRUST UNITS

  	
   

  	
  9

  
	
   

  	
  3.1

  	
  Nature and Ranking of Trust Units

  	
   

  	
  9

  
	
   

  	
  3.2

  	
  Authorized Number of Trust Units

  	
   

  	
  9

  
	
   

  	
  3.3

  	
  No Fractional Trust Units

  	
   

  	
  9

  
	
   

  	
  3.4

  	
  Offerings of Trust Units and Indebtedness

  	
   

  	
  9

  
	
   

  	
  3.5

  	
  Ranking of Trust Units

  	
   

  	
  10

  
	
   

  	
  3.6

  	
  Trust Units Fully Paid and Non-Assessable

  	
   

  	
  10

  
	
   

  	
  3.7

  	
  No Conversion, Retraction, Redemption or Pre-Emptive
  Rights

  	
   

  	
  10

  
	
   

  	
  3.8

  	
  Consolidation of Trust Units

  	
   

  	
  10

  
	
   

  	
  3.9

  	
  Status as a Mutual Fund Trust

  	
   

  	
  10

  
	
   

  	
  3.10

  	
  Special Voting Units

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4 INVESTMENTS
  OF TRUST FUND

  	
   

  	
  11

  
	
   

  	
  4.1

  	
  Purpose of the Trust

  	
   

  	
  11

  
	
   

  	
  4.2

  	
  Permitted Investments

  	
   

  	
  11

  
	
   

  	
  4.3

  	
  Other Investment Restrictions

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5
  DISTRIBUTIONS

  	
   

  	
  12

  
	
   

  	
  5.1

  	
  Determination of Distributable Cash of the Trust

  	
   

  	
  12

  
	
   

  	
  5.2

  	
  Distributable Cash of the Trust to Become Payable

  	
   

  	
  13

  
	
   

  	
  5.3

  	
  Computation of Income and Net Realized Capital Gains

  	
   

  	
  13

  
	
   

  	
  5.4

  	
  Net Realized Capital Gains to Become Payable

  	
   

  	
  13

  
	
   

  	
  5.5

  	
  Net Income and Net Realized Capital Gains,
  Redemption Income and Redemption Gains for Income Tax Purposes to Become
  Payable

  	
   

  	
  13

  
	
   

  	
  5.6

  	
  Other Amounts

  	
   

  	
  14

  
	
   

  	
  5.7

  	
  Enforcement

  	
   

  	
  14

  
	
   

  	
  5.8

  	
  Payment of Amounts Payable

  	
   

  	
  14

  
	
   

  	
  5.9

  	
  Distribution of Additional Trust Units

  	
   

  	
  14

  
	
   

  	
  5.10

  	
  Withholding Taxes

  	
   

  	
  15

  
	
   

  	
  5.11

  	
  Character of Distributions and Designations

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6
  APPOINTMENT, RESIGNATION AND REMOVAL OF TRUSTEE

  	
   

  	
  15

  
	
   

  	
  6.1

  	
  Trustee’s Term of Office

  	
   

  	
  15

  
	
   

  	
  6.2

  	
  Resignation of Trustee

  	
   

  	
  15

  
	
   

  	
  6.3

  	
  Removal of Trustee

  	
   

  	
  16

  
	
   

  	
  6.4

  	
  Appointment of Successor to Trustee

  	
   

  	
  16

  
	
   

  	
  6.5

  	
  Failure to Appoint Successor

  	
   

  	
  16

  
						

 

 i
 

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  6.6

  	
  Qualifications of Trustee

  	
   

  	
  16

  
	
   

  	
  6.7

  	
  Continuing Obligations of the Trust

  	
   

  	
  17

  
	
   

  	
  6.8

  	
  Vacancies

  	
   

  	
  17

  
	
   

  	
  6.9

  	
  Successor and Additional Trustee

  	
   

  	
  17

  
	
   

  	
  6.10

  	
  Validity of Acts

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7 CONCERNING
  THE TRUSTEE  

  	
   

  	
  17

  
	
   

  	
  7.1

  	
  Powers of the Trustee and the Administrator

  	
   

  	
  17

  
	
   

  	
  7.2

  	
  Specific Powers and Authorities

  	
   

  	
  18

  
	
   

  	
  7.3

  	
  Restrictions on the Trustee’s Powers

  	
   

  	
  21

  
	
   

  	
  7.4

  	
  Banking

  	
   

  	
  22

  
	
   

  	
  7.5

  	
  Standard of Care

  	
   

  	
  22

  
	
   

  	
  7.6

  	
  Fees and Expenses

  	
   

  	
  22

  
	
   

  	
  7.7

  	
  Limitations on Liability of Trustee

  	
   

  	
  23

  
	
   

  	
  7.8

  	
  Indemnification of Trustee

  	
   

  	
  23

  
	
   

  	
  7.9

  	
  Environmental Indemnity

  	
   

  	
  24

  
	
   

  	
  7.10

  	
  Apparent Authority

  	
   

  	
  24

  
	
   

  	
  7.11

  	
  Notice to Unitholders of Non-Eligibility for
  Deferred Income Plans

  	
   

  	
  25

  
	
   

  	
  7.12

  	
  Declaration as to Beneficial Ownership

  	
   

  	
  25

  
	
   

  	
  7.13

  	
  Conditions Precedent to Trustee’s Obligations to Act

  	
   

  	
  25

  
	
   

  	
  7.14

  	
  Survival of Indemnities

  	
   

  	
  25

  
	
   

  	
  7.15

  	
  Trustee May Have Other Interests

  	
   

  	
  25

  
	
   

  	
  7.16

  	
  Documents Held by Trustee

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8 DELEGATION
  OF POWERS

  	
   

  	
  26

  
	
   

  	
  8.1

  	
  General Delegation to the Administrator

  	
   

  	
  26

  
	
   

  	
  8.2

  	
  Administration Agreement

  	
   

  	
  26

  
	
   

  	
  8.3

  	
  Public Disclosure Documents

  	
   

  	
  27

  
	
   

  	
  8.4

  	
  Acceptance of Delegation

  	
   

  	
  27

  
	
   

  	
  8.5

  	
  Power of Attorney

  	
   

  	
  27

  
	
   

  	
  8.6

  	
  Liability of Trustee

  	
   

  	
  27

  
	
   

  	
  8.7

  	
  Compliance

  	
   

  	
  27

  
	
   

  	
  8.8

  	
  Liability of Trustee

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9 AMENDMENT

  	
   

  	
  28

  
	
   

  	
  9.1

  	
  Amendment

  	
   

  	
  28

  
	
   

  	
  9.2

  	
  Amendments Prior to Trust Reorganization

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10 MEETINGS
  OF UNITHOLDERS

  	
   

  	
  29

  
	
   

  	
  10.1

  	
  Annual and Special Meetings of Unitholders

  	
   

  	
  29

  
	
   

  	
  10.2

  	
  Notice of Meetings

  	
   

  	
  29

  
	
   

  	
  10.3

  	
  Quorum

  	
   

  	
  29

  
	
   

  	
  10.4

  	
  Voting Rights of Unitholders

  	
   

  	
  30

  
	
   

  	
  10.5

  	
  Resolutions

  	
   

  	
  30

  
	
   

  	
  10.6

  	
  Meaning of “Special Resolution”

  	
   

  	
  30

  
	
   

  	
  10.7

  	
  Record Date for Voting

  	
   

  	
  31

  
	
   

  	
  10.8

  	
  Binding Effect of Resolutions

  	
   

  	
  31

  
	
   

  	
  10.9

  	
  Solicitation of Proxies

  	
   

  	
  31

  
	
   

  	
  10.10

  	
  No Breach

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11
  CERTIFICATES, REGISTRATION AND TRANSFER OF TRUST UNITS

  	
   

  	
  32

  
	
   

  	
  11.1

  	
  Nature of Trust Units

  	
   

  	
  32

  
	
   

  	
  11.2

  	
  Certificates

  	
   

  	
  32

  
	
   

  	
  11.3

  	
  Register of Unitholders

  	
   

  	
  32

  
	
   

  	
  11.4

  	
  Transfer of Trust Units

  	
   

  	
  33

  
						

 

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  Page

  
	
   

  	
  11.5

  	
  Trust Units Held Jointly or in a Fiduciary Capacity

  	
   

  	
  33

  
	
   

  	
  11.6

  	
  Performance of Trust

  	
   

  	
  33

  
	
   

  	
  11.7

  	
  Lost Certificates

  	
   

  	
  34

  
	
   

  	
  11.8

  	
  Death of a Unitholder

  	
   

  	
  34

  
	
   

  	
  11.9

  	
  Unclaimed Interest or Distribution

  	
   

  	
  34

  
	
   

  	
  11.10

  	
  Exchanges of Trust Certificates

  	
   

  	
  34

  
	
   

  	
  11.11

  	
  Offer for Units

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12
  TERMINATION

  	
   

  	
  36

  
	
   

  	
  12.1

  	
  Termination Date

  	
   

  	
  36

  
	
   

  	
  12.2

  	
  Termination by Special Resolution of Unitholders

  	
   

  	
  36

  
	
   

  	
  12.3

  	
  Procedure Upon Termination

  	
   

  	
  37

  
	
   

  	
  12.4

  	
  Powers of the Trustee upon Termination

  	
   

  	
  37

  
	
   

  	
  12.5

  	
  Sale of Investments

  	
   

  	
  37

  
	
   

  	
  12.6

  	
  Distribution of Proceeds

  	
   

  	
  37

  
	
   

  	
  12.7

  	
  Further Notice to Unitholders

  	
   

  	
  37

  
	
   

  	
  12.8

  	
  Responsibility of Trustee after Sale and Conversion

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13
  SUPPLEMENTAL INDENTURES

  	
   

  	
  38

  
	
   

  	
  13.1

  	
  Provision for Supplemental Indentures

  	
   

  	
  38

  
	
   

  	
  13.2

  	
  Provision for Amended and Restated Indenture

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14 NOTICES TO
  UNITHOLDERS

  	
   

  	
  38

  
	
   

  	
  14.1

  	
  Notices

  	
   

  	
  38

  
	
   

  	
  14.2

  	
  Failure to Give Notice

  	
   

  	
  39

  
	
   

  	
  14.3

  	
  Joint Holders

  	
   

  	
  39

  
	
   

  	
  14.4

  	
  Service of Notice

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 15 AUDITORS

  	
   

  	
  39

  
	
   

  	
  15.1

  	
  Qualification of Auditors

  	
   

  	
  39

  
	
   

  	
  15.2

  	
  Appointment of Auditors

  	
   

  	
  39

  
	
   

  	
  15.3

  	
  Change of Auditors

  	
   

  	
  39

  
	
   

  	
  15.4

  	
  Filling Vacancy

  	
   

  	
  39

  
	
   

  	
  15.5

  	
  Reports of Auditors

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 16 ACCOUNTS,
  RECORDS AND FINANCIAL STATEMENTS

  	
   

  	
  40

  
	
   

  	
  16.1

  	
  Records

  	
   

  	
  40

  
	
   

  	
  16.2

  	
  Quarterly Reporting to Unitholders

  	
   

  	
  40

  
	
   

  	
  16.3

  	
  Annual Reporting to Unitholders

  	
   

  	
  40

  
	
   

  	
  16.4

  	
  Information Available to Unitholders

  	
   

  	
  40

  
	
   

  	
  16.5

  	
  Taxes: Obligation of the Trustee

  	
   

  	
  41

  
	
   

  	
  16.6

  	
  Income Tax: Designations

  	
   

  	
  41

  
	
   

  	
  16.7

  	
  Income Tax: Deductions, Allowances and Credits

  	
   

  	
  41

  
	
   

  	
  16.8

  	
  Fiscal Year

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 17
  MISCELLANEOUS

  	
   

  	
  41

  
	
   

  	
  17.1

  	
  Continued Listing

  	
   

  	
  41

  
	
   

  	
  17.2

  	
  Successors and Assigns

  	
   

  	
  41

  
	
   

  	
  17.3

  	
  Counterparts

  	
   

  	
  42

  
	
   

  	
  17.4

  	
  Severability

  	
   

  	
  42

  
	
   

  	
  17.5

  	
  Day Not a Business Day

  	
   

  	
  42

  
	
   

  	
  17.6

  	
  Time of the Essence

  	
   

  	
  42

  
	
   

  	
  17.7

  	
  Governing Law

  	
   

  	
  42

  
	
   

  	
  17.8

  	
  Notices to Trustee and the Corporation

  	
   

  	
  42

  
	
   

  	
  17.9

  	
  Electronic Execution of Documents

  	
   

  	
  43

  
						

 

 iii
 

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  17.10

  	
  Electronic Delivery of Documents

  	
   

  	
  43

  
	
   

  	
  17.11

  	
  References to Agreements

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 18 REDEMPTION
  OF TRUST UNITS

  	
   

  	
  43

  
	
   

  	
  18.1

  	
  Right of Redemption

  	
   

  	
  43

  
	
   

  	
  18.2

  	
  Exercise of Redemption Right

  	
   

  	
  43

  
	
   

  	
  18.3

  	
  Calculation of Redemption Price Based on Market
  Price

  	
   

  	
  43

  
	
   

  	
  18.4

  	
  Cash Payment of Market Redemption Price

  	
   

  	
  44

  
	
   

  	
  18.5

  	
  Limitation Regarding Cash Payment of Market
  Redemption Price

  	
   

  	
  44

  
	
   

  	
  18.6

  	
  Cancellation of Certificates for all Redeemed Trust
  Units

  	
   

  	
  45

  
	
   

  	
  18.7

  	
  Withholdings by the Trustee

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 19 MERGER
  WITH PETROFUND ENERGY TRUST

  	
   

  	
  45

  
	
   

  	
  19.1

  	
  Creation of Penn West Special Units

  	
   

  	
  45

  
	
   

  	
  19.2

  	
  Dissenting Unitholders

  	
   

  	
  45

  
	
   

  	
  19.3

  	
  Redesignation of Penn West Units

  	
   

  	
  45

  
	
   

  	
  19.4

  	
  Purchase of Petrofund Assets

  	
   

  	
  46

  
	
   

  	
  19.5

  	
  Cancellation of Penn West Special Units

  	
   

  	
  46

  
	
   

  	
  19.6

  	
  Unit Certificate for Penn West Special Units

  	
   

  	
  46

  
	
   

  	
  19.7

  	
  Facilitation of Plan of Arrangement

  	
   

  	
  46

  
	
   

  	
  19.8

  	
  Definitions

  	
   

  	
  46

  
	
   

  	
  19.9

  	
  Application of Article 19

  	
   

  	
  46

  
						

 

 iv

PENN
WEST ENERGY TRUST

TRUST INDENTURE made the
22nd day of April, 2005 as amended and restated on each of May 27, 2005,
May 31, 2005 and June 30, 2006.

BETWEEN:

CIBC MELLON TRUST COMPANY, a trust company existing under the
laws of Canada, with offices in the City of Calgary, in the Province of Alberta
in its capacity as trustee of Penn West Energy Trust (hereinafter called the “Trustee”)

OF THE FIRST PART

and

PENN WEST PETROLEUM LTD.,
a body corporate incorporated under the laws of Alberta, with offices in the
City of Calgary, in the Province of Alberta (hereinafter called the “Corporation”)

OF THE SECOND PART

WHEREAS the Settlor has
paid to the Trustee an amount of twenty thousand dollars in lawful money of
Canada for the purpose of settling the Trust;

AND WHEREAS it is
intended that the beneficiaries of the Trust shall be the holders of Trust
Units, each of which Trust Units shall rank equally in all respects with every
other Trust Unit;

AND WHEREAS it is
intended that the Trust will initially issue Trust Units under the Plan of
Arrangement and thereafter will offer the Trust Units for sale to members of
the public from time to time;

AND WHEREAS it is
intended that the Trust shall qualify as a “unit trust” and as a “mutual fund
trust” under the provisions of paragraph 108(2)(a) and
subsection 132(6) of the Tax Act;

AND WHEREAS the parties
hereto desire to set out the terms and conditions which shall govern the
settlement and the administration of the Trust;

NOW THEREFORE THIS
INDENTURE WITNESSETH that in consideration of the premises and the mutual and
respective covenants and agreements contained herein, the Trustee declares and
covenants and agrees with and in favour of the holders from time to time of the
Trust Units and the Corporation as follows:

ARTICLE 1

INTERPRETATION

1.1                                                                               Definitions

In this Indenture,
including the recitals, and in the Trust Certificates and schedules hereto,
unless the context otherwise requires, the following words and expressions
shall have the following meanings:

(a)                               “ABCA” means the Business Corporations Act (Alberta) as amended from time to
time, including the regulations promulgated thereunder;

(b)                              “AcquisitionCo” means Penn West
AcquisitionCo Inc., a corporation to be incorporated under the ABCA by the
Trust for the purposes of giving effect to the Plan of Arrangement and the
Trust Reorganization, and any successors thereto;

(c)                               “Administration Agreement” means the
agreement between the Trustee and the Corporation pursuant to which the
Corporation has agreed to provide certain administrative and advisory services
in connection with the Trust;

(d)                              “Administrator” means the Corporation at
such time as it enters into the Administration Agreement with the Trustee;

(e)                               “Affiliate” has the meaning set forth in the
Securities Act (Alberta), as
amended from time to time;

(f)                                 “ARC’’ means Alberta Royalty Credit within
the meaning of the Alberta Corporate Tax Act;

(g)                              “Associate” has the meaning set forth in the
Securities Act (Alberta) as
amended from time to time;

(h)                              “Auditors” means KPMG LLP, or such other
firm of chartered accountants as may be appointed as auditor or auditors of the
Trust by or in accordance with Article 15;

(i)                                  “Business Day” means a day other than a
Saturday, Sunday or holiday in the City of Calgary in the Province of Alberta;

(j)                                  “Closing” means the completion of the Trust
Reorganization and “Date of Closing”
means the date on which the Closing occurs;

(k)                               “Corporation” means Penn West Petroleum
Ltd., a corporation incorporated under the ABCA, and any successors thereto,
including any corporation continuing after the amalgamation of the Corporation,
AcquisitionCo, Northern Reef Petroleum Ltd. and Penn West Exploration Ltd.;

(l)                                  “Counsel” means a law firm (which may be
counsel to the Administrator) reasonably acceptable to the Trustee;

(m)                            “Credit Agreement” means any agreement between a Lender and
the Trust or any Affiliate of the Trust, or any similar agreement which
supplements or replaces a Credit Agreement between the Trust or any Affiliate
of the Trust and a Lender;

(n)                              “Debt Service Charges’’ means all interest
(including discount amounts on bankers’ acceptances and commercial paper),
fees, yield maintenance amounts, bonuses, penalties, termination payments and
principal and other payments and other costs, expenses and disbursements
relating to the borrowing of funds or relating to any hedging or swap or other
derivative facilities, in either case by the Trust or any Affiliate of the
Trust and including, without limitation, pursuant to any Credit Agreement;

(o)                              “Distributable Cash of the Trust” has the
meaning set forth in Section 5.1;

(p)                              “Distribution Record Date” means the last
day of each calendar month or such other date as may be determined from time to
time by the Trustee upon the recommendation of the board of directors of the
Corporation, except that December 31 shall in all cases be a Distribution
Record Date;

(q)                              “Indemnified Parties” has the meaning set
forth in Section 7.9;

(r)                                 “Issue Expenses” means all expenses of an
Offering payable by the Trust including legal fees, accounting fees and
printing expenses and all other fees and expenses which may be described,
whether generally or specifically, in any Offering Document relating to the
particular Offering, but excluding Underwriter’s Fees;

 2
 

(s)                               “Lender” means the lender or lenders (or any
of its or their Affiliates) providing one or more credit or debt facilities,
hedging or swap or other derivatives facilities or any other ancillary
facilities to the Trust or any Affiliate of the Trust;

(t)                                 “Market Redemption Price” has the meaning
set forth in Section 18.3;

