EXHIBIT 7.1
ENERPLUS RESOURCES FUND
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AMENDED AND RESTATED
TRUST INDENTURE
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DATED AS OF JUNE 21, 2001
(AS AMENDED APRIL 25, 2002)
BLAKE, XXXXXXX & XXXXXXX LLP
TABLE OF CONTENTS
PAGE
ARTICLE 1
INTERPRETATION
1.01 Definitions............................................................2
1.02 References to Acts Performed by the Fund...............................6
1.03 Income Tax Act.........................................................7
1.04 Gender.................................................................7
1.05 Headings for Reference Only............................................7
1.06 Day Not a Business Day.................................................7
1.07 Time of the Essence....................................................7
1.08 Governing Law..........................................................7
ARTICLE 2
DECLARATION OF TRUST
2.01 Trust Agreement........................................................8
2.02 Initial Contribution...................................................8
2.03 Name of Fund...........................................................8
2.04 Use of Name............................................................8
2.05 Head Office............................................................8
2.06 Nature of the Fund.....................................................8
2.07 Legal Ownership of Assets of the Fund..................................9
2.08 Liability of Unitholder................................................9
ARTICLE 3
ISSUE OF TRUST UNITS
3.01 Trust Units............................................................9
3.02 Limit of Issue.........................................................9
3.03 Terms of Trust Units...................................................9
3.04 Ranking of Trust Units................................................10
3.05 Trust Units Non-Assessable............................................10
3.06 Fractional Trust Units................................................10
3.07 Transferability of Trust Units........................................10
3.08 Issuance of Other Securities..........................................10
ARTICLE 4
INVESTMENTS OF TRUST FUND
4.01 Purpose of the Fund...................................................11
4.02 Other Investments.....................................................11
ARTICLE 5
DISTRIBUTIONS
5.01 Determination of Net Income of the Fund...............................11
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5.02 Net Income of the Fund to Become Payable..............................12
5.03 Net Realized Capital Gains to Become Payable..........................12
5.04 Net Income and Net Realized Capital Gains for Income Tax Purposes
to Become Payable...............................................13
5.05 Other Amounts.........................................................13
5.06 Enforcement...........................................................13
5.07 Payment of Amounts Payable............................................14
5.08 Distribution of Additional Trust Units................................14
ARTICLE 6
REDEMPTION OF TRUST UNITS
6.01 Right of Redemption...................................................14
6.02 Exercise of Redemption Right..........................................14
6.03 Calculation of Redemption Price Based on Market Price.................15
6.04 Cash Payment of Market Redemption Price...............................16
6.05 Limitation Regarding Cash Payment of Market Redemption Price..........16
6.06 Calculation of Redemption Price in Certain Other Circumstances........16
6.07 Cancellation of Certificates for all Redeemed Trust Units.............17
6.08 Purchase for Cancellation.............................................17
ARTICLE 7
APPOINTMENT, RESIGNATION AND REMOVAL OF TRUSTEE
7.01 Trustee's Term of Office..............................................17
7.02 Resignation of Trustee................................................18
7.03 Removal of Trustee....................................................18
7.04 Appointment of Successor to Trustee...................................18
7.05 Failure to Appoint Successor..........................................19
7.06 Qualifications of Trustee.............................................19
ARTICLE 8
CONCERNING THE TRUSTEE
8.01 Powers of the Trustee.................................................19
8.02 Specific Powers and Authorities.......................................19
8.03 Voting of Investments and ERC Royalty Units Held by the Fund..........22
8.04 Restriction on Powers.................................................22
8.05 Banking...............................................................23
8.06 Standard of Care......................................................23
8.07 Fees and Expenses.....................................................23
8.08 Limitations on Liability of Trustee...................................24
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8.09 Indemnification of Trustee............................................25
8.10 Environmental Indemnity...............................................25
8.11 Conditions Precedent to Trustee's Obligation to Act...................26
8.12 Survival of Indemnities...............................................26
8.13 Documents, Monies, etc. held by Trustee...............................26
8.14 Trustee Having Knowledge of Matters...................................26
8.15 Validity of Certificates etc..........................................27
8.16 Trustee May Have Other Interests......................................27
ARTICLE 9
DELEGATION OF POWERS
9.01 Delegation to Corporation.............................................28
9.02 The Advisor...........................................................29
9.03 Additional Management Agreements......................................30
9.04 Power of Attorney.....................................................30
9.05 Liability of Trustee..................................................30
ARTICLE 10
AMENDMENT
10.01 Amendment.............................................................30
10.02 Notification of Amendment.............................................32
ARTICLE 11
MEETINGS OF TRUST UNITHOLDERS
11.01 Annual and Special Meetings of Trust Unitholders......................32
11.02 Notice of Meetings....................................................32
11.03 Quorum................................................................33
11.04 Voting Rights of Trust Unitholders....................................33
11.05 Resolutions Binding the Trustee.......................................33
11.06 Meaning of "Extraordinary Resolution".................................34
11.07 Record Date for Voting................................................35
11.08 Resolutions in Writing................................................35
ARTICLE 12
CERTIFICATES, REGISTRATION AND TRANSFER OF TRUST UNITS
12.01 Nature of Trust Units.................................................35
12.02 Certificates..........................................................36
12.03 Contents of Certificate...............................................36
12.04 Register of Trust Unitholders.........................................37
12.05 Successors of Trust Unitholders.......................................37
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12.06 Trust Units Held Jointly or in a Fiduciary Capacity...................38
12.07 Performance of Trust..................................................38
12.08 Lost Certificates.....................................................38
12.09 Death of a Trust Unitholder...........................................38
12.10 Unclaimed Interest or Distribution....................................39
ARTICLE 13
TERMINATION
13.01 Termination Date......................................................39
13.02 Termination by Trustee with the Approval of Trust Unitholders.........39
13.03 Procedure Upon Termination............................................39
13.04 Powers of the Trustee upon Termination................................40
13.05 Sale of Investments...................................................40
13.06 Distribution of Proceeds..............................................40
13.07 Further Notice to Trust Unitholders...................................40
13.08 Responsibility of Trustee after Sale and Conversion...................41
ARTICLE 14
SUPPLEMENTAL INDENTURES
14.01 Provision for Supplemental Indentures for Certain Purposes............41
14.02 Provision for Amended and Restated Indentures.........................41
ARTICLE 15
GENERAL
15.01 Notices...............................................................41
15.02 Failure to Give Notice................................................42
15.03 Joint Holders.........................................................42
15.04 Service of Notice.....................................................42
15.05 Information Available to Trust Unitholders............................42
15.06 Income Tax: Obligations of the Trustee................................42
15.07 Income Tax: Designations..............................................43
15.08 Income Tax: Deductions................................................43
15.09 Fiscal Year...........................................................43
ARTICLE 16
AUDITORS
16.01 Qualification of Auditors.............................................43
16.02 Appointment of Auditors...............................................43
16.03 Auditors Ceasing to Hold Office.......................................43
16.04 Removal of Auditors...................................................43
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16.05 Filling Vacancy.......................................................44
16.06 Reports of Auditors...................................................44
ARTICLE 17
MISCELLANEOUS
17.01 Successors and Assigns................................................44
17.02 Counterparts..........................................................44
17.03 Severability..........................................................44
17.04 Notices...............................................................44
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THIS AMENDED AND RESTATED TRUST INDENTURE made as of the 21st day of June, 2001
and is amended as of the 25th day of April, 2002.
AMONG:
ENERPLUS RESOURCES CORPORATION, a body corporate
amalgamated under the laws of the Province of Alberta
with offices in the City of Calgary, in the Province
of Alberta (hereinafter called "ERC")
OF THE FIRST PART
- and -
CIBC MELLON TRUST COMPANY, a trust company
incorporated under the laws of Canada (hereinafter
called the "TRUSTEE")
OF THE SECOND PART
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ENERMARK INC., a body corporate amalgamated under the
laws of the Province of Alberta with offices in the
City of Calgary, in the Province of Alberta
(hereinafter called the "CORPORATION")
OF THE THIRD PART
WITNESSETH THAT:
WHEREAS by Trust Indenture made as of the 7th day of July, 1986 between
ERC and The Royal Trust Company (the "ORIGINAL INDENTURE"), ERC created Enerplus
Resources Fund (the "FUND") and provided for the issuance of Trust Units as
defined therein;
AND WHEREAS the Original Indenture was supplemented by a First Amending
Indenture made as of the first day of October, 1986, the Second Supplemental
Trust Indenture made as of the 29th day of January, 1987, the Third Supplemental
Trust Indenture made as of the 27th day of January, 1988, the Fourth
Supplemental Trust Indenture made as of the 7th day of October, 1988, the Fifth
Supplemental Trust Indenture made as of the 31st day of December, 1989, the
Sixth Supplemental Trust Indenture made as of the 14th day of September, 1993,
the Seventh Supplemental Trust Indenture made as of the 9th day of June, 1994,
the Eighth Supplemental Trust Indenture made as of the 30th day of May, 1996,
the Ninth Supplemental Trust Indenture made as of the 11th day of December,
1997, the Tenth Supplemental Indenture
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made as of the 30th day of April, 1998 and the Eleventh Supplemental Trust
Indenture made as of the 23rd day of April, 1999 (the First Amending Indenture
and the Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth and
Eleventh Supplemental Trust Indentures are herein collectively referred to as
the "PRIOR SUPPLEMENTAL INDENTURES");
AND WHEREAS on June 8, 2000, the unitholders of the Fund approved certain
amendments to the Original Indenture (as supplemented) and the amendment and
restatement of the Original Indenture and all amendments and supplements thereto
(the "2000 INDENTURE");
AND WHEREAS on June 21, 2001, the unitholders of the Fund approved certain
amendments to the 2000 Indenture and the amendment and restatement of this
agreement into an Amended and Restated Trust Indenture (the "INDENTURE");
AND WHEREAS on April 25, 2002, the unitholders of the Fund approved
certain amendments to the Indenture and the parties desire to amend the
Indenture to reflect such amendments;
NOW THEREFORE THIS AMENDED AND RESTATED INDENTURE WITNESSETH that, in
consideration of the premises and the mutual and respective covenants and
agreements contained herein, each of the Trustee, the Corporation and ERC
covenants and agrees with each other to govern their mutual and respective
rights, powers and obligations with respect to the settlement and the
administration of the Fund as follows:
ARTICLE 1
INTERPRETATION
1.01 DEFINITIONS
In this Indenture and in the Trust Units, unless the context otherwise
requires, the following terms shall have the following meanings:
(a) "ADVISOR" means the person referred to in Article 9, and initially
shall have the meaning attributed thereto in the Management
Agreement;
(b) "AFFILIATE", when used to indicate a relationship with a person or
company, means the same as set forth in the SECURITIES ACT
(Alberta), and with respect to the Trustee only, "Affiliate" shall
be deemed, for the purposes of this Indenture only, to include
Canadian Imperial Bank of Commerce, CIBC Mellon Global Securities
Services Company and Mellon Bank, N.A. and each of their affiliates
within the meaning of the SECURITIES ACT (Alberta);
(c) "ASSOCIATE", when used to indicate a relationship with a person or
company, means the same as is set forth in the SECURITIES ACT
(Alberta);
(d) "AUDITORS" means the firm or firms of chartered accountants
appointed as auditors of the Fund in accordance with this Indenture;
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(e) "BUSINESS DAY" means a day which is not a Saturday, Sunday or
holiday in the City of Calgary, Province of Alberta;
(f) "CASH DISTRIBUTIONS" has the meaning ascribed thereto in the ERC
Royalty Agreement;
(g) "COUNSEL" means a law firm (who may be counsel to the Fund or the
Corporation) acceptable to the Trustee;
(h) "DISTRIBUTION RECORD DATE" means the dates determined from time to
time by the Trustee;
(i) "ENERMARK ROYALTY" means the royalty payable by the Corporation to
the Fund pursuant to the EnerMark Royalty Agreement;
(j) "ENERMARK ROYALTY AGREEMENT" means the Amended and Restated Royalty
Agreement dated June 21, 2001 between the Corporation and the Fund,
as may be amended, supplemented or restated from time to time;
(k) "ERC ROYALTY" means the royalty granted by ERC to the ERC Royalty
Unitholders pursuant to the ERC Royalty Agreement;
(l) "ERC ROYALTY AGREEMENT" means the Amended and Restated Royalty
Agreement dated June 21, 2001 among ERC, the Trustee and CIBC Mellon
Trust Company, as nominee on behalf of the ERC Royalty Unitholders,
pursuant to which, INTER ALIA, the ERC Royalty is granted in respect
of a series of ERC Royalty Units, as may be amended, supplemented or
restated from time to time;
(m) "ERC ROYALTY INDENTURE" means the Amended and Restated Royalty
Indenture dated June 21, 2001 between ERC, the Trustee and CIBC
Mellon Trust Company, as nominee on behalf of the ERC Royalty
Unitholders, providing for the creation and issue of the ERC Royalty
Units, as may be amended, supplemented or restated from time to
time;
(n) "ERC ROYALTY UNITHOLDERS" means the holders from time to time of one
or more ERC Royalty Units;
(o) "ERC ROYALTY UNITS" means royalty units of ERC issued and certified
under the ERC Royalty Indenture and for the time being outstanding
and entitled to the benefits thereunder, or, as the context may
require, a specific number thereof and includes the Petroleum ERC
Royalty Units, Series G;
(p) "EXTRAORDINARY RESOLUTION" has the meaning attributed to it in
Section 11.06;
