Document:

Peace Oil Corp.

    EXHIBIT
      10.1

     

     

    
      

    

    

     

    FIRST
      AMENDMENT

     

    TO

     

    STOCK
      PURCHASE AGREEMENT

     

    Made
      as of the 30th
      day of November, 2006

     

    

     

      
        

      

    

     

     

     

     

     

     

    

     

    MARCH
      2, 2007

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    

    FIRST
      AMENDMENT TO 

    STOCK
      PURCHASE AGREEMENT

    

    

    THIS
      AMENDING AGREEMENT is made effective as of the 2nd
      day of
      March, 2007.

    

    AMONG:

     

    COLD
      FLOW ENERGY ULC,
      a
      corporation incorporated under the laws of Alberta (“Purchaser”)

     

    -
      and
      -

     

    SURGE
      GLOBAL ENERGY, INC.,
      a
      corporation incorporated under the laws of Delaware (“Surge”)

     

    -
      and
      -

     

    PEACE
      OIL CORP.,
      a
      corporation incorporated under the laws of Alberta (“Target
      Company”)
      

     

    -
      and
      -

     

    1229679
      ALBERTA INC., 1216848 ALBERTA LTD., JEFF CAIRNS (individually and as trustee
      of
      the CAIRNS FAMILY TRUST), DALE FISHER (individually and as trustee of the FISHER
      FAMILY TRUST), PAUL JACOBSON (as trustee of the STOUTHEARTED TRUST), PETER
      LIU
      (as trustee of the LIU FAMILY TRUST) and EDWARD MA (as trustee of the MA FAMILY
      TRUST),
      the
      shareholders of Target Company (each a “Shareholder”
and
      collectively, “Shareholders”)

     

    

    WHEREAS
      Purchaser,
      Surge, Target Company and Shareholders (collectively, the “Parties”) have
      entered into that certain stock purchase agreement dated as of November 30,
      2006
      (the “Stock
      Purchase Agreement”);

    

    AND
      WHEREAS
      the
      Parties have considered it desirable to amend, in the manner set forth herein
      and among other things, certain provisions pertaining to the payment of the
      Purchase Price;

    

    NOW
      THEREFORE THIS AGREEMENT WITNESSES THAT
      in
      consideration of the premises and the mutual covenants and agreements herein
      contained and contained in the Stock Purchase Agreement, and for other good
      and
      valuable consideration (the receipt and sufficiency of which is hereby
      acknowledged), the Parties agree as follows:

     

    ARTICLE
      1

    INTERPRETATION

     

    
      	1.1  	
              Amending
                Agreement

            

    

     

    “this
      Amending Agreement”, “hereto”, “herein”, “hereof”, “hereby”, “hereunder” and
      similar expressions refer to this First Amendment to Stock Purchase Agreement
      and not to any particular article, section, subsection or other subdivision
      hereof and includes any and every instrument supplemental or ancillary hereto
      or
      in implementation hereof.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    
      	1.2  	
              Definitions

            

    

     

    Unless
      otherwise defined herein, all capitalized terms used in this Amending Agreement
      which are defined in the Stock Purchase Agreement shall, for all purposes
      hereof, have the meanings given to such terms in the Stock Purchase Agreement
      unless the context otherwise specifies or requires.

     

    
      	1.3  	
              Interpretation
                Not Affected By
                Headings

            

    

     

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

     

    ARTICLE
      2

    AMENDMENT
      TO THE STOCK PURCHASE AGREEMENT

     

    
      	2.1  	
              Amendment
                to Section 2.1

            

    

     

    Section
      2.1 of the Stock Purchase Agreement is hereby amended by deleting Section 2.1
      in
      its entirety and replacing such section with the following new Section
      2.1:

     

    

      
        	
                “2.1

                 

              	
                Purchase
                  Price, Payment. As
                  full consideration for the sale, assignment, transfer and delivery
                  of the
                  Shares by Shareholders to Purchaser, Purchaser shall deliver (or
                  cause to
                  be delivered) to Shareholders, at the Closing, an aggregate $16,350,000
                  (the “Purchase
                  Price”),
                  payable in the following manner:

              
	 	
                (a)
                  a certified cheque or bank draft of immediately available funds
                  in an
                  aggregate amount of $600,000, such amount representing the Escrow
                  Amount;

                 

              
	
                 

                 

              	
                (b)
                  a certified cheque, bank draft or wire transfer of immediately
                  available
                  funds in an aggregate amount of $150,000, less accrued interest
                  on the
                  Escrow Amount;

                 

              
	
                 

                 

              	(c)
                a promissory note with an aggregate face amount of $1,500,000, bearing
                interest at the rate of 7% per annum, due and payable on June 30,
                2007
                unless earlier paid in full at Purchaser’s option (the “First Promissory
                Note”)
                and addressed to Newco;
	
                 

                 

              	
                (d)
                  a promissory note with an aggregate face amount of $1,000,000,
                  bearing
                  interest at the rate of 7% per annum, due and payable on July 30,
                  2007
                  unless earlier paid in full at Purchaser’s option (the “Second Promissory
                  Note”)
                  and addressed to Newco;

              

      

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      

      
        	 	
                (e)
                  a
                  promissory note with an aggregate face amount of $1,500,000, bearing
                  interest at the rate of 7% per annum, due and payable on July 30,
                  2007
                  unless earlier paid in full at Purchaser’s option (the “Third
                  Promissory Note”
                  and collectively with the First Promissory Note and the Second
                  Promissory
                  Note, the “Promissory
                  Notes”)
                  and addressed to Newco;

              
	 	
                (f)
                  a
                  promissory note with an aggregate face amount of $1,600,000, bearing
                  no
                  interest, due and payable on December 31, 2007 unless earlier paid
                  in full
                  at Purchaser’s option (the “Granite
                  Note”)
                  and addressed to Newco; and

              
	 	
                (g) certificates
                  for an aggregate 8,965,390 exchangeable shares in the capital of
                  Purchaser
                  (the “Exchangeable
                  Shares”),
                  it being expressly acknowledged and agreed that such Exchangeable
                  Shares
                  shall be delivered to the Escrow Agent on behalf of the Shareholders
                  at
                  Closing, to be held by the Escrow Agent in accordance with a closing
                  escrow agreement substantially in the form attached hereto as Exhibit
                  2.1
                  (the “Closing
                  Escrow Agreement”)
                  and that, in the event the Escrow Agent is obligated to return
                  the
                  Exchangeable Shares to Surge pursuant to the Closing Escrow Agreement,
                  such Exchangeable Shares shall automatically be cancelled and the
                  Shareholders’ entire right, title and interest in and to the Exchangeable
                  Shares shall extinguish, without payment of any consideration to,
                  or any
                  right of compensation in favour of, the
                  Shareholders”.

              

      

    

     

    
      	2.2  	
              Amendment
                to Section 2.2

            

    

     

    Section
      2.2 of the Stock Purchase Agreement is hereby amended by deleting Section 2.2
      in
      its entirety and replacing such section with the following new Section
      2.2:

     

    “2.2 Allocation
      of Purchase Price. The
      Purchase Price, except for the amount represented by the Granite Note, shall
      be
      allocated among Shareholders in the proportion set out under the column entitled
      “Allocation of Purchase Price” adjacent to each Shareholder’s name as set forth
      on the Schedule of Shareholders.

     

    
      	2.3  	
              Supplement
                to Section 4.2

            

    

     

    Section
      4.2 of the Stock Purchase Agreement is hereby supplemented by inserting a new
      subsection 4.2(h) as follows:

     

    “(h) Other
      Agreements. The
      Closing Escrow Agreement fully executed by Newco.”

     

    
      	2.4  	
              Amendment
                to Subsection 4.3(a) and
                (f)

            

    

     

    Subsections
      4.3(a) and (f) of the Stock Purchase Agreement are hereby amended by deleting
      subsections 4.3(a) and (f) in their entirety and replacing such subsections
      with
      the following new subsection 4.3(a) and (f), respectively:

     

    

      
        	
                “(a)

                 

              	
                Wire
                  Transfer. A
                  wire transfer to Burstall Winger LLP on behalf of the Shareholders
                  on or
                  before the Closing Date, in an amount equal to the amount set forth
                  in
                  subsection 2.1(b) and representing, together with the Escrow Amount
                  and
                  any accrued interest thereon, and the amounts set forth in subsections
                  2.1(c), (d), (e) and (f), the aggregate cash component of the Purchase
                  Price to be allocated among Shareholders pursuant to Section
                  2.2;

              
	
                (f)

                 

              	
                Other
                  Agreements. The
                  Exchange Agreement, the Support Agreement, the Closing Escrow Agreement,
                  the Promissory Notes, the Granite Note, fixed and floating charge
                  debentures addressed to Newco from each of the Purchaser, the Target
                  Company and Surge in the amount of $4,000,000 (the “Debentures”)
                  in the form attached as Exhibit 4.3(f)(I), a conveyance (the “Conveyance”)
                  back of the Assets in the form attached as Exhibit 4.3(f)(II),
                  a gross
                  overriding royalty agreement (the “GORR
                  Agreement”)
                  in the form attached as Exhibit 4.3(f)(III), guarantees (the “Guarantees”)
                  in the form attached as Exhibit 4.3(f)(IV) and a pledge agreement
                  (the
                  “Pledge
                  Agreement”
                  and, collectively with the Debentures, the Promissory Notes, the
                  GORR
                  Agreement, the Conveyance, and the Guarantees, the “Security
                  Documents”)
                  in the form attached as Exhibit
                  4.3(f)(V).

              

      

    

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    
      	2.5  	
              Supplement
                to Section 4.3

            

    

     

    Section
      4.3 of the Stock Purchase Agreement is hereby supplemented by inserting a new
      subsection 4.3(h) as follows:

     

    “Section
      4.3(h) a wire transfer to Burstall Winger LLP on behalf of the Shareholders,
      in
      amount equal to $20,000, such amount the legal fees incurred by the Shareholders
      in connection with the preparation of this agreement and certain ancillary
      agreements”.

     

    

    
      	2.6  	
              Amendment
                to Subsection 6.2(a)

            

    

     

    Subsection
      6.2(a) of the Stock Purchase Agreement is hereby amended by deleting Subsection
      6.2(a) in its entirety and replacing such subsection with the following new
      Subsection 6.2(a):

     

    “6.2  Capitalization.

     

    

      
        	
                (a)

                 

              	
                The
                  authorized capital of Purchaser consists of an unlimited number
                  of Common
                  Shares and an unlimited number of Exchangeable Shares (collectively,
                  “Purchaser
                  Stock”),
                  of which 1,000 Common Shares designated in the name of Callco and
                  no
                  Exchangeable Shares are and will be, immediately prior to Closing,
                  issued
                  and outstanding. No other shares of capital stock or securities
                  of
                  Purchaser are issued or
                  outstanding.”

              

      

    

     

     

    
      	2.7  	
              Amendment
                to Section 6.3

            

    

     

    Section
      6.3 of the Stock Purchase Agreement is hereby amended by deleting Section 6.3
      in
      its entirety and replacing such subsection with the following new Section
      6.3:

     

    

    “6.3  Authority;
      Binding Nature of Agreements.

     

    Purchaser
      has all requisite corporate power and authority to execute and deliver this
      Agreement, the Security Documents to which it is a party and all other
      Transaction Agreements to which it is a party and to carry out the provisions
      of
      this Agreement, the Security Documents to which it is a party and the other
      Transaction Agreements. The execution, delivery and performance by Purchaser
      of
      this Agreement, the Security Documents to which it is a party and the other
      Transaction Agreements have been approved by all requisite action on the part
      of
      Purchaser. This Agreement has been duly and validly executed and delivered
      by
      Purchaser. Each of this Agreement, the Security Documents to which it is a
      party
      and the other Transaction Agreements constitutes, or upon execution and
      delivery, will constitute, the legal, valid and binding obligation of Purchaser,
      enforceable against Purchaser in accordance with its terms, except as may be
      limited by bankruptcy, insolvency, reorganization, moratorium and other similar
      laws and equitable principles related to or limiting creditors’ rights generally
      and by general principles of equity.”

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    
      	2.8  	
              Amendment
                to Section 8.3

            

    

     

    Section
      8.3 of the Stock Purchase Agreement is hereby amended by deleting Section 8.3
      in
      its entirety and replacing such subsection with the following new Section
      8.3:

    
 

    “8.3  Authority;
      Binding Nature of Agreements.