(u)                              “Material Contracts” means this Trust
Indenture, the Administration Agreement, any Credit Agreement, the NPI
Agreement or Royalty Agreement, each as amended or replaced from time to time,
and any Underwriting Agreement and any loan agreement, credit agreement,
royalty agreement, indenture or other agreement entered into by the Trust for
the purpose of making any Subsequent Investment;

(v)                              “Net Income” has the meaning set forth in
Section 5.3;

(w)                            “Net Realized Capital Gains” has the meaning
set forth in Section 5.3;

(x)                                “Non-Resident” means a person who is a “non-resident”
for purposes of the Tax Act; or a partnership that is not a Canadian
partnership for purposes of the Tax Act;

(y)                              “Notes” means the promissory notes to be
issued by AcquisitionCo pursuant to a note indenture in accordance with the
Plan of Arrangement;

(z)                                “NPI” means the net profits interest granted
under the NPI Agreement;

(aa)                         “NPI Agreement” means the net profits
interest agreement to be entered into between the Corporation and AcquisitionCo
and transferred by AcquisitionCo to the Trust concurrent with the Plan of
Arrangement becoming effective;

(bb)                       “Offering” means any issuance or offering of
Trust Units or any rights, warrants, debentures, notes or other evidences of
indebtedness or other securities to purchase, to convert into or exchange into
Trust Units or any other securities on a public or private basis in Canada or
elsewhere;

(cc)                         “Offering Documents” means any one or more
of a prospectus, information memorandum, private placement memorandum and
similar public or private offering document, or any understanding, commitment
or agreement in respect of an Offering, and including the Information Circular
of the Corporation to be prepared in connection with the Plan of Arrangement
and the Trust Reorganization;

(dd)                       “Ordinary Resolution” means a resolution
approved at a meeting of Unitholders by more than 50% of the votes cast in
respect of the resolution by or on behalf of Unitholders (and including the
holders of Special Voting Units, if any) present in person or represented by
proxy at the meeting;

(ee)                         “outstanding”, in relation to Trust Units,
has the meaning attributed thereto in Section 1.2 hereof;

(ff)                             “Partnership” means Penn West Petroleum, a
general partnership;

(gg)                       “Payment Date” has the meaning set forth in
Section 5.8;

(hh)                       “Penn West Notes” means the promissory notes
to be issued by the Corporation pursuant to a note indenture in accordance with
the Plan of Arrangement;

(ii)                               “Permitted Investments’’ means:

(i)                                  loan
advances to any Affiliate of the Trust;

(ii)                               interest
bearing accounts of certain financial institutions, including Canadian
chartered banks and the Trustee and any Affiliate of the Trustee;

 3
 

(iii)                            obligations
issued or guaranteed by the Government of Canada or any province of Canada or
any agency or instrumentality thereof;

(iv)                           term
deposits, guaranteed investment certificates of deposit or bankers’ acceptances
of or guaranteed or accepted by any Canadian chartered bank or other financial
institution (including the Trustee and any Affiliate of the Trustee), the short
term debt or deposits of which have been rated at least A by Standard &
Poor’s Corporation or the equivalent by Moody’s Investors Service, Inc. or
Dominion Bond Rating Service Limited; and

(v)                              commercial
paper rated at least A by Standard & Poor’s Corporation or the equivalent
by Moody’s Investor Services, Inc. or Dominion Bond Rating Service Limited;

provided that any
investment of the type referred to in Section 4.3 shall not be a Permitted
Investment;

(jj)                               “person” means an individual, partnership,
body corporate, association or trust;

(kk)                         “Plan of Arrangement” means the plan of
arrangement setting forth the terms and conditions on which the Corporation,
AcquisitionCo and the Trust propose to complete an arrangement under
section 193 of the ABCA in order to effect the Trust Reorganization;

(ll)                               “Pro Rata Share” of any particular amount in
respect of a Unitholder at any time shall be the amount obtained by dividing
the number of Trust Units that are owned by that Unitholder at that time by the
total number of all Trust Units that are issued and outstanding at that time;

(mm)                   “Properties’’ means the working, Royalty or
other interests of the Trust or any Affiliate of the Trust from time to time in
any petroleum and natural gas rights, tangibles and miscellaneous interests,
including the properties in which the Corporation or other Affiliates of the
Trust have an interest as at the date hereof, and properties which may be
acquired by any Affiliates of the Trust at a future date;

(nn)                       “Redemption Gains” has the meaning set forth
in Section 5.3;

(oo)                       “Redemption Income” has the meaning set
forth in Section 5.3;

(pp)                       “Redemption Notes” means promissory notes
issued in series, or otherwise, by AcquisitionCo pursuant to a note indenture
and issued to redeeming Unitholders in principal amounts equal to the Market
Redemption Price of the Trust Units to be redeemed in consideration of a cash
payment or by reducing any indebtedness of AcquisitionCo to the Trust and
having the following terms and conditions:

(i)                                     unsecured
and bearing interest from and including the issue date of each such note at a
market rate determined at the time of issuance by the board of directors of
AcquisitionCo having regard to then prevailing rates on debt instruments having
equivalent terms and conditions and payable monthly in arrears (with interest
after as well as before maturity, default and judgment, and interest on overdue
interest at such rate);

(ii)                                  subordinated
and postponed to all senior indebtedness for borrowed money (including
indebtedness under hedging or swap or other derivative facilities) of
AcquisitionCo, including pursuant to any guarantee, indemnity or joint and several
liability of AcquisitionCo for any such borrowed money of the Trust or any
affiliate thereof and which may be subject to specific subordination and
postponement agreements to be entered into by the Trustee pursuant to the note
indenture with holders of senior indebtedness;

(iii)                               being
due and payable on or prior to the third anniversary of the date of issuance
without penalty unless prepaid prior to that time; and

 4
 

(iv)                              subject
to such other standard terms and conditions as would be included in a note
indenture for promissory notes of this kind, including, without limitation,
standstills on enforcement in the event of a default under senior indebtedness
for borrowed money referred to in (ii) above, as may be approved by
AcquisitionCo;

(qq)                       “Royalty” means a right of the Trust to
receive a petroleum and natural gas royalty and whether called a royalty, net
profits interest or otherwise;

(rr)                             “Royalty Agreement” means any agreement
granting a Royalty entered into with the Trust;

(ss)                         “Settled Amount” means the amount of twenty
thousand dollars in lawful money of Canada paid by the Settlor to the Trustee
for the purpose of settling the Trust;

(tt)                             “Settlor” means William DeJong;

(uu)                       “Shares” means the issued and outstanding
common shares of the Corporation as of the Date of Closing and also means
shares of any class issued by the Corporation thereafter;

(vv)                       “Special Resolution” has the meaning
attributed thereto in Section 10.6;

(ww)                   “Special Voting Unit” has the meaning
ascribed thereto in Section 3.10;

(xx)                           “Subsequent Investment” means any of the
investments which the Trust may make pursuant to
Subsection 4.1(b)-4.1(f));

(yy)                       “Tax Act” has the meaning ascribed thereto
in Section 1.3;

(zz)                           “Transfer Agent” means the CIBC Mellon Trust
Company, its successors or assigns, in its capacity as transfer agent and
registrar for the Trust Units, or such other company as may from time to time
be appointed by the Trustee to act as transfer agent and registrar for the
Trust Units together, in either such case, with any subtransfer agent duly
appointed by the transfer agent;

(aaa)                   “Trust” means Penn West Energy Trust and
refers to the trust relationship between the Trustee and the Unitholders with
respect to the Trust Fund, upon the terms and conditions set out herein from
time to time and, if the context requires, may also refer to the Trust Fund;

(bbb)                “Trust Certificate” or “Trust Unit Certificate” means a
certificate, in the form approved by the Trustee, evidencing one or more Trust
Units, issued and certified in accordance with the provisions hereof;

(ccc)                   “Trust Expenses” means all expenses incurred
by the Trustee, the Corporation, or any third party, in each case for the
account of the Trust, in connection with this Indenture, the establishment and
ongoing management of the Trust and the ongoing administration of the Trust
Units, including without limitation those amounts payable to the Trustee under
Sections 7.6, 7.8 and 7.9 and all amounts payable to the Corporation
pursuant to the Administration Agreement;

(ddd)                “Trust Fund”, at any time, shall mean such
of the following monies, properties and assets that are at such time held by
the Trustee on behalf of the Trust for the purposes of the Trust under this
Indenture:

(i)                                     the
Settled Amount;

(ii)                                  shares
in the capital of AcquisitionCo;

(iii)                               the
Penn West Notes and Notes acquired pursuant to the Plan of Arrangement;

(iv)                              all
funds realized from an Offering;

 5
 

(v)                                 any
Permitted Investments in which funds may from time to time be invested;

(vi)                              all
rights in respect of and income generated under the NPI Agreement or any
Royalty Agreement;

(vii)                           any
Subsequent Investment;

(viii)                        any
proceeds of disposition of any of the foregoing property; and

(ix)                                all
income, interest, profit, gains and accretions and additional assets, rights
and benefits of any kind or nature whatsoever arising directly or indirectly
from or in connection with or accruing to such foregoing property or such
proceeds of disposition;

(eee)                   “Trust Reorganization” means the series of
transactions resulting in the Trust owning all of the issued and outstanding
securities of AcquisitionCo, the particulars of which are set forth in the
information circular of the Corporation prepared with respect to the Plan of
Arrangement;

(fff)                         “Trust Unit” means a trust unit of the Trust
created, issued and certified hereunder and for the time being outstanding and
entitled to the benefits hereof, provided that the term “Trust Unit” shall not
include the Special Voting Units except as specifically provided herein;

(ggg)                “Trustee” means CIBC Mellon Trust Company,
or its permitted successor or successors for the time being as trustee
hereunder;

(hhh)                “Underwriting Agreement” means any
underwriting, agency or similar agreement entered into by the Trustee and
investment dealers, and such other persons, including the Corporation, as may
be a party thereto relating to an Offering;

(iii)                            “Underwriter’s Fees” means any underwriting,
agency or similar fees payable pursuant to any Underwriting Agreement;

(jjj)                            “Unitholders” means the holders from time to
time of one or more Trust Units, provided that the term “Unitholder” shall not
include the holders of the Special Voting Units except as specifically provided
herein; and

(kkk)                   “year” means initially, the period
commencing on the date hereof and ending on December 31, 2005, and
thereafter means a calendar year.

1.2                                                                               Meaning
of “Outstanding”

Every Trust Unit created,
issued, certified and delivered hereunder shall be deemed to be outstanding
until it shall be cancelled or delivered to the Trustee for cancellation,
provided that when a new Trust Certificate has been issued in substitution for
a Trust Certificate which has been lost, stolen or destroyed, only one of such
Trust Certificates shall be counted for the purpose of determining the number
of Trust Units outstanding.

1.3                                                                               Income
Tax Act

In this Indenture, any
reference to the Tax Act shall refer to the Income
Tax Act, Revised Statutes of Canada 1985, Chapter 1 (5th
Supplement) and the Income Tax Regulations as amended from time to time applicable
with respect thereto.  Any reference
herein to a particular provision of the Tax Act shall include a reference to
that provision as it may be renumbered or amended from time to time.  Where there are proposals for amendments to
the Tax Act which have not been enacted into law or proclaimed into force on or
before the date on which such proposals are to become effective, the Trustee
may take such proposals into consideration and apply the provisions hereof as
if such proposals had been enacted into law and proclaimed into force.

 6
 

1.4                                                                               Headings

The division of this
Indenture into articles and sections, subsections, clauses, subclauses and
paragraphs and the provision of headings is for convenience of reference only
and shall not affect the construction or interpretation of this Indenture.

1.5                                                                               Construction
of Terms

Words importing the
singular number only shall include the plural, and vice versa, and words
importing gender shall include the masculine, feminine and neuter genders.  References in this Indenture to “this Trust
Indenture”, “this Indenture”, “hereto”, “herein”, “hereof”, “hereby”, “hereunder”
and similar expressions shall be deemed to refer to this instrument and not to
any particular Article, Section or portion hereof, and include any and every
instrument supplemental or ancillary hereto or in implementation hereof.

1.6                                                                               References
to Acts Performed by the Trust

Any reference in this
Indenture to an act to be performed by the Trust shall be construed and applied
for all purposes as if it referred to an act to be performed by the Trustee on
behalf of the Trust or, to the extent applicable, by the Corporation on
behalf of the Trust and where reference
is made in this Indenture to actions, rights or obligations of the Trustee,
such reference shall be construed and applied for all purposes to refer to
actions, rights or obligations of the Trustee in its capacity as Trustee of the
Trust, and not in its other capacities, unless the context otherwise requires.

ARTICLE 2

DECLARATION OF TRUST

2.1                                                                               Settlement
of Trust

The Settlor has paid the
Settled Amount to the Trustee and the Trustee has accepted the Settled Amount
for the purpose of creating and settling the Trust and the Settlor has been
issued one thousand and one hundred and twenty-five initial Trust Units in the
Trust.

2.2                                                                               Declaration
of Trust

The Trustee hereby agrees
to act as Trustee and declares and agrees to hold the Trust Fund in trust for
the use and benefit of the Unitholders, their permitted assigns and personal
representatives upon the trusts and subject to the terms and conditions
hereinafter declared and set forth, such trust to constitute the Trust
hereunder.

2.3                                                                               Name

The Trust shall be known
and designated as “Penn West Energy Trust” and, whenever lawful and convenient,
the affairs of the Trust shall be conducted and transacted under that
name.  If the Trustee determines that the
use of the name “Penn West Energy Trust” is not practicable, legal or
convenient, it may use such other designation or it may adopt such other name
for the Trust as it deems appropriate and the Trust may hold property and
conduct its activities under such other designation or name.

2.4                                                                               Nature
of the Trust

The Trust is an open-end
unincorporated investment trust, established for the purposes specified in
Section 4.1 hereof.  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
Trustee or the Unitholders or any of them or any person be, or be deemed to be,
treated in any way whatsoever as liable or responsible hereunder as partners or
joint venturers.  The Trustee shall not
be, or be deemed to be, an agent of the Unitholders.  The relationship of the Unitholders to the
Trustee shall be solely that of beneficiaries of the Trust and their rights
shall be limited to those conferred upon them by this Indenture.

 7
 

2.5                                                                               Legal
Entitlements and Restrictions on Unitholders

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

(b)                                 Subject
to the terms and conditions of this Indenture, no Unitholder or Unitholders
shall be entitled to interfere or give any direction to the Trustee or the Administrator with respect to
the affairs of the Trust or in connection with the exercise of any powers or
authorities conferred upon the Trustee or the Administrator under this
Indenture or the Material Contracts.

(c)                                  The
legal ownership of the assets of the Trust and the right to conduct the affairs
of the Trust (subject to the limitations contained herein) are vested
exclusively in the Trustee and the Unitholders shall have no interest therein
and they shall have no right to compel or call for any partition, division,
dividend or distribution of the Trust Fund or any of the assets of the
Trust.  The Trust Units shall be personal
property and shall confer upon the holders thereof only the interest and rights
specifically set forth in this Indenture. 
No Unitholder has or is deemed to have any right of ownership in any of
the assets of the Trust.

2.6                                                                               Liability
of Unitholders

No Unitholder, in its
capacity as such, shall incur or be subject to any liability in contract or in
tort or of any other kind whatsoever to any person in connection with the Trust
Fund or the obligations or the affairs of the Trust or with respect to any act
performed by the Trustee or by any other person pursuant to this Indenture or
with respect to any act or omission of the Trustee or any other person in the
performance or exercise, or purported performance or exercise, of any
obligation, power, discretion or authority conferred upon the Trustee or such
other person hereunder or with respect to any transaction entered into by the
Trustee or by any other person pursuant to this Indenture.  No Unitholder shall be liable to indemnify
the Trustee or any such other person with respect to any such liability or
liabilities incurred by the Trustee or by any such other person or persons or
with respect to any taxes payable by the Trust or by the Trustee or by any
other person on behalf of or in connection with the Trust.  Notwithstanding the foregoing, to the extent
that any Unitholders are found by a court of competent jurisdiction to be
subject to any such liability, such liability shall be enforceable only
against, and shall be satisfied only out of, the Trust Fund and the Trust (to
the extent of the Trust Fund) is liable to, and shall indemnify and save
harmless any Unitholder against any costs, damages, liabilities, expenses,
charges or losses suffered by any Unitholder from or arising as a result of
such Unitholder not having any such limited liability.

2.7                                                                               Contracts
of the Trust

In respect of any
obligations or liabilities being incurred by the Trust, the Trustee or the
Corporation on behalf of the Trust, the Trustee, the Corporation and the Trust
shall make all reasonable efforts to ensure that every contract entered into by
or on behalf of the Trust, whether by the Trustee, the Corporation, or
otherwise, shall (except as the Trustee or the Administrator may otherwise
expressly agree in writing with respect to their own personal liability)
include a provision substantially to the following effect:

The parties hereto acknowledge that the [Trustee] [Administrator] 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] [Administrator] or any of the Unitholders of the
Trust and that any recourse against the Trust or any Unitholder in any manner
in respect of any indebtedness, obligation or liability of the Trust arising
hereunder or arising in connection herewith or from the matters to which this
agreement relates, if any, including without limitation claims based on
negligence or otherwise tortious behaviour, shall be limited to, and satisfied
only out of, the Trust Fund as defined in the trust indenture dated as of April
22, 2005, as amended from time to time.

The omission of such a
provision from any such written instrument shall not operate to impose personal
liability on the Trustee, the Corporation or any Unitholder.  If, notwithstanding this provision, the
Trustee, the Corporation or 

 8
 

any Unitholder shall be
held liable to any person by reason of the omission of such statement from any
such agreement, undertaking or obligation, the Trustee, the Corporation or
Unitholder shall be entitled to indemnification and reimbursement out of the
Trust Fund to the full extent of such liability.

2.8                                                                               Head
Office of Trust

The head office of the
Trust hereby created shall be located at Suite 2200, 425 1st Street S.W. Calgary, Alberta, T2P 3L8 or at
such other place or places in Canada as the Trustee may from time to time
designate.

ARTICLE 3

ISSUE AND SALE OF TRUST UNITS

3.1                                                                               Nature
and Ranking of Trust Units

(a)                                  Subject
to Sections 3.10 and 19.1 of this Indenture, the beneficial interests in
the Trust shall be divided into interests of one class, described and
designated as Trust 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 Trust Units registered
in the name of the Unitholder.

(b)                                 Each
Trust Unit shall entitle the holder or holders thereof to one vote at any
meeting of the Unitholders and represents an equal fractional undivided
beneficial interest in any distribution from the Trust (whether of income, net
realized capital gains or other amounts) and in any net assets of the Trust in
the event of termination or winding-up of the Trust.  All Trust Units outstanding from time to time
shall be entitled to equal shares in any distributions by the Trust and, in the
event of termination or winding-up of the Trust, in the net assets of the
Trust.  All Trust Units shall rank among
themselves equally and rateably without discrimination, preference or priority.

3.2                                                                               Authorized
Number of Trust Units

The aggregate number of
Trust Units and Special Voting Units  which
are authorized and may be issued hereunder is unlimited.

3.3                                                                               No
Fractional Trust Units

Fractions of Trust Units
shall not be issued, except pursuant to distributions of additional Trust Units
to all Unitholders pursuant to Section 5.9.

3.4                                                                               Offerings
of Trust Units and Indebtedness

(a)                                  Trust
Units, including rights, warrants, special warrants, subscription receipts or
other securities to purchase, to convert into or exchange into Trust Units, may
be created, issued, sold and delivered pursuant to Offering Documents or
otherwise, as the case may be, on terms and conditions and at such time or
times as the board of directors of the Corporation may determine.

(b)                                 The
board of directors of the Corporation may authorize the creation and issuance
of debentures, notes and other evidences of indebtedness of the Trust
(including rights, warrants, subscription warrants, subscription receipts or
other securities to purchase, or convert into or exchange into, debentures,
notes or other evidences of indebtedness) which debentures, notes or other
evidences of indebtedness may be created and issued from time to time on such
terms and conditions, to such persons and for such consideration and at such
time or times as the Corporation may determine.