(q) "GOVERNANCE AGREEMENT" means the Governance Agreement dated June 21,
2001 among the Fund, the Trustee, the Corporation, ERC and the
Advisor, as may be amended, supplemented and restated from time to
time;
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(r) "INITIAL CONTRIBUTION" means the amount of ten dollars in lawful
money of Canada paid by ERC to the Trustee on the 7th day of July,
1986 for the purpose of settling the Fund;
(s) "INITIAL UNIT" means the beneficial interest in the Fund acquired by
ERC by virtue of making the Initial Contribution;
(t) "INVESTMENT" means any investment or property acquired by the Fund
that is described in section 132(6)(b) of the INCOME TAX ACT
(Canada) and includes, without limitation, any investment or
property acquired directly or indirectly from the issue of the Trust
Units, but shall not include any property or investment which would
result in the Fund not being either a "unit trust" or "mutual fund
trust" for the purposes of the INCOME TAX ACT or which would cause
the Trust Units to be foreign property for the purposes of the
INCOME TAX ACT;
(u) "MANAGEMENT AGREEMENT" means the Management, Advisory and
Administration Agreement dated June 21, 2001 among the Fund, the
Trustee, the Advisor, ERC and the Corporation, as may be amended,
supplemented or restated from time to time, and includes any
subsequent agreement whereby an advisor is engaged to provide
certain services in connection with the management and
administration of the Fund or the Corporation or their assets, or
any other entity acquired, directly or indirectly, by the Fund or
the Corporation or the assets of such entity;
(v) "MATERIAL CONTRACTS" means the EnerMark Royalty Agreement, the ERC
Royalty Agreement, the ERC Royalty Indenture, the Management
Agreement and the Governance Agreement;
(w) "NOTES" means the unsecured subordinated notes issued by the
Corporation to the Fund and any other evidence of indebtedness which
may, from time to time, be issued to and held, directly or
indirectly, by the Fund;
(x) "OFFER" has the meaning attributed to it in subsection 9.01(b);
(y) "OFFERING" means any issuance, offering or repurchase of Trust
Units, or any rights, warrants, options or other securities to
purchase, to convert into or to exchange into Trust Units or any
other securities of the Fund or its subsidiaries, on a public or
private basis in Canada or elsewhere;
(z) "OFFERING DOCUMENTS" means, in connection with an Offering, any one
or more of a prospectus, registration statement, information
memorandum, offering memorandum, issuer bid circular or any similar
public or private offering document or any understanding, commitment
or agreement to issue, offer or repurchase securities of the Fund or
any Affiliate thereof;
(aa) "PERSON" means any individual, company, corporation, partnership,
trust, firm, sole proprietorship, association, trustee, executor,
administrator, legal
5
representative, government agency, regulatory authority or other
entity, however designated or constituted;
(bb) "PRO RATA SHARE" of any particular amount in respect of a Trust
Unitholder at any time shall be the product obtained by multiplying
the number of Trust Units that are outstanding and are owned by that
Trust Unitholder at that time by the amount obtained when the
particular amount is divided by the total number of all Trust Units
that are issued and outstanding at that time;
(cc) "PROPERTIES" has the meaning ascribed thereto in the ERC Royalty
Agreement;
(dd) "SHARES" means the issued and outstanding shares of the Corporation
held by the Fund, and any shares or other securities of any other
entity which may from time to time be held, directly or indirectly,
by the Fund;
(ee) "SUBSIDIARY" has the meaning ascribed thereto in the SECURITIES
ACT (Alberta);
(ff) "THIS TRUST INDENTURE", "THIS INDENTURE", "HERETO", "HEREIN",
"HEREOF", "HEREBY", "HEREUNDER" and similar expressions refer to
this instrument and not to any particular Article, section or
portion hereof, and include any and every instrument supplemented or
ancillary hereto or in implement hereof;
(gg) "TRANSFER AGENTS" means CIBC Mellon Trust Company, together with
Xxxxx Xxxxxx Shareholder Services, LLC as co-transfer agent, or such
other company as may from time to time be appointed by the Trustee
to hold such offices, together, in either such case, with any
sub-transfer agent duly appointed by the Transfer Agents;
(hh) "TRUST" or "FUND" means Enerplus Resources Fund and refers to the
trust relationship between the Trustee and the Trust Unitholders
with respect to the Trust Fund, upon the terms and conditions set
out herein from time to time, and if the context requires may also
refer to the Trust Fund;
(ii) "TRUST FUND", at any time, shall mean such of the following monies,
properties and assets that are at such time held by the Fund or by
the Trustee on behalf of the Fund for the purposes of the Fund under
this Trust Indenture, including, without limitation:
(i) all ERC Royalty Units from time to time delivered to the
Trustee or held for its account and accepted by the Trustee in
accordance with this Trust Indenture for the purposes of the
Fund;
(ii) all income, interest, profit, gains, accretions, additional
assets, and rights and benefits of any kind or nature
whatsoever arising directly or indirectly from or in
connection with or accruing to such foregoing property or such
proceeds of disposition;
6
(iii) all Shares and Notes, and any securities issued upon maturity
of any Notes;
(iv) any Investment acquired by the Fund;
(v) any proceeds of disposition of any of the foregoing property
including, without limitation, the Shares and Notes; and
(vi) the Initial Contribution;
(jj) "TRUST UNIT CERTIFICATE" means the definitive certificate evidencing
the Trust Units;
(kk) "TRUST UNITHOLDERS" means the holders from time to time of one or
more Trust Units;
(ll) "TRUST UNITS" means the trust units of the Fund created, issued and
certified hereunder and for the time being outstanding and entitled
to the benefits hereof, or, as the context may require, a specific
number thereof;
(mm) "TRUSTEE" means the current Trustee as well as any predecessor
trustee of the Fund and any successor trustee appointed in
accordance with Article 7, unless the context otherwise requires;
and
(nn) "YEAR" means a calendar year.
1.02 REFERENCES TO ACTS PERFORMED BY THE FUND
For greater certainty:
(a) where any reference is made in this Indenture to an act to be
performed by the Fund, such reference shall be construed and applied
for all purposes as if it referred to an act to be performed by the
Trustee on behalf of the Fund; and
(b) where any reference is made in this Indenture to an act to be
performed by the Corporation, such reference shall be construed and
applied for all purposes as if it referred to an act to be performed
by the directors of the Corporation, or any person duly authorized
to take such action by the directors of the Corporation, on behalf
of the Corporation.
1.03 INCOME TAX ACT
In this Indenture, any reference to the INCOME TAX ACT shall refer to the
INCOME TAX ACT (Canada), R.S.C. 1985, c.1 (5th Supp.), as amended, including the
Income Tax Regulations and the Income Tax Application Rules as amended from time
to time applicable with respect thereto. Any reference herein to a particular
provision of the INCOME TAX ACT shall include a reference to that provision as
it may be renumbered or amended from time to time. Where there are proposals for
amendments to the INCOME TAX ACT which have not been enacted into law or
7
proclaimed into force on or before the date on which such proposals are to
become effective, the Trustee may take such proposals into consideration and
apply the provisions hereof as if such proposals had been enacted into law and
proclaimed into force.
1.04 GENDER
In this Indenture, unless herein otherwise expressly provided or unless
the context otherwise requires, words importing the singular number only shall
include the plural, and vice-versa, and words importing the masculine gender
shall include the feminine and neuter genders and words importing persons shall
include an individual, partnership, association, body corporate, trustee,
executor, administrator or legal representative.
1.05 HEADINGS FOR REFERENCE ONLY
The division of this Indenture into Articles and Sections, the provision
of a Table of Contents and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Indenture.
1.06 DAY NOT A BUSINESS DAY
In the event that any day on or before which any amount is to be
determined or any action is required to be taken hereunder is not a Business
Day, then such amount shall be determined or such action shall be required to be
taken at or before the requisite time on the next succeeding day that is a
Business Day.
1.07 TIME OF THE ESSENCE
Time shall be of the essence in this Indenture.
1.08 GOVERNING LAW
This Indenture and the Trust Unit Certificates shall be construed in
accordance with the laws of the Province of Alberta and the laws of Canada
applicable therein and shall be treated in all respects as Alberta contracts.
The parties hereto do hereby irrevocably submit and attorn to the non-exclusive
jurisdiction of the Courts of the Province of Alberta.
ARTICLE 2
DECLARATION OF TRUST
2.01 TRUST AGREEMENT
The Trustee hereby declares that it agrees to, and agrees with ERC that it
will, hold the Trust Fund in trust for the use and benefit of the Trust
Unitholders, their successors, permitted assigns and personal representatives
upon the trusts and subject to the terms and conditions hereinafter declared and
set forth.
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2.02 INITIAL CONTRIBUTION
ERC has paid the Initial Contribution to the Trustee for the purpose of
settling the Fund. On August 6, 1986, the Fund purchased the Initial Unit from
ERC, and ERC sold the Initial Unit to the Fund, for a purchase price of ten
dollars in lawful money of Canada and, upon the completion of such purchase and
sale, the Initial Unit was cancelled and was no longer outstanding for any
purpose of this Indenture.
2.03 NAME OF FUND
The Fund shall be known and designated as "Enerplus Resources Fund" and,
whenever lawful and convenient, the property of the Fund shall be held and the
affairs of the Fund shall be conducted and transacted under that name.
2.04 USE OF NAME
If the Trustee determines that the use of the name "Enerplus Resources
Fund" is not practicable, legal or convenient, it may use such other designation
or it may adopt such other name for the Fund as it deems appropriate and the
Fund may hold property and conduct its activities under such other designation
or name.
2.05 HEAD OFFICE
The head office of the Fund hereby created shall be located at Xxxxx 0000,
000 - 0xx Xxxxxx X.X., Xxxxxxx, Xxxxxxx, X0X 0X0 or at such other place or
places as the Trustee may from time to time designate.
2.06 NATURE OF THE FUND
The Fund is an unincorporated investment trust, established for the
purposes specified in Section 4.01 hereof. The Fund is not and is not intended
to be, shall not be deemed to be and shall not be treated as a general
partnership, limited partnership, syndicate, association, joint venture,
company, corporation or joint stock company, nor shall the Trustee or the Trust
Unitholders or any of them or any person be, or be deemed to be, treated in any
way whatsoever liable or responsible hereunder as partners, or joint venturers.
The Trustee shall not be, or be deemed to be, an agent of the Trust Unitholders.
The relationship of the Trust Unitholders to the Trustee shall be solely that of
beneficiaries of the Fund and their rights shall be limited to those conferred
upon them by this Trust Indenture.
2.07 LEGAL OWNERSHIP OF ASSETS OF THE FUND
The legal ownership of the assets of the Fund and the right to conduct the
business of the Fund are vested exclusively in the Trustee, and the Trust
Unitholders shall have no interest therein other than the beneficial interest in
the Trust Fund conferred by their Trust Units issued hereunder and they shall
have no right to compel any partition, division, dividend or distribution of the
Trust Fund or any of the assets of the Fund. The Trust Units shall be personal
property and shall confer upon the holders thereof only the interest and rights
specifically set forth in this
9
Trust Indenture. No Trust Unitholder has or is deemed to have any right of
ownership in any of the assets of the Fund.
2.08 LIABILITY OF UNITHOLDER
No Trust Unitholder shall be subject to any personal liability whatsoever,
in tort, contract or otherwise, to any person in connection with the Fund or the
obligations or the affairs of the Fund and all such persons shall look solely to
the Fund property for satisfaction of claims of any nature arising out of or in
connection therewith and the Fund property only shall be subject to levy or
execution.
ARTICLE 3
ISSUE OF TRUST UNITS
3.01 TRUST UNITS
The beneficial interests in the trust shall be divided into interests of
one class, described and designated as "Trust Units", which shall be entitled to
the rights and subject to the limitations, restrictions and conditions set out
herein and which may be represented by instalment receipts.
3.02 LIMIT OF ISSUE
The aggregate number of Trust Units which may be authorized and issued
hereunder is unlimited.
3.03 TERMS OF TRUST UNITS
(a) The directors of the Corporation may from time to time authorize the
issue of Trust Units on such terms and conditions, at such times and
to such persons and for such consideration as such directors may
determine. Whenever any additional Trust Units shall have been
authorized as aforesaid, the same may be from time to time executed
by the Corporation and delivered to the Trustee, and shall be
certified by or on behalf of the Trustee and delivered by it to, or
to the order of, the Corporation upon receipt and deposit with the
Trustee of an order of the Corporation for the certification and
delivery of such Trust Units.
(b) No issued Trust Units shall be subdivided or consolidated except
with the approval by Extraordinary Resolution by Trust Unitholders.
3.04 RANKING OF TRUST UNITS
Each Trust Unit represents an equal fractional undivided beneficial
interest in the Trust Fund. All Trust Units outstanding from time to time shall
be entitled to a pro rata share in any distributions by the Fund and, in the
event of termination of the Fund. All Trust Units shall rank among themselves
equally and rateably without discrimination, preference or priority whatever may
be the actual date or terms of issue of the same respectively.
10
3.05 TRUST UNITS NON-ASSESSABLE
No Trust Units shall be issued other than as fully paid and non-assessable
provided, however, that Trust Units may be issued and sold on an instalment
basis, and in such case the Fund may take a security interest in any Trust Units
so issued as security for unpaid instalments. No person shall be entitled, as a
matter of right, to subscribe for or purchase any Trust Unit. There are no
pre-emptive rights attaching to the Trust Units.
3.06 FRACTIONAL TRUST UNITS
Fractions of Trust Units may be issued, provided that no Trust Unit
Certificate evidencing any fraction of a Trust Unit will be issued. A Trust
Unitholder shall be entitled to receive all distributions and payments provided
for hereunder in respect of any fraction of a Trust Unit held, but shall not be
entitled to exercise voting rights in respect of any such fraction of a Trust
Unit.
3.07 TRANSFERABILITY OF TRUST UNITS
The Trust Units are fully transferable, subject to applicable securities
laws.
3.08 ISSUANCE OF OTHER SECURITIES
(a) The directors of the Corporation may from time to time authorize the
creation and issuance of rights, warrants or options to subscribe
for Trust Units or other securities convertible or exchangeable into
Trust Units of the Fund, which rights, warrants, options or other
securities may be created and issued from time to time on such terms
and conditions, exercisable at such subscription price or prices and
at such time or times as the directors of the Corporation may
determine. Any rights, warrants, options or securities so created
may be issued for no consideration or for such consideration as the
directors of the Corporation may determine. A right, warrant, option
or security shall not be a Trust Unit and a holder thereof shall not
be a Trust Unitholder.
(b) The directors of the Corporation may authorize the creation and
issuance of debentures, notes and other evidences of indebtedness of
the Fund which debentures, notes or other evidences of indebtedness
may be created and issued from time to time on such terms and
conditions, to such persons and for such consideration as the
directors of the Corporation may determine.