     

    Surge
      has
      all requisite corporate power and authority to execute and deliver this
      Agreement, the Security Documents to which it is a party and all other
      Transaction Agreements to which it is a party and to carry out the provisions
      of
      this Agreement, the Security Documents to which it is a party and the other
      Transaction Agreements. The execution, delivery and performance by Surge of
      this
      Agreement, the Security Documents to which it is a party and the other
      Transaction Agreements have been approved by all requisite action on the part
      of
      Surge. This Agreement has been duly and validly executed and delivered by Surge.
      Each of this Agreement, the Security Documents to which it is a party and the
      other Transaction Agreements constitutes, or upon execution and delivery, will
      constitute, the legal, valid and binding obligation of Surge, enforceable
      against Surge in accordance with its terms, except as may be limited by
      bankruptcy, insolvency, reorganization, moratorium and other similar laws and
      equitable principles related to or limiting creditors’ rights generally and by
      general principles of equity.”

    

    
      	2.9  	
              Amendment
                to Section 8.5

            

    

     

    Section
      8.5 of the Stock Purchase Agreement is hereby amended by deleting Section 8.5
      in
      its entirety and replacing such subsection with the following new Section
      8.5:

     

    
      	 	
            	
              
                “8.5

              

            	
              
                No
                  Subsidiaries. Other than Purchaser, Callco, Signet and
                  Cynthia, Surge does not own any shares of capital stock or other
                  securities of, or control, directly or indirectly, any other Entity
                  and
                  has never owned, beneficially or otherwise, any shares or other
                  securities
                  of, or any direct or indirect equity interest in, any
                  Entity.”

              

            

    

     

    
      	2.10  	
              Amendment
                to Exhibit A - Certain
                Definitions

            

    

     

    
      	(a)  	
              Exhibit
                A to the Stock Purchase Agreement is hereby amended by inserting
                the
                following new definition immediately following the definition for
                “Business Day”:

            

    

     

    “Callco”     shall
      mean 1294697 Alberta Ltd., a corporation incorporated under the laws of
      Alberta;”

     

    
      	(b)  	
              Exhibit
                A to the Stock Purchase Agreement is hereby amended by inserting
                the
                following new definition immediately following the definition for
                “Miscellaneous Interests”:

            

    

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    “Newco”     shall
      mean 1304146 Alberta Ltd., a corporation incorporated under the laws of
      Alberta;”

     

    
      	2.11  	
              Form
                of Closing Escrow
                Agreement

            

    

     

    The
      Stock
      Purchase Agreement is hereby supplemented by adding to the Exhibits thereto
      a
      new Exhibit 2.1 - Closing
      Escrow Agreement in
      the
      form attached hereto as Exhibit A.

     

    

    
      	2.12  	
              Form
                of Debenture

            

    

     

    The
      Stock
      Purchase Agreement is hereby supplemented by adding to the Exhibits thereto
      a
      new Exhibit 4.3(f)(I) - Debenture
      in
      the
      form attached hereto as Exhibit B.

     

    
      	2.13  	
              Form
                of Asset Transfer Back

            

    

     

    The
      Stock
      Purchase Agreement is hereby supplemented by adding to the Exhibits thereto
      a
      new Exhibit 4.3(f)(II) - Asset
      Transfer Back in
      the
      form attached hereto as Exhibit C.

     

    
      	2.14  	
              Form
                of Gross Overriding Royalty
                Agreement

            

    

     

    The
      Stock
      Purchase Agreement is hereby supplemented by adding to the Exhibits thereto
      a
      new Exhibit 4.3(f)(III) - GORR
      Agreement in
      the
      form attached hereto as Exhibit D.

     

    
      	2.15  	
              Form
                of Guarantees

            

    

     

    The
      Stock
      Purchase Agreement is hereby supplemented by adding to the Exhibits thereto
      a
      new Exhibit 4.3(f)(IV) - Guarantees
      - in
      the
      form attached hereto as Exhibit E.

     

    
      	2.16  	
              Form
                of Pledge Agreement

            

    

     

    The
      Stock
      Purchase Agreement is hereby supplemented by adding to the Exhibits thereto
      a
      new Exhibit 4.3(f)(V) -
      Pledge Agreement- in
      the
      form attached hereto as Exhibit F.

    

     

    ARTICLE
      3

    GENERAL

     

    
      	3.1  	
              Effect
                of Amending Agreement

            

    

     

    This
      Amending Agreement amends the Stock Purchase Agreement to the extent set forth
      herein, and the Stock Purchase Agreement shall, from this date forward, be
      read
      in conjunction with this Amending Agreement. The Stock Purchase Agreement and
      this Amending Agreement shall, from this date forward, have effect as if all
      the
      provisions of the Stock Purchase Agreement and this Amending Agreement were
      contained in one instrument. As amended hereby, all the terms and conditions
      as
      set forth in the Stock Purchase Agreement remain valid, binding and in full
      force and effect upon the Parties.

     

    
      	3.2  	
              Counterpart
                and Facsimile Execution

            

    

     

    This
      Amending Agreement may be executed in counterpart, each of which when so
      executed in counterpart shall have the same effect as if each Party had joined
      in executing one and the same document, and notwithstanding their date of
      execution, each counterpart shall be deemed to be dated and effective as of
      the
      day and year first set forth above. Any counterparts delivered by facsimile
      shall be deemed for all purposes to be original counterparts of this Amending
      Agreement.

     

    
      	3.3  	
              Governing
                Law

            

    

     

    This
      Amending Agreement shall, in all respects, be subject to and be interpreted,
      construed and enforced in accordance with the laws in effect within the Province
      of Alberta. Each Party hereby expressly attorns to the non-exclusive
      jurisdiction of the courts of the Province of Alberta.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    
      	3.4  	
              Further
                Assurances

            

    

     

    Each
      of
      the Parties hereto agrees to use reasonable commercial efforts to take, or
      cause
      to be taken, all such further actions and to do, or cause to be done, all things
      necessary, proper or advisable to give effect to the true intent, meaning and
      purpose of this Amending Agreement.

     

    
      	3.5  	
              Enurement

            

    

     

    The
      provisions of this Amending Agreement shall enure to the benefit of, and be
      binding upon, the Parties hereto and their respective successors and
      assigns.

     

    [Remainder
      of Page Intentionally Blank]

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF
      each of
      the Parties has caused this Amending Agreement to be executed by its proper
      officers, duly authorized on its behalf, with effect as of the day and year
      first set forth above.

     

    
      	 	 	
              COLD
                FLOW ENERGY ULC

               

            
	
              By:

            	 /s/
              David Perez 
              
Authorized
              Signing Officer
	 	
               

               

            
	
              By:

            	  

              
Authorized
              Signing Officer
	 	
               

               

            
	 	 	
              SURGE
                GLOBAL ENERGY, INC.

               

            
	
              By:

            	 /s/
              David Perez 
              
Authorized
              Signing Officer
	 	
               

            
	
              By:

            	 /s/
              William Greene 
              
Authorized
              Signing Officer
	 	
               

               

            
	 	 	
              PEACE
                OIL CORP. 

               

            
	
              By:

            	 /s/ Jeff
              Cairns 
              
Authorized
              Signing Officer
	 	
               

            
	
              By:

            	 /s/ Dale
              Fisher 

              
Authorized
              Signing Officer
	 	
               

               

            
	 	 	
              1229679
                ALBERTA INC.

               

            
	
              By:

            	 /s/ Dale
              Fisher 

              

              Authorized
                Signing Officer

            
	 	
               

            
	
              By:

            	  

              
Authorized
              Signing Officer
	 	
               

               

            
	 	 	
              1216848
                ALBERTA LTD.

               

            
	
              By:

            	 /s/ George
              Brown 
              
Authorized
              Signing Officer
	 	
               

            
	
              By:

            	  

              
Authorized
              Signing Officer
	 	
               

            

    

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    

    
      	 	 	 
	
                

                

              

              Witness

               

            	 	
              /s/
                Jeff Cairns 
                
Jeff
                Cairns individually and as trustee of the Cairns Family Trust

               

            
	 	 	 
	
               

                

              

              Witness

               

            	 	
               /s/
                Dale Fisher 

                

              

              Dale
                Fisher individually and as trustee of the Fisher Family Trust

               

            
	 	 	 
	
               

                

              

              Witness

               

            	 	
              /s/
                Paul Jacobson 
                
Paul
                Jacobson as trustee of the Stouthearted Trust

               

            
	 	 	 
	
              /s/
                signature
                

              

              Witness

               

            	 	
              /s/
                Peter Liu
                

              

              Peter
                Liu as trustee of the Liu Family Trust

               

            
	 	 	 
	
              /s/
                signature
                

              

              Witness

               

            	 	
              /s/
                Ming Ma
                

              

              Ming Ma
                as trustee of the Ma Family Trust

               

            

    

    

     
-10-Voting and Exchange

    EXHIBIT
      10.2

    

     

    VOTING
      AND EXCHANGE TRUST AGREEMENT
      (“Agreement”)
      made
      as of the 2nd
      day of
      March,
      2007.

     

    BETWEEN:

     

    SURGE
      GLOBAL ENERGY, INC.,
      a
      corporation incorporated under the laws of Delaware

    (hereinafter
      referred to as “Acquiror”)

     

    -
      and
      -

     

    COLD
      FLOW ENERGY ULC,
      an
      unlimited liability company incorporated under the laws of Alberta

    (hereinafter
      referred to as the “Corporation”)

     

    -
      and
      -

     

    OLYMPIA
      TRUST COMPANY,
      a trust
      company incorporated under the laws of Alberta (hereinafter referred to as
      the
“Trustee”)

     

    WHEREAS:

     

    
      	
              A.

               

            	
              in
                connection with the Acquisition Agreement, the Corporation is required
                to
                issue Exchangeable Shares to holders of Peace Shares in consideration,
                in
                part, for the acquisition of their Peace Shares; and

               

            
	
              B.

               

            	
              pursuant
                to the Acquisition Agreement, Acquiror has agreed to, and to cause
                the
                Corporation to, execute this Agreement.

               

            

    

    NOW
      THEREFORE
      in
      consideration of the respective covenants and agreements provided in this
      Agreement and for other good and valuable consideration (the receipt and
      sufficiency of which are hereby acknowledged), the parties hereto covenant
      and
      agree as follows:

     

    INTERPRETATION

     

    Section 1.1 Definitions

     

    In
      this
      Agreement, unless the context otherwise requires, the following terms shall
      have
      the following meanings respectively:

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    “ABCA”
has
      the
      meaning ascribed thereto in the Exchangeable Share Provisions;

     

    “Acquiror
      Consent”
has
      the
      meaning ascribed thereto in Section 4.2;

     

    “Acquiror
      Control Transaction”
has
      the
      meaning ascribed thereto in the Exchangeable Share Provisions;

     

    “Acquiror
      Meeting”
has
      the
      meaning ascribed thereto in Section 4.2;

     

    “Acquiror
      Shares”
has
      the
      meaning provided in the Exchangeable Share Provisions;

     

    “Acquiror
      Special Voting Share”
means
      one share of preferred stock of Acquiror to which that number of voting rights
      attach (each such voting right to be equal to the voting rights attached to
      one
      Acquiror Share) equal to two times the number of outstanding Exchangeable Shares
      held by Beneficiaries; 

     

    “Acquiror
      Successor”
has
      the
      meaning ascribed thereto in Section 10.1(a);

     

    “Acquisition
      Agreement”
has
      the
      meaning ascribed thereto in the Exchangeable Share Provisions;

     

    “Affiliate”
has
      the
      meaning ascribed thereto in the Exchangeable Share Provisions;

     

    “Automatic
      Exchange Rights”
means
      the benefit of the obligation of Acquiror to effect the automatic exchange
      of
      Exchangeable Shares for Acquiror Shares pursuant to Section 5.12;

     

    “Beneficiaries”
means
      the registered holders from time to time of Exchangeable Shares, other than
      Acquiror and its Affiliates;

     

    “Beneficiary
      Votes”
has
      the
      meaning ascribed thereto in Section 4.2;

     

    “Business
      Day”
has
      the
      meaning ascribed thereto in the Exchangeable Share Provisions;

     

    “Callco”
means
      1294697
      Alberta Ltd.,
      a
      corporation incorporated under the ABCA;

     

    “Change
      of Law Call Right”
has
      the
      meaning ascribed thereto in the Exchangeable Share Provisions; 

     

    “Equivalent
      Vote Amount”
means,
      with respect to any matter, proposition or question on which holders of Acquiror
      Shares are entitled to vote, consent or otherwise act, the number of votes
      to
      which a holder of two Acquiror Shares is entitled with respect to such matter,
      proposition or question;

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    “Exchange
      Right”
has
      the
      meaning ascribed thereto in Section 5.1;

     

    “Exchangeable
      Share Consideration”
has
      the
      meaning ascribed thereto in the Exchangeable Share Provisions;

     

    “Exchangeable
      Share Price”
has
      the
      meaning ascribed thereto in the Exchangeable Share Provisions;

     

    “Exchangeable
      Share Provisions”
means
      the rights, privileges, restrictions and conditions attaching to the
      Exchangeable Shares;

     