 9
 

3.5                                                                               Ranking
of Trust Units

Each Trust Unit
represents an equal fractional undivided beneficial interest in the Trust
Fund.  All Trust Units outstanding from
time to time shall be entitled to an equal fractional undivided share of any
distributions by the Trust and, in the event of termination of the Trust, in
the net assets of the Trust.  All Trust
Units shall rank among themselves equally and rateably without discrimination,
preference or priority regardless of the actual date or terms of issue thereof.

3.6                                                                               Trust
Units Fully Paid and Non-Assessable

Trust Units shall be
issued only when fully paid in money or property or past service, provided that
property may include indebtedness, a promissory note or other promise to pay
given by the allottee.  The Unitholders
shall not thereafter be required to make any further contribution to the Trust
with respect to such Trust Units; provided however that the Trust Units to be
issued under an Offering may be issued for consideration payable in instalments
and that the Trust may take security over such Trust Units to be issued under
such an Offering as security for the payment of unpaid instalments.

3.7                                                                               No
Conversion, Retraction, Redemption or Pre-Emptive Rights

No person shall be
entitled, as a matter of right, to subscribe for or purchase any Trust
Unit.  Except as set forth in Article 18,
there are no conversion, retraction, redemption or pre-emptive rights attaching
to the Trust Units.

3.8                                                                               Consolidation
of Trust Units

Immediately after any pro
rata distribution of additional Trust Units to all Unitholders pursuant to Section 5.5 or Section 5.9,
the number of outstanding Trust Units will be consolidated such that each
Unitholder will hold after the consolidation the same number of Trust Units as
the Unitholder held before the distribution of additional Trust Units.  In such case, each Trust Unit Certificate
representing a number of Trust Units prior to the distribution of additional
Trust Units is deemed to represent the same number of Trust Units after the
distribution of additional Trust Units and the consolidation.  Notwithstanding the foregoing, where tax is
required to be withheld in respect of a Unitholder’s share of the distribution:
(i) the consolidation of the Trust Units held by such Unitholder will result in
such Unitholder holding that number of Trust Units equal to the number of Trust
Units held by such Unitholder prior to the distribution minus the number of
Trust Units withheld on account of withholding taxes payable by the Unitholder
in respect of the distribution; and (ii) the consolidation shall not apply to
any Trust Units so withheld.  Any Trust
Units so withheld shall either be delivered to the appropriate taxation
authority or sold, in which case the net proceeds shall be remitted to the
appropriate taxation authority.  Such
Unitholder will be required to surrender the Trust Unit Certificates, if any,
representing such Unitholder’s original Trust Units, in exchange for a Trust
Unit Certificate representing such Unitholder’s post-consolidation Trust
Units.  Such consolidation shall not
constitute a redemption or cancellation of the Trust Units so consolidated and
a Unitholder whose Trust Units are consolidated shall not receive, and shall
not be entitled to receive, any proceeds of disposition in respect thereof.

3.9                                                                               Status
as a Mutual Fund Trust

The Trust will use its
best commercial efforts to maintain its status as a mutual fund trust under the
Tax Act, including complying with the requirements of Subsection 108(2)
and 132(6) and (7) of the Tax Act.

3.10                                                                        Special
Voting Units

In addition to the Trust
Units, there may be issued Special Voting Units entitling the holders thereof
to attend meetings of Unitholders and to such number of votes at meetings of
Unitholders as may be prescribed by the board of directors of the Corporation
in the resolution authorizing the issuance of any such Special Voting
Units.  Except for the right to attend
and vote at meetings of the Unitholders, the Special Voting Units shall not
confer upon the holders thereof any other rights; and for greater certainty,
the holders of Special Voting Units 

 10
 

shall not be
entitled to any distributions of any nature whatsoever from the Trust or have
any beneficial interest in any assets of the Trust on termination of the Trust.

ARTICLE 4

INVESTMENTS OF TRUST FUND

4.1                                                                               Purpose
of the Trust

The Trust is hereby
created for the following purposes:

(a)                                  to
participate in the Plan of Arrangement and the Trust Reorganization;

(b)                                 acquiring
or investing in securities of AcquisitionCo, or any other Affiliate or
subsidiary of the Trust and acquiring (directly or indirectly) the Shares, the
Notes, the Penn West Notes and the NPI and other securities pursuant to the
Trust Reorganization, which investments shall be for the purpose of funding the
acquisition, development, exploitation and disposition of all types of
petroleum and natural gas and energy related assets, including without
limitation, facilities of any kind, oil sands interests, electricity or power
generating assets and pipeline, gathering, processing and transportation assets
(hereinafter referred to as “Energy Assets”)
and whether effected by AcquisitionCo or any other Affiliate or subsidiary of
the Trust  or the Administrator
through an acquisition of or investment in assets or an acquisition of or
investment in shares or other form of ownership interest in any entity the
substantial majority of the assets of which are comprised of like assets;

(c)                                  acquiring
or investing in the securities of any other entity, including without
limitation bodies corporate, partnerships or trusts, and borrowing funds or
otherwise obtaining credit and entering into hedging or swap agreements or
other derivative transactions, including granting guarantees, with respect to
the obligations, indebtedness and liabilities of any Affiliate of the Trust or
any other person for the purpose of directly or indirectly acquiring Energy
Assets;

(d)                                 acquiring
Royalties and net profits interests;

(e)                                  making
loans or other advances to any Affiliate of the Trust or the Corporation;

(f)                                    acquiring
or investing in Royalties and making any deferred royalty purchase payments
which may be required with respect to such Royalties or the NPI; provided
however that in no event shall the Trust acquire or invest in any Royalties
which constitute an interest in land or a covenant running with the properties
with respect to which such Royalties relate;

(g)                                 disposing
of any part of the Trust Fund, including, without limitation, any securities of
any Affiliate of the Trust and any Royalties;

(h)                                 temporarily
holding cash and investments for the purposes of paying the expenses and the
liabilities of the Trust, making other investments as contemplated by
Section 4.2 hereof, paying amounts payable by the Trust in connection with
the redemption of any Trust Units, and making distributions to Unitholders;

(i)                                     paying
costs, fees and expenses associated with the foregoing purposes or incidental
thereto; and

(j)                                     engaging
in all activities ancillary or incidental to any of those activities set forth
in paragraphs 4.1(a) through 4.1(h), inclusive.

4.2                                                                               Permitted
Investments

Any funds within the
Trust Fund that are not required to be invested as provided in Section 4.1
shall be used by the Trust only to acquire Permitted Investments or as
permitted by Section 7.2(f) or Section 7.2(t) or to pay expenses or
liabilities.

 11
 

4.3                                                                               Other
Investment Restrictions

Notwithstanding anything
contained in this Indenture, under no circumstances shall the Trustee acquire
any investment which (a) is “foreign property” under any provision of the Tax
Act if said purchase or other transaction would cause the Trust Units
themselves to be “foreign property” under the Tax Act, or (b) would result in
the Trust not being considered either a “unit trust” or a “mutual fund trust”
for purposes of the Tax Act.  The Trustee
may consult with and receive direction from the Administrator with respect to
any investment to ensure compliance with this provision and may, prior to any
investment, request the Administrator obtain an opinion of counsel confirming
that such investment will not cause the Trust Units to become “foreign property”
and that the Trust will continue to maintain its status as a “unit trust” and a
“mutual trust” for the purposes of the Tax Act.

ARTICLE 5

DISTRIBUTIONS

5.1                                                                               Determination
of Distributable Cash of the Trust

In this Article 5, the “Distributable Cash of the Trust” for the
period ending on a Distribution Record Date shall be the amount calculated, for
the period commencing immediately following the preceding Distribution Record
Date (or, for the first Distribution Record Date, the period commencing on the
date hereof) and ending on such Distribution Record Date, on the following
basis:

(a)                                  interest
income on the Notes or any other interest income shall be included in
Distributable Cash of the Trust on an accrual basis (to the extent that it is or will reasonably be expected to be received
by the Payment Date) and shall accrue from day to day;

(b)                                 any
amounts received or reasonably anticipated to be received before the Payment
Date pursuant to any Royalties, the NPI, any interest or other income from
Permitted Investments, and ARTC received by the Trust shall be included in
Distributable Cash of the Trust;

(c)                                  any
dividends, distributions or interest or principal repayments on securities of
any Affiliate of the Trust shall be included in Distributable Cash of the Trust
when received, or reasonably anticipated to be received before the Payment
Date;

(d)                                 all
other income received or reasonably anticipated to be received before the
Payment Date by the Trust since the immediately preceding Distribution Record
Date from investments of the Trust Fund shall be included in Distributable Cash
of the Trust; and

(e)                                  all
expenses and liabilities of the Trust which have been incurred or may
reasonably be anticipated to be incurred and any other amounts required by law
or hereunder to be deducted, withheld or paid with respect to the Trust
(including taxes) shall be deducted in computing Distributable Cash of the
Trust, including the following:

(i)                                     Debt
Service Charges of the Trust;

(ii)                                  non-deductible
Crown royalties that have been reimbursed by the Trust pursuant to any Royalty
Agreement or the NPI Agreement;

(iii)                               the
aggregate of all cash amounts paid in respect of the redemption of Trust Units
during such period of time; and

(iv)                              any
amount, in addition to those amounts set forth above, which the Administrator
or the Trustee may reasonably consider to be necessary to provide for the
payment of any liabilities which have been or will be incurred by the Trust,
including any tax liability of the Trust.

 12

Items of income or
expense not provided for above or in Section 5.4 shall be included in such
calculation on such basis as may be considered appropriate by the Trustee upon
the recommendation of the Administrator.

5.2                                                                               Distributable
Cash of the Trust to Become Payable

The Trustee may, upon the
recommendation of the Administrator, on or before any Distribution Record Date,
declare payable to the Unitholders on that Distribution Record Date all or any
part of the Distributable Cash of the Trust for the period ending on that
Distribution Record Date determined in accordance with Section 5.1.  The share of each Unitholder in the amount so
payable shall be the Pro Rata Share of such Unitholder determined as at that
Distribution Record Date; and subject to Section 5.8, such amount shall be
payable on that Distribution Record Date. 
Notwithstanding the foregoing, the amount of any Distributable Cash of
the Trust that is determined by the Trustee to be required to be retained by
the Trust in order to pay any tax liability of the Trust shall not be payable
by the Trust to Unitholders.

5.3                                                                               Computation
of Income and Net Realized Capital Gains

(a)                                  The
income of the Trust (the “Net Income”)
for any taxation year of the Trust shall be the income for such year computed
in accordance with the provisions of the Tax Act, other than
paragraphs 82(1)(b) and subsection 104(6) thereof, regarding the
calculation of income for the purposes of determining the “taxable income” of
the Trust; 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 (the “Net
Realized Capital Gains”) 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 realized in such year exceeds (i) the aggregate of the capital
losses of the Trust realized in such year, and (ii) each amount determined by
the Corporation in respect of any such net capital loss for a prior taxation
year which the Trust is permitted by the Tax Act to deduct in computing the
taxable income of the Trust for such year.

(c)                                  Notwithstanding
subsections 5.3(a) and (b), Net Income and Net Realized Capital Gains
shall not include any income (“Redemption
Income”) or capital gains (“Redemption
Gains”), respectively, which are realized by the Trust, in
accordance with the Tax Act, on a distribution of Trust property to a
Unitholder pursuant to an in specie
redemption of the Unitholder’s Trust Units under Section 18.5.

5.4                                                                               Net
Realized Capital Gains to Become Payable

In addition to the
distributions which are made payable to Unitholders pursuant to
Section 5.2, the Trustee may, in its sole discretion, in respect of a
distribution period, declare a distribution to be payable, to holders of Trust
Units of record as at the close of business on the Distribution Record Date for
such distribution period, out of Net Income, Net Realized Capital Gains, the
capital of the Trust or otherwise, in any year, in such amount or amounts, and
on such dates as the Trustee may determine.

5.5                                                                               Net
Income and Net Realized Capital Gains, Redemption Income and Redemption Gains
for Income Tax Purposes to Become Payable

So as to ensure the
allocation and distribution, to holders of Trust Units, of all of the Net
Income, Net Realized Capital Gains and any other applicable amounts so that the
Trust will not have any liability for tax under the Tax Act in any year, the
amount, if any, by which the Net Income and Net Realized Capital Gains exceed
the aggregate of:

(a)                                  such
part of the taxable capital gains of the Trust for the calendar year required
to be retained by the Trust to maximize its capital gains refund for such year,
unless any administrator has given written notice to the Trustee that this
clause is not to apply to the Trust for that year by the end of the year; and

 13
 

(b)                                 any
amount that became payable or was deemed to become payable by the Trustee
during the calendar year to Unitholders on the Trust Units (other than amounts
that became payable to Unitholders on the redemption of their Trust Units);

shall, without any
further actions on the part of the Trustee, be payable to holders of Trust
Units of record as of the close of business on the last Distribution Record
Date in such year.  The share of each
Unitholder in the amount so payable shall be the Pro Rata Share of such
Unitholder determined as at the end of such year.

In addition to the
distributions which are made payable to Unitholders otherwise hereunder, the
Trust shall allocate any Redemption Income and Redemption Gains realized by the
Trust in connection with the redemption of Trust Units of a particular
Unitholder pursuant to Article 18, to that Unitholder, so that an amount equal
to such Redemption Income and Redemption Gains shall be allocated to and shall
be treated as an amount paid to the redeeming Unitholder.  In addition, one-half (or any other
proportion that may be provided for from time to time under section 38 of
the Tax Act) of such Redemption Gains shall be designated as taxable capital
gains of that Unitholder under subsection 104(21) of the Tax Act, and any
portion of the Redemption Income and Redemption Gains in respect of that
Unitholder as may be income from a source in a country other than Canada,
within the meaning of subsection 104(22) of the Tax Act, shall be
designated as that Unitholder’s income from that source in accordance with that
subsection.

Distributions or amounts
payable to Unitholders pursuant to this Article 5 shall be deemed to be
distributions of Net Income, Net Realized Capital Gains, Redemption Income and
Redemption Gains, trust capital or other items in such amounts as the Trustee
shall, in its discretion, determine.  For
greater certainty, it is hereby declared that any distribution of Net Realized
Capital Gains and Redemption Gains shall include the non-taxable portion of the
capital gains of the Trust which are comprised in such distribution.

Any amounts payable
pursuant to this Section 5.5 may, at the option of the Trustee, be paid
through a distribution of additional Trust Units having a value equal to the
amount payable.  For the purposes of this
Section 5.5, the value of the additional Trust Units issued shall be
determined using the closing trading price (or, if there was no trade, the
average of the last bid and the last ask prices) of the Trust Units on
December 31 (or, if December 31 is not a Business Day, on the last
preceding Business Day) of the year of distribution on the principal stock
exchange where the Trust Units are listed or, if no so listed, such other value
as the Trustee shall determine.

5.6                                                                               Other
Amounts

Any amounts not otherwise
payable to Unitholders prior to the end of a particular fiscal year of the
Trust pursuant to the provisions of Article 5 may be declared by the Trustee,
upon the recommendation of the Corporation, to be payable to Unitholders in the
same manner as provided for in Section 5.2.

5.7                                                                               Enforcement

Each Unitholder shall
have the right to enforce payment of any amount payable to the Unitholder under
this Article 5 (or a distribution of additional Trust Units under
Section 5.9, if applicable) at the time the amount became payable. Absent
a demand from a Unitholder to enforce payment, such amount shall be paid to
Unitholders on the Payment Date specified in Section 5.8.

5.8                                                                               Payment
of Amounts Payable

Amounts payable to
Unitholders pursuant to Sections 5.2 and 5.4 may be paid by the Trust on
any date (the “Payment Date”)
specified by the Trustee as the applicable Distribution Record Date, or a day
within 30 days after the applicable Distribution Record Date and in the
same calendar year.

5.9                                                                               Distribution
of Additional Trust Units

Where after the last
Distribution Record Date and on or before the next Distribution Record Date an
amount or amounts of cash has or have been or is or are being paid under
Section 18.4 in respect of Trust Units 

 14
 

tendered for
redemption, the distribution payable to Unitholders on such next Distribution
Record Date may include a distribution of additional Trust Units having a value
equal to the aggregate of such amounts, in which case the amount of cash to be
distributed on the distribution shall be reduced by the aggregate of such
amounts.  In addition, if on any
Distribution Record Date the Trust does not have cash in an amount sufficient
to pay the full distribution to be made on such Distribution Record Date in
cash, the distribution payable to Unitholders on such Distribution Record Date
may, at the option of the Trustee, include a distribution of additional Trust
Units having a value equal to the cash shortfall, in which case the amount of
cash to be distributed on the distribution shall be reduced by the amount of
such cash shortfall.  For the purposes of
this Section 5.9, the value of the additional Trust Units to be issued
shall be determined using the closing trading price (or if there was no trade,
the average of the last bid and the last ask prices) of the Trust Units on the
Distribution Record Date (or, if the Distribution Record Date is not a Business
Day, on the last Business Day preceding the Distribution Record Date) on the
principal stock exchange where the Trust Units are listed or, if not so listed,
such other value as the Trustee shall determine.

5.10                                                                        Withholding
Taxes

For greater certainty, in
the event that withholding taxes are exigible on any distributions or
redemption amounts distributed under this Indenture, the Trustee shall withhold
the withholding taxes required and shall promptly remit such taxes to the
appropriate taxing authority.  In the
event that withholding taxes are exigible on any distributions or redemption
amounts distributed under this Indenture and the Trustee is, or was, unable to
withhold taxes from a particular distribution to a Unitholder or has not
otherwise withheld taxes on past distributions to the Unitholder, the Trustee
shall be permitted to withhold amounts from other distributions to such
Unitholder to satisfy the Trustee’s withholding tax obligations.

5.11                                                                        Character
of Distributions and Designations

In accordance with and to
the extent permitted by Tax Act,
the Trustee in each year shall make designations in respect of the amounts
payable to Unitholders for such amounts that the Trustee considers to be
reasonable in all of the circumstances, including, without limitation,
designations relating to taxable dividends 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 elections under subsections 104(13.1) and/or (13.2) of the Tax Act that income be taxed to the
Trust, rather than to the Unitholders. 
Distributions payable to Unitholders pursuant to this Article 5 shall be
deemed to be distributions of Net Income of the Trust, Net Realized Capital
Gains, Redemption Income, Redemption Gains, trust capital or other items in
such amounts as the Trustee shall, in its absolute discretion, determine.

ARTICLE 6

APPOINTMENT, RESIGNATION AND REMOVAL OF TRUSTEE

6.1                                                                               Trustee’s
Term of Office

Subject to
Sections 6.2 and 6.3, CIBC Mellon Trust Company is hereby appointed as
Trustee hereunder for an initial term of office which shall expire upon the
conclusion of the third annual meeting of Unitholders.  The Unitholders shall, at the third annual
meeting of the Unitholders, reappoint, or appoint a successor to the Trustee,
and thereafter, the Unitholders shall reappoint or appoint a successor to the
Trustee at the annual meeting of Unitholders three years following the
reappointment or appointment of the successor to the Trustee.  Any such reappointment or appointment shall
be made either by an Ordinary Resolution at such meeting of Unitholders or
shall be made in the manner set out in Section 6.4.  Notwithstanding the foregoing, if a Trustee
is not reappointed at the meeting of Unitholders held immediately before the
term of office of such Trustee expires and if no successor to such Trustee is
appointed at that meeting, such Trustee shall continue to hold the office of
Trustee under this Indenture until a successor has been appointed under
Section 6.4.

6.2                                                                               Resignation
of Trustee

The Trustee may resign
from the office of trustee hereunder on giving not less than 60 days’
notice in writing to the Corporation; provided that no such resignation shall
be effective until (i) the appointment of, and 

 15
 

acceptance of such
appointment by, a new Trustee in the place of the resigning Trustee has been
made in the manner set out in Section 6.4, and (ii) the legal and
valid assumption by the new Trustee of all obligations of the Trustee related
hereto in the same capacities as the resigning Trustee.