ARTICLE 4
INVESTMENTS OF TRUST FUND
4.01 PURPOSE OF THE FUND
The Fund is a limited purpose Fund and is restricted to:
(a) investing in Investments;
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(b) disposing of any part of the Trust Fund, including, without
limitation, any Investment; and
(c) temporarily holding cash and investments for the purposes of paying
the expenses and the liabilities of the Fund, making subsequent
investments as contemplated by Section 4.02 hereof, making other
investments as contemplated by Section 4.02 hereof, paying amounts
payable by the Fund in connection with the redemption of any Trust
Units or any repurchase of Trust Units contemplated by Section 6.08,
and making distributions to Trust Unitholders.
4.02 OTHER INVESTMENTS
To the extent that any monies or other property received by the Fund or
the Trustee are not to be immediately used by the Trustee for the purposes of
the Fund as set forth herein, the Trustee is hereby authorized to retain any
cash balance in the Fund in its deposit department or in the deposit department
of an Affiliate of the Trustee without it or its Affiliates being liable to
account for any profit to the Fund, the Corporation or any other person other
than at a rate established from time to time by the Trustee or such Affiliate;
or to invest such cash balances in short term interest bearing or discount debt
obligations issued or guaranteed by the Government of Canada or a Province
thereof or a Canadian chartered bank or trust company (which may include the
Trustee or an Affiliate of the Trustee), provided that each such obligation is
rated at least R1 (middle) by the Dominion Bond Rating Services Limited or an
equivalent rating from CBRS Inc., the same to be subject to withdrawal on such
terms and in such manner and by such person or persons (including any one or
more officers, agents or representatives) as the Trustee may determine; provided
that under no circumstances shall the Trustee purchase or authorize the purchase
of any investment which would result in the Fund not being considered either a
"unit trust" or a "mutual fund trust" for purposes of the INCOME TAX ACT at the
time such investment was acquired or which would cause the Trust Units to be
foreign property for the purposes of the INCOME TAX ACT.
ARTICLE 5
DISTRIBUTIONS
5.01 DETERMINATION OF NET INCOME OF THE FUND
In this Article 5, the "NET INCOME OF THE FUND" for the period ending on a
Distribution Record Date shall be the amount calculated, for the period
commencing immediately following the preceding Distribution Record Date and
ending on such Distribution Record Date, on the following basis:
(a) amounts in respect of royalties (including, without limitation, the
EnerMark Royalty and all Cash Distributions received by the Trustee
from ERC in respect of ERC Royalty Units held by the Trustee on
behalf of the Fund) shall be included in Net Income of the Fund when
received;
(b) interest income shall be included in Net Income of the Fund on an
accrual basis and shall accrue from day to day;
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(c) dividends on any securities held by the Fund shall be included in
Net Income of the Fund when received;
(d) such other amounts as may be determined from time to time by the
directors of the Corporation in their sole discretion to be included
in the Net Income of the Fund; and
(e) all expenses and liabilities of the Fund which are due or accrued
and which are chargeable to income shall be deducted in computing
Net Income of the Fund.
Items of income or expense not provided for above or in Section 5.03 shall
be included in such calculation on such basis as may be considered appropriate
by the Trustee.
5.02 NET INCOME OF THE FUND TO BECOME PAYABLE
The Trustee may, on or before any Distribution Record Date, declare
payable to the Trust Unitholders on that Distribution Record Date all or any
part of the Net Income of the Fund for the period ending on that Distribution
Record Date determined in accordance with Section 5.01, and the proportionate
share of each Trust Unit in the amount so payable shall be determined by
dividing such amount by the number of Trust Units in the Fund as of that
Distribution Record Date. Each Trust Unitholder's share thereof shall be equal
to the proportionate share per Trust Unit multiplied by the number of Trust
Units owned of record by the Trust Unitholder on that Distribution Record Date
and, subject to Section 5.07, shall be payable to each such Trust Unitholder on
that Distribution Record Date. Notwithstanding the foregoing, the amount of any
Net Income of the Fund that is determined by the Trustee to be required to be
retained by the Fund in order to pay any liability of the Fund which has not
been previously deducted in determining the Net Income of the Fund shall not be
payable by the Fund to Trust Unitholders.
5.03 NET REALIZED CAPITAL GAINS TO BECOME PAYABLE
The Trustee may, on or before any Distribution Record Date, declare
payable to the Trust Unitholders on that Distribution Record Date all or part of
the net realized capital gains of the Fund to the extent not previously declared
payable, and the proportionate share of each Trust Unit in the amount so payable
shall be determined by dividing such amount by the number of Trust Units in the
Fund on that Distribution Record Date. Each Trust Unitholder's share thereof
shall be equal to the proportionate share per Trust Unit multiplied by the
number of Trust Units owned of record by the Trust Unitholder on that
Distribution Record Date and, subject to Section 5.07, shall be payable to each
such Trust Unitholder on that Distribution Record Date. For the purposes of this
Article 5, "NET REALIZED CAPITAL GAINS" of the Fund means the total of all
capital gains realized by the Fund less the total of all capital losses realized
by the Fund.
5.04 NET INCOME AND NET REALIZED CAPITAL GAINS FOR INCOME TAX PURPOSES TO
BECOME PAYABLE
On December 31 of each fiscal year, an amount equal to the net income of
the Fund for such fiscal year (excluding net realized capital gains) determined
in accordance with the INCOME TAX ACT, other than paragraph 82(1)(b) thereof, to
the extent not previously payable pursuant to
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Section 5.02 on any Distribution Record Date in the fiscal year (including
December 31 of that fiscal year) to any Trust Unitholder, shall be payable to
Trust Unitholders immediately prior to the end of that fiscal year, and the
proportionate share of each Trust Unit in the amount so payable shall be
determined by dividing such amount by the number of Trust Units in the Fund as
of the end of that year. Each Trust Unitholder's share thereof shall be equal to
the proportionate share per Trust Unit multiplied by the number of Trust Units
owned of record by the Trust Unitholder at the end of that year. Notwithstanding
the foregoing, the amount of any Net Income of the Fund so determined for a
fiscal year that is determined by the Trustee to be required to be retained by
the Fund in order to pay any liability or obligation of the Fund which has not
been previously deducted in determining the Net Income of the Fund in respect of
that or any prior fiscal year shall not be payable by the Fund to Trust
Unitholders.
On December 31 of each fiscal year, an amount equal to the net realized
capital gains of the Fund, to the extent not previously payable pursuant to
Section 5.03 on any Distribution Record Date or pursuant to this paragraph on
any prior December 31, shall be payable to Trust Unitholders immediately prior
to the end of that fiscal year, and the proportionate share of each Trust Unit
in the amount so payable shall be determined by dividing such amount by the
number of Trust Units in the Fund as of the end of that year. Each Trust
Unitholder's share thereof shall be equal to the proportionate share per Trust
Unit multiplied by the number of Trust Units owned of record by the Trust
Unitholder at the end of that year.
5.05 OTHER AMOUNTS
Any amounts not otherwise payable to Trust Unitholders prior to the end of
a particular fiscal year of the Fund pursuant to the provisions of Article 5 may
be declared by the Trustee to be payable to Trust Unitholders in the same manner
as provided for in Section 5.02
5.06 ENFORCEMENT
Each Trust Unitholder shall have the right to enforce payment of any
amount payable to the Trust Unitholder under this Article 5 at the time the
amount became payable unless a Payment Date is specified under Section 5.07 in
respect of such amount payable, in which case the right to enforce payment shall
arise at the later of the time the amount became payable and the applicable
Payment Date specified under Section 5.07.
5.07 PAYMENT OF AMOUNTS PAYABLE
Amounts payable to Trust Unitholders pursuant to Sections 5.02, 5.03, 5.04
and 5.05 may be paid by the Fund on any date (the "PAYMENT DATE") specified by
the Trustee which is the day that is the applicable Distribution Record Date, or
a day within 30 days after and in the same calendar year as the applicable
Distribution Record Date. Subject to Section 5.08, distributions shall be paid
in cash.
5.08 DISTRIBUTION OF ADDITIONAL TRUST UNITS
Where after the last Distribution Record Date and on or before the next
Distribution Record Date an amount or amounts of cash has or have been or is or
are being paid under
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Section 6.03 in respect of Trust Units tendered for redemption, the distribution
payable to Trust Unitholders on such next Distribution Record Date shall include
a distribution of additional Trust Units having a value equal to the aggregate
of such amounts, in which case the amount of cash to be distributed on the
distribution shall be reduced by the aggregate of such amounts. In addition, if
on any Distribution Record Date the Fund does not have cash in an amount
sufficient to pay the full distribution to be made on such Distribution Record
Date in cash, the distribution payable to Trust Unitholders on such Distribution
Record Date may, at the option of the Trustee, include a distribution of
additional Trust Units having a value equal to the cash shortfall, in which case
the amount of cash to be distributed on the distribution shall be reduced by the
amount of such cash shortfall. For the purposes of this Section 5.08, the value
of additional Trust Units to be issued shall be determined using the closing
trading price (or if there was no trade, the average of the last bid and the
last ask prices) of the Trust Units on the Distribution Record Date (or, if the
Distribution Record Date is not a Business Day, on the last Business Day
preceding the Distribution Record Date) on the principal stock exchange where
the Trust Units are listed or, if not so listed, such other value as the Trustee
shall determine.
ARTICLE 6
REDEMPTION OF TRUST UNITS
6.01 RIGHT OF REDEMPTION
Each Trust Unitholder shall be entitled to require the Fund to redeem at
any time or from time to time at the demand of the Trust Unitholder all or any
part of the Trust Units registered in the name of the Trust Unitholder at the
prices determined and payable in accordance with the conditions hereinafter
provided in this Article 6.
6.02 EXERCISE OF REDEMPTION RIGHT
To exercise a Trust Unitholder's right to require redemption under this
Article 6, a duly completed and properly executed notice requiring the Fund to
redeem Trust Units in a form approved by the Trustee, shall be sent to the Fund
at the head office of the Fund, together with the Trust Unit Certificate or
Trust Unit Certificates representing the Trust Units to be redeemed. No form or
manner of completion or execution shall be sufficient unless the same is in all
respects satisfactory to the Trustee and is accompanied by any further evidence
that the Trustee may reasonably require with respect to the identity, capacity
or authority of the person giving such notice.
Upon receipt by the Fund of the notice to redeem Trust Units, the Trust
Unitholder shall thereafter cease to have any rights with respect to the Trust
Units tendered for redemption (other than to receive the redemption payment
therefor) including the right to receive any distributions thereon. Trust Units
shall be considered to be tendered for redemption on the date that the Fund has,
to the satisfaction of the Trustee, received the notice, Trust Unit Certificates
and other required documents or evidence as aforesaid.
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6.03 CALCULATION OF REDEMPTION PRICE BASED ON MARKET PRICE
Subject to Section 6.06, upon receipt by the Fund of the notice to redeem
Trust Units in accordance with Section 6.02, the holder of the Trust Units
tendered for redemption shall be entitled to receive a price per Trust Unit
(hereinafter called the "MARKET REDEMPTION PRICE") equal to the lesser of:
(a) 85% of the market price of the Trust Units on the principal market
on which the Trust Units are quoted for trading during the 10 day
trading period commencing immediately after the date on which the
Trust Units were tendered to the Fund for redemption; and
(b) the closing market price on the principal market on which the Trust
Units are quoted for trading, on the date that the Trust Units were
so tendered for redemption.
For the purposes of subsection 6.03(a), the market price shall be an
amount equal to the simple average of the closing price of the Trust Units for
each of the trading days on which there was a closing price; provided that if
the applicable exchange or market does not provide a closing price but only
provides the highest and lowest prices of the Trust Units traded on a particular
day, the market shall be an amount equal to the simple average of the average of
the highest and lowest prices for each of the trading days on which there was a
trade; and provided further that if there was trading on the applicable exchange
or market for fewer than five of the 10 trading days, the market price shall be
the simple average of the following prices established for each of the 10
trading days: the average of the last bid and last ask prices for each day on
which there was no trading; the closing price of the Trust Units for each day
that there was trading if the exchange or market provides a closing price; and
the average of the highest and lowest prices of the Trust Units for each day
that there was trading, if the market provides only the highest and lowest
prices of Trust Units traded on a particular day. For the purposes of subsection
6.03(b), the closing market price shall be: (i) an amount equal to the closing
price of the Trust Units if there was a trade on the date; (ii) an amount equal
to the average of the highest and lowest prices of Trust Units if there was
trading and the exchange or other market provides only the highest and lowest
prices of Trust Units traded on a particular day; or (iii) and the average of
the last bid and last ask prices if there was no trading on the date.
6.04 CASH PAYMENT OF MARKET REDEMPTION PRICE
Subject to Section 6.05, the Market Redemption Price, payable in respect
of the Trust Units tendered for redemption during any calendar month shall be
paid by cheque, drawn on a Canadian chartered bank or a trust company in lawful
money of Canada, payable at par to or to the order of the Trust Unitholder who
exercised the right of redemption on the last day of the calendar month
following the month in which the Trust Units were tendered for redemption.
Payments made by the Fund of the Market Redemption Price are conclusively deemed
to have been made upon the mailing of a cheque in a postage pre-paid envelope
addressed to the former Trust Unitholder unless such cheque is dishonoured upon
presentment. Upon such payment, the Fund shall be discharged from all liability
to the former Trust Unitholder in respect of the Trust Units so redeemed.
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6.05 LIMITATION REGARDING CASH PAYMENT OF MARKET REDEMPTION PRICE
Section 6.04 shall not be applicable to Trust Units tendered for
redemption by a Trust Unitholder if the total amount payable by the Fund
pursuant to Section 6.04 in respect of such Trust Units and all other Trust
Units tendered for redemption in the same calendar month and in any preceding
calendar month during the same year exceeds $500,000; provided that the Trustee
may, in its sole discretion, waive such limitation in respect of any calendar
month, and failing any such waiver, Trust Units tendered for redemption in any
such calendar month will be redeemed for cash on a basis which is pro rata to
the number of Trust Units tendered by any Trust Unitholder. If this limitation
is not so waived for such calendar month, the Market Redemption Price payable in
respect of the Trust Units tendered for redemption in such calendar month shall
be paid on the last day of the calendar month following such month by:
(a) the Fund distributing Investments having an aggregate fair market
value equal to the aggregate Market Redemption Price, or
(b) the Fund issuing its own Fund promissory notes, (herein referred to
as "REDEMPTION NOTES"); or
(c) any combination thereof in the discretion of the Fund.