    “Exchangeable
      Shares”
means
      the non-voting exchangeable shares in the capital of the Corporation, having
      the
      rights, privileges, restrictions and conditions set out in the Exchangeable
      Share Provisions;

     

    “Indemnified
      Parties”
has
      the
      meaning ascribed thereto in Section 8.1;

     

    “Insolvency
      Event”
means
      (i) the institution by the Corporation of any proceeding to be adjudicated
      a
      bankrupt or insolvent or to be wound up, or the consent of the Corporation
      to
      the institution of bankruptcy, insolvency or winding-up proceedings against
      it,
      or (ii) the filing of a petition, answer or consent seeking dissolution or
      winding-up under any bankruptcy, insolvency or analogous laws, including the
      Companies
      Creditors’ Arrangement Act
      (Canada)
      and the Bankruptcy
      and Insolvency Act
      (Canada), and the failure by the Corporation to contest in good faith any such
      proceedings commenced in respect of the Corporation within 30 days of becoming
      aware thereof, or the consent by the Corporation to the filing of any such
      petition or to the appointment of a receiver, or (iii) the making by the
      Corporation of a general assignment for the benefit of creditors, or the
      admission in writing by the Corporation of its inability to pay its debts
      generally as they become due, or (iv) the Corporation not being permitted,
      pursuant to solvency requirements of applicable law, to redeem any Retracted
      Shares pursuant to Section 6.6 of the Exchangeable Share
      Provisions;

     

    “Liquidation
      Call Right”
has
      the
      meaning ascribed thereto in the Exchangeable Share Provisions;

     

    “Liquidation
      Event”
has
      the
      meaning ascribed thereto in Section 5.12(b);

     

    “Liquidation
      Event Effective Time”
has
      the
      meaning ascribed thereto in Section 5.12(c);

     

    “List”
has
      the
      meaning ascribed thereto in Section 4.6;

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    “Officer’s
      Certificate”
means,
      with respect to Acquiror or the Corporation, as the case may be, a certificate
      signed by any one of the authorized signatories of Acquiror or the Corporation,
      as the case may be;

     

    “Peace”
means
      Peace Oil Corp., a corporation incorporated under the ABCA;

     

    “Person”
      includes any individual, firm, partnership, joint venture, venture capital
      fund,
      limited liability company, unlimited liability company, association, trust,
      trustee, executor, administrator, legal personal representative, estate, group,
      body corporate, corporation, unincorporated association or organization,
      government body, syndicate or other entity, whether or not having legal
      status;

     

    “Redemption
      Date”
has
      the
      meaning ascribed thereto in the Exchangeable Share Provisions;

     

    “Retracted
      Shares”
has
      the
      meaning ascribed thereto in Section 5.7;

     

    “Retraction
      Call Right”
has
      the
      meaning ascribed thereto in the Exchangeable Share Provisions;

     

    “Support
      Agreement”
means
      that certain support agreement made as of even date herewith among the
      Corporation, Callco and Acquiror;

     

    “Trust”
means
      the trust created by this Agreement;

     

    “Trust
      Estate”
means
      the Acquiror Special Voting Share, any other securities, the Exchange Right,
      the
      Automatic Exchange Rights and any money or other property which may be held
      by
      the Trustee from time to time pursuant to this Agreement; and

     

    “Voting
      Rights”
means
      the voting rights of the Acquiror Special Voting Share held by the
      Trustee.

     

    Section 1.2 Interpretation
      Not Affected By Headings, Etc.

     

    The
      division of this Agreement into articles, sections and other portions and the
      insertion of headings are for convenience of reference only and should not
      affect the construction or interpretation hereof. Unless otherwise indicated,
      all references to an “Article” or “Section” followed by a number refer to the
      specified Article or Section of this Agreement. The terms “this Agreement,”
“hereof”, “herein” and “hereunder” and similar expressions refer to this
      Agreement and not to any particular Article, Section or other portion
      hereof.

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    Section 1.3 Rules
      of Construction

     

    Unless
      otherwise specifically indicated or the context otherwise requires, (a) all
      references to “dollars” or “$” mean United States dollars, (b) words importing
      the singular shall include the plural and vice versa and words importing any
      gender shall include all genders, and (c) “include,” “includes” and “including”
shall be deemed to be followed by the words “without limitation.”

     

    Section 1.4 Date
      for Any Action

     

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

     

    Section 1.5 Payments

     

    All
      payments to be made hereunder will be made without interest and less any tax
      required by Canadian law to be deducted or withheld.

     

    ARTICLE 2

    PURPOSE
      OF AGREEMENT

     

    Section 2.1 Establishment
      of Trust

     

    The
      purpose of this Agreement is to create the Trust for the benefit of the
      Beneficiaries and Acquiror, as herein provided. The Trustee will hold the
      Acquiror Special Voting Share in order to enable the Trustee to exercise the
      Voting Rights and will hold the Exchange Right and the Automatic Exchange Rights
      in order to enable the Trustee to exercise such rights, in each case as trustee
      for and on behalf of the Beneficiaries as provided in this Agreement. The
      Trustee will hold the Acquiror Special Voting Share for and on behalf of
      Acquiror for all other rights associated with such Acquiror Special Voting
      Share
      other than the Voting Rights.

     

     

    ARTICLE 3

    ACQUIROR
      SPECIAL VOTING SHARE

     

    Section 3.1 Issue
      and Ownership of the Acquiror Special Voting Share

     

    Acquiror
      hereby agrees to issue to, and deposit with, the Trustee the Acquiror Special
      Voting Share to be hereafter held of record by the Trustee as trustee for and
      on
      behalf of, and for the use and benefit of, the Beneficiaries and in accordance
      with the provisions of this Agreement. Acquiror hereby acknowledges receipt
      from
      the Trustee as trustee for and on behalf of the Beneficiaries of good and
      valuable consideration (and the adequacy thereof) for the issuance of the
      Acquiror Special Voting Share by Acquiror to the Trustee. During the term of
      the
      Trust and subject to the terms and conditions of this Agreement, the Trustee
      shall possess and be vested with full legal ownership of such Acquiror Special
      Voting Share and shall be entitled to exercise all of the rights and powers
      of
      an owner with respect to such Acquiror Special Voting Share provided that the
      Trustee shall:

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    
      	
              (a)

               

            	
              hold
                such Acquiror Special Voting Share and the legal title thereto as
                trustee
                solely for the use and benefit of the Beneficiaries in accordance
                with the
                provisions of this Agreement; and

               

            
	
              (b)

               

            	
              except
                as specifically authorized by this Agreement, have no power or authority
                to sell, transfer, vote or otherwise deal in or with such Acquiror
                Special
                Voting Share and such Acquiror Special Voting Share shall not be
                used or
                disposed of by the Trustee for any purpose other than the purposes
                for
                which this Trust is created pursuant to this Agreement.

               

            

    

    Section 3.2 Legended
      Share Certificates

     

    The
      Corporation will cause each certificate representing Exchangeable Shares to
      bear
      an appropriate legend notifying the Beneficiaries of their right to instruct
      the
      Trustee with respect to the exercise of the portion of the Voting Rights in
      respect of the Exchangeable Shares held by the Beneficiaries.

     

    Section 3.3 Safe
      Keeping of Certificate

     

    The
      physical certificate representing the Acquiror Special Voting Share shall at
      all
      times be held in safe keeping by the Trustee or its duly authorized
      agent.

     

     

    ARTICLE 4

    EXERCISE
      OF VOTING RIGHTS

     

    Section 4.1 Voting
      Rights

     

    The
      Trustee, as the holder of record of the Acquiror Special Voting Share forming
      part of the Trust Estate, shall be entitled to all of the Voting Rights,
      including the right to vote in person or by proxy the Acquiror Special Voting
      Share held by the Trustee on any matter, question, proposal or proposition
      whatsoever that may properly come before the shareholders of Acquiror at an
      Acquiror Meeting or in connection with an Acquiror Consent. The Voting Rights
      shall be and remain vested in and exercised by the Trustee. Subject to
Section 6.15
      hereof:

     

    
      	
              (a)

               

            	
              the
                Trustee shall exercise the Voting Rights only on the basis of instructions
                received pursuant to this Article 4
                from Beneficiaries entitled to instruct the Trustee as to the voting
                thereof at the time at which the Acquiror Meeting is held or an Acquiror
                Consent is sought; and 

               

            

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)

               

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

               

            

    

    Section 4.2 Number
      of Votes

     

    With
      respect to all meetings of shareholders of Acquiror at which holders of Acquiror
      Shares are entitled to vote (each, an “Acquiror
      Meeting”)
      and
      with respect to all written consents sought from Acquiror’s shareholders,
      including the holders of Acquiror Shares (each, an “Acquiror
      Consent”),
      each
      Beneficiary shall be entitled to instruct the Trustee to cast and exercise,
      in
      the manner instructed, a number of votes equal to the Equivalent Vote Amount
      for
      each Exchangeable Share owned of record by such Beneficiary on the record date
      established by Acquiror or by applicable law for such Acquiror Meeting or
      Acquiror Consent, as the case may be (collectively, the “Beneficiary
      Votes”),
      in
      respect of each matter, question, proposal or proposition to be voted on at
      such
      Acquiror Meeting or consented to in connection with such Acquiror
      Consent.

     

    Any
      Beneficiary who chooses to attend an Acquiror Meeting in person will be entitled
      to one vote on a show of hands.

     

    Section 4.3 Mailings
      to Shareholders

     

    With
      respect to each Acquiror Meeting and Acquiror Consent, the Trustee will use
      its
      reasonable efforts promptly to mail or cause to be mailed (or otherwise
      communicate in the same manner as Acquiror utilizes in communications to holders
      of Acquiror Shares subject to applicable regulatory requirements and provided
      such manner of communications is reasonably available to the Trustee) to each
      of
      the Beneficiaries named in the List, such mailing or communication to commence
      on the same day as the mailing or notice (or other communication) with respect
      thereto is commenced by Acquiror to its shareholders:

     

    
      	
              (a)

               

            	
              a
                copy of such notice, together with any related materials, including
                any
                proxy or information statement, to be provided to shareholders of
                Acquiror;

               

            
	
              (b)

               

            	
              a
                statement that such Beneficiary is entitled to instruct the Trustee
                as to
                the exercise of the Beneficiary Votes with respect to such Acquiror
                Meeting or Acquiror Consent or, pursuant to Section 4.7,
                to attend such Acquiror Meeting and to exercise personally thereat
                the
                Beneficiary Votes of such Beneficiary;

               

            

    

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    
      	
              (c)

               

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

               

            

    

     

    
      	
              (i)

               

            	
              a
                proxy to such Beneficiary or its designee to exercise personally
                the
                Beneficiary Votes; or

               

            
	
              (ii)

               

            	
              a
                proxy to a designated agent or other representative of the management
                of
                Acquiror to exercise such Beneficiary Votes;

               

            

    

     

    
      	
              (d)

               

            	
              a
                statement that if no such instructions are received from the Beneficiary,
                the Beneficiary Votes to which such Beneficiary is entitled will
                not be
                exercised;

               

            
	
              (e)

               

            	
              a
                form of direction whereby the Beneficiary may so direct and instruct
                the
                Trustee as contemplated herein; and 

               

            
	
              (f)

               

            	
              a
                statement of the time and date by which such instructions must be
                received
                by the Trustee in order to be binding upon it, which in the case
                of a
                Acquiror Meeting shall not be earlier than the close of business
                on the
                second Business Day prior to such meeting, and of the method for
                revoking
                or amending such instructions.

               

            

    

    For
      the
      purpose of determining Beneficiary Votes to which a Beneficiary is entitled
      in
      respect of any Acquiror Meeting or Acquiror Consent, the number of Exchangeable
      Shares owned of record by the Beneficiary shall be determined at the close
      of
      business on the record date established by Acquiror or by applicable law for
      purposes of determining shareholders entitled to vote at such Acquiror Meeting
      or to give written consent in connection with such Acquiror Consent. Acquiror
      will notify the Trustee of any decision of the Board of Directors of Acquiror
      with respect to the calling of any Acquiror Meeting or the seeking of any
      Acquiror Consent and shall provide all necessary information and materials
      to
      the Trustee in each case promptly and in any event in sufficient time to enable
      the Trustee to perform its obligations contemplated by this Section 4.3.

     

    The
      materials referred to in this Section 4.3
      are to
      be provided to the Trustee by Acquiror and the materials referred to in
Section 4.3(c),
      Section 4.3(e)
      and
Section 4.3(f)
      shall be
      subject to reasonable comment by the Trustee in a timely manner. Acquiror shall
      ensure that the materials to be provided to the Trustee are provided in
      sufficient time to permit the Trustee to comment as aforesaid and to send all
      materials to each Beneficiary at the same time as such materials are first
      sent
      to holders of Acquiror Shares. Acquiror agrees not to communicate with holders
      of Acquiror Shares with respect to the materials referred to in this
Section 4.3
      otherwise than by mail unless such method of communication is also reasonably
      available to the Trustee for communication with the Beneficiaries.
      Notwithstanding the foregoing, Acquiror may at its option exercise the duties
      of
      the Trustee to deliver copies of all materials to each Beneficiary as required
      by this Section 4.3
      so long
      as in each case Acquiror delivers a certificate to the Trustee stating that
      Acquiror has undertaken to perform the obligations set forth in this
Section 4.3.