6.3                                                                               Removal
of Trustee

The Trustee shall be
removed by notice in writing delivered by the Administrator to the Trustee in
the event that, at any time, the Trustee shall no longer satisfy all of the
requirements in Section 6.6, or shall be declared bankrupt or insolvent,
or shall enter into liquidation, whether compulsory or voluntary (and not being
merely a voluntary liquidation for the purposes of amalgamation or
reconstruction), or if the material assets of the Trustee shall otherwise
become liable to seizure or confiscation by any public or governmental
authority, or if the Trustee shall otherwise become incapable of performing, or
shall fail in any material respect to perform its responsibilities under this
Indenture (after receiving five Business Days notice of such failure to perform
and an opportunity to cure such failure to perform during such notice period,
and after taking account of any delegation of responsibilities and duties
contemplated by this Indenture and the Administration Agreement) or as a result
of a material increase in the fees charged by the Trustee.  No decision to remove a Trustee under this
Section 6.3 shall become effective until (i) approved by a Special
Resolution at a meeting of Unitholders duly called for that purpose, (ii) the
appointment of, and acceptance of such appointment by, a new Trustee under
Section 6.4 in the place of the Trustee to be removed, and (iii) the legal
and valid assumption by the new Trustee of all obligations of the Trustee
related hereto in the same capacities as the resigning Trustee.

6.4                                                                               Appointment
of Successor to Trustee

(a)                                  A
successor Trustee to a Trustee which has been removed by a Special Resolution
of Unitholders under Section 6.3, or which has given notice of resignation
under Section 6.2, shall be appointed by an Ordinary Resolution at a
meeting of Unitholders duly called for that purpose, provided the successor
meets the requirements of Section 6.6.

(b)                                 Subject
to Section 6.6, the Administrator may appoint a successor to any Trustee
which has been removed by a Special Resolution of the Unitholders under
Section 6.3, or which has given notice of resignation under
Section 6.2, or which has not been reappointed under Section 6.1, if
the Unitholders fail to do so at such meeting.

No appointment of any
successor Trustee shall be effective until such successor Trustee shall have
complied with the provisions of Section 6.2(ii).

6.5                                                                               Failure
to Appoint Successor

In the event that no
successor Trustee to a Trustee who has delivered a notice of resignation in
accordance with Section 6.2, or who has received notice of removal in
accordance with Section 6.3, has accepted an appointment within
120 days after the receipt by the Administrator of the notice of resignation,
or 60 days after the receipt by the Trustee of the notice of removal, the
Trustee, the Administrator or any Unitholder may apply to a court of competent
jurisdiction for the appointment of a successor to the Trustee.  The Trustee shall be reimbursed by the Trust
for all reasonable costs and expenses of the Trustee relating to obtaining
court approval of a successor.  The
appointment of such successor by such court shall not require the approval of
Unitholders.

6.6                                                                               Qualifications
of Trustee

The Trustee and any
successor to the Trustee or new Trustee appointed under this Article 6 shall be
a corporation incorporated under the laws of Canada or of a province thereof
and shall be a resident of Canada for the purposes of the Tax Act.  Such corporation must at all times when it is
the Trustee be registered under the laws of the Province of Alberta to carry on
the business of a trust company and must have undertaken in writing to
discharge all of the obligations and responsibilities of the Trustee under this
Indenture.

 16
 

6.7                                                                               Continuing
Obligations of the Trust

Upon the resignation or
removal of the Trustee, or the Trustee otherwise ceasing to be the Trustee, it
shall:

(a)                                  cease
to have rights, privileges, powers and authorities of the Trustee hereunder;

(b)                                 execute
and deliver such documents as the Corporation shall reasonably require for the
conveyance of any of the Trust Fund held in the Trustee’s name; and

(c)                                  account
to the Corporation, as the Corporation may require, for all property which the
Trustee holds as Trustee.

Upon the Trustee ceasing
to hold office as provided in this Article 6, the Trustee shall cease to be a
party to this Indenture; provided however, that the Trustee shall continue to
be entitled to payments of any amounts owing by the Trust to the Trustee which
had accrued prior to the Trustee ceasing to hold office and provided further
that the Trustee and each of its directors, officers, employees, shareholders
and agents shall continue to be entitled to the benefit of any indemnity and
limitation provisions contained in this Indenture.

6.8                                                                               Vacancies

No vacancy of the office
of the Trustee shall operate to annul this Indenture or affect the continuity
of the Trust.

6.9                                                                               Successor
and Additional Trustee

The rights of the Trustee
to control and exclusively administer the Trust and to have the title to the
Trust Fund and all other rights of the Trustee at law shall vest automatically
in any person who may hereafter become the Trustee upon its due appointment and
qualification without any further act and it shall thereupon have all the
rights, privileges, powers, obligations and immunities of the Trustee
hereunder.  Such rights shall vest in the
Trustee whether or not conveyancing or transfer documents have been executed
and delivered pursuant to Section 6.7 or otherwise.

6.10                                                                        Validity
of Acts

Any act of a Trustee is
valid notwithstanding any irregularity in the appointment of the Trustee or a
defect in the qualifications of the Trustee.

ARTICLE 7

CONCERNING THE TRUSTEE

7.1                                                                               Powers
of the Trustee and the Administrator

(a)                                  Subject
to the terms and conditions of this Indenture, the Trustee may exercise from
time to time in respect of the Trust Fund any and all rights, powers and
privileges that could be exercised by a beneficial owner that is a natural person
except as specifically designated in Subsection (b) below.  The responsibilities of the Trustee hereunder
are however limited to those specific powers granted to it (subject to
delegations to the Administrator ) and the Trustee has no obligations to Unitholders
or to the Corporation beyond the obligations specifically set out herein.

(b)                                 In
addition to and without limitation of the matters delegated to the Corporation
pursuant to the Administration Agreement, the Corporation shall exercise from
time to time any and all rights, powers, responsibilities and privileges of the
Trustee in relation to all matters relating to:

 17
 

(i)                                     the
maximization of Unitholder value in the context of a response to an offer for
Trust Units or for all or substantially all of the property and assets of the
Trust or the Corporation or any subsidiary of the Corporation or the Trust (an “Offer”) including: 
(A) the entering into of any Unitholder rights protection plan either
prior to or during the course of any Offer; (B) any defensive action either
prior to or during the course of any Offer; (C) the preparation of any “Directors’
Circular” in response to any Offer; (D) consideration on behalf of Unitholders
and recommendations to Unitholders in response to any Offer; (E) any regulatory
or court action in respect of any related matters; and (F) the carriage of all
related and ancillary matters; and

(ii)                                  the
Plan of Arrangement and the Trust Reorganization;

and the Corporation accepts all such rights, powers, responsibilities
and privileges and agrees that, in respect of such matters, it shall carry out
its functions honestly, in good faith and in the best interests of the Trust
and the Unitholders and, in connection therewith, shall exercise that degree of
care, diligence and skill that a reasonably prudent trustee would exercise in
comparable circumstances.  The
Corporation may execute any agreements on behalf of the Trust as have been
authorized within the scope of the exercise of any such rights, powers or
privileges.

7.2                                                                               Specific
Powers and Authorities

Subject only to the
express limitations contained in this Indenture, and in addition to any powers
and authorities conferred by this Indenture (including, without limitation,
Section 7.1(a) hereof) or which the Trustee may have by virtue of any
present or future statute or rule of law, the Trustee, without any action or
consent by the Unitholders, shall have the following powers and authorities
which may be exercised by it from time to time or delegated by it, as herein
provided, in its sole judgment and discretion and in such manner and upon such
terms and conditions as it may from time to time deem proper, provided that the
exercise of such powers and authorities does not adversely affect the status of
the Trust as a “unit trust” and a “mutual fund trust” for the purposes of the
Tax Act:

(a)                                  to
accept subscriptions for Trust Units received by the Trust and to issue Trust
Units pursuant thereto;

(b)                                 to
maintain books and records;

(c)                                  to
provide timely reports to Unitholders in accordance with the provisions hereof;

(d)                                 to
effect payment of distributions to Unitholders;

(e)                                  to
apply for ARC;

(f)                                    to
deposit funds of the Trust in interest-bearing accounts in banks, ATB Financial
or trust companies whose short term obligations constitute Permitted
Investments, including those of the Trustee, the same to be subject to
withdrawal on such terms and in such manner and by such person or persons
(including any one or more officers, agents or representatives) as the Trustee
may determine;

(g)                                 without
limiting the provisions of paragraphs (h), (m), (p), (q), (r), (w) and (dd) of
this Section 7.2, to, directly or indirectly, borrow money from or incur
indebtedness to any person; to guarantee, indemnify, act as a surety or be
jointly and/or jointly and severally liable with respect to payment or
performance of any indebtedness, liabilities or obligation of any kind
(including, without limitation, any debt for borrowed money or obligations
resulting or arising from swap or hedging or other derivatives transactions) of
any person; including, without limitation, any Affiliate of the Trust; to enter
into any other obligations on behalf of the Trust; to enter into any
subordination agreement on behalf of the Trust or any other person; to assign,
charge, pledge, hypothecate, convey, transfer, mortgage, subordinate, and grant
any security interest, mortgage or encumbrance over or with respect to all or
any and all assets, property and undertaking of the Trust, including the Trust
Fund; to subordinate and postpone the interests of the Trust in 

 18
 

the Trust Fund to any other person; and any agreement
in connection with any of the foregoing entered into by the Trustee shall be
binding upon, and enforceable in accordance with its terms, against the Trust;

(h)                                 to
possess and exercise all the rights, powers and privileges pertaining to the
ownership of all or any part of the assets of the Trust, including, without
limitation, the Trust Fund, to the same extent that a natural person might,
unless otherwise limited herein, and, without limiting the generality of the
foregoing, to vote or give any consent, request or notice, or waive any notice,
either in person or by proxy or power of attorney, with or without power of
substitution, to one or more persons, which proxies and power of attorney may
be for meetings or action generally or for any particular meeting or action and
may include the exercise of discretionary power;

(i)                                     where
reasonably required, to engage or employ any persons as agents,
representatives, employees, administrators, consultants or independent
contractors (including, without limitation, investment advisers, registrars,
underwriters, accountants, lawyers, engineers, appraisers, brokers or
otherwise) in one or more capacities;

(j)                                     to
collect, sue for and receive all sums of money coming due to the Trust, and to
engage in, intervene in, prosecute, join, defend, compromise, abandon or
adjust, by arbitration or otherwise, any actions, suits, proceedings, disputes,
claims, demands or other litigation relating to the Trust, the assets of the
Trust or the Trust’s affairs, to enter into agreements therefor, whether or not
any suit is commenced or claim accrued or asserted and, in advance of any
controversy, to enter into agreements regarding the arbitration, adjudication
or settlement thereof;

(k)                                  to
arrange for insurance contracts and policies insuring the assets of the Trust
against any and all risks and insuring the Trust and/or any or all of the
Trustee or the Unitholders against any and all claims and liabilities of any
nature asserted by any person arising by reason of any action alleged to have
been taken or omitted by the Trust or by the Trustee or Unitholders;

(l)                                     to
cause legal title to any of the assets of the Trust to be held by and/or in the
name of the Trustee, or except as prohibited by law, by and/or in the name of
the Trust, or any other person, on such terms, in such manner, with such powers
in such person as the Trustee may determine and with or without disclosure that
the Trust or the Trustee is interested therein, provided that should legal
title to any of the assets of the Trust be held by and/or in the name of any
person other than the Trustee or the Trust, the Trustee shall require such
person to execute a trust agreement acknowledging that legal title to such
assets is held in trust for the benefit of the Trust;

(m)                               to
make, execute, acknowledge and deliver any and all deeds, contracts, waivers,
releases or other documents of transfer and any and all other instruments in
writing necessary or proper for the accomplishment of any of the powers herein
granted;

(n)                                 to
pay out of the Trust Fund the Trust Expenses;

(o)                                 except
as prohibited by law, to delegate any or all of the management and
administrative powers and duties of the Trustee to the Administrator or to any
one or more agents, representatives, officers, employees, independent
contractors or other persons without liability to the Trustee except as
provided in this Indenture;

(p)                                 to
guarantee, indemnify or act as a surety or agree to be jointly and/or jointly
and severally liable with respect to the obligations, indebtedness or
liabilities of any person, including without limitation, any Affiliate of the
Trust and including pursuant to any debt for borrowed money or obligations,
indebtedness or liabilities resulting or arising from swap or hedging or other
derivatives transactions incurred by any such person or Affiliate and pledging
securities issued by any person or Affiliate as security therefor;

(q)                                 notwithstanding
any limitations contained in this Indenture or any other contracts or
obligations of the Trustee or the Trust and the introductory proviso to this
Section 7.2, to enter into on behalf of the Trust and 

 19
 

observe and perform its obligations and the
obligations of the Trust under any agreements with any Lender, including,
without limitation, compliance with any provisions thereof which may restrict
the powers of the Trustee hereunder or preclude the Trustee from acting in
certain circumstances on resolutions of the Unitholders as might otherwise be
provided for hereunder, and each such agreement entered into by the Trustee
shall be binding upon, and enforceable in accordance with its terms against,
the Trust;

(r)                                    to
enter into a subordination or other agreement with any person, including any
Lender or any Affiliate of the Trust, pursuant to which the Trust agrees to
subordinate and/or postpone its right to receive principal, interest, dividends
or income (or any other obligations, indebtedness or liabilities of any
Affiliate to the Trust including, without limitation, under the NPI Agreement)
to the right of any such person, Lender or Affiliate of the Trust to be paid
obligations, indebtedness or liabilities, owing to it by any Affiliate of the
Trust, and which agreement may further provide, without limitation, that in the
event of a default by the Trust or any such Affiliate to any such person or any
Lender, including any such default in connection with any Credit Agreement, no
such Affiliate will make any further payments in respect of such obligations,
indebtedness or liabilities to the Trust or any other Affiliate of the Trust
and the Trust will not make any further cash distributions to Unitholders or
take any action to enforce or collect any such obligations, indebtedness or
liabilities owed to it by any such Affiliate, and each such subordination
entered into by the Trustee shall be binding upon, and enforceable in
accordance with its terms against, the Trust;

(s)                                  to
use reasonable efforts to ensure that the Trust complies at all times with the
requirements of Subsections 108(2) and 132(6) and (7) of the Tax Act and
that the Trust Units of the Trust are not foreign property for purposes of the
Tax Act;

(t)                                    to
advance any amount to any Affiliate of the Trust as a loan, including amounts
which may be advanced to any Affiliate of the Trust to finance future
acquisition and development of the Properties;

(u)                                 to
enter into, perform, enforce and amend the Material Contracts and any other
contracts of the Trust;

(v)                                 without
limiting any of the provisions hereof, to pay out of the Trust Fund:

(i)                                     Underwriter’s
Fees;

(ii)                                  the
purchase price of any Royalties or the NPI and amounts in respect of Permitted
Investments and Subsequent Investments;

(iii)                               Issue
Expenses; and

(iv)                              all
expenses incurred in connection with the Plan of Arrangement and the Trust
Reorganization;

all as contemplated by
the Offering Documents, this Indenture, or the other Material Contracts;

(w)                               to
charge, mortgage, hypothecate and/or pledge on behalf of the Trust all or any
of the currently owned or subsequently acquired monies, properties and assets
comprising the Trust Fund to secure the obligations, indebtedness or
liabilities of the Trust or of any other person, including any Affiliate of the
Trust, for which the Trust has provided a guarantee, indemnity, surety or
agreed to be jointly and/or jointly and severally liable with respect to the
obligations, indebtedness or liabilities of any such other person;

(x)                                   to
convey Royalties or the NPI in connection with any security to or realization
by any Lender upon the Properties;

(y)                                 to
form any subsidiary of the Trust for the purpose of making any Subsequent
Investment and entering into or amending any unanimous shareholders agreement
or other agreement on such terms as may be approved by the Administrator;

(z)                                   to
provide indemnities for the directors and officers of any Affiliates of the
Trust;

 20
 

(aa)                            to
hold the Notes issued by AcquisitionCo and the Penn West Notes issued by the
Corporation;

(bb)                          to
distribute Redemption Notes as provided in Article 18;

(cc)                            to
vote Subsequent Investments held by the Trust which carry voting rights in such
manner as may be approved by the board of directors of the Administrator;

(dd)                          without
limit as to amount, cost, or conditions of reimbursement, to issue any type of
debt securities or convertible debt securities and to borrow money or incur any
other form of indebtedness for the purpose of carrying out the purposes of the
Trust or for other expenses incurred in connection with the Trust and for such purposes
may draw, make, execute and issue promissory notes and other negotiable and
non-negotiable instruments or securities and evidences of indebtedness, secure
the payment of sums so borrowed or indebtedness incurred and mortgage, pledge,
assign or grant a security interest in any money owing to the Trust or engage
in any other means of financing the Trust;

(ee)                            notwithstanding
any other specific provision of this Indenture, to issue Trust Units in
settlement of the Trust and to do all things necessary or incidental to effect
the Trust Reorganization, including without limitation, to execute and deliver
any document, to issue Trust Units, to make any advances to any Affiliate of
the Trust and to adopt any Trust Unit incentive or savings plan for service providers
and the grant of any options or rights under any Trust Unit incentive or
savings plan for service providers;

(ff)                                to
establish and administer a distribution reinvestment plan pursuant to which
Trust Units may be purchased in the market and/or issued by the Trust and to
administer the same; and

(gg)                          to do
all such other acts and things as are incidental to this Section 7.2, and
to exercise all powers which are necessary or useful to carry on the business
of the Trust, to promote any of the purposes for which the Trust is formed and
to carry out the provisions of this Indenture.

7.3                                                                               Restrictions
on the Trustee’s Powers

Notwithstanding anything
contained in this Indenture:

(a)                                  the
Trustee shall not vote, or cause to be voted the Shares with respect to: the
election of directors of the Corporation; or the appointment of auditors of the
Corporation; or the approval of the financial statements of the Corporation (if
required by applicable legislation); except in accordance with an Ordinary
Resolution adopted at an annual or other meeting of Unitholders;

(b)                                 the
Trustee shall not, after the Date of Closing, vote, or cause to be voted, the
Shares or other securities of its Affiliates to authorize:

(i)                                     any
sale, lease or other disposition of, or any interest in, all or substantially
all of the assets of the Trust, taken as a whole, except in conjunction with an
internal reorganization of the direct or indirect assets of any other Affiliate
of the Trust as a result of which either the Trust or any Affiliate of the
Trust has the same, or substantially similar, interest, whether direct or
indirect, in the assets as the interest, whether direct or indirect, that it
had prior to the reorganization;

(ii)                                  any
statutory amalgamation or merger of any Affiliate of the Trust with any other
entity, except in conjunction with an internal reorganization as referred to in
paragraph (i) above and which includes without limitation the amalgamation
of AcquisitionCo, the Corporation, Northern Reef Exploration Ltd. and Penn West
Exploration Ltd.;

(iii)                               any
statutory arrangement involving any Affiliate of the Trust, except in
conjunction with an internal reorganization as referred to in
paragraph (i) above; or

 21
 

(iv)                              any
amendment to the articles of the Corporation to increase or decrease the
minimum or maximum number of directors; or

(v)                                 any
material amendment to the articles of the Corporation to change the authorized
share capital or amend the rights, privileges, restrictions and conditions
attaching to any class of the Corporation’s Shares in a manner which may be
prejudicial to the Trust in the opinion of the Trustee or Administrator,
provided, however, that the Trustee shall have the authority to take such steps
as may be necessary to complete the amalgamation of AcquisitionCo, the
Corporation, Northern Reef Exploration Ltd. and Penn West Exploration Ltd. and
to amend the articles of the Corporation or any Affiliate of the Trust to
create a class or classes or series of exchangeable shares;

without the approval of
the Unitholders by Special Resolution at a meeting of Unitholders called for
that purpose.