Upon such distribution of Investments or issuance of Redemption Notes, the
Fund shall be discharged from all liability to the former Trust Unitholder in
respect of the Trust Units so redeemed. For greater certainty, the Fund shall be
entitled to all interest accrued and unpaid on the Investments so distributed,
where applicable, to and including the date upon which such Investments are
required to be distributed.
6.06 CALCULATION OF REDEMPTION PRICE IN CERTAIN OTHER CIRCUMSTANCES
Section 6.03 shall not be applicable to Trust Units tendered for
redemption by a Trust Unitholder, if:
(a) at the time the Trust Units are tendered for redemption, the
outstanding Trust Units of the Fund are not listed for trading on
The Toronto Stock Exchange and are not traded or quoted on any other
stock exchange or market which the Trustee considers, in its sole
discretion, to provide representative fair market value prices for
the Trust Units; and
(b) the normal trading of the outstanding Trust Units of the Fund is
suspended or halted on any stock exchange on which the Trust Units
are listed for trading or, if not so listed, on any market on which
the Trust Units are quoted for trading, on the date that such Trust
Units tendered for redemption were tendered to the Fund for
redemption or for more than five trading days during the 10 day
trading period commencing immediately after the date on which such
Trust Units tendered for redemption were tendered to the Fund for
redemption,
and in either such case, such Trust Unitholder shall, instead of the
Market Redemption Price, be entitled to receive a price per Trust Unit
(herein referred to as the
17
"APPRAISED REDEMPTION PRICE") equal to 85% of the fair market value
thereof as determined by the Trustee as at the date upon such Trust Units
were tendered for redemption. The Appraised Redemption Price payable in
respect of Trust Units tendered for redemption in any calendar month shall
be paid on the last day of the third calendar month following the month in
which such Trust Units were tendered for redemption, by at the option of
the Fund:
(i) cash payment, in which case the provisions of Section 6.04
shall apply MUTATIS MUTANDIS; or
(ii) in the manner provided for in Section 6.05, in which case the
provisions of Section 6.05 shall apply MUTATIS MUTANDIS.
6.07 CANCELLATION OF CERTIFICATES FOR ALL REDEEMED TRUST UNITS
All certificates representing Trust Units which are redeemed under this
Article 6 shall be cancelled and such Trust Units shall no longer be outstanding
and shall not be reissued.
6.08 PURCHASE FOR CANCELLATION
The Fund may from time to time purchase for cancellation some or all of
the Trust Units in the market or upon any recognized stock exchange on which
such Trust Units are traded or pursuant to tenders received by the Fund upon
request for tenders addressed to all holders of record of Trust Units, at the
lowest price at which in the opinion of the Trustee such Trust Units are
obtainable, plus reasonable costs of purchase, provided the Fund has sufficient
funds to satisfy its obligations under Article 5 and Article 6 hereof after
making such purchase.
ARTICLE 7
APPOINTMENT, RESIGNATION AND REMOVAL OF TRUSTEE
7.01 TRUSTEE'S TERM OF OFFICE
Subject to Sections 7.02 and 7.03, CIBC Mellon Trust Company is hereby
appointed for an initial term of office which shall expire immediately after the
adjournment of the second annual meeting of Trust Unitholders. At such meeting,
the Trustee shall either be reappointed for a further term of two years, or such
meeting shall resolve that a successor to the Trustee shall be appointed for a
term of two years. Thereafter, a decision to reappoint, or to appoint a
successor to, a Trustee shall be made at each second annual meeting of Trust
Unitholders following any reappointment or appointment of a Trustee, with such
appointment being effective immediately after the adjournment of the meeting at
which such appointment or reappointment is made. Any such reappointment or
appointment shall be made either by a resolution approved by a majority of the
votes cast at such meeting of Trust Unitholders or shall be made in the manner
set out in Sections 7.04 and 7.05. Notwithstanding the foregoing, if a Trustee
is not reappointed at the meeting of Trust Unitholders held immediately before
the term of office of such Trustee expires and if no successor to such Trustee
is appointed at that meeting, such Trustee shall continue to hold the office of
Trustee under this Indenture until a successor has been appointed under Section
7.04 or 7.05.
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7.02 RESIGNATION OF TRUSTEE
The Trustee may resign from the office of Trustee hereunder on giving not
less than 60 days' notice in writing delivered to the Corporation but no such
resignation shall be effective until the appointment of, and acceptance of such
appointment by, a new Trustee in the place of the resigning Trustee.
7.03 REMOVAL OF TRUSTEE
The Trustee shall be removed by notice in writing delivered by the
Corporation to the Trustee in the event that, at any time, the Trustee shall no
longer satisfy all of the requirements in Section 7.06 or shall be declared
bankrupt or insolvent or shall enter into liquidation, whether compulsory or
voluntary, and not being merely a voluntary liquidation for the purposes of
amalgamation or reconstruction, or if the assets of the Trustee shall otherwise
become liable to seizure or confiscation by any public or governmental authority
or if the Trustee shall otherwise become incapable of performing its
responsibilities under this Indenture. The Trustee may be removed at any time
for any other reason if such removal of the Trustee is approved by an
Extraordinary Resolution of Trust Unitholders at a meeting duly called for that
purpose. No decision to remove a Trustee under this Section 7.03 shall become
effective until the appointment of, and acceptance of such appointment by, a new
Trustee under Section 7.04 in the place of the Trustee to be removed.
7.04 APPOINTMENT OF SUCCESSOR TO TRUSTEE
(a) The Corporation may appoint a successor to any Trustee who has been
removed by the Corporation under Section 7.03. In the event of any
removal of or resignation of a Trustee, the Corporation shall
promptly appoint a successor or promptly recommend a successor for
appointment by Trust Unitholders.
(b) A successor to a Trustee whose term of office has expired and who
has not been reappointed under Section 7.01, who has resigned under
Section 7.02 or who has been removed at a meeting of Trust
Unitholders under Section 7.03 may be appointed by a resolution
passed by a majority of the votes cast at a meeting of Trust
Unitholders duly called for that purpose.
(c) When a successor to a Trustee has been appointed under Section
7.04(a) or under Section 7.04(b) in consequence of the resignation
or the removal of the Trustee, the successor to such Trustee shall
hold office only for the balance of the term of office of such
Trustee.
7.05 FAILURE TO APPOINT SUCCESSOR
In the event that no successor to a Trustee whose term of office has
expired, who has delivered a notice of resignation in accordance with Section
7.02, or who has received notice of removal in accordance with Section 7.03, has
accepted an appointment under Section 7.01 or 7.04 within 60 days after the
expiration of such term or the delivery of such notice, the Trustee or the
Corporation may apply to a court of competent jurisdiction for the appointment
of a
19
successor to the Trustee to hold office for the term referred to in Section 7.01
or 7.04, as the case may be. The appointment of such successor by such court
shall not require the approval of Trust Unitholders.
7.06 QUALIFICATIONS OF TRUSTEE
The Trustee and any successor to the Trustee appointed under this Article
7 shall be a corporation incorporated under the laws of Canada or of a province
thereof. Such corporation must at all times when it is the Trustee be registered
under the laws of the Province of Alberta to carry on the business of a trust
company, must not be an Affiliate of the Corporation and must have undertaken in
writing to discharge all of the obligations and responsibilities of the Trustee
under this Indenture.
ARTICLE 8
CONCERNING THE TRUSTEE
8.01 POWERS OF THE TRUSTEE
Subject to the terms and conditions of this Indenture or other contracts
or obligations of the Trustee or the Fund, the Trustee may exercise from time to
time in respect of the Trust Fund any and all rights, powers and privileges that
could be exercised by a beneficial owner thereof, except as specifically
designated elsewhere in this Indenture.
8.02 SPECIFIC POWERS AND AUTHORITIES
Subject only to the express limitations contained in this Indenture and in
addition to any powers and authorities conferred by this Indenture or which the
Trustee may have by virtue of any present or future statute or rule of law, the
Trustee without any action or consent by the Trust Unitholders shall have and
may exercise at any time and from time to time the following powers and
authorities which may or may not be exercised by it in its sole judgment and
discretion and in such manner and upon such terms and conditions as it may from
time to time deem proper:
(a) to review and accept subscriptions for Trust Units received by the
Fund and to issue Trust Units pursuant thereto;
(b) to subscribe for ERC Royalty Units;
(c) to maintain records and provide timely reports to Trust Unitholders;
(d) to effect payment of distributions to Trust Unitholders;
(e) to act as agent for the reinvestment of Cash Distributions
distributed by the Trustee pursuant to Section 5.01 and as agent for
all voluntary cash contributions for the purchase of additional
Trust Units and ERC Royalty Units in accordance with the terms and
conditions of any distribution reinvestment and unit subscription
plan of the Fund and ERC;
20
(f) to deposit funds of the Fund in interest-bearing accounts in banks,
trust companies and other depositories, including the Trustee or any
Affiliate thereof, the same to be subject to withdrawal on such
terms and in such manner and by such person or persons (including
any one or more officers, agents or representatives) as the Trustee
may determine;
(g) to possess and exercise all the rights, powers and privileges
appertaining to the ownership of all or any mortgages, or
securities, issued or created by, or interest in, any person,
forming part of the assets of the Fund, to the same extent that an
individual might, unless otherwise limited herein, and, without
limiting the generality of the foregoing, to vote or give any
consent, request or notice, or waive any notice, either in person or
by proxy or power of attorney, with or without power of
substitution, to one or more persons, which proxies and powers of
attorney may be for meetings or action generally or for any
particular meeting or action and may include the exercise of
discretionary power;
(h) to borrow, incur indebtedness, give any guarantee or enter into any
subordination agreement on behalf of the Fund or any other person,
or to charge, pledge, hypothecate or grant any security interest,
mortgage or encumbrance over or with respect to all or any of the
Trust Fund or to subordinate the interests of the Fund in the Trust
Fund to any other person;
(i) where reasonably required, to engage or employ any persons as
agents, representatives, employees or independent contractors
(including, without limitation, investment advisers, registrars,
underwriters, accountants, lawyers, appraisers, brokers or
otherwise) in one or more capacities;
(j) except as prohibited by applicable law or in this Indenture, to
delegate any of the powers and duties of the Trustee to any one or
more agents, representatives, officers, employees, independent
contractors or other persons, including, without limitation, to the
Corporation and the Advisor as provided in this Indenture and in the
Management Agreement, without liability to the Trustee and without
regard as to whether such authority is normally granted or delegated
by trustees;
(k) to collect, xxx for and receive all sums of money coming due to the
Fund, and to engage in, intervene in, prosecute, join, defend,
compromise, abandon or adjust, by arbitration or otherwise, any
actions, suits, proceedings, disputes, claims, demands or other
litigation relating to the Trust, the assets of the Fund or the
Fund's affairs, to enter into agreements therefor, whether or not
any suit is commenced or claim accrued or asserted and, in advance
of any controversy, to enter into agreements regarding the
arbitration, adjudication or settlement thereof;
(l) to arrange for insurance contracts and policies insuring the assets
of the Fund against any and all risks and insuring the Fund and/or
any or all of the Trustee or the Trust Unitholders against any and
all claims and liabilities of any nature asserted by any person
arising by reason of any action alleged to have been taken or
omitted by the Fund or by the Trustee or Trust Unitholders;
21
(m) to cause legal title to any of the assets of the Fund to be held by
and/or in the name of the Trustee, or except as prohibited by law,
by and/or in the name of the Fund or any other person, on such
terms, in such manner, with, such powers in such person as the
Trustee may determine and with or without disclosure that the Fund
or Trustee is interested therein, provided however that should legal
title to any of the assets of the Fund be held by and/or in the name
of any person or persons other than the Trustee, the Trustee shall
require such person or persons to execute a trust agreement
acknowledging that legal title to such assets is held in trust for
the benefit of the Fund;
(n) to use its best efforts to ensure that the Fund complies at all
times with the requirements of subsections 108(2) and 132(6) of the
INCOME TAX ACT;
(o) to make, execute, acknowledge and deliver, from time to time, as
Trustee on behalf of the Fund, any and all agreements, deeds,
contracts, waivers, releases or other documents or instruments in
writing (including, without limitation, the Material Contracts)
necessary or proper for the accomplishment of any of the powers
herein granted, and any of such documents in writing so signed shall
be binding upon the Fund without further authorization or formality;
(p) to supervise the activities and manage the investments and affairs
of the Fund;
(q) to invest funds of the Fund as set forth in Article 4;
(r) to form, acquire, invest in, make loans to or enter into royalty or
other agreements with any subsidiary (either direct or indirect) of
the Fund;
(s) to renew or extend or participate in the renewal or extension of any
security of the Corporation, ERC or any other entity acquired
directly or indirectly by the Fund, or any royalty acquired from the
Corporation, ERC or any other entity acquired, directly or
indirectly, by the Fund, upon such terms as may be deemed advisable,
and to agree to any other modification or change in the terms of any
such security or royalty, in any manner and to any extent that it
may be deemed advisable; to waive any default whether in performance
of any covenant or condition of any such security or royalty, or to
enforce the rights in respect of any such default in such manner and
to such extent that it may be deemed advisable; and to exercise and
enforce in any action, suit or proceeding at law or in equity any
rights or remedies with respect to any such security or royalty;
(t) to pay out of the Trust Fund all reasonable fees, costs and expenses
incurred in the administration of the Fund; and
(u) to do all such other acts and things as are incidental to the
foregoing, and to exercise all powers which are necessary or useful
to carry on the business of the Fund, to promote any of the purposes
for which the Fund is formed and to carry out the provisions of this
Indenture.
22
8.03 VOTING OF INVESTMENTS AND ERC ROYALTY UNITS HELD BY THE FUND
(a) Except as provided for in this Indenture, Investments held from time
by the Trustee as part of the Trust Fund which carry voting rights
(including, without limitation, the Shares and the Notes) may be
voted by the person and in the manner directed by the Trustee.