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    Section 4.4 Copies
      of Shareholder Information

     

    Acquiror
      will deliver to the Trustee copies of all proxy materials (including notices
      of
      Acquiror Meetings but excluding proxies to vote Acquiror Shares), information
      statements, reports (including all interim and annual financial statements)
      and
      other written communications that, in each case, are to be distributed from
      time
      to time to holders of Acquiror Shares in sufficient quantities and in sufficient
      time so as to enable the Trustee to send those materials to each Beneficiary,
      to
      the extent possible, at the same time as such materials are first sent to
      holders of Acquiror Shares. The Trustee will mail or otherwise send to each
      Beneficiary, at the expense of Acquiror, copies of all such materials (and
      all
      materials specifically directed to the Beneficiaries or to the Trustee for
      the
      benefit of the Beneficiaries by Acquiror) received by the Trustee from Acquiror,
      to the extent possible, at the same time as such materials are sent to holders
      of Acquiror Shares. The Trustee will make copies of all such materials available
      for inspection by any Beneficiary at the Trustee’s principal office in
Calgary,
      Alberta.
      Notwithstanding the foregoing, Acquiror at its option may exercise the duties
      of
      the Trustee to deliver copies of all materials to each Beneficiary as required
      by this Section 4.4
      so long
      as in each case Acquiror delivers a certificate to the Trustee stating that
      Acquiror has undertaken to perform the obligations set forth in this
Section 4.4.

     

    Section 4.5 Other
      Materials

     

    As
      soon
      as reasonably practicable after receipt by Acquiror or holders of Acquiror
      Shares (if such receipt is known by Acquiror) of any material sent or given
      by
      or on behalf of a third party to holders of Acquiror Shares generally, including
      dissident proxy and information circulars (and related information and material)
      and tender and exchange offer circulars (and related information and material),
      Acquiror shall use its reasonable best efforts to obtain and deliver to the
      Trustee copies thereof in sufficient quantities so as to enable the Trustee
      to
      forward such material (unless the same has been provided directly to
      Beneficiaries by such third party) to each Beneficiary as soon as possible
      thereafter. As soon as reasonably practicable after receipt thereof, the Trustee
      will mail or otherwise send to each Beneficiary, at the expense of Acquiror,
      copies of all such materials received by the Trustee from Acquiror. The Trustee
      will also make available for inspection by any Beneficiary at the Trustee’s
      principal office in Calgary, Alberta, copies of all such materials.
      Notwithstanding the foregoing, Acquiror at its option may exercise the duties
      of
      the Trustee to deliver copies of all such materials to each Beneficiary as
      required by this Section 4.5
      so long
      as in each case Acquiror delivers a certificate to the Trustee stating that
      Acquiror has undertaken to perform the obligations set forth in this
Section 4.5.

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    Section 4.6 List
      of Persons Entitled to Vote

     

    The
      Corporation shall, (a) prior to each annual and special Acquiror Meeting or
      the
      seeking of any Acquiror Consent and (b) forthwith upon each request made at
      any
      time by the Trustee in writing, prepare or cause to be prepared a list (a
“List”)
      of the
      names and addresses of the Beneficiaries arranged in alphabetical order and
      showing the number of Exchangeable Shares held of record by each such
      Beneficiary, in each case at the close of business on the date specified by
      the
      Trustee in such request or, in the case of a List prepared in connection with
      an
      Acquiror Meeting or an Acquiror Consent, at the close of business on the record
      date established by Acquiror or pursuant to applicable law for determining
      the
      holders of Acquiror Shares entitled to receive notice of and/or to vote at
      such
      Acquiror Meeting or to give consent in connection with such Acquiror Consent.
      Each such List shall be delivered to the Trustee promptly after receipt by
      the
      Corporation of such request or the record date for such meeting or seeking
      of
      consent, as the case may be, and in any event within sufficient time as to
      permit the Trustee to perform its obligations under this Agreement. Acquiror
      agrees to give the Corporation notice (with a copy to the Trustee) of the
      calling of any Acquiror Meeting or the seeking of any Acquiror Consent by
      Acquiror or its management, together with the record dates therefor,
      sufficiently prior to the date of the calling of such meeting or seeking of
      such
      consent so as to enable the Corporation to perform its obligations under this
      Section 4.6.

     

    Section 4.7 Entitlement
      to Direct Votes

     

    Any
      Beneficiary named in a List prepared in connection with any Acquiror Meeting
      or
      Acquiror Consent will be entitled (a) to instruct the Trustee in the manner
      described in Section 4.3
      with
      respect to the exercise of the Beneficiary Votes to which such Beneficiary
      is
      entitled or (b) to attend such meeting and personally exercise thereat (or
      to
      personally exercise with respect to any Acquiror Consent), as the proxy of
      the
      Trustee, the Beneficiary Votes to which such Beneficiary is
      entitled.

     

    Section 4.8 Voting
      by Trustee and Attendance of Trustee Representative at
      Meeting

     

    
      	
              (a)

               

            	
              In
                connection with each Acquiror Meeting and Acquiror Consent, the Trustee
                shall exercise, either in person or by proxy, in accordance with
                the
                instructions received from a Beneficiary pursuant to Section 4.3,
                the Beneficiary Votes as to which such Beneficiary is entitled to
                direct
                the vote (or any lesser number thereof as may be set forth in the
                instructions); provided, however, that such written instructions
                are
                received by the Trustee from the Beneficiary prior to the time and
                date
                fixed by the Trustee for receipt of such instruction in the notice
                given
                by the Trustee to the Beneficiary pursuant to Section 4.3.

               

            

    

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)

               

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

            

    

     

    Section 4.9 Distribution
      of Written Materials

     

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

     

    
      	
              (a)

               

            	
              a
                current List; and

               

            
	
              (b)

               

            	
              upon
                the request of the Trustee, mailing labels to enable the Trustee
                to carry
                out its duties under this Agreement.

               

            

    

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    The
      Corporation’s obligations under this Section 4.9
      shall be
      deemed satisfied to the extent Acquiror exercises its option to perform the
      duties of the Trustee to deliver copies of materials to each Beneficiary and
      the
      Corporation provides the required information and materials to
      Acquiror.

     

    Section 4.10 Termination
      of Voting Rights

     

    Except
      as
      otherwise provided herein or in the Exchangeable Share Provisions, all of the
      rights of a Beneficiary with respect to the Beneficiary Votes exercisable in
      respect of the Exchangeable Shares held by such Beneficiary, including the
      right
      to instruct the Trustee as to the voting of or to vote personally such
      Beneficiary Votes, shall be deemed to be surrendered by the Beneficiary to
      Acquiror or Callco, as the case may be, and such Beneficiary Votes and the
      Voting Rights represented thereby shall cease and be terminated immediately,
      upon the delivery by such Beneficiary to the Trustee of the certificates
      representing such Exchangeable Shares in connection with the exercise by the
      Beneficiary of the Exchange Right or upon the occurrence of the automatic
      exchange of Exchangeable Shares for Acquiror Shares, as specified in
Article 5
      (unless,
      in either case, Acquiror shall not have delivered the Exchangeable Share
      Consideration deliverable in exchange therefor to the Trustee for delivery
      to
      the Beneficiaries), or upon the redemption of Exchangeable Shares pursuant
      to
      Article 6 or Article 7 of the Exchangeable Share Provisions, or upon the
      effective date of the liquidation, dissolution or winding-up of the Corporation
      pursuant to Article 5 of the Exchangeable Share Provisions or upon the purchase
      of Exchangeable Shares from the holder thereof by Callco pursuant to the
      exercise by Callco of the Retraction Call Right, Redemption Call Right or
      Liquidation Call Right, or upon the purchase of Exchangeable Shares from the
      holders thereof by Acquiror or Callco pursuant to the exercise by Acquiror
      or
      Callco of the Change of Law Call Right.

     

     

    ARTICLE 5

    EXCHANGE
      RIGHT AND AUTOMATIC EXCHANGE

     

    Section 5.1 Grant
      and Ownership of the Exchange Right

     

    Acquiror
      hereby grants to the Trustee as trustee for and on behalf of, and for the use
      and benefit of, the Beneficiaries the right (the “Exchange
      Right”),
      upon
      the occurrence and during the continuance of an Insolvency Event, to require
      Acquiror to purchase from each or any Beneficiary all or any part of the
      Exchangeable Shares held by such Beneficiary and the Automatic Exchange Rights,
      all in accordance with the provisions of this Agreement. Acquiror hereby
      acknowledges receipt from the Trustee as trustee for and on behalf of the
      Beneficiaries of good and valuable consideration (and the adequacy thereof)
      for
      the grant of the Exchange Right and the Automatic Exchange Rights by Acquiror
      to
      the Trustee. During the term of the Trust and subject to the terms and
      conditions of this Agreement, the Trustee shall possess and be vested with
      full
      legal ownership of the Exchange Right and the Automatic Exchange Rights and
      shall be entitled to exercise all of the rights and powers of an owner with
      respect to the Exchange Right and the Automatic Exchange Rights, provided that
      the Trustee shall:

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    
      	
              (a)

               

            	
              hold
                the Exchange Right and the Automatic Exchange Rights and the legal
                title
                thereto as trustee solely for the use and benefit of the Beneficiaries
                in
                accordance with the provisions of this Agreement; and

               

            
	
              (b)

               

            	
              except
                as specifically authorized by this Agreement, have no power or authority
                to exercise or otherwise deal in or with the Exchange Right or the
                Automatic Exchange Rights, and the Trustee shall not exercise any
                such
                rights for any purpose other than the purposes for which the Trust
                is
                created pursuant to this Agreement.

               

            

    

     

    Section 5.2 Legended
      Share Certificates

     

    The
      Corporation will cause each certificate representing Exchangeable Shares to
      bear
      an appropriate legend notifying the Beneficiaries of:

     

    
      	
              (a)

               

            	
              their
                right to instruct the Trustee with respect to the exercise of the
                Exchange
                Right in respect of the Exchangeable Shares held by a Beneficiary;
                and

               

            
	
              (b)

               

            	
              the
                Automatic Exchange Rights.

               

            

    

    Section 5.3 General
      Exercise of Exchange Right

     

    The
      Exchange Right shall be and remain vested in and exercisable by the Trustee.
      Subject to Section 6.15,
      the
      Trustee shall exercise the Exchange Right only on the basis of instructions
      received pursuant to this Article 5 from Beneficiaries entitled to instruct
      the
      Trustee as to the exercise thereof. To the extent that no instructions are
      received from a Beneficiary with respect to the Exchange Right, the Trustee
      shall not exercise or permit the exercise of the Exchange Right.

     

    Section 5.4 Purchase
      Price

     

    The
      purchase price payable by Acquiror for each Exchangeable Share to be purchased
      by Acquiror under the Exchange Right shall be an amount per share equal to
      the
      Exchangeable Share Price on the last Business Day prior to the day of closing
      of
      the purchase and sale of such Exchangeable Share under the Exchange Right.
      In
      connection with each exercise of the Exchange Right, Acquiror shall provide
      to
      the Trustee an Officer’s Certificate setting forth the calculation of the
      Exchangeable Share Price for each Exchangeable Share. The Exchangeable Share
      Price for each such Exchangeable Share so purchased may be satisfied only by
      Acquiror delivering or causing to be delivered to the Trustee, on behalf of
      the
      relevant Beneficiary, the Exchangeable Share Consideration representing the
      total Exchangeable Share Price. Upon payment by Acquiror of such purchase price
      to the Trustee for the benefit of the Beneficiary, the relevant Beneficiary
      shall cease to have any right to be paid any amount in respect of declared
      and
      unpaid dividends on each such Exchangeable Share by the
      Corporation.