7.4                                                                               Banking

The banking activities of
the Trust, or any part thereof, shall be transacted with such financial
institution (including the Trustee or an Affiliate thereof) or other person
carrying on a financial services business as the Trustee may designate, appoint
or authorize from time to time and all such financial services business, or any
part thereof, shall be transacted on the Trust’s behalf by such one or more
officers of the Trustee and/or other persons as the Trustee may designate,
appoint or authorize from time to time (who may be officers or employees of the
Administrator) including, but without restricting the generality of the
foregoing, the operation of the Trust’s accounts; the making, signing, drawing,
accepting, endorsing, negotiating, lodging, depositing or transferring of any
cheques, promissory notes, drafts, bankers’ acceptances, bills of exchange,
letters of credit and orders for the payment of money; the giving of receipts
for and orders relating to any property of the Trust; the execution of any
agreement relating to any property of the Trust; the execution of any agreement
relating to any such financial services business and defining the rights and
powers of the parties hereto; and the authorizing of any officer of such
financial institution, or any trustee or agent thereof to do any act or thing
on the Trust’s behalf to facilitate such banking business.

7.5                                                                               Standard
of Care

The Trustee shall
exercise its powers and carry out its functions hereunder as Trustee honestly,
in good faith and in the best interests of the Trust and the Unitholders and,
in connection therewith, shall exercise that degree of care, diligence and
skill that a reasonably prudent trustee would exercise in comparable
circumstances.  Unless otherwise required
by law, the Trustee shall not be required to give bond, surety or security in
any jurisdiction for the performance of any duties or obligations hereunder.  The Trustee shall not be required to devote
its entire time to the business and affairs of the Trust.

7.6                                                                               Fees
and Expenses

The Trustee shall be paid
by the Trust, upon direction of the Corporation, such fees as may be agreed
upon from time to time by the Corporation and the Trustee and if such fees are
not paid by the Trust, at the direction of the Corporation, within 30 days
after the date of any invoice in respect thereof, the Trustee shall be entitled
to have such fees paid by the Trust out of the Trust Fund.  As part of the Trust Expenses, the Trustee
may pay or cause to be paid reasonable fees, costs and expenses incurred in
connection with the administration and management of the Trust, including
(without limitation) fees of auditors, lawyers, appraisers and other agents,
consultants and professional advisers employed by or on behalf of the Trust and
the cost of reporting or giving notices to Unitholders.  All costs, charges and expenses (including
any amounts payable to the Trustee under Section 7.8 or 7.9) properly
incurred by the Trustee on behalf of the Trust shall be paid by the Trust upon
direction of the Corporation and if any such costs, charges and expenses are
not paid by the Trust within 30 days after the date of any invoice in
respect thereof, the Trustee shall be entitled to have such costs, charges and
expenses paid by the Trust paid out of the Trust Fund.  The Trustee shall have a lien on the Trust
Fund (which shall have priority over the interests of the Unitholders pursuant
hereto) to enforce payment of the fees, costs, charges, expenses and other
amounts payable or reimbursable by the Trust to the Trustee.

 22

7.7                                                                               Limitations
on Liability of Trustee

The Trustee, its
directors, officers, employees, shareholders and agents shall not be liable to
any Unitholder or any other person, in tort, contract or otherwise, in
connection with any matter pertaining to the Trust or the Trust Fund, arising
from the exercise by the Trustee of any powers, authorities or discretion
conferred under this Indenture, including, without limitation, entering into
the Administration Agreement and relying on the Corporation thereunder, any action
taken or not taken in good faith in reliance on any documents that are, prima facie, properly executed, any
depreciation of, or loss to, the Trust Fund incurred by reason of the sale of
any asset, any inaccuracy in any evaluation provided by any appropriately
qualified person, any reliance on any such evaluation, any action or failure to
act of the Administrator, or any other person to whom the Trustee has, with the
consent of the Administrator, delegated any of its duties hereunder, or any
other action or failure to act (including failure to compel in any way any
former trustee to redress any breach of trust or any failure by the
Administrator to perform its duties under or delegated to it under this
Indenture or any other contract), including anything done or permitted to be
done pursuant to, or any error or omission relating to, the rights, powers,
responsibilities and duties conferred upon, granted, allocated and delegated to
the Administrator hereunder or under the Administration Agreement, or the act
of agreeing to the conferring upon, granting, allocating and delegating any
such rights, powers, responsibilities and duties to the Administrator in
accordance with the terms of this Indenture or under the Administration
Agreement, unless such liabilities arise out of the negligence, wilful default
or fraud of the Trustee or any of its directors, officers, employees,
shareholders, or agents.  If the Trustee
has retained an appropriate expert or adviser or Counsel with respect to any
matter connected with its duties under this Indenture or any other contract,
the Trustee may act or refuse to act based on the advice of such expert,
adviser or Counsel, and notwithstanding any other provision of this Indenture
the Trustee shall not be liable for and shall be fully protected from any loss
or liability occasioned by any action or refusal to act based on the advice of
any such expert, adviser or Counsel.  In
the exercise of the powers, authorities or discretion conferred upon the
Trustee under this Indenture, the Trustee is and shall be conclusively deemed
to be acting as Trustee of the assets of the Trust and shall not be subject to
any personal liability for any debts, liabilities, obligations, claims,
demands, judgments, costs, charges or expenses against or with respect to the
Trust or the Trust Fund.

7.8                                                                               Indemnification
of Trustee

The Trust (to the extent
of the Trust Fund) is liable to, and shall indemnify and save harmless the
Trustee and each of its directors, officers, employees, shareholders and agents
in respect of:

(a)                                  any
liability and all losses, damages, costs, charges and expenses sustained or
incurred in respect of any action, suit or proceeding that is proposed or
commenced against the Trustee or against such directors, officers, employees,
shareholders or agents, as the case may be, for or in respect of any act,
omission or error in respect of the Trust and the Trustee’s execution of all
duties and responsibilities and exercise of all powers and authorities
pertaining thereto;

(b)                                 any
liability and all losses, damages, costs, charges and expenses sustained or
incurred in respect of any action, suit or proceeding that is proposed or
commenced against the Trustee or against such directors, officers, employees,
shareholders or agents, as the case may be, in respect of the Administrator’s
providing or omitting to provide service to the Trust or otherwise performing
obligations pursuant to the Administration Agreement or as delegated or
otherwise contemplated hereunder;

(c)                                  all
other liability, losses, damages, costs, charges, expenses, taxes, penalties
and interest in respect of unpaid taxes or other tax matters; and

(d)                                 all
other expenses and liabilities sustained or incurred by the Trustee in respect
of the administration or termination of the Trust;

in each case including
the aggregate amount paid in reasonable settlement of any actions, suits,
proceedings, investigations or claims and the reasonable fees and expenses of
counsel to the indemnified parties that may be incurred in obtaining advice with
respect to and defending any action, suit, proceedings, investigation or claim
that may be made or threatened against any indemnified party, or that may be
incurred in enforcing this indemnity, unless and to the extent any of the
foregoing arise principally and directly out of the gross negligence, wilful
default 

 23
 

or fraud of the Trustee
or any of its directors, officers, employees, shareholders or agents, in which
case the provisions of this Section 7.8 shall not apply.

7.9                                                                               Environmental
Indemnity

The Trust (to the extent
of the Trust Fund) is liable to, and shall indemnify and save harmless, the
Trustee, its directors, officers, employees, shareholders and agents, and all
of their successors and assigns (collectively, the “Indemnified Parties”) against any loss, expense, claim,
charge, damage, penalty, liability or asserted liability (including strict
liability and costs and expenses of abatement and remediation of spills or
releases of contaminants and liabilities of the Indemnified Parties to third
parties, including governmental agencies, in respect of bodily injuries,
property damage, damage to or impairment of the environment or any other injury
or damage and including liabilities of the Indemnified Parties to third parties
for the third parties’ foreseeable and unforeseeable consequential damages)
incurred as a result of:

(a)                                  the
administration of the Trust created hereby; or

(b)                                 the
exercise or performance by the Trustee of any rights or obligations hereunder
or under any other contracts for and on behalf of the Trust;

and which result from or
relate, directly or indirectly, to:

(c)                                  the
presence or release or threatened presence or release of any contaminants, by
any means or for any reason, on or in respect of the Properties, whether or not
such presence or release or threatened presence or release of the contaminants
was under the control, care or management of the Trust or any Affiliate of the
Trust, or of a previous owner or operator of a Property;

(d)                                 any
contaminant present on or released from any property adjacent to or in the
proximate area of the Properties;

(e)                                  the
breach or alleged breach of any federal, provincial or municipal environmental
law, regulation, by­law, order, rule or permit by the Trust or any Affiliate of
the Trust or an owner or operator of a Property; or

(f)                                    any
misrepresentation or omission of a known fact or condition made by any
Affiliate of the Trust relating to any Property.

For the purpose of this
Section 7.9, “liability” shall include: 
(i) liability of an Indemnified Party for costs and expenses of
abatement and remediation of spills and releases of contaminants;
(ii) liability of an Indemnified Party to a third party to reimburse the
third party for bodily injuries, property damage and other injuries or damages
which the third party suffers, including (to the extent, if any, that the
Indemnified Party is liable therefor) foreseeable and unforeseeable
consequential damages suffered by the third party; and (iii) liability of
the Indemnified Party for damage to or impairment of the environment.

Notwithstanding the
foregoing, the Trust shall not be liable to indemnify an Indemnified Party
against any loss, expense, claim, liability or asserted liability to the extent
resulting principally and directly from the gross negligence, wilful default or
fraud of the Indemnified Party.

7.10                                                                        Apparent
Authority

No purchaser, transfer
agent or other person dealing with the Trustee or with any officer, employee or
agent of the Trustee shall be bound to make any inquiry concerning the validity
of any transaction purporting to be made by the Trustee or by such officer,
employee or agent or make inquiry concerning, or be liable for, the application
of money or property paid, lent or delivered to or on the order of the Trustee
or of such officer, employee or agent. 
Any person dealing with the Trustee in respect of any matter pertaining
to the Trust Fund and any right, title or interest therein shall be entitled to
rely on a certificate, statutory declaration or resolution executed 

 24
 

or certified on
behalf of the Trustee as to the capacity, power and authority of any officer,
employee or any other person to act for and on behalf and in the name of the
Trust.

7.11                                                                        Notice
to Unitholders of Non-Eligibility for Deferred Income Plans

If the Corporation
becomes aware that the Trust Units have ceased to be eligible investments for,
or foreign property of, registered retirement savings plans, registered
retirement income funds, registered education savings plans and deferred profit
sharing plans (all within the meaning of the Tax Act) or any of such plans, the
Corporation shall give notice to Unitholders at their latest address as shown
on the register of Unitholders that Trust Units have ceased to be eligible
investments for such plans. 
Notwithstanding the foregoing, the Trustee and the Corporation shall not
be liable to the Trust or to any Unitholder for any costs, expenses, charges,
penalties or taxes imposed upon a Unitholder as a result of or by virtue of a
Trust Unit not being an eligible investment, or being foreign property, for any
such plan, notwithstanding any failure or omission of the Administrator to have
given such notice.

7.12                                                                        Declaration
as to Beneficial Ownership

The Administrator may
require any Unitholder, as shown on the register of Unitholders, to provide a
declaration in a form prescribed by the Administrator as to the beneficial
ownership of Trust Units registered in such Unitholder’s name and as to the
jurisdiction in which such beneficial owners are resident.

7.13                                                                        Conditions
Precedent to Trustee’s Obligations to Act

The obligation of the
Trustee to call any meeting pursuant to Article 10 or to commence to wind up
the affairs of the Trust pursuant to Article 12 shall be conditional upon the
Unitholders or another person furnishing, when required by notice in writing by
the Trustee, sufficient funds to commence or continue such act, action or
proceeding and indemnity (to the extent sufficient funds for such purpose are
not available in the Trust Fund) reasonably satisfactory to the Trustee to
protect and hold harmless the Trustee against the costs, charges and expenses
and liabilities to be incurred therein and any loss and damage it may suffer by
reason thereof and the obligation of the Trustee to commence or continue any
act, action or proceeding for the purpose of enforcing the rights of the
Trustee and of the Unitholders shall, if required by notice in writing by the
Trustee, be subject to the same conditions as to funding and indemnity.  None of the provisions contained in this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers unless indemnified as aforesaid.

7.14                                                                        Survival
of Indemnities

All indemnities, all
limitations of liability and all other provisions for the protection of the
Trustee provided for in this Indenture shall survive the termination of this
Indenture under Article 12 and the removal or resignation of the Trustee under
Article 6.

7.15                                                                        Trustee
May Have Other Interests

Subject to applicable
securities laws, and without affecting or limiting the duties and
responsibilities or the limitations and indemnities provided in this Indenture,
the Trustee is hereby expressly permitted to:

(a)                                  be
an Associate or an Affiliate of a person from or to whom assets of the Trust
have been or are to be purchased or sold;

(b)                                 be,
or be an Associate or an Affiliate of, a person with whom the Trust or any
other Affiliate of the Trust contracts or deals or which supplies services to
the Trust or any other Affiliate of the Trust;

 25
 

(c)                                  acquire,
hold and dispose of, either for its own account or the accounts of its
customers, any assets not constituting part of the Trust Fund, even if such
assets are of a character which could be held by the Trust, and exercise all
rights of an owner of such assets as if it were not a trustee;

(d)                                 carry
on its business as a trust company in the usual course while it is the Trustee,
including the rendering of trustee or other services to other trusts and other
persons for gain carry on its business as a trust company in the usual course
while it is the Trustee, including the rendering of trustee or other services
to other trusts and other persons for gain, including other trusts with whom
the Trust or the Corporation or any of their Affiliates may enter into any
transaction;

(e)                                  derive
direct or indirect benefit, profit or advantage from time to time as a result
of dealing with the Trust or the relationships, matters, contracts,
transactions, affiliations or other interests stated in this Section 7.15
without being liable to the Trust or any Unitholder for any such direct or
indirect benefit, profit or advantage; and

(f)                                    enter
into agreements with the Trust in relation to the provision of services,
including without limitation, as registrar and transfer agent of any securities
of the Trust or any Affiliate of the Trust; trustee under any indenture
governing rights, warrant, debt or other securities of the Trust or any Affiliate
of the Trust; any depository, escrow, trust or other agreement to facilitate
any arrangement, reorganization or merger of the Trust or any Affiliate of the
Trust, including in relation to the Trust Reorganization.

Subject to applicable
laws, none of the relationships, matters, contracts, transactions, affiliations
or other interests permitted above shall be, or shall be deemed to be or to
create, a material conflict of interest with the Trustee’s duties hereunder.

7.16                                                                        Documents
Held by Trustee

Any securities, documents
of title or other instruments that may at any time be held by the Trustee
subject to the trusts hereof may be placed in the deposit vaults of the Trustee
or of any chartered bank in Canada, including an Affiliate of the Trustee, or
deposited for safekeeping with any such bank.

ARTICLE 8

DELEGATION OF POWERS

8.1                                                                               General
Delegation to the Administrator

Except as expressly
prohibited by law, the Trustee may grant or delegate to the Administrator such
authority as the Trustee may in its sole discretion deem necessary or desirable
to effect the actual administration of the duties of the Trustee under this
Indenture, without regard to whether such authority is normally granted or
delegated by trustees.  The Trustee may
grant broad discretion to the Administrator to administer and manage the
day-to-day operations of the Trust, to act as agent for the Trust, to execute
documents on behalf of the Trust and to make executive decisions which conform
to general policies and general principles set forth herein or previously
established by the Trustee.  The
Administrator shall have the powers and duties expressly provided for herein
and in any other agreement providing for the management or administration of
the Trust (including the Administration Agreement), including, without
limitation, the power to further delegate administration of the Trust and the
power to retain and instruct such appropriate experts or advisors to perform
those duties and obligations herein which it is not qualified to perform (and the
Administrator shall notify the Trustee of the name of the person or persons
retained or instructed and the terms and conditions thereof).

8.2                                                                               Administration
Agreement

The Trustee is authorized
to enter into the Administration Agreement with the Corporation (and to enter
into any further agreements to amend the same provided such amendments are not
inconsistent with the provisions hereof) pursuant to the authority provided for
hereunder contemporaneously with this Indenture.  The 

 26
 

Trustee hereby
delegates to the Corporation all of the Trustee’s power, authority and
responsibility for any or all matters provided for in the Administration
Agreement.

8.3                                                                               Public
Disclosure Documents

Notwithstanding anything
to the contrary contained herein, the Trustee shall not have any liability or
responsibility in respect of prospectuses, offering memoranda, rights offering
circulars, other Offering Documents, financial statements, management’s
discussion and analysis, annual information forms, proxy or information
circulars, takeover bid or issuer bid circulars, material change reports,
business acquisition reports, press releases or other public disclosures or
filings required by law or the rules or policies of securities regulatory
authorities or stock exchanges, or any agreements or documents relating thereto
(including, without limitation, stock exchange related matters, Underwriting
Agreements and indemnity agreements and ancillary matters).  Such matters shall be the sole and exclusive
responsibility of the Corporation and by executing this Indenture, the
Corporation acknowledges such responsibilities. 
In furtherance thereof, where certification is required under applicable
securities laws, the Corporation (which may authorize any directors or officers
of the Corporation to do so) shall be entitled and authorized to execute such
certification on behalf of the Trust.

8.4                                                                               Acceptance
of Delegation

The Corporation accepts
the delegations in this Article 8 and agrees that, in respect of such matters,
it shall carry out its functions honestly, in good faith and in the best
interests of the Trust and the Unitholders and, in connection therewith, shall
exercise that degree of care, diligence and skill that a reasonably prudent
trustee would exercise in comparable circumstances.  The Corporation may, and if directed by the
Corporation in writing, the Trustee shall, execute any agreement on behalf of
the Trust as the Corporation shall have authorized within the scope of any
authority delegated to it hereunder or under the Administration Agreement.

8.5                                                                               Power
of Attorney

Without limiting any of
the other provisions of this Article 8, the Trustee hereby delegates to the
Corporation from time to time the full power and authority, and constitutes the
Corporation its true and lawful attorney in fact, to sign on behalf of the
Trust:

(a)                                  all
rights plans, prospectuses, annual information forms, management proxy
circulars, other Offering Documents and any other documents ancillary or
similar thereto required to be signed by the Trust from time to time, including
any Underwriting Agreements, indemnity agreements (pursuant to which the Trust
and not the Trustee provides indemnities) or documents ancillary or similar
thereto; and

(b)                                 any
and all agreements relating to the Plan of Arrangement and the Trust
Reorganization and any document ancillary or similar thereto required to be
signed by the Trust from time to time.

8.6                                                                               Liability
of Trustee

The Trustee shall have no
liability or responsibility for any matters delegated to the Corporation
hereunder or under any of the Material Contracts, and the Trustee, in relying
upon the Corporation and in entering into the Material Contracts, shall: (a)
have no duty to supervise or investigate the Corporation in respect of those
matters delegated to the Corporation hereunder or under any Material Contracts,
including in relation to any amendment of a Material Contract, unless and until
it receives a notice of default under Section 8.7; (b) be deemed to have
complied with its obligations under Section 7.5; and (c) be entitled to
the benefit of the indemnities, limitations of liability and other protection
provisions provided for herein.

8.7                                                                               Compliance

The Corporation shall be
required to notify the Trustee of any defaults hereunder or the Administration
Agreement of which it becomes aware, and to provide an annual compliance
certificate in form and 

 27
 

substance
satisfactory to the Trustee, acting reasonably, with respect to the
satisfaction of its obligations under this Indenture and the Administration
Agreement.

8.8                                                                               Liability
of Trustee

The Trustee shall have no
liability or responsibility for any matters provided for in this Indenture or
required by the Trustee to be completed pursuant to the Trust Reorganization,
including the execution and delivery of any documents, or the entering into of
the Administration Agreement and in doing so, shall be deemed to have complied
with its obligations under Section 7.5 and shall be entitled to the
benefit of the indemnities, limitations of liability and other protection provisions
provided for herein.