(b) All ERC Royalty Units of any series held from time to time by the
Trustee as part of the property of the Fund shall not be voted by
the Trustee but shall be voted by Trust Unitholders at any and all
meetings of ERC Royalty Unitholders of that series on the basis of
one ERC Royalty Unit for each Trust Unit owned or held. In order to
facilitate such voting of the ERC Royalty Units, the Trustee shall
enter into the ERC Royalty Indenture and the Governance Agreement
which shall provide, among other things, for the entitlement of the
Trust Unitholders to receive notice of and to attend all meetings of
the ERC Royalty Unitholders of that series and to one vote per Trust
Unit held on any ballot thereat.
8.04 RESTRICTION ON POWERS
Notwithstanding any other provision in this Indenture:
(a) the Trustee may not under any circumstances whatsoever authorize or
vote any Shares, Notes, ERC Royalty Units or other Investments
carrying voting rights held by the Fund in favour of any transaction
that would result in the sale, assignment, lease, exchange or other
disposition of all or substantially all of the Trust Fund, except
with the approval of Trust Unitholders by Extraordinary Resolution
or except as part of an internal reorganization of the direct or
indirect assets of the Fund as a result of which the Fund has the
same interest, whether direct or indirect, in the assets as the
interest, whether direct or indirect, that it had prior to the
reorganization;
(b) the Trustee shall have no power to sell, assign, lease, exchange or
otherwise dispose of any Investments or portion of the Trust Fund
which would result in the sale of all or substantially all of the
Trust Fund, except with the approval of the Trust Unitholders by
Extraordinary Resolution or except as part of an internal
reorganization of the direct or indirect assets of the Fund as a
result of which the Fund has the same interest, whether direct or
indirect, in the assets as the interest, whether direct or indirect,
that it had prior to the reorganization; and
(c) the Trustee shall not sell, assign or otherwise dispose of any
Investments or other portion of the Trust Fund or acquire any
securities or property or take, or fail to take, any action, which
would result in the Fund not qualifying as a "mutual fund trust"
under the INCOME TAX ACT.
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8.05 BANKING
The banking business of the Fund, or any part thereof, shall be transacted
with such financial institution (including the Trustee or an Affiliate thereof)
or other person carrying on a financial services business as the Trustee may
designate, appoint or authorize from time to time and all such financial
services business, or any part thereof, shall be transacted on the Fund's behalf
by such one or more officers of the Trustee and/or other persons as the Trustee
may designate, appoint or authorize from time to time including, but without
restricting the generality of the foregoing, the operation of the Fund's
accounts; the making, signing, drawing, accepting, endorsing, negotiating,
lodging, depositing or transferring of any cheques, promissory notes, drafts,
bankers' acceptances, bills of exchange, letters of credit and orders for the
payment of money; the giving of receipts for and orders relating to any property
of the Fund; the execution of any agreement relating to any property of the
Fund; the execution of any agreement relating to any such financial services
business and defining the rights and powers of the parties hereto; and the
authorizing of any officer of such financial institution, or any trustee or
agent thereof to do any act or thing on the Fund's behalf to facilitate such
banking business.
8.06 STANDARD OF CARE
Subject to Article 9 hereof, the Trustee shall exercise its powers and
carry out its functions hereunder as Trustee honestly, in good faith and in the
best interests of the Fund and the Trust Unitholders and, in connection
therewith, shall exercise that degree of care, diligence and skill that a
reasonably prudent person would exercise in comparable circumstances. Unless
otherwise required by law, the Trustee shall not be required to give bond,
surety or security in any jurisdiction for the performance of any duties or
obligations hereunder. The Trustee, in its capacity as trustee, shall not be
required to devote its entire time to the business and affairs of the Fund. The
Trustee may act and rely and shall be protected in acting in good faith on the
opinion or advice of or information obtained from any agent, counsel,
accountant, engineer, appraiser or other expert or adviser, whether retained or
employed by the Fund, the Corporation, ERC or the Trustee, in relation to any
matter arising in the performance of its duties under the Trust Indenture,
provided that, the Trustee complied with the standard of care prescribed in this
Section 8.06 in retaining or employing such person.
8.07 FEES AND EXPENSES
The Trustee shall be entitled to receive from the Corporation such fees as
may be agreed upon in writing from time to time by the Advisor and the Trustee
and shall be entitled to reimbursement from the Corporation for any of its
expenses incurred in acting as Trustee. If the Corporation does not pay such
fees or reimbursement amounts within the agreed time period then the Trustee
shall be entitled to be paid such fees or reimbursement amounts from the Trust
Fund. If the Trustee is affiliated with the Advisor, the Trustee shall not be
entitled to receive any fees for its services as Trustee and shall not be
entitled to reimbursement from the Corporation of any of its expenses incurred
in acting as Trustee. As part of General and Administrative Costs (as defined in
the Management Agreement), the Corporation on behalf of the Trustee may pay or
cause to be paid reasonable expenses incurred in connection with the
administration and management of the Fund, including without limitation fees of
auditors, lawyers, appraisers and other agents, consultants and professional
advisers employed by or on behalf of the Fund and the
24
cost of reporting or giving notices to Trust Unitholders. The Corporation on
behalf of the Trustee may pay or cause to be paid brokerage commissions at
prevailing rates in respect of the acquisition and disposition of any securities
acquired or disposed of by the Fund to brokers including Affiliates of the
Trustee.
8.08 LIMITATIONS ON LIABILITY OF TRUSTEE
The Trustee, its directors, officers, employees, shareholders and agents
shall not be liable to any Trust Unitholder or any other Person, in tort,
contract or otherwise, in connection with any matter pertaining to the Fund and
the Trust Fund, arising from the exercise by the Trustee of any powers,
authorities or discretion conferred under this Indenture, including, without
limitation, any action taken in good faith in reliance on any documents that
are, prima facie, properly executed, any depreciation of, or loss to, the Trust
Fund incurred by reason of the sale of any security or asset, the disposition of
monies or securities, any inaccuracy in any evaluation or advice provided by the
Advisor or any other appropriate qualified person, any reliance on any such
evaluation or advice, any action or failure to act of the Advisor, the
Corporation, or any other person to whom the Trustee has, with the consent of
the Corporation, delegated any of its duties hereunder or, any other action or
failure to act (including, without limitation, the failure to compel in any way
any former trustee to redress any breach of trust or any failure by the
Corporation to perform its duties under this Indenture or any Material Contract)
except in cases of the Trustee's wilful misfeasance, bad faith, negligence or
disregard of its obligations and duties or for a breach of its duties and
responsibilities and its standard of care, diligence and skill as set out in
Section 8.06. If the Trustee has retained an appropriate expert or advisor with
respect to any matter connected with its duties under this Indenture or under
the ERC Royalty Indenture, the Trustee may act or refuse to act based on the
advice of such expert or advisor or Counsel and, notwithstanding any provision
of this Indenture and the ERC Royalty Indenture, including, without limitation,
the standard of care, diligence and skill set out in Section 8.06 hereof, the
Trustee shall not be liable for and shall be fully protected from any loss or
liability occasioned by any action or refusal to act based on the advice of any
such expert or advisor or Counsel. In the exercise of the powers, authorities or
discretion conferred upon the Trustee under this Indenture, the Trustee is and
shall be conclusively deemed to be acting as Trustee of the assets and property
of the Trust and shall not be subject to any personal liability for any debts,
liabilities, claims, demands, judgments, costs, charges or expenses against or
with respect to the Trust, the Trust Fund or the Trust Unitholders except as
provided herein. The Trustee shall have no liability or responsibility arising
under any other agreement to which it is not a party.
8.09 INDEMNIFICATION OF TRUSTEE
The Trustee and each of its directors, officers, employees, shareholders
and agents shall be entitled to be indemnified and reimbursed out of the Trust
Fund in respect of any (a) costs, charges, taxes, penalties or interest in
respect of unpaid taxes or other governmental charges, expenses and liabilities
imposed upon the Trustee in consequence of its performance of its duties
hereunder; and (b) any liability and all costs, charges and expenses sustained
or incurred in respect of any action, suit or proceeding that is proposed or
commenced against the Trustee or against such director, officer, employee,
shareholder or agent, as the case may be, for or in respect of anything done or
permitted to be done in respect of the Fund and the execution of all
25
duties, responsibilities, powers and authorities pertaining thereto; unless any
of the foregoing arises out of the Trustee's or such director's, officers,
employee's, shareholder's or agent's breach of the standard of care, diligence
and skill required of the Trustee under Section 8.06. The Trustee or such
director, officer, employee, shareholder or agent shall not be entitled to
satisfy any right of indemnity or reimbursement granted herein, or otherwise
existing under law, except out of the Trust Fund, and no Trust Unitholder shall
be personally liable to any person with respect to any claim for such indemnity
or reimbursement as aforesaid.
8.10 ENVIRONMENTAL INDEMNITY
The Fund is liable to and shall indemnify and save harmless the Trustee
and each of its directors, officers, employees, shareholders, agents and their
respective successors and assigns (collectively, the "INDEMNIFIED PARTIES")
against any loss, expense, claim, liability or asserted liability (including
strict liability and costs and expenses of abatement and remediation of spills
or releases of contaminants and liabilities of the Indemnified Parties to third
parties (including government agencies) in respect of bodily injuries, property
damage, damage to or impairment of the environment or any other injury or damage
and including liabilities of the Indemnified Parties to third parties for the
third parties' foreseeable and unforeseeable consequential damages) incurred as
a result of:
(a) the operations of the Fund, or
(b) the exercise by the Trustee of any power or right hereunder,
and which result from or relate, directly or indirectly, to:
(c) the presence or release or threatened presence or release of any
contaminants, by any means or for any reason, on or in respect of
the Properties, whether or not such presence or release or
threatened presence or release of the contaminants was under the
control, care or management of the Fund, the Trustee, the Advisor,
the Corporation or another owner or operator of a Property,
including a previous owner or operator;
(d) any contaminant present on or released from any property adjacent to
or in the proximate area of the Properties;
(e) the breach or alleged breach of any federal, provincial or municipal
environmental law, regulation, by-law, order, rule or permit by the
Fund, the Trustee, the Advisor, the Corporation or another owner or
operator of a Property, including a previous owner or operator; or
(f) any misrepresentation or omission of a known fact or condition made
by the Advisor or the Corporation relating to any Property.
For the purposes of this Section 8.10, "LIABILITY" shall include, without
limitation, (i) liability of an Indemnified Party for costs and expenses of
abatement and remediation of spills and releases of contaminants, (ii) liability
of an Indemnified Party to a third party to reimburse the third party for bodily
injuries, property damage and other injuries or damages which the third
26
party suffers, including (to the extent, if any, that the Indemnified Party is
liable therefor) foreseeable and unforeseeable consequential damages suffered by
the third party, and (iii) liability of the Indemnified Party for damage to or
impairment of the environment.
8.11 CONDITIONS PRECEDENT TO TRUSTEE'S OBLIGATION TO ACT
Any obligation, power or right of the Trustee to commence or continue any
act, action or proceeding for the purpose of enforcing the rights of the Trustee
and the Trust Unitholders shall be conditional upon the Advisor or the Trust
Unitholders furnishing, when required by notice in writing by the Trustee,
sufficient funds to commence or continue such act, action or proceeding and
indemnity (to the extent sufficient funds for such purpose are not available)
reasonably satisfactory to the Trust to protect and hold harmless the Trustee
against the costs, charges, expenses and liabilities to be incurred thereby and
any loss and damage it may suffer by reason thereof. None of the provisions
contained in this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers unless it is
indemnified as aforesaid.
8.12 SURVIVAL OF INDEMNITIES
The indemnities provided in Sections 8.09 and 8.10 shall survive the
termination of this Indenture under Article 13 and the removal or resignation of
the Trustee under Article 7.
8.13 DOCUMENTS, MONIES, ETC. HELD BY TRUSTEE
Any securities, monies, documents of title or other instruments that may
at any time be held by the Trustee under this Indenture may be placed in the
deposit vaults of the Trustee or any chartered bank in Canada, including an
Affiliate of the Trustee, or deposited for safekeeping with any such bank.
Unless herein otherwise expressly provided, any monies so held by the Trustee
pending the application or withdrawal thereof under the provisions of this
Indenture or otherwise may be deposited in the name of the Trustee in any
Canadian chartered bank, including an Affiliate of the Trustee, at the rate of
interest, if any, then current on similar deposits.
8.14 TRUSTEE HAVING KNOWLEDGE OF MATTERS
The Trustee shall not be required to take notice or be deemed to have
notice or "actual knowledge" of any matter hereunder unless the Trustee shall
have received from the Corporation, the Advisor, a regulatory authority or a
Trust Unitholder a notice stating the matter in respect of which the Trustee
should have notice or actual knowledge.
8.15 VALIDITY OF CERTIFICATES ETC.
If at any time in the performance of its duties under this Indenture, it
shall be necessary for the Trustee to receive, accept, act or rely upon any
certificate, notice, request, waiver, consent, receipt, direction, affidavit or
other paper, writing or document furnished to it and purporting to have been
executed or issued by a Trust Unitholder, Trust Unitholders, ERC, the
Corporation or their authorized officers or attorneys, the Trustee shall be
entitled to rely and act upon the genuineness and authenticity of any such
writing submitted to it. It shall not be necessary for the Trustee to ascertain
whether or not the persons who have executed, signed or
27
otherwise issued, authenticated or receipted such papers, writings or documents
have authority so to do or that they are the same persons named therein or
otherwise to pass upon any requirement of such papers, writings or documents
that may be essential for their validity or effectiveness or upon the truth and
acceptability of any information contained therein which the Trustee in good
faith believes to be genuine.
8.16 TRUSTEE MAY HAVE OTHER INTERESTS
Subject to applicable laws, and without affecting or limiting the duties
and responsibilities or the limitations and indemnities provided in this
Indenture, the Trustee is hereby expressly permitted to:
(a) be an Associate or an Affiliate of a person from whom property and
assets of the Fund has been or is to be purchased or sold;
(b) be, or be an Associate or an Affiliate of, a person with whom the
Fund contracts or deals with or which supplies services to the Fund;
(c) acquire, hold and dispose of, other than from or to the Fund, the
Corporation or the Advisor, either for its own account or the
accounts of its customers, any property, real or personal, even if
such property is of a character which could be held by the Fund and
to exercise all rights of an owner of such property as if it were
not a Trustee;
(d) carry on its business as a trust company in the usual course while a
Trustee, including the rendering of trustee or other services to
other trusts and other persons for gain; and
(e) derive direct or indirect benefit, profit or advantage from time to
time as a result of dealing with the Fund or the relationships,
matters, contracts, transactions, affiliations or other interests
stated in this Section 8.16 and the Trustee shall not be liable to
the Fund or any Trust Unitholder for any such direct or indirect
benefit, profit or advantage.