    
      
        
        

      

      
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    Section 5.5 Exercise
      Instructions

     

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

    
      
        
        

      

      
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    Section 5.6 Delivery
      of Acquiror Shares; Effect of Exercise

     

    Promptly
      after the receipt by the Trustee of the certificates representing the
      Exchangeable Shares which the Beneficiary desires Acquiror to purchase under
      the
      Exchange Right, together with such documents and instruments of transfer and
      a
      duly completed form of notice of exercise of the Exchange Right (and payment
      of
      taxes, if any payable as contemplated by Section 5.8
      or
      evidence thereof), duly endorsed for transfer to Acquiror, the Trustee shall
      notify Acquiror and the Corporation of its receipt of the same, which notice
      to
      Acquiror and the Corporation shall constitute exercise of the Exchange Right
      by
      the Trustee on behalf of the Beneficiary in respect of such Exchangeable Shares,
      and Acquiror shall promptly thereafter deliver or cause to be delivered to
      the
      Trustee, for delivery to the Beneficiary in respect of such Exchangeable Shares
      (or to such other persons, if any, properly designated by such Beneficiary)
      the
      Exchangeable Share Consideration deliverable in connection with the exercise
      of
      the Exchange Right; provided, however, that no such delivery shall be made
      unless and until the Beneficiary requesting the same shall have paid (or
      provided evidence satisfactory to the Trustee, the Corporation and Acquiror
      of
      the payment of) the taxes (if any) payable as contemplated by Section 5.8 of
      this Agreement. Immediately upon the giving of notice by the Trustee to Acquiror
      and the Corporation of the exercise of the Exchange Right, as provided in this
      Section 5.6, the closing of the transaction of purchase and sale contemplated
      by
      the Exchange Right shall be deemed to have occurred, and the Beneficiary of
      such
      Exchangeable Shares shall be deemed to have transferred to Acquiror all of
      such
      Beneficiary’s right, title and interest in and to such Exchangeable Shares and
      in the related interest in the Trust Estate and shall cease to be a holder
      of
      such Exchangeable Shares and shall not be entitled to exercise any of the rights
      of a holder in respect thereof, other than the right to receive his
      proportionate part of the total purchase price therefor, unless such
      Exchangeable Share Consideration is not delivered by Acquiror to the Trustee
      for
      delivery to such Beneficiary (or to such other person, if any, properly
      designated by such Beneficiary) within five Business Days of the date of the
      giving of such notice by the Trustee, in which case the rights of the
      Beneficiary shall remain unaffected until such Exchangeable Share Consideration
      is delivered by Acquiror and any cheque included therein is paid. Upon delivery
      of such Exchangeable Share Consideration by Acquiror to the Trustee, the Trustee
      shall deliver such Exchangeable Share Consideration to such Beneficiary (or
      to
      such other person, if any, properly designated by such Beneficiary).
      Concurrently with such Beneficiary ceasing to be a holder of Exchangeable
      Shares, the Beneficiary shall be considered and deemed for all purposes to
      be
      the holder of the Acquiror Shares delivered to it pursuant to the Exchange
      Right.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    Section 5.7 Exercise
      of Exchange Right Subsequent to Retraction

     

    In
      the
      event that a Beneficiary has exercised its right under Article 6 of the
      Exchangeable Share Provisions to require the Corporation to redeem any or all
      of
      the Exchangeable Shares held by the Beneficiary (the “Retracted
      Shares”)
      and is
      notified by the Corporation pursuant to Section 6.6 of the Exchangeable Share
      Provisions that the Corporation will not be permitted as a result of solvency
      requirements of applicable law to redeem all such Retracted Shares, and provided
      that Callco shall not have exercised the Retraction Call Right with respect
      to
      the Retracted Shares and that the Beneficiary has not revoked the retraction
      request delivered by the Beneficiary to the Corporation pursuant to Section
      6.7
      of the Exchangeable Share Provisions, and provided further that the Trustee
      has
      received written notice of same from the Corporation or Acquiror, the retraction
      request will constitute and will be deemed to constitute notice from the
      Beneficiary to the Trustee instructing the Trustee to exercise the Exchange
      Right with respect to those Retracted Shares that the Corporation is unable
      to
      redeem. In any such event, the Corporation hereby agrees with the Trustee and
      in
      favour of the Beneficiary promptly to forward or cause to be forwarded to the
      Trustee all relevant materials delivered by the Beneficiary to the Corporation
      or to the transfer agent of the Exchangeable Shares (including a copy of the
      retraction request delivered pursuant to Section 6.1 of the Exchangeable Share
      Provisions) in connection with such proposed redemption of the Retracted Shares
      and the Trustee will thereupon exercise the Exchange Right with respect to
      the
      Retracted Shares that the Corporation is not permitted to redeem and will
      require Acquiror to purchase such shares in accordance with the provisions
      of
      this Article 5.

     

    Section 5.8 Stamp
      or Other Transfer Taxes

     

    Upon
      any
      sale of Exchangeable Shares to Acquiror pursuant to the Exchange Right or the
      Automatic Exchange Rights, the share certificate or certificates representing
      Acquiror Shares to be delivered in connection with the payment of the purchase
      price therefor shall be issued in the name of the Beneficiary in respect of
      the
      Exchangeable Shares so sold or in such names as such Beneficiary may otherwise
      direct in writing without charge to the holder of the Exchangeable Shares so
      sold; provided, however, that such Beneficiary (a) shall pay (and none of
      Acquiror, the Corporation or the Trustee shall be required to pay) any
      documentary, stamp, transfer or other taxes that may be payable in respect
      of
      any transfer involved in the issuance or delivery of such shares to a person
      other than such Beneficiary or evidenced to the satisfaction of the such taxes,
      if any, have been paid.

     

    Section 5.9 Notice
      of Insolvency Event

     

    As
      soon
      as practicable following the occurrence of an Insolvency Event or any event
      that
      with the giving of notice or the passage of time or both would be an Insolvency
      Event, the Corporation and Acquiror shall give written notice thereof to the
      Trustee. As soon as practicable following the receipt of notice from the
      Corporation and Acquiror of the occurrence of an Insolvency Event, or upon
      the
      Trustee becoming aware of an Insolvency Event, the Trustee will mail to each
      Beneficiary, at the expense of Acquiror (such funds to be received in advance),
      a notice of such Insolvency Event in the form provided by Acquiror, which notice
      shall contain a brief statement of the rights of the Beneficiaries with respect
      to the Exchange Right.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    Section 5.10 Qualification
      of Acquiror Shares

     

    Acquiror
      covenants that if any Acquiror Shares issuable pursuant to the Exchange Right
      or
      the Automatic Exchange Rights require registration or qualification with or
      approval of or the filing of any document, including any registration statement,
      prospectus or similar document, or the taking of any proceeding with or the
      obtaining of any order, ruling or consent from any governmental or regulatory
      authority under any Canadian or United States federal, provincial, territorial
      or state law or regulation or pursuant to the rules and regulations of any
      regulatory authority or stock exchange or the fulfilment of any other Canadian
      or United States federal, provincial, territorial or state legal requirement
      before such shares may be issued and delivered by Acquiror to the initial holder
      thereof or in order that such shares may be freely traded thereafter (other
      than
      any restrictions of general application on transfer by reason of a holder being
      a “control person” of Acquiror for purposes of Canadian provincial securities
      law or an “affiliate” of Acquiror for purposes of United States federal or state
      securities law), Acquiror will in good faith use its reasonable best efforts
      to
      take all such actions and do all such things as are necessary or desirable
      to
      cause such Acquiror Shares to be and remain duly registered, qualified or
      approved under United States and/or Canadian law, as the case may be, to the
      extent provided in the Acquisition Agreement. Acquiror will use its reasonable
      best efforts and in good faith expeditiously take all such actions and do all
      such things as are reasonably necessary or desirable to cause all Acquiror
      Shares to be delivered pursuant to the Exchange Right or the Automatic Exchange
      Rights to be listed, quoted or posted for trading on all stock exchanges and
      quotation systems on which outstanding Acquiror Shares are listed, quoted or
      posted for trading at such time.

     

    Section 5.11 Acquiror
      Shares

     

    Acquiror
      hereby represents, warrants and covenants that the Acquiror Shares issuable
      to
      Beneficiaries as described herein will be duly authorized and validly issued,
      fully paid and non-assessable and shall be free and clear of any lien, claim
      or
      encumbrance.

     

    Section 5.12 Automatic
      Exchange on Liquidation of Acquiror

     

    
      	
              (a)

               

            	
              Acquiror
                will give the Trustee written notice of each of the following events
                at
                the time set forth below:

               

            

    

     

    
      	
              (i)

               

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

            

    

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    
      	
              (ii)

               

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

            

    

     

    
      	
              (b)

               

            	
              Promptly
                following receipt by the Trustee from Acquiror of notice of any event
                (a
                “Liquidation
                Event”)
                contemplated by Section 5.12(a)
                above, the Trustee will give notice thereof to the Beneficiaries.
                Such
                notice shall be provided to the Trustee by Acquiror and shall include
                a
                brief description of rights of the Beneficiaries with respect to
                the
                Automatic Exchange Rights provided for in Section 5.12(c).

               

            
	
              (c)

               

            	
              In
                order that the Beneficiaries will be able to participate on a pro
                rata
                basis with the holders of Acquiror Shares in the distribution of
                assets of
                Acquiror in connection with a Liquidation Event, immediately prior
                to the
                effective time (the “Liquidation
                Event Effective Time”)
                of a Liquidation Event all of the then outstanding Exchangeable Shares
                shall be automatically exchanged for Acquiror Shares. To effect such
                automatic exchange, Acquiror shall purchase each Exchangeable Share
                outstanding immediately prior to the Liquidation Event Effective
                Time and
                held by Beneficiaries, and each Beneficiary shall sell the Exchangeable
                Shares held by such Beneficiary at such time, for a purchase price
                per
                share equal to the Exchangeable Share Price applicable at that time.
                Acquiror shall provide the Trustee with an Officer’s Certificate in
                connection with any automatic exchange setting forth the calculation
                of
                the Exchangeable Share Price for each Exchangeable Share.

               

            

    

    
      
        
        

      

      
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              (d)

               

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

               

            

    

    Section 5.13 Withholding
      Rights

     

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

    
      
        
        

      

      
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    ARTICLE 6

    CONCERNING
      THE TRUSTEE

     

    Section 6.1 Powers
      and Duties of the Trustee

     

    The
      rights, powers, duties and authorities of the Trustee under this Agreement,
      in
      its capacity as trustee of the Trust, shall include:

     

    
      	
              (a)

               

            	
              receipt
                and deposit of the Acquiror Special Voting Share from Acquiror as
                trustee
                for and on behalf of the Beneficiaries in accordance with the provisions
                of this Agreement;

               

            
	
              (b)

               

            	
              granting
                proxies and distributing materials to Beneficiaries as provided in
                this
                Agreement;

               

            
	
              (c)

               

            	
              casting
                and exercising the Beneficiary Votes in accordance with the provisions
                of
                this Agreement;

               

            
	
              (d)

               

            	
              receiving
                the grant of the Exchange Right and the Automatic Exchange Rights
                from
                Acquiror as trustee for and on behalf of the Beneficiaries in accordance
                with the provisions of this Agreement;

               

            
	
              (e)

               

            	
              exercising
                the Exchange Right and enforcing the benefit of the Automatic Exchange
                Rights, in each case in accordance with the provisions of this Agreement,
                and in connection therewith receiving from Beneficiaries Exchangeable
                Shares and other requisite documents and distributing to such
                Beneficiaries Acquiror Shares and cheques, if any, to which such
                Beneficiaries are entitled upon the exercise of the Exchange Right
                or
                pursuant to the Automatic Exchange Rights, as the case may
                be;

               

            
	
              (f)

               

            	
              holding
                title to the Trust Estate;

               

            
	
              (g)

               

            	
              investing
                any moneys forming, from time to time, a part of the Trust Estate
                as
                provided in this Agreement;

               

            
	
              (h)

               

            	
              taking
                action on its own initiative or at the direction of a Beneficiary
                or
                Beneficiaries to enforce the obligations of Acquiror and the Corporation
                under this Agreement; and

               

            

    

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

    
      	
              (i)

               

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

               

            

    

     

    In
      the
      exercise of such rights, powers, duties and authorities, the Trustee shall
      have
      (and is granted) such incidental and additional rights, powers, duties and
      authority not in conflict with any of the provisions of this Agreement as the
      Trustee, acting in good faith and in the reasonable exercise of its discretion,
      may deem necessary, appropriate or desirable to effect the purpose of the Trust.
      Any exercise of such discretionary rights, powers, duties and authorities by
      the
      Trustee shall be final, conclusive and binding upon all persons.

     

    The
      Trustee in exercising its rights, powers, duties and authorities hereunder
      shall
      act honestly and in good faith and with a view to the best interests of the
      Beneficiaries and shall exercise the care, diligence and skill that a reasonably
      prudent trustee would exercise in comparable circumstances.

     

    The
      Trustee shall not be bound to give notice or do or take any act, action or
      proceeding by virtue of the powers conferred on it hereby unless and until
      it
      shall be specifically required to do so under the terms hereof, nor shall the
      Trustee be required to take any notice of, or to do, or to take any act, action
      or proceeding as a result of any default or breach of any provision hereunder,
      unless and until notified in writing of such default or breach, which notices
      shall distinctly specify the default or breach desired to be brought to the
      attention of the Trustee, and in the absence of such notice the Trustee may
      for
      all purposes of this Agreement conclusively assume that no default or breach
      has
      been made in the observance or performance of any of the representations,
      warranties, covenants, agreements or conditions contained herein.