ARTICLE 9

AMENDMENT

9.1                                                                               Amendment

Except as specifically
provided otherwise herein, the provisions of this Indenture may only be amended
by the Trustee with the consent of the Unitholders by Special Resolution.

Any of the provisions of
this Indenture may be amended by the Trustee at any time or times, without the
consent, approval or ratification of any of the Unitholders or any other person
for the purpose of:

(a)                                  ensuring
that the Trust will comply with any applicable laws or requirements of any
governmental agency or authority of Canada or of any province;

(b)                                 ensuring
that the Trust will satisfy the provisions of each of subsections 108(2)
and 132(6) of the  Tax Act as from
time to time amended or replaced and will not be foreign property for purposes
of the Tax Act;

(c)                                  ensuring
that such additional protection is provided for the interests of Unitholders as
the Trustee may consider expedient;

(d)                                 amending,
modifying or changing any provisions hereof that are necessary or desirable in
the opinion of the Corporation as a result of amendments to the Tax Act, the
regulations thereunder or the interpretation thereof including, without
limitation, amendments or changes relating to foreign property, eligibility for
investment and the requirements to maintain the Trust’s status as a “unit trust”
and a “mutual fund trust” for purposes of the Tax Act;

(e)                                  removing
or curing any conflicts or inconsistencies between the provisions of this
Indenture or any supplemental indenture, any Administration Agreement and any
other agreement of the Trust or any Offering Document with respect to the
Trust, or any applicable law or regulation of any jurisdiction, provided that
in the opinion of the Trustee the rights of the Trustee and of the Unitholders
are not prejudiced thereby;

(f)                                    providing
for, or amending the provisions for, the electronic delivery by the Trust to
Unitholders of documents relating to the Trust (including annual and quarterly
reports, including financial statements, notices of Unitholder meetings and
information circulars and proxy related materials) at such time as applicable
securities laws have been amended to permit such electronic delivery in place
of normal delivery procedures, provided that such amendments to the Indenture
are not contrary to or do not conflict with such laws;

(g)                                 curing,
correcting or rectifying any ambiguities, defective or inconsistent provisions,
errors, mistakes or omissions, provided that in the opinion of the Trustee the
rights of the Trustee and of the Unitholders are not prejudiced thereby; and

 28
 

(h)                                 making
any modification in the form of Trust Unit Certificates to conform with the
provisions of this Indenture, or any other modifications, provided the rights
of the Trustee and of the Unitholders are not prejudiced thereby.

Notwithstanding the
foregoing, no amendment shall reduce the percentage of votes required to be
cast at a meeting of the Unitholders for the purpose of amending this
Section 9.1 without the consent of the holders of all of the Trust Units then
outstanding.

9.2                                                                               Amendments
Prior to Trust Reorganization

Notwithstanding the
provisions of Section 9.1, the provisions of this Indenture may be amended
by the Trustee and the Settlor from time to time without the consent, approval
or ratification of any of the Unitholders or any other person at any time prior
to or on the date of the Closing, including, without limitation, any amendments
necessary or advisable to exclude the Settlor as a party to this Indenture and
include the Administrator as a party to this Indenture.

ARTICLE 10

MEETINGS OF UNITHOLDERS

10.1                                                                        Annual
and Special Meetings of Unitholders

Annual meetings of the
Unitholders shall be called by the Trustee, commencing in 2006, on a day, at a
time and at a place to be set by the Administrator.  The business transacted at such meetings shall
include the transaction of such business as Unitholders may be entitled to vote
upon as hereinafter provided in this Article 10, or as the Administrator may
determine.  Special meetings of the
Unitholders may be called at any time by the Administrator and shall be called
by the Trustee upon a written request of Unitholders holding in the aggregate
not less than 20% of the Trust Units then outstanding (and for this purpose,
holders of any issued Special Voting Units shall be regarded as representing
outstanding Trust Units equivalent in number to the votes attached to such
Special Voting Units and for which such holders have a direction to vote), such
request specifying the purpose or purposes for which such meeting is to be
called.  Meetings of Unitholders shall be
held in the City of Calgary, or at such other place as the Administrator shall
designate.  The Chairman of any annual or
special meeting shall be a person designated by the Administrator for the purpose
of such meeting except that, on the motion of any Unitholder, any person may be
elected as Chairman by a majority of the votes cast at the meeting instead of
such designated person or in the event that no person shall be designated by
the Administrator.

10.2                                                                        Notice
of Meetings

Notice of all meetings of
Unitholders shall be given by unregistered mail postage prepaid addressed to
each Unitholder at his registered address, mailed at least 21 days and not
more than 50 days before the meeting. 
Such notice shall set out the time when, and the place where, such
meeting is to be held and shall specify the nature of the business to be
transacted at such meeting in sufficient detail to permit a Unitholder to form
a reasoned judgment thereon, together with the text of any resolution in
substantially final form proposed to be passed. 
Any adjourned meeting may be held as adjourned without further
notice.  The accidental omission to give
notice to or the non-receipt of such notice by the Unitholders shall not
invalidate any resolution passed at any such meeting.

10.3                                                                        Quorum

At any meeting of the
Unitholders, subject as hereinafter provided, a quorum shall consist of two or
more persons either present in person or represented by proxy and representing
in the aggregate not less than 5% of the outstanding Trust Units.  For the purposes of determining such quorum,
the holders of any issued Special Voting Units who are present at the meeting
shall be regarded as representing outstanding Trust Units equivalent in number
to the votes attaching to such Special Voting Units and for which such holders
have a direction to vote.  If a quorum is
not present at the appointed place on the date for which the meeting is called
within one half hour after the time fixed for the holding of such meeting, the
meeting, if convened on the requisition of Unitholders, shall be dissolved, but
in any other case it shall stand adjourned to such day being not less than
fourteen (14) days later and 

 29
 

to such place and
time as may be appointed by the Chairman of the meeting.  If at such adjourned meeting a quorum as
above defined is not present, the Unitholders present either personally or by
proxy shall 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.

10.4                                                                        Voting
Rights of Unitholders

Only Unitholders of
record and holders of Special Voting Units shall be entitled to vote and each
Trust Unit shall entitle the holder or holders of that Trust Unit to one vote
at any meeting of the Unitholders and each Special Voting Unit shall entitle
the holder thereof to such number of votes as may be prescribed in the
resolution of the board of directors of the Administrator authorizing the
issuance of such Special Voting Unit at any meeting of Unitholders.  Every question submitted to a meeting, other
than a Special Resolution, shall, unless a poll vote is demanded, be decided by
a show of hands vote, on which every person present and entitled to vote shall
be entitled to one vote.  At any meeting
of Unitholders, any holder of Trust Units or Special Voting Units entitled to
vote thereat may vote by proxy and a proxy need not be a Unitholder, provided
that no proxy shall be voted at any meeting unless it shall have been placed on
file with the Trustee, or with such agent of the Trustee as the Trustee may
direct, for verification prior to the commencement of such meeting no later
than the time for which proxies are to have been received as set forth in the
notice of such meeting.  If approved by
the Trustee, proxies may be solicited in the name of the Trustee.  When any Trust Unit is held jointly by
several persons, any one of them may vote at any meeting in person or by proxy
in respect of such Trust Unit, but if more than one of them shall be present at
such meeting in person or by proxy, and such joint owners of their proxies so
present disagree as to any vote to be cast, the joint owner present or represented
whose name appears first in the register maintained pursuant to
Section 11.3 shall be entitled to cast such vote.

10.5                                                                        Resolutions

(a)                                  The
Trustee shall in accordance with an Ordinary Resolution passed by the
Unitholders: (i) change the Auditors as provided in Section 15.3; and (ii)
elect the directors of the Corporation.

(b)                                 The
Trustee shall in accordance with a Special Resolution passed by the
Unitholders:

(i)                                     subject
to Section 9.1, amend this Indenture;

(ii)                                  subdivide
or consolidate Trust Units (other than as provided in Section 3.8);

(iii)                               sell
or agree to sell the property of the Trust Fund as an entirety or substantially
as an entirety;

(iv)                              resign
if removed pursuant to Section 6.3; and

(v)                                 commence
to wind-up and wind-up the affairs of the Trust if requested pursuant to
Section 12.2.

Except with respect to
the above matters set out in this Section 10.5 and the matters set forth
in Sections 6.3, 6.4 and 12.2 hereof, no action taken by the Unitholders
or resolution of the Unitholders at any meeting shall in any way bind the
Trustee.

10.6                                                                        Meaning
of “Special Resolution”

The expression “Special Resolution” when used in this
Indenture means, subject as hereinafter in this Article provided, a resolution
proposed to be passed as a special resolution at a meeting of Unitholders
(including an adjourned meeting) duly convened for the purpose and held in
accordance with the provisions of this Article at which two or more holders of
at least 10% of the aggregate number of Trust Units then outstanding are present
in person or by proxy and passed by the affirmative votes of the holders of not
less than 66 2/3% of the Trust Units (including the Special Voting Units)
represented at the meeting and voted on a poll upon such resolution.  For the purpose of determining such
percentage, the holders of any issued Special Voting Units who are present at
the 

 30
 

meeting shall be
regarded as representing outstanding Trust Units equivalent in number to the
votes attaching to such Special Voting Units and for which such holders have a
direction to vote.

If, at any such meeting,
the holders of 10% of the aggregate number of Trust Units outstanding are not
present in person or represented by proxy within 30 minutes after the time
appointed for the meeting, then the meeting, if convened by or on the
requisition of Unitholders, shall be dissolved; but in any other case it shall
stand adjourned to such date, being not less than 21 nor more than 60 days
later, and to such place and time as may be appointed by the chairman.  Not less than ten days’ prior notice shall be
given of the time and place of such adjourned meeting in the manner provided in
Section 10.2.  Such notice shall
state that at the adjourned meeting the Unitholders present in person or represented
by proxy shall form a quorum but it shall not be necessary to set forth the
purposes for which the meeting was originally called or any other
particulars.  At the adjourned meeting,
the Unitholders present in person or represented by proxy shall form a quorum
and may transact the business for which the meeting was originally convened,
and a resolution proposed at such adjourned meeting and passed by the requisite
vote as provided in this Section 10.6 shall be a Special Resolution within
the meaning of this Indenture, notwithstanding that the holders of less than
10% of the aggregate number of Trust Units then outstanding are present or
represented by proxy at such adjourned meeting.

Votes on a Special
Resolution shall always be given on a poll and no demand for a poll on a Special
Resolution shall be necessary.  No
Special Resolution changing or amending any provision hereof relating to or
affecting: (i) the Trustee, including the qualification, powers, authorities,
appointment, removal or resignation thereof; or (ii) the provisions of Article
9, Article 10 or Article 12 shall be effective prior to 60 days from the
adoption thereof in accordance with the provisions hereof or such shorter
period as may be approved by Unitholders.

10.7                                                                        Record
Date for Voting

For the purpose of determining
the Unitholders and Special Voting Unitholders who are entitled to vote or act
at any meeting or any adjournment thereof, the Trustee may fix a date not more
than 50 days and not less than 21 days prior to the date of any
meeting of Unitholders and Special Voting Unitholders as a record date for the
determination of Unitholders entitled to vote at such meeting or any
adjournment thereof, and any Unitholder who was a Unitholder at the time so
fixed shall be entitled to vote at such meeting or any adjournment thereof even
though he has since that time disposed of his Trust Units, and no Unitholder
becoming such after that time shall be so entitled to vote at such meeting or
any adjournment thereof.  In the event that
the Trustee does not fix a record date for any meeting of Unitholders, the
record date for such meeting shall be the Business Day immediately preceding
the date upon which notice of the meeting is given as provided under
Section 10.2.

10.8                                                                        Binding
Effect of Resolutions

Every Ordinary Resolution
and every Special Resolution passed in accordance with the provisions of this
Indenture at a meeting of Unitholders shall be binding upon all the Unitholders
and holders of the Special Voting Units, whether present at or absent from such
meeting, and each and every Unitholder and Special Voting Unitholders shall be
bound to give effect accordingly to every such Ordinary Resolution and Special
Resolution.

10.9                                                                        Solicitation
of Proxies

A Unitholder shall have
the right to appoint a proxy to attend and act for the Unitholder at any
meeting of Unitholders.  The Trustee
shall solicit proxies from Unitholders in connection with all meetings of
Unitholders.  In connection therewith, the
Trustee shall comply, as near as may be possible, with all provisions of the
ABCA and the requirements of Canadian securities legislation applicable to the
solicitation of proxies.

10.10                                                                 No
Breach

Notwithstanding any
provisions of this Indenture, neither Unitholders nor holders of Special Voting
Units shall have the power to effect any amendment hereto which would require
the Trustee to take any action or conduct the affairs of the Trust in a manner
which would constitute a breach or default by the Trust or the Trustee under
any agreement binding on or obligation of the Trust or the Trustee.

 31
 

ARTICLE 11

CERTIFICATES, REGISTRATION AND TRANSFER OF TRUST UNITS

11.1                                                                        Nature
of Trust Units

The nature of a Trust
Unit and the relationship of a Unitholder to the Trustee and the relationship
of one Unitholder to another is as described in Section 2.4
and Subsection 2.5(c) and the provisions of this Article 11 shall not
in any way alter the nature of Trust Units or the said relationships of a
Unitholder to the Trustee and of one Unitholder to another, but are intended
only to facilitate the issuance of certificates evidencing the beneficial
ownership of Trust Units and the recording of all such transactions whether by
the Trust, securities dealers, stock exchanges, transfer agents, registrars or
other persons.

11.2                                                                        Certificates

(a)                                  The
form of certificate representing Trust Units shall be substantially as set out
in the Schedule hereto or such other form as is authorized from time to time by
the Trustee.  Each such certificate shall
bear an identifying serial number and shall be certified manually on behalf of
the Trustee.  Any additional signature
required by the Trustee to appear on such certificate may be printed,
lithographed or otherwise mechanically reproduced thereon and, in such event,
certificates so signed are as valid as if it had been signed manually.  Any certificate which has one manual
signature as hereinbefore provided shall be valid notwithstanding that one or
more of the persons whose signature is printed, lithographed or mechanically
reproduced no longer holds office at the date of issuance of such
certificate.  The Trust Certificates may
be engraved, printed or lithographed, or partly in one form and partly in
another, as the Trustee may determine.

(b)                                 Any
Trust Unit Certificate validly issued in accordance with the terms of this
Indenture in effect at the time of issuance shall validly represent issued and
outstanding Trust Units, notwithstanding that the form of such Trust Unit
Certificate may not be in the form currently required by this Indenture.

11.3                                                                        Register
of Unitholders

A register shall be
maintained at the principal corporate trust office of the Transfer Agent in the
City of Calgary by the Transfer Agent designated to act on behalf and under the
direction of the Trustee, which register shall contain the names and addresses
of the Unitholders, the respective numbers of Trust Units held by them, the
certificate numbers of the certificates representing such Trust Units and a
record of all transfers thereof.  Branch
transfer registers shall be maintained at such other offices of the Transfer
Agent as the Trustee may from time to time designate.  The Transfer Agent shall designate an office
in the City of Toronto at which a branch register shall be maintained.  Except in the case of the registers required
to be maintained at the Cities of Calgary and Toronto, the Transfer Agent shall
have the power at any time to close any register of transfers and in that event
shall transfer the records thereof to another existing register or to a new
register.

Only Unitholders whose
certificates are so recorded shall be entitled to receive distributions or to
exercise or enjoy the rights of Unitholders hereunder.  The Trustee shall have the right to treat the
person registered as a Unitholder on the register of the Trust as the owner of
such Trust Units for all purposes, including, without limitation, payment of
any distribution, giving notice to Unitholders and determining the right to
attend and vote at meetings of Unitholders, and the Trustee shall not be bound
to recognize any transfer, pledge or other disposition of a Trust Unit or any
attempt to transfer, pledge or dispose of a Trust Unit, or any beneficial
interest or equitable or other right or claim with respect thereto, whether or
not the Trustee shall have actual or other notice thereof, until such Trust
Unit shall have been transferred on the register of the Transfer Agent as
herein provided.

The register and the
branch transfer register referred to in this Section 11.3 shall at all
reasonable times be open for inspection by the Unitholders, the Administrator
and the Trustee.

 32

11.4                                                                        Transfer
of Trust Units

(a)                                  Subject
to the provisions of this Article 11, the Trust Units shall be fully
transferable without charge as between persons, but no transfer of Trust Units
shall be effective as against the Trustee or shall be in any way binding upon
the Trustee until the transfer has been recorded on the register or one of the
branch transfer registers maintained by the Transfer Agent.  No transfer of a Trust Unit shall be
recognized unless such transfer is of a whole Trust Unit.

(b)                                 Subject
to the provisions of this Article 11, Trust Units shall be transferable on the
register or one of the branch transfer registers of Unitholders of the Trust
only by the Unitholders of record thereof or their executors, administrators or
other legal representatives or by their agents hereunto duly authorized in
writing, and only upon delivery to the Transfer Agent of the Trust, of the
certificate therefor, if certificates representing Trust Units are issued,
properly endorsed or accompanied by a duly executed instrument of transfer and
accompanied by all necessary transfer or other taxes imposed by law, together
with such evidence of the genuineness of such endorsement, execution and
authorization and other matters that may reasonably be required by the Transfer
Agent.  Upon such delivery the transfer
shall be recorded on the register of Unitholders and a new Trust Certificate
for the residue thereof (if any) shall be issued to the transferor.  Unless the Corporation agrees to assume
liability for the transfer and exchange fees the Unitholder shall be
responsible for such fees and expenses.

(c)                                  Any
person becoming entitled to any Trust Units as a consequence of the death,
bankruptcy or incompetence of any Unitholder or otherwise by operation of law,
shall be recorded as the holder of such Trust Units and shall receive a new
Trust Certificate therefor only upon production of evidence satisfactory to the
Transfer Agent thereof and delivery of the existing Trust Certificate to the
Transfer Agent, but until such record is made the Unitholder of record shall
continue to be and be deemed to be the holder of such Trust Units for all
purposes whether or not the Trustee or the Transfer Agent shall have actual or
other notice of such death or other event.

11.5                                                                        Trust
Units Held Jointly or in a Fiduciary Capacity

The Trustee and the
Transfer Agent may treat two or more persons holding any Trust Units as joint
owners of the entire interest therein unless their ownership is expressly
otherwise recorded on the register of the Trust, but no entry shall be made in
the register or on any Trust Certificate that any person is in any other manner
entitled to any future, limited or contingent interest in any Trust Units;
provided, however, that any person recorded as a Unitholder may, subject to the
provisions hereinafter contained, be described in the register or on any Trust
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.  Where any Trust
Certificate is registered in more than one name, the distributions (if any) in
respect thereof may be paid to the order of all such holders failing written
instructions from them to the contrary and such payment shall be a valid
discharge to the Trustee and any Transfer Agent.  In the case of the death of one or more joint
holders, the distributions (if any) in respect of any Trust Units may be paid
to the survivor or survivors of such holders and such payment shall be a valid
discharge to the Trustee and any Transfer Agent.

11.6                                                                        Performance
of Trust

The Trustee, the
Unitholders and any officer or agent of the Trustee shall not be bound to be
responsible for or otherwise inquire into or ensure the performance of any
trust, express, implied or constructive, or of any charge, pledge or equity to
which any of the Trust Units or any interest therein are or may be subject, or
to ascertain or enquire whether any transfer of any such Trust Units or
interests therein by any such Unitholder or by his personal representatives is
authorized by such trust, charge, pledge or equity, or to recognize any person
as having any interest therein except for the person recorded as a Unitholder.