Subject to applicable laws, none of the relationships, matters, contracts,
transactions, affiliations or other interests permitted above shall be, or shall
be deemed to be or to create, a material conflict of interest with the Trustee's
duties hereunder.
ARTICLE 9
DELEGATION OF POWERS
9.01 DELEGATION TO CORPORATION
Except as expressly prohibited by applicable law and the terms of this
Trust Indenture, the Trustee hereby delegates to the Corporation the supervision
of the management of the business and affairs of the Fund, including the
supervision of the Advisor in carrying out its duties pursuant to Section 9.02
hereof, without regard to whether such authority is normally
28
delegated or granted by trustees. Without limiting the generality of the
foregoing, the Trustee hereby delegates to the Corporation:
(a) the responsibility for any or all matters relating to an Offering
including, without limitation: (i) ensuring compliance with all
applicable laws in connection with such Offering; (ii) all matters
relating to the content and accuracy of the disclosure contained in
any Offering Documents, or any management proxy circulars or
continuous disclosure documents relating to an Offering or
incorporated by reference into any Offering Document and, where
required, the approval, certification and execution by the
Corporation thereof on behalf of the Fund; and (iii) all matters
concerning any underwriting or agency agreement providing for an
Offering, including the execution by the Corporation of such
agreement on behalf of the Fund;
(b) the ability and responsibility to exercise from time to time any and
all rights, powers and privileges in relation to all matters
relating to any take-over bid, merger, amalgamation, arrangement,
acquisition of all or substantially all of the assets of a person,
including the Fund or the Corporation or any subsidiary of the Fund
or the Corporation, any process to maximize Trust Unitholder value
or any similar transaction or form of business combination (an
"OFFER"), including (i) approving and implementing any unitholder
rights protection plan either prior to or during the course of any
Offer; (ii) taking any legally permitted defensive action either
prior to or during the course of any Offer; (iii) the preparation,
approval and execution on behalf of the Fund of any agreements,
circulars or other documents in connection with any Offer; (iv)
consideration of the terms of an Offer on behalf of Trust
Unitholders and recommendations to Trust Unitholders in response to
any Offer; (v) prosecuting or defending any regulatory or court
action in respect of any matters related to an Offer, and (vi) the
carriage of all related and ancillary matters;
(c) the responsibility for all matters concerning the terms of, and the
execution and amendment from time to time of, any of the Material
Contracts;
(d) the voting of Investments held by the Fund which carry voting rights
as provided in Section 8.03(a) (provided that the board of directors
of the Corporation shall be subject to Section 8.04 and any other
provision of this Indenture and the Governance Agreement relating to
the voting of such securities);
(e) the responsibility for all matters pertaining to the redemption of
Trust Units pursuant to Article 6;
(f) the responsibility for any borrowing, securing of credit or granting
of security by the Fund, the subordination by the Fund of any of its
interests in the Trust Fund and such other related matters as
described in Section 8.02(h);
(g) the responsibility for the formation or acquisition of any
subsidiaries of the Fund, any acquisitions made by the Fund or any
subsidiary thereof, and any investments
29
in, loans made to or royalty or other agreements entered into by the
Fund with any subsidiary (direct or indirect) of the Fund;
(h) the responsibility to approve the financial statements of the Fund
or any subsidiary of the Fund and to sign such statements, each as
may be required by applicable law; and
(i) the responsibility for those matters expressly made subject to the
review and approval of the Corporation in the Management Agreement.
The Corporation accepts such delegation and agrees that, in respect of
such matters, it shall exercise its powers and carry out its functions honestly,
in good faith and with a view to the best interests of the Fund and the Trust
Unitholders and, in connection therewith, shall exercise that degree of care,
diligence and skill that a reasonably prudent person would exercise in
comparable circumstances. The Corporation may, and if directed by the
Corporation in writing, the Trustee shall, execute any document or agreement on
behalf of the Fund as the Corporation shall have authorized within the scope of
any authority delegated to it hereunder. The Trustee, in relying upon the
Corporation with respect to the matters described in this Section 9.01, shall be
deemed to have complied with its obligations under Section 8.06 and shall be
entitled to the benefit of the indemnities provided for in Sections 8.09 and
8.10, and, for greater certainty, the provisions of Section 8.08 shall apply for
the benefit of the Trustee with respect to the matters designated as the
Corporation's responsibility in this Section 9.01.
9.02 THE ADVISOR
Except as expressly prohibited by applicable law, the Trustee may grant or
delegate to the Advisor under the Management Agreement, in accordance with its
terms, such authority as the Trustee may in its sole discretion deem necessary
or desirable to effect the actual administration of the duties of the Trustee
under this Trust Indenture, without regard to whether such authority is normally
granted or delegated by trustees. The Trustee may grant broad discretion to the
Advisor, subject to the supervision of the Corporation, to administer and manage
the day-to-day operations of the Fund, act as agent for the Fund and to make
executive decisions which conform to general policies and general principles set
forth herein or previously established by the Trustee and the Corporation. The
Advisor shall have the powers and duties expressly provided for herein and in
the Management Agreement including, without limitation, the power to further
delegate to or retain and instruct such appropriate persons to effect the
administration of the Fund (and the Advisor shall notify the Trustee of the name
of the person or persons to whom such further delegation is made or that is
retained or instructed and the terms and conditions thereof). The Trustee shall
enter into the Management Agreement with the Advisor and the Corporation.
9.03 ADDITIONAL MANAGEMENT AGREEMENTS
Upon the recommendation of the directors of the Corporation, the Trustee
is, where required, authorized and directed to enter into a Management
Agreement, in a form substantially similar to any then existing Management
Agreement, with respect to the management of any additional entity acquired,
directly or indirectly, by the Fund.
30
9.04 POWER OF ATTORNEY
Without limiting any of the other provisions of this Article 9, the
Trustee hereby delegates to the Corporation from time to time the full power and
authority, and constitutes the Corporation its true and lawful attorney in fact,
to sign on behalf of the Fund any and all agreements, contracts, deeds, waivers,
releases or other documents or instruments in writing as provided for in
subsection 8.02(o), including, without limitation, all Offering Documents
(including any underwriting or agency agreements), management proxy circulars,
continuous disclosure documents, documents relating to an Offer and any other
documents ancillary or similar thereto required to be signed by the Fund from
time to time.
9.05 LIABILITY OF TRUSTEE
The Trustee shall have no liability or responsibility for any matters
delegated to the Corporation or the Advisor hereunder or under any of the
Material Contracts, and the Trustee, in relying upon the Corporation or the
Advisor and in entering into the Material Contracts, shall be deemed to have
complied with its obligations under Section 8.06 and shall be entitled to the
benefit of the indemnities provided in Sections 8.09 and 8.10, and for greater
certainty, the provisions of Section 8.08 shall apply for the benefit of the
Trustee with respect to the matters designated as the Corporation's
responsibility in Sections 9.01 and 9.04.
ARTICLE 10
AMENDMENT
10.01 AMENDMENT
The provisions of this Indenture, except where specifically provided
otherwise, may only be amended by Extraordinary Resolution, provided, however,
that any of the provisions of this Indenture, except where specifically provided
otherwise, may be amended by the Trustee, ERC and the Corporation at any time or
times, without the consent, approval or ratification of any of the Trust
Unitholders or any other person, for the purpose of:
(a) ensuring that the Fund will comply with any applicable laws or
requirements of any governmental agency or authority of Canada or of
any province;
(b) ensuring that the Fund will satisfy the provisions of each of
subsections 108(2) and 132(6) of the INCOME TAX ACT;
(c) ensuring that such additional protection is provided for the
interests of Trust Unitholders as the Trustee or the board of
directors of the Corporation may consider expedient;
(d) removing any conflicts or inconsistencies between the provisions of
this Indenture or any supplemental indenture and any prospectus
filed with any regulatory or governmental body with respect to the
Fund, or any applicable law or regulation of any jurisdiction, if,
in the opinion of the Trustee, such an amendment will not be
detrimental to the interests of the Trust Unitholders;
31
(e) adding to the provisions hereof such additional covenants and
enforcement provisions as, in the opinion of Counsel, are necessary
or advisable, provided that the same are not, in the opinion of the
Trustee, prejudicial to the interests of the Trust Unitholders;
(f) making such provisions not inconsistent with this Indenture as may
be necessary or desirable with respect to matters or questions
arising hereunder, provided that such provisions are not, in the
opinion of the Trustee, prejudicial to the interests of the Trust
Unitholders;
(g) making any modification in the form of Trust Unit Certificates which
does not materially affect the substance thereof;
(h) modifying any of the provisions of this Indenture, including
relieving the Corporation from any of the obligations, conditions or
restrictions herein contained, provided that such modification or
relief shall be or become operative or effective only if, in the
opinion of the Trustee, such modification or relief in no way
prejudices any of the rights of the Trust Unitholders or the
Trustee, provided further that the Trustee may in its sole
discretion decline to enter into any such supplemental indenture
which in its opinion may not afford adequate protection to the
Trustee when the same shall become operative; and
(i) for any other purpose not inconsistent with the terms of this
Indenture, including the correction or rectification of any
ambiguities, defective or inconsistent provisions, errors, mistakes
or omissions herein, provided that in the opinion of the Trustee the
rights of the Trustee and of the Trust Unitholders are not
prejudiced thereby,
but notwithstanding the foregoing, no such amendment shall reduce the
fractional undivided interest in the Trust Fund represented by any Trust Unit
without the consent of the holder of such Trust Unit and, no amendment shall
reduce the percentage of votes required to be cast at a meeting of the Trust
Unitholders for the purpose of this Section 10.01 without the consent of the
holders of all of the Trust Units then outstanding. In this Section 10.01, the
Trustee may, if the Trustee deems necessary, act and rely on the opinion of
Counsel with respect to those matters which refer to the "opinion of the
Trustee".
10.02 NOTIFICATION OF AMENDMENT
As soon as shall be practicable after the making of any amendment pursuant
to this Article 10 which the directors of the Corporation determine is material
to the interests of the Trust Unitholders and should be disclosed to the Trust
Unitholders, the Trustee shall furnish written notification of the substance of
such amendment to each Trust Unitholder in the manner determined by the
directors of the Corporation.
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ARTICLE 11
MEETINGS OF TRUST UNITHOLDERS
11.01 ANNUAL AND SPECIAL MEETINGS OF TRUST UNITHOLDERS
Annual meetings of the Trust Unitholders shall be held on a day, at a time
and at a place to be set by the Trustee. The business transacted at such
meetings shall include the presentation of the audited financial statements of
the Fund for the prior fiscal year and the transaction of such business as Trust
Unitholders may be entitled to vote upon as hereinafter provided in this Article
11, or as the Trustee may determine. Special meetings of the Trust Unitholders
may be called at any time by the Trustee and shall be called by the Trustee upon
a written request of Trust Unitholders holding in the aggregate not less than
20% of the Trust Units then outstanding, such request specifying the purpose or
purposes for which such meeting is to be called. Meetings of Trust Unitholders
shall be held in the City of Calgary, or at such other place within Alberta as
the Trustee shall designate. The chairman of any annual or special meeting shall
be a person designated by the Trustee for the purpose of such meeting except
that, on the motion of any Trust Unitholder, any person may be elected as
chairman by a majority of the votes cast at the meeting instead of such
designated person or in the event that no person shall be designated by the
Trustee.
11.02 NOTICE OF MEETINGS
Notice of all meetings of Trust Unitholders shall be given by unregistered
mail postage prepaid addressed to each Trust Unitholder at his registered
address, mailed at least twenty one (21) days and not more than fifty (50) days
before the meeting. Such notice shall set the time when, and the place where,
such meeting is to be held and shall specify the nature of the business to be
transacted at such meeting in sufficient detail to permit a Trust Unitholder to
form a reasonable judgment thereon, together with the text of any resolution, at
the time of mailing of the notice, proposed to be passed. Any adjourned meeting
may be held as adjourned without further notice. The accidental omission to give
notice or the non-receipt of such notice by a Trust Unitholder shall not
invalidate any resolution passed at any such meeting. Notwithstanding the
foregoing, a meeting of Trust Unitholders may be held at any time without notice
if all the Trust Unitholders are present or represented thereat or those not so
present or represented have waived notice. Any Trust Unitholder (or a duly
appointed proxy of a Trust Unitholder) may waive any notice required to be given
under the provisions of this paragraph, and such waiver, whether given before or
after the meeting, shall cure any default in the giving of such notice.
11.03 QUORUM
At any meeting of the Trust Unitholders, subject as hereinafter provided,
a quorum shall consist of two or more individuals present in person either
holding personally or representing as proxies not less than 5% of the
outstanding Trust Units. In the event of such quorum not being present at the
appointed place on the date for which the meeting is called within one half
(1/2) hour after the time fixed for the holding of such meeting, the meeting
shall stand adjourned to such day being not less than one (1) day later (unless
such day is not a Business Day, in which case it shall stand adjourned to the
next following Business Day) and to such place and time as
33
may be appointed by the chairman of the meeting. If at such adjourned meeting a
quorum as above defined is not present, the Trust Unitholders present either
personally or by proxy shall form a quorum, and any business may be brought
before or dealt with at such an adjourned meeting which might have been brought
before or dealt with at the original meeting in accordance with the notice
calling the same.
11.04 VOTING RIGHTS OF TRUST UNITHOLDERS
Only Trust Unitholders of record shall be entitled to vote and each whole
Trust Unit shall entitle the holder or holders of that Trust Unit to one vote.