     

    Section 6.2 No
      Conflict of Interest

     

    The
      Trustee represents to Acquiror and the Corporation that at the date of execution
      and delivery of this Agreement there exists no material conflict of interest
      in
      the role of the Trustee as a fiduciary hereunder and the role of the Trustee
      in
      any other capacity. The Trustee shall, within 90 days after it becomes aware
      that such material conflict of interest exists, either eliminate such material
      conflict of interest or resign in the manner and with the effect specified
      in
Article 10.
      If,
      notwithstanding the foregoing provisions of this Section 6.2,
      the
      Trustee has such a material conflict of interest, the validity and
      enforceability of this Agreement shall not be affected in any manner whatsoever
      by reason only of the existence of such material conflict of interest. If the
      Trustee contravenes the foregoing provisions of this Section 6.2,
      any
      interested party may apply to a court of competent jurisdiction for an order
      that the Trustee be replaced as trustee hereunder.

    
      
        
        

      

      
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    Section 6.3 Dealings
      with Transfer Agents, Registrars, etc.

     

    Acquiror
      and the Corporation irrevocably authorize the Trustee, from time to time,
      to:

     

    
      	
              (a)

               

            	
              consult,
                communicate and otherwise deal with the respective registrars and
                transfer
                agents, and with any such subsequent registrar or transfer agent,
                of the
                Exchangeable Shares and Acquiror Shares; and

               

            
	
              (b)

               

            	
              requisition,
                from time to time, (i) from any such registrar or transfer agent
                any
                information readily available from the records maintained by it which
                the
                Trustee may reasonably require for the discharge of its duties and
                responsibilities under this Agreement and (ii) from the transfer
                agent of
                Acquiror Shares, and any subsequent transfer agent of such shares,
                the
                share certificates issuable upon the exercise from time to time of
                the
                Exchange Right and pursuant to the Automatic Exchange Rights.

               

            

    

    Acquiror
      and the Corporation irrevocably authorize their respective registrars and
      transfer agents to comply with all such requests. Acquiror covenants that it
      will supply its transfer agent with duly executed share certificates for the
      purpose of completing the exercise from time to time of the Exchange Right
      and
      the Automatic Exchange Rights.

     

    Section 6.4 Books
      and Records

     

    The
      Trustee shall keep available for inspection by Acquiror and the Corporation
      at
      the Trustee’s principal office in Calgary, Alberta correct and complete books
      and records of account relating to the Trust created by this Agreement,
      including all relevant data relating to mailings and instructions to and from
      Beneficiaries and all transactions pursuant to the Exchange Right and the
      Automatic Exchange Rights. On or before January 15 in every year, so long as
      any
      Acquiror Shares are on deposit with the Trustee, the Trustee shall transmit
      to
      Acquiror and the Corporation a brief report, dated as of the preceding December
      31, with respect to:

     

    
      	
              (a)

               

            	
              the
                property and funds comprising the Trust Estate as of that
                date;

               

            
	
              (b)

               

            	
              the
                number of exercises of the Exchange Right, if any, and the aggregate
                number of Exchangeable Shares received by the Trustee on behalf of
                Beneficiaries in consideration of the issuance by Acquiror of Acquiror
                Shares in connection with the Exchange Right, during the calendar
                year
                ended on such December 31; and

               

            
	
              (c)

               

            	
              any
                action taken by the Trustee in the performance of its duties under
                this
                Agreement which it had not previously reported and which, in the
                Trustee’s
                opinion, materially affects the Trust Estate.

               

            

    

     

    Section 6.5 Income
      Tax Returns and Reports

     

    The
      Trustee shall, to the extent necessary, prepare and file on behalf of the Trust
      appropriate United States and Canadian income tax returns and any other returns
      or reports as may be required by applicable law or pursuant to the rules and
      regulations of any securities exchange or other trading system through which
      the
      Exchangeable Shares are traded. In connection therewith, the Trustee may obtain
      the advice and assistance of such experts or advisors as the Trustee reasonably
      considers necessary or advisable (who may be experts or advisors to Acquiror
      or
      the Corporation). If requested by the Trustee, Acquiror or the Corporation
      shall
      retain qualified experts or advisors for the purpose of providing such tax
      advice or assistance.

     

    Section 6.6 Indemnification
      Prior to Certain Actions by Trustee

     

    The
      Trustee shall exercise any or all of the rights, duties, powers or authorities
      vested in it by this Agreement at the request, order or direction of any
      Beneficiary upon such Beneficiary furnishing to the Trustee reasonable funding,
      security or indemnity against the costs, expenses and liabilities which may
      be
      incurred by the Trustee therein or thereby, provided that no Beneficiary shall
      be obligated to furnish to the Trustee any such security or indemnity in
      connection with the exercise by the Trustee of any of its rights, duties, powers
      and authorities with respect to the Acquiror Special Voting Share held by the
      Trustee pursuant to Article 4,
      subject
      to Section 6.15,
      with
      respect to the Exchange Right pursuant to Article 5,
      subject
      to Section 6.15,
      and
      with respect to the Automatic Exchange Rights pursuant to Article 5,
      subject
      to Section 6.15.

     

    None
      of
      the provisions contained in this Agreement shall require the Trustee to expend
      or risk its own funds or otherwise incur financial liability in the exercise
      of
      any of its rights, powers, duties, or authorities unless funded, given security
      or indemnified as aforesaid.

     

    Section 6.7 Action
      of Beneficiaries

     

    No
      Beneficiary shall have the right to institute any action, suit or proceeding
      or
      to exercise any other remedy authorized by this Agreement for the purpose of
      enforcing any of its rights or for the execution of any trust or power hereunder
      unless the Beneficiary has requested the Trustee to take or institute such
      action, suit or proceeding and furnished the Trustee with the funding, security
      or indemnity required by Section 6.6
      and the
      Trustee shall have failed to act within a reasonable time thereafter. In such
      case, but not otherwise, the Beneficiary shall be entitled to take proceedings
      in any court of competent jurisdiction such as the Trustee might have taken;
      it
      being understood and intended that no one or more Beneficiaries shall have
      any
      right in any manner whatsoever to affect, disturb or prejudice the rights hereby
      created by any such action, or to enforce any right hereunder or the Voting
      Rights, the Exchange Rights or the Automatic Exchange Rights except subject
      to
      the conditions and in the manner herein provided, and that all powers and trusts
      hereunder shall be exercised and all proceedings at law shall be instituted,
      had
      and maintained by the Trustee, except only as herein provided, and in any event
      for the equal benefit of all Beneficiaries.

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    Section 6.8 Reliance
      Upon Declarations

     

    The
      Trustee shall not be considered to be in contravention of any of its rights,
      powers, duties and authorities hereunder if, when required, it acts and relies
      in good faith upon statutory declarations, certificates, opinions, Lists,
      reports or other papers or documents furnished pursuant to the provisions hereof
      or required by the Trustee to be furnished to it in the exercise of its rights,
      powers, duties and authorities hereunder if such statutory declarations,
      certificates, opinions, Lists, reports or other papers or documents comply
      with
      the provisions of Section 6.9,
      if
      applicable, and with any other applicable provisions of this
      Agreement.

     

    Section 6.9 Evidence
      and Authority to Trustee

     

    Acquiror
      and/or the Corporation shall furnish to the Trustee evidence of compliance
      with
      the conditions provided for in this Agreement relating to any action or step
      required or permitted to be taken by Acquiror and/or the Corporation or the
      Trustee under this Agreement or as a result of any obligation imposed under
      this
      Agreement, including in respect of the Voting Rights or the Exchange Right
      or
      the Automatic Exchange Rights and the taking of any other action to be taken
      by
      the Trustee at the request of or on the application of Acquiror and/or the
      Corporation promptly if and when:

     

    
      	
              (a)

               

            	
              such
                evidence is required by any other section of this Agreement to be
                furnished to the Trustee in accordance with the terms of this Section 6.9;
                or

               

            
	
              (b)

               

            	
              the
                Trustee, in the exercise of its rights, powers, duties and authorities
                under this Agreement, gives Acquiror and/or the Corporation written
                notice
                requiring it to furnish such evidence in relation to any particular
                action
                or obligation specified in such notice.

               

            

    

     

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

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    Whenever
      such evidence relates to a matter other than the Voting Rights or the Exchange
      Right or the Automatic Exchange Rights or the taking of any other action to
      be
      taken by the Trustee at the request or on the application of Acquiror and/or
      the
      Corporation, and except as otherwise specifically provided herein, such evidence
      may consist of a report or opinion of any solicitor, attorney, auditor,
      accountant, appraiser, valuer, engineer or other expert or any other person
      whose qualifications give authority to a statement made by him, provided that
      if
      such report or opinion is furnished by a director, officer or employee of
      Acquiror and/or the Corporation it shall be in the form of an Officer’s
      Certificate or a statutory declaration.

     

    Each
      statutory declaration, Officer’s Certificate, opinion or report furnished to the
      Trustee as evidence of compliance with a condition provided for in this
      Agreement shall include a statement by the person giving the
      evidence:

     

    
      	
              (c)

               

            	
              declaring
                that such person has read and understands the provisions of this
                Agreement
                relating to the condition in question;

               

            
	
              (d)

               

            	
              describing
                the nature and scope of the examination or investigation upon which
                such
                person based the statutory declaration, certificate, statement or
                opinion;
                and

               

            
	
              (e)

               

            	
              declaring
                that such person has made such examination or investigation as such
                person
                believes is necessary to enable such person to make the statements
                or give
                the opinions contained or expressed therein.

               

            

    

    Section 6.10 Experts,
      Advisers and Agents

     

    The
      Trustee may:

     

    
      	
              (a)

               

            	
              in
                relation to these presents act and rely on the opinion or advice
                of or
                information obtained from any solicitor, attorney, auditor, accountant,
                appraiser, valuer, engineer or other expert, whether retained by
                the
                Trustee or by Acquiror and/or the Corporation or otherwise, and may
                retain
                or employ such assistants as may be necessary to the proper discharge
                of
                its powers and duties and determination of its rights hereunder and
                may
                pay proper and reasonable compensation for all such legal and other
                advice
                or assistance as aforesaid; and

               

            
	
              (b)

               

            	
              employ
                such agents and other assistants as it may reasonably require for
                the
                proper determination and discharge of its powers and duties hereunder,
                and
                may pay reasonable remuneration for all services performed for it
                (and
                shall be entitled to receive reasonable remuneration for all services
                performed by it) in the discharge of the trusts hereof and compensation
                for all disbursements, costs and expenses made or incurred by it
                in the
                discharge of its duties hereunder and in the management of the
                Trust.

               

            

    

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    Section 6.11 Investment
      of Moneys Held by Trustee

     

    Unless
      otherwise provided in this Agreement, any moneys held by or on behalf of the
      Trustee which under the terms of this Agreement may or ought to be invested
      or
      which may be on deposit with the Trustee or which may be in the hands of the
      Trustee may be invested and reinvested in the name or under the control of
      the
      Trustee, in trust for the Corporation, in securities in which, under the laws
      of
      the Province of Alberta, trustees are authorized to invest trust moneys,
      provided that such securities are stated to mature within two years after their
      purchase by the Trustee, and the Trustee shall so invest such moneys on the
      written direction of the Corporation. Pending the investment of any moneys
      as
      hereinbefore provided, such moneys may be deposited in the name of the Trustee
      in any chartered bank in Canada or, with the consent of the Corporation, in
      the
      deposit department of the Trustee or any other loan or trust company authorized
      to accept deposits under the laws of Canada or any province thereof at the
      rate
      of interest then current on similar deposits.

     

    Section 6.12 Trustee
      Not Required to Give Security

     

    The
      Trustee shall not be required to give any bond or security in respect of the
      execution of the trusts, rights, duties, powers and authorities of this
      Agreement or otherwise in respect of the premises.

     

    Section 6.13 Trustee
      Not Bound to Act on Request

     

    Except
      as
      in this Agreement otherwise specifically provided, the Trustee shall not be
      bound to act in accordance with any direction or request of Acquiror and/or
      the
      Corporation or of the directors thereof until a duly authenticated copy of
      the
      instrument or resolution containing such direction or request shall have been
      delivered to the Trustee, and the Trustee shall be empowered to act and rely
      upon any such copy purporting to be authenticated and believed by the Trustee
      to
      be genuine.

     

    Section 6.14 Authority
      to Carry on Business

     

    The
      Trustee represents to Acquiror and the Corporation that at the date of execution
      and delivery by it of this Agreement it is authorized to carry on the business
      of a trust company in each of the Provinces of Canada but if, notwithstanding
      the provisions of this Section 6.14,
      it
      ceases to be so authorized to carry on business, the validity and enforceability
      of this Agreement and the Voting Rights, the Exchange Right and the Automatic
      Exchange Rights shall not be affected in any manner whatsoever by reason only
      of
      such event but the Trustee shall, within 90 days after ceasing to be authorized
      to carry on the business of a trust company in any province of Canada, either
      become so authorized or resign in the manner and with the effect specified
      in
Article 10.