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11.7                                                                        Lost
Certificates

In the event that any
Trust Certificate is lost, stolen, destroyed or mutilated, the Trustee or the
Transfer Agent may authorize the issuance of a new Trust Certificate for the
same number of Trust Units in lieu thereof. 
The Trustee or the Transfer Agent may in its discretion, before the
issuance of such new Trust Certificate, require the owner of the lost, stolen,
destroyed or mutilated Trust Certificate, or the legal representative of the
owner to make an affidavit or statutory declaration setting forth such facts as
to the loss, theft, destruction or mutilation as the Trustee or the Transfer
Agent may deem necessary, to surrender any mutilated Trust Certificate and may
require the applicant to supply to the Trust a “lost certificate bond” or a
similar bond in such reasonable sum as the Trustee or the Transfer Agent may
direct indemnifying the Trustee and its agent for so doing.  The Trustee shall have the power to require
from an insurer or insurers a blanket lost security bond or bonds in respect of
the replacement of lost, stolen, destroyed or mutilated Trust
Certificates.  The Trustee may pay all
premiums and other funds of money payable for such purpose out of the Trust
Fund with such contribution, if any, by those insured as may be determined by
the Trustee in its sole discretion.  If
such blanket lost security bond is required, the Trustee may authorize and
direct (upon such terms and conditions as the Trustee may from time to time
impose) any agent to whom the indemnity of such bond extends to take such
action to replace any lost, stolen, destroyed or mutilated Trust Certificate
without further action or approval by the Trustee.

11.8                                                                        Death
of a Unitholder

The death of a Unitholder
during the continuance of the Trust shall not terminate the Trust or any of the
mutual or respective rights and obligations created by or arising under this
Indenture nor give such Unitholder’s personal representative a right to an
accounting or take any action in court or otherwise against other Unitholders
or the Trustee or the Trust Fund, but shall entitle the personal
representatives of the deceased Unitholder to demand and receive, pursuant to
the provisions hereof, a new Trust Certificate for Trust Units in place of the
Trust Certificate held by the deceased Unitholder, and upon the acceptance
thereof such personal representatives shall succeed to all rights of the
deceased Unitholder under this Indenture.

11.9                                                                        Unclaimed
Interest or Distribution

In the event that the
Trustee shall hold any amount of interest or other distributable amount which
is unclaimed or which cannot be paid for any reason, the Trustee shall be under
no obligation to invest or reinvest the same but shall only be obliged to hold
the same in a current non-interest-bearing account pending payment to the
person or persons entitled thereto.  The
Trustee shall, as and when required by law, and may at any time prior to such
required time, pay all or part of such interest or other distributable amount
so held to the public trustee (or other appropriate government official or
agency) whose receipt shall be a good discharge and release of the Trustee.

11.10                                                                 Exchanges
of Trust Certificates

Trust Certificates
representing any number of Trust Units may be exchanged without charge for
Trust Certificates representing an equivalent number of Trust Units in the aggregate.  Any exchange of Trust Certificates may be
made at the offices of the Trustee or at the offices of any Transfer Agent
where registers are maintained for the Trust Certificates pursuant to the
provisions of this Article 11.  Any Trust
Certificates tendered for exchange shall be surrendered to the Trustee or
appropriate Transfer Agent and shall be cancelled.  The Corporation shall reimburse the Trustee
for all exchange fees associated with any such exchange.  Subject to the foregoing, unless the Corporation
agrees to assume liability for the transfer and exchange fees, the Unitholder
shall be responsible for all such fees and expenses.

11.11                                                                 Offer
for Units

(a)                                  In
this Section 11.11:

(i)                                     “Dissenting Unitholder” means a Unitholder
who does not accept an Offer referred to in Subsection (b) and includes
any assignee of the Trust Unit of a Unitholder to whom such an Offer is made,
whether or not such assignee is recognized under this Indenture;

 34
 

(ii)                                  “Offer” means an offer to acquire
outstanding Trust Units where, as of the date of the offer to acquire, the
Trust Units that are subject to the offer to acquire, together with the Offeror’s
Units, constitute in the aggregate 20% or more of all outstanding Trust Units;

(iii)                               “offer to acquire” includes an acceptance of
an offer to sell;

(iv)                              “Offeror” means a person, or two or more
persons acting jointly or in concert, who make an Offer to acquire Trust Units;

(v)                                 “Offeror’s Notice” means the notice
described in Subsection (c); and

(vi)                              “Offeror’s Units” means Trust Units
beneficially owned, or over which control or direction is exercised, on the
date of an Offer by the Offeror, any Affiliate or Associate of the Offeror or
any person or company acting jointly or in concert with the Offeror.

(b)                                 If
an Offer for all of the outstanding Trust Units (other than Trust Units held by
or on behalf of the Offeror or an Affiliate or Associate of the Offeror) is
made and:

(i)                                     within
the time provided in the Offer for its acceptance or within 90 days after
the date the Offer is made, whichever period is the shorter, the Offer is
accepted by Unitholders representing at least 90% of the outstanding Trust
Units, other than the Offeror’s Units;

(ii)                                  the
Offeror is bound to take up and pay for, or has taken up and paid for the Trust
Units of the Unitholders who accepted the Offer; and

(iii)                               the
Offeror complies with Subsections (c) and (e);

the Offeror is entitled
to acquire, and the Dissenting Unitholders are required to sell to the Offeror,
the Trust Units held by the Dissenting Unitholders for the same consideration
per Trust Unit payable or paid, as the case may be, under the Offer.

(c)                                  Where
an Offeror is entitled to acquire Trust Units held by Dissenting Unitholders
pursuant to Subsection (b), and the Offeror wishes to exercise such right,
the Offeror shall send by registered mail within 30 days after the date of
termination of the Offer a notice (the “Offeror’s
Notice”) to each Dissenting Unitholder stating that:

(i)                                     Unitholders
holding at least 90% of the Trust Units of all Unitholders, other than Offeror’s
Units, have accepted the Offer;

(ii)                                  the
Offeror is bound to take up and pay for, or has taken up and paid for, the
Trust Units of the Unitholders who accepted the Offer;

(iii)                               Dissenting
Unitholders must transfer their respective Trust Units to the Offeror on the
terms on which the Offeror acquired the Trust Units of the Unitholders who
accepted the Offer within 21 days after the date of the sending of the
Offeror’s Notice; and

(iv)                              Dissenting
Unitholders must send their respective Trust Unit Certificate(s) to the Trustee
within 21 days after the date of the sending of the Offeror’s Notice.

(d)                                 A
Dissenting Unitholder to whom an Offeror’s Notice is sent pursuant to
Subsection (c) shall, within 21 days after the sending of the Offeror’s
Notice, send his or her Trust Unit Certificate(s) to the Trustee, duly endorsed
for transfer.

 35
 

(e)                                  Within
21 days after the Offeror sends an Offeror’s Notice pursuant to
Subsection (c), the Offeror shall pay or transfer to the Trustee, or to
such other person as the Trustee may direct, the cash or other consideration
that is payable to Dissenting Unitholders pursuant to Subsection (b).

(f)                                    The
Trustee, or the person directed by the Trustee, shall hold in trust for the
Dissenting Unitholders the cash or other consideration it receives under
Subsection (e).  The Trustee, or
such person, shall deposit cash in a separate account in a Canadian chartered
bank, and shall place other consideration in the custody of a Canadian
chartered bank or similar institution for safekeeping.

(g)                                 Within
30 days after the date of the sending of an Offeror’s Notice pursuant to
Subsection (c), the Trustee, if the Offeror has complied with
Subsection (e), shall:

(i)                                     do
all acts and things and execute and cause to be executed all instruments as in
the Trustee’s opinion may be necessary or desirable to cause the transfer of
the Trust Units of the Dissenting Unitholders to the Offeror;

(ii)                                  send
to each Dissenting Unitholder who has complied with Subsection (d) the
consideration to which such Dissenting Unitholder is entitled under this
Section 11.11; and

(iii)                               send
to each Dissenting Unitholder who has not complied with Subsection (d) a
notice stating that:

(A)                              his
or her Trust Units have been transferred to the Offeror;

(B)                                the
Trustee or some other person designated in such notice is holding in trust the
consideration for such Trust Units; and

(C)                                the
Trustee, or such other person, will send the consideration to such Dissenting
Unitholder as soon as practicable after receiving such Dissenting Unitholder’s
Trust Unit Certificate(s) or such other documents as the Trustee, or such other
person may require in lieu thereof;

and the Trustee is hereby
appointed the agent and attorney of the Dissenting Unitholders for the purposes
of giving effect to the foregoing provisions.

(h)                                 An
Offeror cannot make an Offer for Trust Units unless, concurrent with the
communication of the Offer to any Unitholder, a copy of the Offer is provided
to the Trust.

ARTICLE 12

TERMINATION

12.1                                                                        Termination
Date

Unless the Trust is
terminated or extended earlier, the Trustee shall commence to wind up the
affairs of the Trust on December 31, 2099.

12.2                                                                        Termination
by Special Resolution of Unitholders

The Unitholders may vote
by Special Resolution to terminate the Trust at any meeting of Unitholders duly
called for that purpose, whereupon the Trustee shall commence to wind up the
affairs of the Trust, provided that such a vote may only be held if requested
in writing by the holders of not less than 20% of the outstanding Trust Units
(including Special Voting Units) and a quorum of holders of not less than 50%
of the outstanding Trust Units (including Special Voting Units) are present in
person or represented by proxy at the meeting or any adjournment thereof at which
the vote is taken.  For the purposes of
determining the foregoing percentages, any outstanding Special Voting Unit
shall be regarded as representing outstanding Trust Units 

 36
 

equivalent in
number to the votes attached as such Special Voting Units and for which such
holders have a direction vote.

12.3                                                                        Procedure
Upon Termination

Forthwith upon being
required to commence to wind up the affairs of the Trust, the Trustee shall
give notice thereof to the Unitholders, which notice shall designate the time
or times at which Unitholders may surrender their Trust Units for cancellation
and the date at which the register of the Trust shall be closed.

12.4                                                                        Powers
of the Trustee upon Termination

After the date on which
the Trustee is required to commence to wind up the affairs of the Trust, the
Trustee shall carry on no activities except for the purpose of winding up the
affairs of the Trust as hereinafter provided and for these purposes, the
Trustee shall continue to be vested with and may exercise all or any of the powers
conferred upon the Trustee under this Indenture.

12.5                                                                        Sale
of Investments

After the date referred
to in Section 12.4, the Trustee shall proceed to wind up the affairs of
the Trust as soon as may be reasonably practicable and for such purpose shall, subject
to the terms of any agreements binding on or obligations of the Trust and the
Trustee, sell and convert into money the assets comprising the Trust Fund in
one transaction or in a series of transactions at public or private sale and do
all other acts appropriate to liquidate the Trust Fund, and shall in all
respects act in accordance with the directions, if any, of the Unitholders in
respect of a termination authorized under Section 12.2.  Notwithstanding anything herein contained, in
no event shall the Trust be wound up until any Royalties and the NPI shall have
been disposed of.

12.6                                                                        Distribution
of Proceeds

Subject to Section 19.1
of this Indenture, after paying, retiring or discharging or making provision
for the payment, retirement or discharge of all known liabilities and
obligations of the Trust and providing for indemnity against any other
outstanding liabilities and obligations, the Trustee shall distribute the
remaining part of the proceeds of the sale of the Royalties and other assets
together with any cash forming part of the Trust Fund among the Unitholders in
accordance with their Pro Rata Share.

12.7                                                                        Further
Notice to Unitholders

In the event that all of
the Unitholders shall not surrender their Trust Units for cancellation within
six (6) months after the time specified in the notice referred to in
Section 12.3, such remaining Trust Units shall be deemed to be cancelled
without prejudice to the rights of the holders of such Trust Units to receive
their Pro Rata Share of the amounts referred to in Section 12.6 and the
Trustee may either take appropriate steps, or appoint an agent to take
appropriate steps, to contact such Unitholders (deducting all expenses thereby
incurred from the amounts to which such Unitholders are entitled as aforesaid)
or, in the discretion of the Trustee, may pay such amounts into court.

12.8                                                                        Responsibility
of Trustee after Sale and Conversion

The Trustee shall be
under no obligation to invest the proceeds of any sale of any Royalties, the
NPI or other assets or cash forming part of the Trust Fund after the date
referred to in Section 12.4 and, after such sale, the sole obligation of
the Trustee under this Indenture shall be to hold such proceeds in trust for
distribution under Section 12.6.

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ARTICLE 13

SUPPLEMENTAL INDENTURES

13.1                                                                        Provision
for Supplemental Indentures

From time to time the
Trustee and the Corporation may, subject to the provisions hereof, and it
shall, when so directed in accordance with the provisions hereof, execute and
deliver by its proper officers, indentures or instruments supplemental hereto,
which thereafter shall form part hereof, for any one or more or all of the
following purposes:

(a)                                  giving
effect to any amendment as provided in Article 9;

(b)                                 giving
effect to any Special Resolution passed as provided in Article 10;

(c)                                  making
such provision not inconsistent with this Indenture as may be necessary or
desirable with respect to matters or questions arising hereunder, provided that
such provisions are not, in the opinion of the Trustee, prejudicial to the
interests of the Unitholders;

(d)                                 making
any modification in the form of Trust Certificates which does not materially
affect the substance thereof; and

(e)                                  for
any other purpose not inconsistent with the terms of this Indenture, including
the correction or rectification of any ambiguities, defective or inconsistent
provisions, errors, mistakes or omissions herein, provided that in the opinion
of the Trustee, the rights of the Trustee and the Unitholders are not
prejudiced thereby;

provided that the Trustee
may in its sole discretion decline to enter into any such supplemental
indenture which in its opinion may not afford adequate protection to the
Trustee when the same shall become operative.

Notwithstanding
Section 10.5 and the foregoing, on or before the Date of Closing, the
Trustee may execute and deliver such indentures or instruments supplemental
hereto, which may add to or delete or amend, vary or change any of the
provisions hereof, as the Corporation may direct in writing.

13.2                                                                        Provision
for Amended and Restated Indenture

Notwithstanding
Section 13.1, following any amendments to this Indenture, the parties to
the Indenture may enter into an amended and restated version of the Indenture
which shall include and give effect to all amendments to the Indenture in
effect at the applicable time.

ARTICLE 14

NOTICES TO UNITHOLDERS

14.1                                                                        Notices

Any notice required to be
given under this Indenture to the Unitholders shall be given by letter or
circular sent through ordinary post addressed to each registered holder at his
last address appearing on the register; provided that if there is a general
discontinuance of postal service due to strike, lockout or otherwise, such
notice may be given by publication twice in the National Edition of The Globe
and Mail or The National Post or any other newspaper having national
circulation in Canada; provided further that if there is no newspaper having
national circulation, then by publishing twice in a newspaper in each city
where the register or a branch transfer register is maintained.  Any notice so given shall be deemed to have
been given on the day following that on which the letter or circular was posted
or, in the case of notice being given by publication, the day following the day
of the second publication in the designated newspaper or newspapers.  In proving notice was posted, it shall be
sufficient to prove that such letter or circular was properly addressed,
stamped and posted.

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14.2                                                                        Failure
to Give Notice

The failure by the
Trustee, by accident or omission or otherwise unintentionally, to give the
Unitholders any notice provided for herein shall not affect the validity or
effect of any action referred to in such notice, and the Trustee shall not be
liable to any Unitholder for any such failure.

14.3                                                                        Joint
Holders

Service of a notice or
document on any one of several joint holders of Trust Units shall be deemed
effective service on the other joint holders.

14.4                                                                        Service
of Notice

Any notice or document
sent by post to or left at the address of a Unitholder pursuant to this Article
shall, notwithstanding the death or bankruptcy of such Unitholder, and whether
or not the Trustee has notice of such death or bankruptcy, be deemed to have
been fully served and such service shall be deemed sufficient service on all persons
interested in the Trust Units concerned.

ARTICLE 15

AUDITORS

15.1                                                                        Qualification
of Auditors

The Auditors shall be an
independent recognized firm of chartered accountants which has an office in
Alberta.

15.2                                                                        Appointment
of Auditors

The Trustee hereby
appoints KPMG LLP, Chartered Accountants, as the auditors of the Trust, to hold
such office until the first annual meeting of the Unitholders at such
remuneration as may be approved by the Trustee from time to time.  The Auditors will be selected at each annual
meeting of Unitholders.

15.3                                                                        Change
of Auditors

The Auditors may at any
time be removed by the Trustee with the approval of the Unitholders by means of
an Ordinary Resolution at a meeting of Unitholders duly called for that purpose
and, upon the resignation or the removal of Auditors as aforesaid, new auditors
may be appointed by the Trustee with the approval of the Unitholders by means
of an Ordinary Resolution at a meeting duly called for the purpose.  A vacancy created by the removal of the
Auditors as aforesaid may be filled at the meeting of Unitholders at which the
Auditors are removed or, if not so filled, may be filled under
Section 15.4.

15.4                                                                        Filling
Vacancy

In the event that the
Auditors resign as auditors of the Trust, the Trustee shall forthwith fill the
vacancy with such new auditors as is approved by the members of the Board of
Directors of the Corporation whom are independent of the Corporation, and such
new auditors shall act as auditors of the Trust for the unexpired term of the
predecessor auditors of the Trust.

15.5                                                                        Reports
of Auditors

The Auditors shall audit
the accounts of the Trust at least once in each year and a report of the
Auditors with respect to the annual financial statements of the Trust shall be
provided to each Unitholder as set out in Section 16.3.

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ARTICLE 16

ACCOUNTS, RECORDS AND FINANCIAL STATEMENTS

16.1                                                                        Records

The Trustee shall keep
such books, records and accounts as are necessary and appropriate to document
the Trust Fund and each transaction of the Trust.  Without limiting the generality of the
foregoing, the Trustee will, at its principal office in Calgary, Alberta, keep
records of all transactions of the Trust, a list of the assets of the Trust
Fund from time to time and a copy of this Indenture.

16.2                                                                        Quarterly
Reporting to Unitholders

Subject to compliance
with applicable laws, the Trustee will mail to each Unitholder (or such
Unitholders as required under applicable securities laws) within 45 days
(or such other period as may be prescribed by applicable securities laws) after
March 31, June 30 and September 30 in each year, an unaudited
quarterly financial statement of the Trust for the most recent calendar
quarter.  The Administrator will review
any forecast provided in any Offering Document and, if necessary, will provide
the Trustee with a quarterly update.  The
Trustee will mail any such update to Unitholders.

16.3                                                                        Annual
Reporting to Unitholders

Subject to compliance
with applicable laws, the Trustee will mail:

(a)                                  to
each Unitholder (or such Unitholders as required under applicable securities
laws), within 90 days after the end of each year (or such Unitholders or
other period as may be required under applicable securities laws), the audited
consolidated financial statements of the Trust for the most recently completed
year together with the report of the Auditors thereon; and

(b)                                 to
each person who received a distribution from the Trust during a year, within
90 days after the end of such year, the tax reporting information relating
to such year as prescribed by the Tax Act.

16.4                                                                        Information
Available to Unitholders

(a)                                  Each
Unitholder shall have the right to obtain, on demand and on payment of
reasonable reproduction costs, from the head office of the Trust, a copy of
this Indenture and any indenture supplemental hereto or any Material Contract.

(b)                                 Each
Unitholder, upon payment of a reasonable fee and upon sending to the Trustee
the affidavit referred to in paragraph (d) below, may upon application
require the Trustee to furnish within 10 days from the receipt of the
affidavit a list (the “basic list”)
made up to a date not more than 10 days before the date of receipt of the
affidavit setting out the names of the Unitholders, the number of Trust Units
owned by each Unitholder and the address of each Unitholder as shown on the
records of the Trustee.

(c)                                  A
person requiring the Trustee to supply a basic list may, if he states in the
affidavit referred to in paragraph (d) below that he requires supplemental
lists, require the Trustee upon payment of a reasonable fee to furnish
supplemental lists setting out any changes from the basic list in the names or
addresses of the Unitholders and the number of Trust Units owned by each
Unitholder for each business day following the date the basic list is made up
to.

(d)                                 The
affidavit referred to in paragraph (b) above shall state:

(i)                                     the
name and address of the applicant;

(ii)                                  the
name and address for service of the body corporate if the applicant is a body
corporate; and

 40
 

(iii)                               that
the basic list and any supplemental lists will not be used except as permitted
under paragraph (e) below.