At any meeting of Trust Unitholders, any holder of Trust Units entitled to vote
thereat may vote by proxy and a proxy need not be a Trust Unitholder, provided
that no proxy shall be voted at any meeting unless it shall have been placed on
file with the Trustee, or with such agent of the Trustee as the Trustee may
direct, for verification twenty-four hours prior to the commencement of such
meeting. If approved by the Trustee, proxies may be solicited in the name of the
Trustee. When any Trust Unit is held jointly by several persons, any one of them
may vote at any meeting in person or by proxy in respect of such Trust Unit, but
if more than one of them shall be present at such meeting in person or by proxy,
and such joint owners of their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust Unit. A proxy
purporting to be executed by or on behalf of a Trust Unitholder shall be deemed
valid unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger.
11.05 RESOLUTIONS BINDING THE TRUSTEE
Trust Unitholders shall be entitled to pass resolutions that will bind the
Trustee only with respect to the following matters:
(a) the removal or appointment of the Trustee as provided in Section
7.03 or 7.04;
(b) the nomination of the Auditors as provided in Section 16.02 and the
removal and reappointment of the Auditors as provided in Section
16.04;
(c) the nomination of the directors of the Corporation pursuant to the
terms of the Governance Agreement, with the exception of the
Advisor's nominees pursuant to the terms thereof;
(d) consenting to any amendments of this Indenture as provided in
Section 10.01;
(e) approval of subdivisions or consolidations of Trust Units;
(f) approval of any resolution of the Trust Unitholders to terminate the
Fund as provided in Section 13.02; and
(g) the matters specified in Section 8.04 as requiring approval of the
Trust Unitholders.
Except with respect to the above matters set out in this Section 11.05, no
action taken by the Trust Unitholders or resolution of the Trust Unitholders at
any meeting shall in any way bind
34
the Trustee. Any action taken or resolution passed in respect of any matter at a
meeting of Trust Unitholders shall require the approval of a simple majority of
the votes cast by Trust Unitholders in respect of such action or resolution,
unless:
(a) the contrary is otherwise expressly provided under any specific
provision of this Indenture;
(b) any applicable securities laws, rules, regulations or policies or
the rules, policies or requirements of any stock exchange requires
approval by Extraordinary Resolution or any other prescribed
threshold; or
(c) the matter voted on by the Trust Unitholders would, if the Fund were
a corporation governed by the BUSINESS CORPORATIONS ACT (Alberta),
require the approval of shareholders by way of an Extraordinary
Resolution.
11.06 MEANING OF "EXTRAORDINARY RESOLUTION"
(a) The expression "EXTRAORDINARY RESOLUTION" when used in this
Indenture means, subject as hereinafter in this Article provided, a
resolution proposed to be passed as an extraordinary resolution at a
meeting of Trust Unitholders (including an adjourned meeting) duly
convened for the purpose and held in accordance with the provisions
of this Article at which two or more holders of at least 5% of the
aggregate number of Trust Units then outstanding are present in
person or by proxy and passed by the affirmative votes of the
holders of not less than 66-2/3% of the Trust Units represented at
the meeting and voted on a poll upon such resolution.
(b) If, at any such meeting, the holders of 5% of the aggregate number
of Trust Units outstanding are not present in person or by proxy
within thirty minutes after the time appointed for the meeting, then
the meeting, if summoned by the Unitholders or pursuant to a request
of the Trust Unitholders, shall be dissolved; but in any other case
the meeting unless the Chairman of the meeting determines otherwise
shall be adjourned to the next day (unless such day is not a
Business Day, in which case it shall be adjourned to the next
following Business Day) at the same time and place and no notice of
the adjournment need be given. Any business may be brought before or
dealt with at the adjourned meeting which might have been dealt with
at the original meeting in accordance with the notice calling the
same. At the adjourned meeting, the Trust Unitholders present in
person or by proxy shall form a quorum and may transact the business
for which the meeting was originally convened and a resolution
proposed at such adjourned meeting and passed by the requisite vote
as provided in subsection (a) of this Section shall be an
Extraordinary Resolution within the meaning of this Indenture,
notwithstanding that the holders of less than 5% of the aggregate
number of Trust Units then outstanding are present in person or by
proxy at such adjourned meeting.
35
(c) Votes on an Extraordinary Resolution shall always be given on a poll
and no demand for a poll on an Extraordinary Resolution shall be
necessary.
11.07 RECORD DATE FOR VOTING
For the purpose of determining the Trust Unitholders who are entitled to
vote or act at any meeting or any adjournment thereof, the Trustee may fix a
date not more than fifty (50) days and not less than twenty one (21) days prior
to the date of any meeting of Trust Unitholders as a record date for the
determination of Trust Unitholders entitled to vote at such meeting or any
adjournment thereof, and any Trust Unitholder who was a Trust Unitholder at the
time so fixed shall be entitled to vote at such meeting or any adjournment
thereof even though he has since that time disposed of his Trust Units, and no
Trust Unitholder becoming such after that time shall be so entitled to vote at
such meeting or any adjournment thereof. In the event that the Trustee does not
fix a record date for any meeting of Trust Unitholders, the record date for such
meeting shall be the date upon which notice of the meeting is given as provided
under Section 11.02.
11.08 RESOLUTIONS IN WRITING
Notwithstanding any other provision of this Indenture, after due and
proper prior notice to all Trust Unitholders, a resolution in writing executed
by any number of Trust Unitholders at any time shall be as valid and binding for
all purposes of this Indenture as if such Trust Unitholders had exercised at
that time all of the voting rights to which they were then entitled under
Section 11.05 in favour of such resolution at a meeting of Trust Unitholders
duly called for the purpose.
ARTICLE 12
CERTIFICATES, REGISTRATION AND TRANSFER OF TRUST UNITS
12.01 NATURE OF TRUST UNITS
The nature of a Trust Unit and the relationship of a Trust Unitholder to
the Trustee and the relationship of one Trust Unitholder to another is as
described in Sections 2.06 and 2.07 and the provisions of this Article 12 shall
not in any way alter the nature of Trust Units or the said relationships of a
Trust Unitholder to the Trustee and of one Trust Unitholder to another, but are
intended only to facilitate the issuance of certificates evidencing the
beneficial ownership of Trust Units and the recording of all such transactions
whether by the Fund, securities dealers, stock exchanges, transfer agents,
registrars or other persons.
12.02 CERTIFICATES
(a) The form of Trust Unit Certificate shall be such as is from time to
time authorized by the Trustee. Each Trust Unit Certificate shall be
dated their respective dates of original issue (including all
replacements issued in accordance with this Indenture) and shall
bear such distinguishing letters and numbers as the Corporation may,
with the approval of the Trustee, prescribe. Each such certificate
shall be signed manually on behalf of the Trustee. Any additional
signature required to appear on such certificate by the Trustee may
be printed,
36
lithographed or otherwise mechanically reproduced thereon and, in
such event, certificates so signed are as valid as if they had
been signed manually. Any certificate which has one manual signature
as hereinbefore provided shall be valid notwithstanding that one or
more of the persons whose signature is printed, lithographed or
mechanically reproduced no longer holds office at the date of
issuance of such certificate.
(b) The definitive form of Trust Unit Certificate and the certificate of
the Trustee endorsed thereon shall be in both the English and French
languages and the French language thereof shall be proper and
complete translation of the English language version thereof. In the
event that any provision of the Trust Unit Certificate in the French
language shall be susceptible of an interpretation different from
the equivalent provision in the English language, the interpretation
of such provision in the English language shall be determinative.
(c) Any Trust Unit Certificate validly issued prior to the date hereof
in accordance with the terms of this Indenture in effect at such
time shall validly represent issued and outstanding Trust Units,
notwithstanding that the form of such Trust Unit Certificate may not
be strictly in the form required by this Trust Indenture.
12.03 CONTENTS OF CERTIFICATE
Until otherwise determined by the Trustee, each certificate issued
following the date hereof shall legibly set forth on the face thereof, INTER
ALIA, the following:
(a) the name of the Fund and the words "a trust created under the laws
of the Province of Alberta by an Amended and Restated Trust
Indenture dated as of June 21, 2001" or words of like effect;
(b) the name of the person to whom the certificate is issued as Trust
Unitholder;
(c) the number of Trust Units represented thereby and that the Trust
Units represented thereby are fully paid; (d) "The Trust Units
represented by this certificate are issued upon the terms and
subject to the conditions of the Trust Indenture, which Trust
Indenture is binding upon all holders of Trust Units and, by
acceptance of this certificate, the holder assents to the terms and
conditions of the Trust Indenture. A copy of the Trust Indenture
pursuant to which this certificate and the Trust Units represented
thereby are issued may be obtained by any Trust Unitholder on demand
and without fee from the head office of the Fund." or words of like
effect; and
(e) "For information as to personal liability of a Trust Unitholder, see
the reverse side of this certificate." or words of like effect.
Until otherwise determined by the Trustee, each such certificate
shall legibly set forth on the face or the reverse side thereof, inter alia, the
following:
37
(a) "The Trust Indenture provides that no Trust Unitholder shall be
subject to any personal liability whatsoever, in tort, contract or
otherwise, to any person in connection with Fund property or the
obligations or the affairs of the Fund and all such persons shall
look solely to the Fund property for satisfaction of claims of any
nature arising out of or in connection therewith and the Fund
property only shall be subject to levy or execution." or words of
like effect; and
(b) an appropriate form of notice of exercise of right of redemption.
The Trust Unit Certificates may be engraved, printed or lithographed, or
partly in one form and partly in another, as the Corporation may determine.
12.04 REGISTER OF TRUST UNITHOLDERS
A register shall be kept at the principal corporate trust office in
Calgary, Alberta of the Transfer Agent, which register shall contain the names
and addresses of the Trust Unitholders, the respective numbers of Trust Units
held by them, the certificate numbers of the certificates representing such
Trust Units and a record of all redemptions thereof. Branch transfer registers
shall be maintained at such other offices of the Transfer Agents as the Trustee
may from time to time designate. Only Trust Unitholders whose certificates are
so recorded shall be entitled to receive distributions or to exercise or enjoy
the rights of Trust Unitholders hereunder. The Trustee shall have the right to
treat the person registered as a Trust Unitholder on the register of the Fund as
the owner of such Trust Units for all purposes, including, without limitation,
payment of any distribution, giving notice to Trust Unitholders and determining
the right to attend and vote at meetings of Trust Unitholders.
12.05 SUCCESSORS OF TRUST UNITHOLDERS
Any person becoming entitled to any Trust Units as a consequence of the
death of any Trust Unitholder, by gift, or otherwise by operation of law, shall
be recorded as the holder of such Trust Units and shall receive a new
certificate therefor upon production of evidence satisfactory to the Trustee
thereof and delivery of the existing certificate to the Trustee, but until such
record is made the Trust Unitholder of record shall continue to be and be deemed
to be the holder of such Trust Units for all purposes whether or not the Trustee
shall have actual or other notice of such death, or other event.
12.06 TRUST UNITS HELD JOINTLY OR IN A FIDUCIARY CAPACITY
The Trustee may treat two or more persons holding any Trust Units as joint
owners of the entire interest therein unless their ownership is expressly
otherwise recorded on the register of the Fund, but no entry shall be made in
the register or on any certificate that any person is in any other manner
entitled to any future, limited or contingent interest in any Trust Units;
provided, however that any person recorded as a Trust Unitholder may, subject to
the provisions hereinafter contained, be described in the register or on any
certificate as a fiduciary of any kind and any customary words may be added to
the description of the holder to identify the nature of such fiduciary
relationship.
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12.07 PERFORMANCE OF TRUST
The Trustee, the Trust Unitholders and any officer or agent of the Trustee
shall not be bound to be responsible for or otherwise inquire into or ensure the
performance of any trust, express, implied or constructive, or of any charge,
pledge or equity to which any of the Trust Units or any interest therein are or
may be subject, or to ascertain or enquire whether any transfer of any such
Trust Units or interests therein by any such Trust Unitholder or by his personal
representatives is authorized by such trust, charge, pledge or equity, or to
recognize any person as having any interest therein except for the person
recorded as Trust Unitholder.
12.08 LOST CERTIFICATES
In the event that any certificate for Trust Units is lost, stolen,
destroyed or mutilated, the Trustee or the Transfer Agents may authorize the
issuance of a new certificate for the same number of Trust Units in lieu
thereof. The Trustee or the Transfer Agents may, in its or their discretion,
before the issuance of such new certificate, require the owner of the lost,
stolen, destroyed or mutilated certificate, or the legal representative of the
owner, to make an affidavit or statutory declaration setting forth such facts as
to the loss, theft, destruction or mutilation as the Trustee or the Transfer
Agents may deem necessary, to surrender any mutilated certificate and may
require the applicant to supply to the Fund a "lost certificate bond" or a
similar bond in such reasonable sum as the Trustee or the Transfer Agents may
direct indemnifying the Trustee and the Transfer Agents and their agents for so
doing. The Trustee and the Transfer Agents shall have the power to require from
an insurer or insurers a blanket lost security bond or bonds in respect of the
replacement of lost, stolen, destroyed or mutilated certificates. All premiums
and other funds or money payable for such purpose shall be payable out of the
Trust Fund with such contribution, if any, by those insured as may be determined
by the Trustee in its sole discretion. If such blanket lost security bond is
required, the Trustee may authorize and direct (upon such terms and conditions
as the Trustee may from time to time impose) any agent to whom the indemnity of
such bond extends to take such action to replace any lost, stolen, destroyed or
mutilated certificate without further action or approval by the Trustee.
12.09 DEATH OF A TRUST UNITHOLDER
The death of a Trust Unitholder during the continuance of the Fund shall
not terminate the Fund or any of the mutual or respective rights and obligations
created by or arising under this Indenture nor give such Trust Unitholder's
personal representative a right to an accounting or take any action in court or
otherwise against other Trust Unitholders or the Trustee or the Trust Fund
property, but shall merely entitle the personal representatives of the deceased
Trust Unitholder to demand and receive, pursuant to the provisions hereof, a new
certificate for Trust Units in place of the certificate held by the deceased
Trust Unitholder, and upon the acceptance thereof such personal representatives
shall succeed to all rights of the deceased Trust Unitholder under this
Indenture.