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    Section 6.15 Conflicting
      Claims

     

    If
      conflicting claims or demands are made or asserted with respect to any interest
      of any Beneficiary in any Exchangeable Shares, including any disagreement
      between the heirs, representatives, successors or assigns succeeding to all
      or
      any part of the interest of any Beneficiary in any Exchangeable Shares,
      resulting in conflicting claims or demands being made in connection with such
      interest, then the Trustee shall be entitled, at its sole discretion, to refuse
      to recognize or to comply with any such claims or demands. In so refusing,
      the
      Trustee may elect not to exercise any Voting Rights, Exchange Right or Automatic
      Exchange Rights subject to such conflicting claims or demands and, in so doing,
      the Trustee shall not be or become liable to any person on account of such
      election or its failure or refusal to comply with any such conflicting claims
      or
      demands. The Trustee shall be entitled to continue to refrain from acting and
      to
      refuse to act until:

     

    
      	
              (a)

               

            	
              the
                rights of all adverse claimants with respect to the Voting Rights,
                Exchange Right or Automatic Exchange Rights subject to such conflicting
                claims or demands have been adjudicated by a final judgment of a
                court of
                competent jurisdiction and all rights of appeal have expired;
                or

               

            
	
              (b)

               

            	
              all
                differences with respect to the Voting Rights, Exchange Right or
                Automatic
                Exchange Rights subject to such conflicting claims or demands have
                been
                conclusively settled by a valid written agreement binding on all
                such
                adverse claimants, and the Trustee shall have been furnished with
                an
                executed copy of such agreement certified to be in full force and
                effect.

               

            

    

     

    If
      the
      Trustee elects to recognize any claim or comply with any demand made by any
      such
      adverse claimant, it may in its discretion require such claimant to furnish
      such
      surety bond or other security satisfactory to the Trustee as it shall deem
      appropriate to fully indemnify it as between all conflicting claims or
      demands.

     

    Section 6.16 Acceptance
      of Trust

     

    The
      Trustee hereby accepts the Trust created and provided for by and in this
      Agreement and agrees to perform the same upon the terms and conditions herein
      set forth and to hold all rights, privileges and benefits conferred hereby
      and
      by law in trust for the various persons who shall from time to time be
      Beneficiaries, subject to all the terms and conditions herein set
      forth.

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    Section 6.17 Maintenance
      of Office or Agency

     

    Acquiror
      will maintain in Calgary, Alberta an office or agency where certificates
      representing Exchangeable Shares may be presented or surrendered for exchange
      by
      Beneficiaries and where notices and demands to or upon Acquiror or the
      Corporation in respect of the Exchangeable Shares may be served. Acquiror will
      give prompt written notice to the Trustee of the location, and any change in
      the
      location, of such office or agency. If at any time Acquiror shall fail to
      maintain any such office or agency or shall fail to furnish the Trustee with
      the
      address thereof, such presentations, surrenders, notices and demands may be
      served at the Corporate Trust Office of the Trustee, and Acquiror and the
      Corporation hereby appoint the Trustee as their agent to receive all such
      presentations, surrenders, notices and demands. Furthermore, copies of all
      Acquiror proxy materials will be made available for inspection by any
      Beneficiary at such office or agency.

     

     

    ARTICLE 7

    COMPENSATION

     

    Section 7.1 Fees
      and Expenses of the Trustee

     

    Acquiror
      and the Corporation jointly and severally agree to pay the Trustee reasonable
      compensation for all of the services rendered by it under this Agreement and
      will reimburse the Trustee for all reasonable expenses (including taxes other
      than taxes based on the net income of the Trustee, fees paid to legal counsel
      and other experts and advisors and travel expenses) and disbursements, including
      the cost and expense of any suit or litigation of any character and any
      proceedings before any governmental agency reasonably incurred by the Trustee
      in
      connection with its duties under this Agreement; provided that Acquiror and
      the
      Corporation shall have no obligation to reimburse the Trustee for any expenses
      or disbursements paid, incurred or suffered by the Trustee in any suit or
      litigation in which the Trustee is determined to have acted in bad faith or
      with
      negligence, recklessness or wilful misconduct.

     

     

    ARTICLE 8

    INDEMNIFICATION
      AND LIMITATION OF LIABILITY

     

    Section 8.1 Indemnification
      of the Trustee

     

    Acquiror
      and the Corporation jointly and severally agree to indemnify and hold harmless
      the Trustee and each of its directors, officers, employees and agents appointed
      and acting in accordance with this Agreement (collectively, the “Indemnified
      Parties”)
      against all claims, losses, damages, reasonable costs, penalties, fines and
      reasonable expenses (including reasonable expenses of the Trustee’s legal
      counsel) which, without fraud, negligence, recklessness, wilful misconduct
      or
      bad faith on the part of such Indemnified Party, may be paid, incurred or
      suffered by the Indemnified Party by reason or as a result of the Trustee’s
      acceptance or administration of the Trust, its compliance with its duties set
      forth in this Agreement, or any written or oral instruction delivered to the
      Trustee by Acquiror or the Corporation pursuant hereto.

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

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

     

    Section 8.2 Limitation
      of Liability

     

    The
      Trustee shall not be held liable for any loss which may occur by reason of
      depreciation of the value of any part of the Trust Estate or any loss incurred
      on any investment of funds pursuant to this Agreement, except to the extent
      that
      such loss is attributable to the fraud, negligence, recklessness, wilful
      misconduct or bad faith on the part of the Trustee.

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

     

    ARTICLE 9

    CHANGE
      OF TRUSTEE

     

    Section 9.1 Resignation

     

    The
      Trustee, or any trustee hereafter appointed, may at any time resign by giving
      written notice of such resignation to Acquiror and the Corporation specifying
      the date on which it desires to resign, provided that such notice shall not
      be
      given less than thirty (30) days before such desired resignation date unless
      Acquiror and the Corporation otherwise agree and provided further that such
      resignation shall not take effect until the date of the appointment of a
      successor trustee and the acceptance of such appointment by the successor
      trustee. Upon receiving such notice of resignation, Acquiror and the Corporation
      shall promptly appoint a successor trustee, which shall be a corporation
      organized and existing under the laws of Canada or any Province thereof, by
      written instrument in duplicate, one copy of which shall be delivered to the
      resigning trustee and one copy to the successor trustee. Failing the appointment
      and acceptance of a successor trustee, a successor trustee may be appointed
      by
      order of a court of competent jurisdiction upon application of one or more
      of
      the parties to this Agreement. If the retiring trustee is the party initiating
      an application for the appointment of a successor trustee by order of a court
      of
      competent jurisdiction, Acquiror and the Corporation shall be jointly and
      severally liable to reimburse the retiring trustee for its legal costs and
      expenses in connection with same.

     

    Section 9.2 Removal

     

    The
      Trustee, or any trustee hereafter appointed, may (provided a successor trustee
      is appointed) be removed at any time on not less than 30 days’ prior notice by
      written instrument executed by Acquiror and the Corporation, in duplicate,
      one
      copy of which shall be delivered to the trustee so removed and one copy to
      the
      successor trustee.

     

    Section 9.3 Successor
      Trustee

     

    Any
      successor trustee appointed as provided under this Agreement shall execute,
      acknowledge and deliver to Acquiror and the Corporation and to its predecessor
      trustee an instrument accepting such appointment. Thereupon the resignation
      or
      removal of the predecessor trustee shall become effective and such successor
      trustee, without any further act, deed or conveyance, shall become vested with
      all the rights, powers, duties and obligations of its predecessor under this
      Agreement, with the like effect as if originally named as trustee in this
      Agreement. However, on the written request of Acquiror and the Corporation
      or of
      the successor trustee, the trustee ceasing to act shall, upon payment of any
      amounts then due it pursuant to the provisions of this Agreement, execute and
      deliver an instrument transferring to such successor trustee all the rights
      and
      powers of the trustee so ceasing to act. Upon the request of any such successor
      trustee, Acquiror, the Corporation and such predecessor trustee shall execute
      any and all instruments in writing for more fully and certainly vesting in
      and
      confirming to such successor trustee all such rights and
      powers.

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

    Section 9.4 Notice
      of Successor Trustee

     

    Upon
      acceptance of appointment by a successor trustee as provided herein, Acquiror
      and the Corporation shall cause to be mailed notice of the succession of such
      trustee hereunder to each Beneficiary specified in a List. If Acquiror or the
      Corporation shall fail to cause such notice to be mailed within 10 days after
      acceptance of appointment by the successor trustee, the successor trustee shall
      cause such notice to be mailed at the expense of Acquiror and the
      Corporation.

     

    ARTICLE 10

    ACQUIROR
      SUCCESSORS

     

    Section 10.1 Certain
      Requirements in Respect of Combination, etc.

     

    Acquiror
      shall not consummate any transaction (whether by way of reconstruction,
      reorganization, consolidation, merger, transfer, sale, lease or otherwise)
      whereby all or substantially all of its undertaking, property and assets would
      become the property of any other person or, in the case of a merger, of the
      continuing corporation resulting therefrom, but may do so if:

     

    
      	
              (a)

               

            	
              such
                other person or continuing corporation (herein called the “Acquiror
                Successor”),
                by operation of law, becomes, without more, bound by the terms and
                provisions of this Agreement or, if not so bound, executes, prior
                to or
                contemporaneously with the consummation of such transaction, a trust
                agreement supplemental hereto and such other instruments (if any)
                as are
                satisfactory to the Trustee, acting reasonably, and in the opinion
                of
                legal counsel to the Trustee are reasonably necessary or advisable
                to
                evidence the assumption by the Acquiror Successor of liability for
                all
                moneys payable and property deliverable hereunder (including without
                limitation one or more voting securities of such Acquiror Successor
                to
                allow Beneficiaries to exercise voting rights in respect of the Acquiror
                Successor substantially similar to those provided for in this Agreement
                in
                respect of Acquiror) and the covenant of such Acquiror Successor
                to pay
                and deliver or cause to be delivered the same and its agreement to
                observe
                and perform all the covenants and obligations of Acquiror under this
                Agreement; and

               

            

    

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)

               

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

               

            

    

    Section 10.2 Vesting
      of Powers in Successor

     

    Whenever
      the conditions of Section 10.1
      have
      been duly observed and performed, the Trustee, Acquiror Successor and the
      Corporation shall, if required by Section 10.1,
      execute
      and deliver the supplemental trust agreement provided for in Article 11
      and
      thereupon Acquiror Successor shall possess and from time to time may exercise
      each and every right and power of Acquiror under this Agreement in the name
      of
      Acquiror or otherwise and any act or proceeding by any provision of this
      Agreement required to be done or performed by the Board of Directors of Acquiror
      or any officers of Acquiror may be done and performed with like force and effect
      by the directors or officers of such Acquiror Successor.

     

    Section 10.3 Wholly-Owned
      Subsidiaries

     

    Nothing
      herein shall be construed as preventing the amalgamation or merger of any
      wholly-owned direct or indirect subsidiary of Acquiror with or into Acquiror
      or
      the winding-up, liquidation or dissolution of any wholly-owned subsidiary of
      Acquiror provided that all of the assets of such subsidiary are transferred
      to
      Acquiror or another wholly-owned direct or indirect subsidiary of Acquiror
      and
      any such transactions are expressly permitted by this Article 10.

     

    Section 10.4 Successorship
      Transaction

     

    Notwithstanding
      the foregoing provisions of this Article 10,
      in the
      event of an Acquiror Control Transaction:

     

    
      	
              (a)

               

            	
              in
                which Acquiror merges or amalgamates with, or in which all or
                substantially all of the then outstanding Acquiror Shares are acquired
                by,
                one or more other corporations to which Acquiror is, immediately
                before
                such merger, amalgamation or acquisition, “related” within the meaning of
                the Income
                Tax Act (Canada)
                (otherwise than by virtue of a right referred to in paragraph 251(5)(b)
                thereof);

               

            
	
              (b)

               

            	
              which
                does not result in an acceleration of the Redemption Date in accordance
                with paragraph (b) of that definition; and

               

            
	
              (c)

               

            	
              in
                which all or substantially all of the then outstanding Acquiror Shares
                are
                converted into or exchanged for shares or rights to receive such
                shares
                (the “Other
                Shares”)
                of another corporation (the “Other
                Corporation”)
                that, immediately after such Acquiror Control Transaction, owns or
                controls, directly or indirectly, Acquiror;

               

            

    

     

    then
      (i) all
      references herein to “Acquiror” shall thereafter be and be deemed to be
      references to “Other Corporation” and all references herein to “Acquiror Shares”
shall thereafter be and be deemed to be references to “Other Shares” (with
      appropriate adjustments, if any, as are required to result in a holder of
      Exchangeable Shares on the exchange, redemption or retraction of such shares
      pursuant to the Exchangeable Share Provisions or exchange of such shares
      pursuant to this Agreement immediately subsequent to the Acquiror Control
      Transaction being entitled to receive that number of Other Shares equal to
      the
      number of Other Shares such holder of Exchangeable Shares would have received
      if
      the exchange, redemption or retraction of such shares pursuant to the
      Exchangeable Share Provisions or exchange of such shares pursuant to this
      Agreement had occurred immediately prior to the Acquiror Control Transaction
      and
      the Acquiror Control Transaction was completed) without any need to amend the
      terms and conditions of this Agreement and without any further action required;
      and (ii) Acquiror
      shall cause the Other Corporation to deposit one or more voting securities
      of
      such Other Corporation to allow Beneficiaries to exercise voting rights in
      respect of the Other Corporation substantially similar to those provided for
      in
      this Agreement. 