(e)                                  A
list of Unitholders obtained under this Section shall not be used by any person
except in connection with:

(i)                                     an
effort to influence the voting of Unitholders;

(ii)                                  an
offer to acquire Trust Units; or

(iii)                               any
other matter relating to the affairs of the Trust.

16.5                                                                        Taxes:
Obligation of the Trustee

The Trustee shall
discharge all obligations and responsibilities of the Trustee under the Tax Act
or any similar provincial legislation and the Excise Tax Act (Canada), and
neither the Trust nor the Trustee shall be accountable or liable to any
Unitholder by reason of any act or acts of the Trustee consistent with any such
obligations or responsibilities.

16.6                                                                        Income
Tax: Designations

In the return of its
income under Part I of the Tax Act for each year the Trust shall make such
designations to Unitholders with respect to any amounts distributed or payable
to Unitholders in the year including, without restricting the generality of the
foregoing, designations pursuant to subsection 104(29) of the Tax Act and
designations with respect to any taxable capital gains realized and distributed
to Unitholders by the Trust in the year, as shall be permitted under the
provisions of the Tax Act and as the Trustee in its sole discretion shall deem
to be appropriate.  In the first tax
year, in filing a return of income for the Trust, the Trust shall elect that
the Trust be deemed to be a mutual fund trust for the entire year pursuant to
subsection 132(6.1) of the Tax Act.

16.7                                                                        Income
Tax: Deductions, Allowances and Credits

The Corporation shall
determine the tax deductions, allowances and credits to be claimed by the Trust
in any year, and the Trustee shall claim such deductions, allowances and
credits for the purposes of computing the income of the Trust and the amount
payable by the Trust pursuant to the provisions of the Tax Act and the Excise
Tax Act (Canada).

16.8                                                                        Fiscal
Year

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

ARTICLE 17

MISCELLANEOUS

17.1                                                                        Continued
Listing

The Trustee hereby
appoints the Corporation as its agent and the Corporation hereby covenants to
the Trustee and agrees that it shall, at the cost and expense of the Trust,
take all steps and actions and do all things that may be required to obtain and
maintain the listing and posting for trading of the Trust Units on the Toronto
Stock Exchange and to maintain its status as a “reporting issuer” not in
default of the securities legislation and regulations in such of the provinces
of Canada as determined necessary by the Corporation or Counsel.

17.2                                                                        Successors
and Assigns

The provisions of this
Indenture shall enure to the benefit of and be binding upon the parties and
their successors and assigns.

 41
 

17.3                                                                        Counterparts

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

17.4                                                                        Severability

If any provision of this
Indenture shall be held invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect or render invalid or
unenforceable such provision in any other jurisdiction or any other provision
of this Indenture in any jurisdiction.

17.5                                                                        Day
Not a Business Day

In the event that any day
on or before which any amount is to be determined or any action is required to
be taken hereunder is not a Business Day, then such amount shall be determined
or such action shall be required to be taken at or before the requisite time on
the next succeeding day that is a Business Day.

17.6                                                                        Time
of the Essence

Time shall be of the
essence in this Indenture.

17.7                                                                        Governing
Law

This Indenture and the
Trust Certificates shall be construed in accordance with the laws of the
Province of Alberta and the laws of Canada applicable therein and shall be
treated in all respects as Alberta contracts. 
The parties hereby irrevocably submit to the jurisdiction of the Courts
of the Province of Alberta.

17.8                                                                        Notices
to Trustee and the Corporation

(a)                                  Any
notice to the Trustee under this Indenture shall be valid and effective if delivered
or if given by registered letter, postage prepaid, addressed to the attention
of CIBC Mellon Trust Company at 600, 333 - 7th Avenue S.W., Calgary, Alberta, T2P 2Z1,
Attention: Manager, Corporate Trust (Fax (403) 232-2400), or may be given
by electronic or telecommunications device, and shall be deemed to have been
given on the date of delivery or, if mailed, effective five days after deposit
in the Canadian mail.

(b)                                 Any
notice to the Corporation under this Indenture shall be valid and effective if
delivered or if given by registered letter, postage prepaid, addressed to the
Corporation at 2200, 425 — 1st
Street S.W., Calgary, Alberta, T2P 3L8 Attention: President (Fax
(403) 777-2687) may be given by electronic or telecommunications device,
and shall be deemed to have been effectively given on the date of delivery or,
if mailed, five days after deposit in the Canadian mail.

(c)                                  The
Corporation or the Trustee may from time to time notify the other in writing of
a change of address which thereafter, until changed by like notice, shall be
the address of the Corporation or the Trustee for all purposes of this
Indenture.

(d)                                 If,
by reason of a strike, lockout or other work stoppage, actual or threatened,
involving postal employees, any notice to be given hereunder could reasonably
be considered unlikely to reach its destination, such notice shall be valid and
effective only if it is delivered at the appropriate address provided in this
Section, by cable, telegram, electronic, telecommunications device or other
means of prepaid, transmitted and recorded communication.

 42

17.9                                                                        Electronic
Execution of Documents

Any document required or
permitted by this Indenture to be executed by a Unitholder (including a holder
of Special Voting Units), including a form of proxy, is satisfied if, in
relation to an electronic document, the signature results from the application
by a person of a technology or a process that permits the following to be
proven:

(a)                                  the
signature resulting from the use by a person of the technology or process is
unique to the person;

(b)                                 the
technology or process is used by a person to incorporate, attach or associate
the person’s signature to the electronic document; and

(c)                                  the
technology or process can be used to identify the person using the technology
or process.

17.10                                                                 Electronic
Delivery of Documents

Any document or
instrument permitted or required to be delivered to any Unitholder (including a
holder of Special Voting Units, may, if permitted under applicable laws, be
delivered by electronic means in accordance with the requirements of such
applicable laws.

17.11                                                                 References
to Agreements

Any reference herein to
any agreement, contract or obligation shall refer to such agreement, contract
or obligation as the same may be amended from time to time.

ARTICLE 18

REDEMPTION OF TRUST UNITS

18.1                                                                        Right
of Redemption

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

18.2                                                                        Exercise
of Redemption Right

To exercise a Unitholder’s
right to require redemption under this Article 18, a duly completed and
properly executed notice requiring the Trust to redeem Trust Units, in a form
approved by the Trustee, shall be sent to the Trust at the head office of the
Trust, together with the Trust Unit Certificate or Trust Unit Certificates
representing the Trust Units to be redeemed. 
No form or manner of completion or execution shall be sufficient unless
the same is in all respects satisfactory to the Administrator and is
accompanied by any further evidence that the Corporation may reasonably require
with respect to the identity, capacity or authority of the person giving such
notice.

Upon receipt by the Trust
of the notice to redeem Trust Units, the Unitholder shall thereafter cease to
have any rights with respect to the Trust Units tendered for redemption (other
than to receive the redemption payment therefor) including the right to receive
any distributions thereon.  Trust Units
shall be considered to be tendered for redemption on the date that the Trust
has, to the satisfaction of the Administrator, received the notice, Trust Unit
Certificates and other required documents or evidence as aforesaid.

18.3                                                                        Calculation
of Redemption Price Based on Market Price

Upon receipt by
the Trust of the notice to redeem Trust Units in accordance with
Section 18.2, the holder of the Trust Units tendered for redemption shall
be entitled to receive a price per Trust Unit (hereinafter called the “Market Redemption Price”) equal to the
lesser of:

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(a)                                  95%
of the market price of the Trust Units on the principal market on which the
Trust Units are quoted for trading during the 10 day trading period
commencing immediately after the date on which the Trust Units were tendered to
the Trust for redemption;

(b)                                 95%
of the closing market price on the principal market on which the Trust Units
are quoted for trading, on the date that the Trust Units were so tendered for
redemption; and

(c)                                  95%
of the closing market price of the Trust Units on the date of redemption.

For the purposes of
Subsection 18.3(a), the market price shall be an amount equal to the
simple average of the closing price of the Trust Units for each of the trading
days on which there was a closing price; provided that if the applicable
exchange or market does not provide a closing price but only provides the
highest and lowest prices of the Trust Units traded on a particular day, the
market price shall be an amount equal to the simple average of the highest and
lowest prices for 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 5 of the 10 trading days, the market price shall be the
simple average of the following prices established for each of the
10 trading days;  the average of the
last bid and last ask prices for each day on which there was no trading; the
closing price of the Trust Units for each day that there was trading if the
exchange or market provides a closing price; and the average of the highest and
lowest prices of the Trust Units for each day that there was trading, if the
market provides only the highest and lowest prices of Trust Units traded on a
particular day.

For the purposes
of subsection 18.3(b), the closing market price shall be: an amount equal
to the closing price of the Trust Units if there was a trade on the date; an
amount equal to the average of the highest and lowest prices of Trust Units if
there was trading and the exchange or other market provides only the highest
and lowest prices of Trust Units traded on a particular day; and the average of
the last bid and last ask prices if there was no trading on the date.

18.4                                                                        Cash
Payment of Market Redemption Price

Subject to
Section 18.5, the Market Redemption Price, payable in respect of the Trust
Units tendered for redemption during any calendar month shall be paid by
cheque, drawn on a Canadian chartered bank or a trust company in lawful money
of Canada, payable at par to or to the order of the Unitholder who exercised
the right of redemption on the last day of the calendar month following the
month in which the Trust Units were tendered for redemption.  Payments made by the Trust of the Market
Redemption Price are conclusively deemed to have been made upon the mailing of
a cheque in a postage pre-paid envelope addressed to the former Unitholder
unless such cheque is dishonoured upon presentment.  Upon such payment, the Trust shall be discharged
from all liability to the former Unitholder in respect of the Trust Units so
redeemed.

18.5                                                                        Limitation
Regarding Cash Payment of Market Redemption Price

Section 18.4 shall
not be applicable to Trust Units tendered for redemption by a Unitholder if the
total amount payable by the Trust pursuant to Section 18.4 in respect of
such Trust Units and all other Trust Units tendered for redemption in the same
calendar month exceeds $250,000; provided that the Administrator may, in its
sole discretion, waive such limitation in respect of any calendar month.  If this limitation is not so waived for such
calendar month, the Market Redemption Price payable in respect of the Trust
Units tendered for redemption in such calendar month shall be paid on the last
day of the calendar month following such month by the Trust distributing
Redemption Notes to the Unitholders who exercise the right of redemption having
an aggregate principal amount equal to the aggregate Redemption Price. Upon
such distribution of Redemption Notes, the Trust shall be discharged from all
liability to the former Unitholder in respect of the Trust Units so redeemed,
except with respect to any outstanding payments in respect of Trust Units
pertaining to distributions payable thereon to such former Unitholder of record
on a date which is prior to the date that the Trust Units were tendered to the
Trust for redemption.

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18.6                                                                        Cancellation
of Certificates for all Redeemed Trust Units

All certificates
representing Trust Units which are redeemed under this Article 18 shall be
cancelled and such Trust Units shall no longer be outstanding and shall not be
reissued.

18.7                                                                        Withholdings
by the Trustee

The Trustee may
deduct or withhold from all payments or other distributions payable to any
Unitholder pursuant to this Article 18 all amounts required by law to be so
withheld.

ARTICLE 19

MERGER WITH PETROFUND ENERGY TRUST

19.1                                                                        Creation
of Penn West Special Units

In addition to Trust
Units and Special Voting Units as more particularly described in Article 3, as
at the Effective Time the beneficial interests in the Trust shall also be
divided into interests of another class of trust units, described and
designated as Penn West Special Units which for all purposes will be of a
nature and ranking equal to Trust Units except:

(a)                                  Penn
West Special Units shall entitle the holder or holders thereof to three-sixteenths
of one vote at any meeting of Unitholders;

(b)                                 Holders
of Penn West Special Units on any particular Distribution Record Date shall be
entitled to a preferential distribution equal to $0.02 for each Penn West
Special Unit or such lesser amount where the Net Income declared to be payable
by the Trustee would not be sufficient to pay such amount, and the Pro Rata
Share payable to Unitholders shall be determined after such preferential
distribution; and

(c)                                  Holders
of Penn West Special Units shall be entitled to a preferential distribution
equal to $1.00 for each Penn West Special Unit, or such lesser amount where the
residual assets of the Trust would not be sufficient to pay such amount, and
the Pro Rata Share payable to Unitholders shall be determined after such
preferential distribution.

Reference in this
Indenture to “Trust Units” and “Unitholders” shall include the Penn West
Special Units and the holders of Penn West Special Units, respectively, except
when the context requires otherwise, and as modified to reflect the unique
rights of the Penn West Special Units.

19.2                                                                        Dissenting
Unitholders

Notwithstanding any other
provision of this Indenture, Penn West Units held by registered holders of Penn
West Units who are Dissenting Securityholders shall be deemed to have been
transferred to Penn West (free of any claims) at the Effective Time and such
registered holders of Penn West Units who are Dissenting Securityholders shall
cease to have any rights as Penn West Unitholders as of the Effective Time
other than the right to be paid the fair value of their Penn West Units in
accordance with the Plan of Arrangement.

19.3                                                                        Redesignation
of Penn West Units

At the Effective Time, at
the time specified in the Plan of Arrangement, the Penn West Units shall be
redesignated as New Penn West Units with rights and privileges, which are
substantially the same as the Penn West Units except for the amendment with
respect to Non-Resident ownership constraints effected by the deletion of
Section 3.9 of this Indenture in effect prior to the Effective Time and
replacement thereof with the provision currently set forth in Section 3.9
of this Indenture and the certificates representing the Penn West Units shall
be and shall be deemed to be exchanged for certificates representing the New
Penn West Units and all references herein shall, from and after such time, be
deemed to be references to New Penn West Units.

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19.4                                                                        Purchase
of Petrofund Assets

Penn West shall purchase
and accept from Petrofund, at the time specified in the Plan of Arrangement,
all of the Petrofund Assets and Penn West shall, at the same time (i) assume
and become liable to pay, satisfy, discharge and observe, perform and fulfill
the Petrofund Assumed Liabilities in accordance with their terms, and (ii)
issue to Petrofund 0.60 of a Penn West Special Unit for each one (1) Petrofund
Unit outstanding and held by a Resident and 0.60 of a Penn West Unit for each
one (1) Petrofund Unit outstanding and held by a Non-Resident, being such that
Petrofund can meet its distribution obligations set forth under Subsection
3.1(l) of the Plan of Arrangement.

19.5                                                                        Cancellation
of Penn West Special Units

Penn West shall purchase
and accept from MFCorp all of the MFCorp Assets at the time specified in the
Plan of Arrangement, including the Penn West Special Units held by MFCorp,
which shall be immediately cancelled by Penn West on receipt of the Penn West
Special Units.

19.6                                                                        Unit
Certificate for Penn West Special Units

The form of unit
certificate for Penn West Special Units will be substantially in the same form
as the unit certificate for Trust Units with such modifications and amendments
as may be necessary or desirable, in the sole discretion PWPL.

19.7                                                                        Facilitation
of Plan of Arrangement

Penn West shall be
authorized and directed to execute and deliver all manner of documents and
instruments and do all things as are necessary or desirable in the opinion of
PWPL to effect the Plan of Arrangement.

19.8                                                                        Definitions

In this Article 19,
capitalized terms shall have the same meaning as set forth in the Plan of
Arrangement attached as Exhibit ”A” to the Amended and Restated
Arrangement Agreement dated May 23, 2006 among Penn West, PWPL, Petrofund
and PC and the term “Plan of Arrangement” refers to that plan of arrangement.

19.9                                                                        Application
of Article 19

This Article 19 has been
added to the Indenture solely to facilitate Penn West and PWPL in the
performance of their respective obligations under the Plan of Arrangement and
should be so interpreted.

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IN WITNESS WHEREOF
each of the parties has caused these presents to be executed by its proper
officers duly authorized on its behalf on each of April 22, 2005, May 27,
2005, May 31, 2005 and June 30, 2006.

	
  

  	
   

  	
  CIBC MELLON TRUST COMPANY 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PENN WEST PETROLEUM LTD.  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  

 

 47

SCHEDULE

To the annexed trust
indenture dated as of April 22, 2005,

as amended and restated from time to time

and made between

PENN WEST PETROLEUM LTD.

and

CIBC MELLON TRUST
COMPANY

(Form of Certificate for
the Trust

Units in the
English Language)

TRUST UNITS

PENN WEST ENERGY
TRUST

(a trust created
under the laws of the Province of Alberta)

No.       

             Trust
Units

THIS CERTIFIES THAT

                                                                                 
is the registered holder of                             
fully paid Trust Units issued by PENN WEST ENERGY TRUST (the “Trust”) transferable only on the books of
the Trust by the registered holder hereof in person or by attorney duly
authorized upon surrender of this certificate properly endorsed.

The Trust Units
represented by this certificate are issued upon the terms and subject to the
conditions of an amended and restated trust indenture (which indenture together
with all other instruments supplemental or ancillary thereto is herein referred
to as the “Trust Indenture”) dated
April 22, 2005 and made between Penn West Petroleum Ltd. and CIBC Mellon
Trust Company (the “Trustee”), as
amended and restated from time to time, which Trust Indenture is binding upon
all holders of Trust Units and, by acceptance of this certificate, the holder
assents to the terms and conditions of the Trust Indenture.  Terms defined in the Trust Indenture have the
same meaning when used herein.

A copy of the Trust
Indenture pursuant to which this certificate and the Trust Units represented
hereby are issued may be obtained by any Unitholder on demand and on payment of
reasonable reproduction costs from the head office of the Trust.

This certificate may only
be transferred, upon compliance with the conditions prescribed in the Trust
Indenture, on the register to be kept at the office of the transfer agent in
the City of Calgary and the City of Toronto, as applicable, and at such other
place or places, if any, as the Trustee may designate, by the registered holder
thereof or his executors or administrators or other legal representatives or
his or their attorney duly appointed by an instrument in writing in form and
execution satisfactory to the Trustee, and upon compliance with such reasonable
requirements as the Trustee may prescribe.

The Trust Indenture
contains provisions for the holding of meetings of Unitholders and rendering
resolutions passed at such meetings binding upon all Unitholders.

The Trust Indenture
provides that no Unitholder shall incur or be subject to any liability in
connection with the Trust Fund or the obligations or the affairs of the Trust
or with respect to any act performed by the Trustee or by any other person
pursuant to the Trust Indenture.

The Trust Indenture
provides that Trust Units shall be issued only when fully paid and the
Unitholders shall not thereafter be required to make any further contribution
to the Trust with respect to such Trust Units.

This certificate shall
not be valid for any purpose until it shall have been countersigned and
registered by the transfer agent of the Trust.

IN WITNESS WHEREOF the
Corporation has caused this certificate to be signed by its duly authorized
officers.

	
  DATED           

  	
   

  	
  PENN WEST ENERGY TRUST, by its
  administrator,

  
	
   

  	
   

  	
  Penn West Petroleum Ltd.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Countersigned and Registered 

  
	
   

  	
   

  	
  CIBC MELLON TRUST COMPANY  

  
	
   

  	
   

  	
  Transfer Agent and Registrar or 

  
	
   

  	
   

  	
  MELLON INVESTOR SERVICES LLC  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Officer

  

 

 2

TRANSFER FORM

FOR VALUE RECEIVED the
undersigned hereby sells, assigns and transfers unto

(please print or
typewrite name and address of assignee)

                  
Trust Units of PENN WEST ENERGY TRUST represented by this certificate and
hereby irrevocably constitutes and appoints                                     
Attorney to transfer the said Trust Units on the registers of the Trust for the
said purpose, with full power of substitution in the premises.

	
  Dated 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (SIGNATURE OF TRANSFEROR)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The signature of the
  registered holder of the within certificate to the foregoing assignment must
  be guaranteed by a chartered bank, by a trust company or a member firm of the
  Toronto Stock Exchange, the TSX Venture Exchange, a national securities
  exchange in the United Sates or the National Association of Securities
  Dealers, Inc. who are members of the Securities Transfer Association
  Medallion Program.

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