12.10 UNCLAIMED INTEREST OR DISTRIBUTION
In the event that the Trustee shall hold any amount of interest or other
distributable amount which is unclaimed or which cannot be paid for any reason,
the Trustee shall be under no
39
obligation to invest or reinvest the same but shall only be obliged to hold the
same in a current interest-bearing account pending payment to the person or
persons entitled thereto. The Trustee shall, as and when required by law, and
may at any time prior to such required time, pay all or part of such interest or
other distributable amount so held to the Public Trustee (or other appropriate
government official or agency) whose receipt shall be a good discharge and
release of the Trustee.
ARTICLE 13
TERMINATION
13.01 TERMINATION DATE
Unless terminated earlier under Section 13.02, the Trustee shall commence
to wind up the affairs of the Trust when there are no longer any Trust Units
outstanding.
13.02 TERMINATION BY TRUSTEE WITH THE APPROVAL OF TRUST UNITHOLDERS
(a) The Trust Unitholders may vote by Extraordinary Resolution to
terminate the Fund at any meeting of Trust Unitholders duly called
for the purpose of considering termination of the Fund, provided
that such a vote may only be held if requested in writing by the
holders of not less than 25% of the Trust Units, or if called by the
Trustee following the refusal of the Trustee to redeem Trust Units.
(b) For the purpose of this Section and notwithstanding the provisions
of Section 11.06(b), a quorum of 20% of the issued and outstanding
Trust Units must be present or represented by proxy at the meeting
at which the vote is taken.
13.03 PROCEDURE UPON TERMINATION
Forthwith upon being required to commence to wind up the affairs of the
Fund, the Trustee shall give notice of the commencement of the winding-up of the
affairs of the Fund and such notice of any resolution approved by Trust
Unitholders under Section 13.02 shall designate the time or times at which Trust
Unitholders may surrender their Trust Units for cancellation and the date at
which the register of the Fund shall be closed.
13.04 POWERS OF THE TRUSTEE UPON TERMINATION
After the date referred to in Section 13.01 or the date on which a
resolution has been approved under Section 13.02, the Trustee shall carry on no
activities except for the purpose of winding up the affairs of the Fund as
hereinafter provided and, for this purpose, the Trustee shall continue to be
vested with and may exercise all or any of the powers conferred upon the Trustee
under this Indenture.
13.05 SALE OF INVESTMENTS
After the date referred to in Section 13.04, the Trustee shall proceed to
wind up the affairs of the Fund as soon as may be reasonably practicable and for
such purpose shall sell and
40
convert into money any remaining investments (including Investments) or other
assets comprising the Trust Fund in one transaction or in a series of
transactions by public or private sale and do all other acts appropriate to
liquidate the Trust Fund, and shall in all respects act in accordance with the
directions, if any, of the Trust Unitholders (in respect of a termination
authorized under Section 13.02). If the Trustee is unable to sell all or any of
the Investments or other assets comprising the Trust Fund by the date set for
termination, the Trustee may distribute undivided interests in the remaining
Trust Fund directly to the Trust Unitholders in accordance with their pro rata
share.
13.06 DISTRIBUTION OF PROCEEDS
After paying, retiring, discharging or making provision for the payment,
retirement or discharge of all known liabilities and obligations of the Fund and
providing for indemnity against any other outstanding liabilities and
obligations, the Trustee shall distribute the remaining part of the proceeds of
the sale of investment and other assets together with any cash forming part of
the Trust Fund among the Trust Unitholders in the following manner:
(a) the Trustee shall allocate to each Trust Unitholder and each Trust
Unitholder shall thereupon be entitled to enforce payment of his pro
rata share of such part of all amounts that would otherwise be
included in computing the income of the Fund for the purposes of the
INCOME TAX ACT for the year and that are not payable to Trust
Unitholders in the year by virtue of any provision of this Trust
Indenture other than this Section 13.06; and
(b) the remaining part, if any, of the said proceeds, other assets and
cash shall be distributed among the Trust Unitholders in accordance
with their pro rata shares.
13.07 FURTHER NOTICE TO TRUST UNITHOLDERS
In the event that all of the Trust Unitholders shall not surrender their
Trust Units for cancellation within six (6) months after the time specified in
the notice or resolution referred to in Section 13.04 the Trustee shall give
further notice to the remaining Trust Unitholders to surrender their Trust Units
for cancellation and, if within one (1) year after the further notice, all the
Trust Units shall not have been surrendered for cancellation, such remaining
Trust Units shall be deemed to be cancelled without prejudice to the rights of
the holders of such Trust Units to receive their pro rata shares of the amounts
referred to in Section 13.06 and the Trustee may either take appropriate steps,
or appoint an agent to take appropriate steps, to contact such Trust Unitholders
(deducting all expenses thereby incurred from the amounts to which such Trust
Unitholders are entitled as aforesaid) or, in the discretion of the Trustee, may
pay such amounts into court.
13.08 RESPONSIBILITY OF TRUSTEE AFTER SALE AND CONVERSION
The Trustee shall be under no obligation to invest the proceeds of any
sale of Investments or other assets or cash forming part of the Trust Fund after
the date referred to in Section 13.04 and, after such sale, the sole obligation
of the Trustee under this Indenture shall be to hold such proceeds in trust for
distribution under Section 13.06.
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ARTICLE 14
SUPPLEMENTAL INDENTURES
14.01 PROVISION FOR SUPPLEMENTAL INDENTURES FOR CERTAIN PURPOSES
From time to time the Corporation and ERC (when authorized by a resolution
of the directors of the Corporation) and the Trustee may, subject to the
provisions hereof, and they shall, when so directed in accordance with the
provisions hereof, execute and deliver by their proper officers, indentures or
instruments supplemental hereto, which thereafter shall form part hereof, for
any one or more or all of the following purposes:
(a) modifying or amending any provisions of this Trust Indenture in the
circumstances set forth in Article 10 where the Trustee and the
Corporation may do so without the consent, approval or ratification
of the Trust Unitholders or any other person; and
(b) modifying or amending any provisions of this Trust Indenture where
the modification or amendment has been approved by Extraordinary
Resolution.
14.02 PROVISION FOR AMENDED AND RESTATED INDENTURES
Notwithstanding Section 14.01, following any amendments to this Trust
Indenture, the parties to the Trust Indenture may enter into an amended and
restated version of the Trust Indenture which shall include and give effect to
all amendments to the Trust Indenture in effect at the applicable time.
ARTICLE 15
GENERAL
15.01 NOTICES
Any notice required to be given under this Indenture shall be given to the
Trust Unitholders by letter or circular sent through ordinary post addressed to
each registered holder at his last address appearing on the register; provided
that if there is a general discontinuance of postal service due to strike,
lockout or otherwise, such notice may be given by publication twice in the
National Edition of The Globe and Mail or any other newspaper having national
circulation in Canada; provided further that if there is no newspaper having
national circulation, then by publishing twice in a newspaper in each city where
the register or a branch register is maintained. Any notice so given shall be
deemed to have been given on the day following that on which the letter or
circular was posted or, in the case of notice being given by publication, after
publishing such notice twice in the designated newspaper or newspapers. In
proving notice was posted, it shall be sufficient to prove that such letter or
circular was properly addressed, stamped and posted.
42
15.02 FAILURE TO GIVE NOTICE
The failure by the Trustee, by accident or omission or otherwise
unintentionally, to give any Trust Unitholder any notice provided for herein
shall not affect the validity, effect, taking effect or time or taking effect of
any action referred to in such notice, and the Trustee shall not be liable to
any Unitholder for any such failure.
15.03 JOINT HOLDERS
Service of a notice or document on any one of several joint holders of
Trust Units shall be deemed effective service on the other joint holders.
15.04 SERVICE OF NOTICE
Any notice or document sent by post to or left at the address of a Trust
Unitholder pursuant to this Article shall, notwithstanding the death or
bankruptcy of such Trust Unitholder, and whether or not the Trustee has notice
of such death or bankruptcy, be deemed to have been fully served and such
service shall be deemed sufficient service on all persons interested in the
Trust Units concerned.
15.05 INFORMATION AVAILABLE TO TRUST UNITHOLDERS
Each Trust Unitholder shall have the right to obtain, on demand and on
payment of reasonable reproduction costs from the head office of the Fund, a
copy of this Trust Indenture and the supplemental indentures, if any, and shall
be entitled to inspect, and, on payment of a reasonable fee thereof, obtain a
list of the Trust Unitholders for purposes connected with the Fund.
15.06 INCOME TAX: OBLIGATIONS OF THE TRUSTEE
The Trustee shall satisfy, perform and discharge all obligations and
responsibilities of the Trustee under the INCOME TAX ACT (including any
obligations of the Fund under Part XIII of the said Act) and neither the Fund
nor the Trustee shall be accountable or liable to any Trust Unitholder by reason
of any act or acts of the Trustee consistent with any such obligations or
responsibilities.
15.07 INCOME TAX: DESIGNATIONS
Subject to Section 5.03 hereof, in the return of its income under Part I
of the INCOME TAX ACT for each year the Fund shall make such designations to
Trust Unitholders with respect to any amounts distributed or payable to Trust
Unitholders in the year including, without restricting the generality of the
foregoing, designations with respect to any taxable capital gains realized and
distributed to Trust Unitholders by the Fund in the year, and to any interest
payable to Trust Unitholders in the year, as shall be permitted under the
provisions of the INCOME TAX ACT and as the Trustee in its sole discretion shall
deem to be reasonable and equitable.
43
15.08 INCOME TAX: DEDUCTIONS
The Trustee shall claim the maximum deductions available to the Fund for
the purposes of computing its income pursuant to the provisions of the INCOME
TAX ACT but the Trustee shall not claim any such deduction that if not so
claimed would be available to the Fund in a subsequent year for the purpose of
so computing its income to the extent that the effect thereof would be to
create, or to increase the amount of, a loss or a capital loss of the Fund for
the year pursuant to the INCOME TAX ACT.
15.09 FISCAL YEAR
The fiscal year of the Fund shall end on December 31 of each year.
ARTICLE 16
AUDITORS
16.01 QUALIFICATION OF AUDITORS
The Auditors shall be an independent recognized firm of chartered
accountants which has an office within Alberta.
16.02 APPOINTMENT OF AUDITORS
Subject to Sections 16.04 and 16.05, the Auditors will be selected at each
annual meeting of Trust Unitholders. The Auditors will receive such remuneration
as may be approved by the directors of the Corporation.
16.03 AUDITORS CEASING TO HOLD OFFICE
The Auditors shall cease to hold office when the Auditor resigns or is
removed pursuant to Section 16.04. The resignation of the Auditors shall become
effective at the time a written resignation is sent to the Fund or at the time
specified in the resignation, whichever is later.
16.04 REMOVAL OF AUDITORS
The Auditors may at any time be removed by the Trustee with the approval
of a majority of the votes cast by Trust Unitholders at a meeting of Trust
Unitholders duly called for that purpose. A vacancy created by the removal of
Auditors as aforesaid may be filled by the Trustee with the approval of a
majority of votes cast by Trust Unitholders at a meeting duly called for that
purpose, or if not so filled, may be filled under Section 16.05.
16.05 FILLING VACANCY
The board of directors of the Corporation shall forthwith fill a vacancy
in the office of Auditors. The Auditors appointed to fill a vacancy shall hold
office until the unexpired term of the Auditors' predecessor. The board of
directors of the Corporation shall fix the remuneration of the Auditors
appointed to fill such a vacancy.
44
16.06 REPORTS OF AUDITORS
The Auditors shall audit the accounts of the Fund at least once in each
year and a report of the Auditors with respect to the annual financial
statements of the Fund shall be provided to each Trust Unitholder with notice of
the annual general meeting of the Fund.
ARTICLE 17
MISCELLANEOUS
17.01 SUCCESSORS AND ASSIGNS
The provisions of this Indenture shall enure to the benefit of, and be
binding upon, the parties and their successors and permitted assigns.
17.02 COUNTERPARTS
This Indenture may be simultaneously executed in several counterparts,
each of which so executed shall be deemed to be an original, and such
counterparts, together, shall constitute but one and the same instrument, which
shall be sufficiently evidenced by any such original counterparts.
17.03 SEVERABILITY
If any provision of this Indenture shall be held invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall attach only to
such provision in such jurisdiction and shall not in any manner affect or render
invalid or unenforceable such provision in any other jurisdiction or any other
provision of this Indenture in any jurisdiction.
17.04 NOTICES
Any payment, notice, direction or other instrument required or permitted
to be given under this Indenture by or to the Trustee or the Corporation hereto
shall be in writing and may be given by delivering same or mailing same by
registered mail or sending by facsimile, telecommunication device or other
similar form of communication to the following addresses:
The Trustee:
ENERPLUS RESOURCES FUND
c/o CIBC Mellon Trust Company, as Trustee
6th Floor, The Dome Tower
000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Account Manager
Facsimile: (000) 000-0000
45
The Corporation and ERC:
ENERMARK INC./ENERPLUS RESOURCES CORPORATION
0000, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: President
Facsimile: (000) 000-0000
Any notice, direction or instrument aforesaid shall:
(a) if delivered, be deemed to have been given or made at the time of
delivery;
(b) if mailed and properly addressed, be deemed to have been given or
made on the fifth (5th) day following the day on which it was so
mailed, provided that, if mailed, should there be at the time of
mailing or between the time of mailing and the actual receipt of the
notice, a mail strike, slow down or other labour dispute or
interruption which might affect the delivery of such notice or
communication by the mails, then such notice or communication shall
be only effective when actually delivered; and
(c) if sent by facsimile, telecommunication device or other similar form
of communication, be deemed to have been given or made on the day
following the day on which it was sent.
The Trustee, the Corporation or ERC may give written notice of
change of address in the same manner, in which event such notice or
communication shall thereafter be given to it as above provided at such
changed address.
46
IN WITNESS WHEREOF each of the parties has caused these presents to
be executed by its proper officers duly authorized in its behalf.
CIBC MELLON TRUST COMPANY
By: "XXXXXXX XXXXXX"
---------------------------
By: "XXXXX XXXXXXXX"
---------------------------
ENERPLUS RESOURCES CORPORATION
By: "XXXXXX X. XXXX"
---------------------------
By: "XXXXXXXXX X. XXXXXXXX"
---------------------------
ENERMARK INC.
By: "XXXXXX X. XXXX"
---------------------------
By: "XXXXXXXXX X. XXXXXXXX"
---------------------------