     

     

    ARTICLE 11

    AMENDMENTS
      AND SUPPLEMENTAL TRUST AGREEMENTS

     

    Section 11.1 Amendments,
      Modifications, etc.

     

    This
      Agreement may not be amended or modified except by an agreement in writing
      executed by Acquiror, the Corporation and the Trustee and approved by the
      Beneficiaries in accordance with Section 10.2
      of the
      Exchangeable Share Provisions.

     

    Section 11.2 Ministerial
      Amendments

     

    Notwithstanding
      the provisions of Section 11.1,
      the
      parties to this Agreement may in writing, at any time and from time to time,
      without the approval of the Beneficiaries, amend or modify this Agreement for
      the purposes of

     

    
      	
              (a)

               

            	
              adding
                to the covenants of any or all parties hereto for the protection
                of the
                Beneficiaries hereunder provided that the Board of Directors of each
                of
                the Corporation and Acquiror shall be of the good faith opinion that
                such
                additions will not be prejudicial to the rights or interests of the
                Beneficiaries;

               

            

    

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)

               

            	
              making
                such amendments or modifications not inconsistent with this Agreement
                as
                may be necessary or desirable with respect to matters or questions
                which,
                in the good faith opinion of the Board of Directors of each of Acquiror
                and the Corporation and in the opinion of the Trustee, having in
                mind the
                best interests of the Beneficiaries it may be expedient to make,
                provided
                that such Boards of Directors and the Trustee, acting on the advice
                of
                counsel, shall be of the opinion that such amendments and modifications
                will not be prejudicial to the interests of the Beneficiaries;
                or

               

            
	
              (c)

               

            	
              making
                such changes or corrections which, on the advice of counsel to Acquiror,
                the Corporation and the Trustee, are required for the purpose of
                curing or
                correcting any ambiguity or defect or inconsistent provision or clerical
                omission or mistake or manifest error, provided that the Trustee,
                acting
                on the advice of counsel, and the Board of Directors of each of Acquiror
                and the Corporation shall be of the opinion that such changes or
                corrections will not be prejudicial to the rights and interests of
                the
                Beneficiaries.

            

    

     

    Section 11.3 Meeting
      to Consider Amendments

     

    The
      Corporation, at the request of Acquiror, shall call a meeting or meetings of
      the
      Beneficiaries for the purpose of considering any proposed amendment or
      modification requiring approval pursuant hereto. Any such meeting or meetings
      shall be called and held in accordance with the by-laws of the Corporation,
      the
      Exchangeable Share Provisions and all applicable laws; provided that any such
      meeting shall only be called for a bona fide business purpose and not for the
      principal purpose of causing a Redemption Date to occur or
      transpire.

     

    Section 11.4 Changes
      in Capital of Acquiror and the Corporation

     

    At
      all
      times after the occurrence of any event contemplated pursuant to Section 2.7
      or
      2.8 of the Support Agreement or otherwise, as a result of which either Acquiror
      Shares or the Exchangeable Shares or both are in any way changed, this Agreement
      shall forthwith be deemed amended and modified as necessary in order that it
      shall apply with full force and effect, mutatis
      mutandis,
      to all
      new securities into which Acquiror Shares or the Exchangeable Shares or both
      are
      so changed.

     

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

    Section 11.5 Execution
      of Supplemental Trust Agreements

     

    No
      amendment to or modification or waiver of any of the provisions of this
      Agreement otherwise permitted hereunder shall be effective unless made in
      writing and signed by all of the parties hereto. From time to time the
      Corporation, Acquiror and the Trustee may, subject to the provisions of these
      presents, and they shall, when so directed by these presents, execute and
      deliver by their proper officers, trust agreements or other instruments
      supplemental hereto, which thereafter shall form part hereof, for any one or
      more of the following purposes:

     

    
      	
              (a)

               

            	
              evidencing
                the succession of Acquiror Successors and the covenants of and obligations
                assumed by each such Acquiror Successor in accordance with the provisions
                of Article 10
                and the successors of any successor trustee in accordance with the
                provisions of Article 9;

               

            
	
              (b)

               

            	
              making
                any additions to, deletions from or alterations of the provisions
                of this
                Agreement or the Voting Rights, the Exchange Right or the Automatic
                Exchange Rights which, in the opinion of the Trustee, will not be
                prejudicial to the interests of the Beneficiaries or are, in the
                opinion
                of counsel to the Trustee, necessary or advisable in order to incorporate,
                reflect or comply with any legislation the provisions of which apply
                to
                Acquiror, the Corporation, the Trustee or this Agreement; and

               

            
	
              (c)

               

            	
              for
                any other purposes not inconsistent with the provisions of this Agreement,
                including to make or evidence any amendment or modification to this
                Agreement as contemplated hereby, provided that, in the opinion of
                the
                Trustee, the rights of the Trustee and Beneficiaries will not be
                prejudiced thereby.

               

            

    

     

     

    ARTICLE 12

    TERMINATION

     

    Section 12.1 Term

     

    The
      Trust
      created by this Agreement shall continue until the earliest to occur of the
      following events:

     

    
      	
              (a)

               

            	
              no
                outstanding Exchangeable Shares are held by a Beneficiary;

               

            
	
              (b)

               

            	
              each
                of Acquiror and the Corporation elects in writing to terminate the
                Trust
                and such termination is approved by the Beneficiaries in accordance
                with
                Section 10.2 of the Exchangeable Share Provisions; and

               

            
	
              (c)

               

            	
              21
                years after the death of the last survivor of the descendants of
                His
                Majesty King George VI of Canada and the United Kingdom of Great
                Britain
                and Northern Ireland living on the date of the creation of the
                Trust.

               

            

    

     

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

    Section 12.2 Survival
      of Agreement

     

    This
      Agreement shall survive any termination of the Trust and shall continue until
      there are no Exchangeable Shares outstanding held by a Beneficiary; provided,
      however, that the provisions of Article 7
      and
Article 8
      shall
      survive any such termination of this Agreement.

     

    ARTICLE 13

    GENERAL

     

    Section 13.1 Severability

     

    If
      any
      term or other provision of this Agreement is invalid, illegal or incapable
      of
      being enforced by any rule of law or public policy, all other conditions and
      provisions of this Agreement shall nevertheless remain in full force and effect
      so long as the economic or legal substance of the transactions contemplated
      hereby is not affected in any manner materially adverse to any party. Upon
      such
      determination that any term or other provision is invalid, illegal or incapable
      of being enforced, the parties hereto shall negotiate in good faith to modify
      this Agreement so as to effect the original intent of the parties as closely
      as
      possible in an acceptable manner to the end that transactions contemplated
      hereby are fulfilled to the extent possible.

     

    Section 13.2 Assignment

     

    No
      party
      hereto may assign this Agreement or any of its rights, interests or obligations
      under this Agreement (whether by operation of law or otherwise) except that
      the
      Corporation may assign in its sole discretion, any or all of its rights,
      interests and obligations hereunder to any wholly-owned subsidiary of
      Acquiror.

     

    Section 13.3 Binding
      Effect

     

    Subject
      to Section 13.2,
      this
      Agreement and the Arrangement shall be binding upon, enure to the benefit of
      and
      be enforceable by the parties hereto and their respective successors and assigns
      and to the benefit of the Beneficiaries.

     

    Section 13.4 Notices
      to Parties

     

    All
      notices and other communications hereunder shall be in writing and shall be
      deemed given when delivered personally, telecopied (which is confirmed) or
      dispatched (postage prepaid) to a nationally recognized overnight courier
      service with overnight delivery instructions, in each case addressed to the
      particular party at:

     

    
      	
              (a)

            	
              if
                to Acquiror or the Corporation, at:

            

    

    c/o
      Surge
      Global Energy, Inc.

    12220
      El
      Camino Real, Suite 410

    San
      Diego, California 92130

     

    Attention:
      CEO
      and
      Chairman

    Telecopier
      Number: (858)
      704-5011

     

    With
      copies to:

     

    Greenberg
      Traurig, LLP

    650
      Town
      Center Drive, 17th
      Floor

    Costa
      Mesa, California 92626

     

    Attention:
      Steven Anapoell

    Telecopier
      Number: (714)
      708-6501

     

    And:

     

    Stikeman
      Elliott LLP

    4300,
      888
      - 3rd
      Street
      S.W.

    Calgary,
      Alberta T2P 5C5

     

    Attention:
      Keith R. Chatwin

    Telecopier
      Number: (403) 266-9034

     

    
      	
              (b)

            	
              if
                to the Trustee, at:

            

    

    Olympia
      Trust Company 

    2300,
      125
      - 9th
      Avenue
      S.E.

    Calgary,
      Alberta

    T2G
      0P6

     

    Attention:
      Manager, Corporate and Shareholder Services

    Telecopier
      Number: (403) 265-1455

     

    or
      at
      such other address of which any party may, from time to time, advise the other
      parties by notice in writing given in accordance with the
      foregoing.

     

    Section 13.5 Notice
      to Beneficiaries

     

    Any
      and
      all notices to be given and any documents to be sent to any Beneficiaries may
      be
      given or sent to the address of such Beneficiary shown on the register of
      holders of Exchangeable Shares in any manner permitted by the by-laws of the
      Corporation from time to time in force in respect of notices to shareholders
      and
      shall be deemed to be received (if given or sent in such manner) at the time
      specified in such by-laws, the provisions of which by-laws shall apply mutatis
      mutandis to notices or documents as aforesaid sent to such
      Beneficiaries.

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

    Section 13.6 Counterparts

     

    This
      Agreement may be executed in counterparts, each of which shall be deemed to
      be
      an original but all of which together shall constitute one and the same
      instrument.

     

    Section 13.7 Governing
      Laws; Consent to Jurisdiction

     

    This
      Agreement shall be governed by and construed in accordance with the laws of
      Alberta. Each party hereby irrevocably attorns to the jurisdiction of the courts
      of Alberta in respect of all matters arising under or in relation to this
      Agreement and Acquiror hereby appoints Stikeman Elliott LLP as its registered
      office in Alberta as attorney for service of process.

     

    Section 13.8 United
      States Tax Characterization

     

    The
      parties hereto recognize and intend that, for United States federal, state
      and
      local income, franchise and similar tax purposes, the Trust will be disregarded
      as an entity separate from Acquiror pursuant to Treas. Reg. 301.7701-3(b),
      and
      no party shall take any position on any tax return or otherwise that is
      inconsistent with such treatment.

     

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF the
      parties hereto have caused this Agreement to be duly executed as of the date
      first above written.

     

    
      	
              SURGE
                GLOBAL ENERGY, INC.

               

            
	
              By:

            	
              /s/
                David Perez 
                

              

              Name:
                David Perez

            
	 	
              Title:
                CEO & Chairman

            
	 	 
	 	 
	
              By:

            	
              /s/
                William Greene 
                

              

              Name:
                William Greene

              Title:
                CFO

            
	 	
               

            
	 	
               

            
	
               

              COLD
                FLOW ENERGY ULC

               

            
	
              By:

            	
              /s/
                David Perez 
                

              

              Name:
                David Perez

              Title:
                CEO and Chairman

            
	 	
               

            
	 	
               

            
	
              By:

            	
              
              

              
                

                Name:
                  

                Title:

              

            
	 	
               

            
	 	
               

            
	
               

              OLYMPIA
                TRUST COMPANY 

               

            
	
              By:

            	
              /s/
                Randy C. Gregory 
                

              

              Name:
                Randy C. Gregory

              Title:
                Vice President

            
	 	
               

            
	 	
               

            
	
              By:

            	
              /s/
                W. Anne DeWaele 
                

              

              Name:
                W. Anne DeWaele

              Title:
                Senior Trust Officer

            
	 	
               

            
	 	
               

            

    

    

     
-36-

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