EXHIBIT 99.2
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AMENDED AND RESTATED VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 31st day of January, 2001,
and amended and restated as of the 16th day of May, 2003.
AMONG:
ARC ENERGY TRUST, a trust organized under the laws of Alberta
(hereinafter referred to as "ARC")
OF THE FIRST PART,
- and -
908563 ALBERTA LTD., a corporation incorporated under the laws of
Alberta (hereinafter referred to as "ARC Subco")
OF THE SECOND PART,
- and -
ARC RESOURCES LTD., a corporation incorporated under the laws of
Alberta (hereinafter referred to as "ARC Resources")
OF THE THIRD PART,
- and -
COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company
incorporated under the laws of Canada (hereinafter referred to as
"Trustee")
OF THE FOURTH PART.
WHEREAS in connection with a Plan of Arrangement filed January
31, 2001 (the "Plan of Arrangement") holders of common shares of Startech Energy
Inc. received: (1) at the election of the holder, either 0.96 trust units of ARC
or 0.96 exchangeable shares of ARC Resources (the "ARC Resources Exchangeable
Shares"); and (ii) one common share of Impact Energy Inc.;
AND WHEREAS in connection with a Share Purchase Agreement dated
July 9, 2002, between ARC Resources Management Ltd., each of the shareholders of
ARC Resources Management Ltd., 980445 Alberta Ltd. ("ARC Acquisition"), ARC
Resources Ltd. and ARC (the "Share Purchase Agreement") holders of common shares
of ARC Resources Management Ltd. received consideration which included, at the
election of the shareholder, exchangeable shares of ARC Acquisition (the "ARML
Exchangeable Shares");
AND WHEREAS on August 29, 2002, ARC Acquisition amalgamated with
its then wholly-owned subsidiary ARC Resources Management Ltd. and continued
under the name "ARC Resources Management Ltd." ("ARML");
AND WHEREAS ARC Resources has amended its Articles by replacing
the rights, privileges restrictions and conditions attaching to the ARC
Resources Exchangeable Shares with rights,
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privileges, restrictions and conditions which are in substance identical to
those attaching to the ARML Exchangeable Shares;
AND WHEREAS ARC Resources has acquired all of the outstanding
ARML Exchangeable Shares in exchange for ARC Resources Exchangeable Shares
("Exchangeable Shares") which have been amended to have rights, privileges,
restrictions and conditions which are in substance identical to those attaching
to the ARML Exchangeable Shares (the "Share Exchange")
AND WHEREAS to give effect to the Share Exchange the parties
hereto have agreed to amend and restate this Agreement;
AND WHEREAS the Articles of ARC Resources set forth the rights,
privileges, restrictions and conditions attaching to the Exchangeable Shares;
AND WHEREAS the parties hereto have agreed to enter into this
Agreement in order to give effect to those exchange rights;
NOW THEREFORE in consideration of the respective covenants and
agreements provided in this Agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties hereto covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement, the following terms shall have the following
meanings:
"Act" means the Business Corporations Act (Alberta), as amended.
"Affiliate" has the meaning given to that term in the Securities Act.
"Aggregate Equivalent Vote Amount" means, with respect to any matter,
proposition or question on which ARC Unitholders are entitled to vote,
consent or otherwise act, the number of Exchangeable Shares issued and
outstanding and held by Beneficiaries.
"ARC Consent" has the meaning given to that term in Section 4.2.
"ARC Energy Units" means the trust units of ARC as constituted on the
date hereof.
"ARC Liquidation Event" has the meaning given to that term in Section
5.12(b).
"ARC Liquidation Event Effective Date" has the meaning given to that
term in Section 5.12(c).
"ARC Meeting" has the meaning given to that term in Section 4.2.
"ARC Successor" has the meaning given to that term in Section 10.1(a).
"ARC Unitholders" means the registered holders of ARC Energy Units from
time to time.
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"Automatic Exchange Rights" means the benefit of the obligation of ARC
and ARC Subco to effect the automatic exchange of Exchangeable Shares
for ARC Energy Units as defined in Section 5.12(c).
"Beneficiary Votes" has the meaning given to that term in Section 4.2.
"Beneficiaries" means the registered holders from time to time of
Exchangeable Shares, other than ARC and ARC Subco.
"Board of Directors" means the Board of Directors of ARC Resources from
time to time.
"Business Day" means any day on which commercial banks are generally
open for business in Calgary, Alberta, other than a Saturday, a Sunday
or a day observed as a holiday in Calgary, Alberta under the laws of
the Province of Alberta or the federal laws of Canada.
"Call Rights" has the meaning given to that term in the Share
Provisions.
"Current Market Price" has the meaning given to that term in the Share
Provisions.
"Exchange Ratio" has the meaning given to that term in the Share
Provisions.
"Exchange Rights" has the meaning given to that term in Section 5.1(a).
"Exchangeable Shares" means the non-voting exchangeable shares in the
capital of ARC Resources, having the rights, privileges, restrictions
and conditions set out in the Share Provisions.
"Indemnified Parties" has the meaning given to that term in Section
8.1.
"Insolvency Event" means the institution by ARC Resources of any
proceeding to be adjudicated a bankrupt or insolvent or to be wound up,
or the consent of ARC Resources to the institution of bankruptcy,
insolvency, dissolution or winding-up proceedings against it, or the
filing of a petition, answer or consent seeking dissolution or
winding-up under any bankruptcy, insolvency or analogous laws,
including without limitation the Companies Creditors' Arrangement Act
(Canada) and the Bankruptcy and Insolvency Act (Canada), and the
failure by ARC Resources to contest in good faith any such proceedings
commenced in respect of ARC Resources within 15 days of becoming aware
thereof, or the consent by ARC Resources to the filing of any such
petition or to the appointment of a receiver, or the making by ARC
Resources of a general assignment for the benefit of creditors, or the
admission in writing by ARC Resources of its inability to pay its debts
generally as they become due, or ARC Resources not being permitted,
pursuant to solvency requirements of applicable law, to redeem any
Retracted Shares pursuant to Section 4.6 of the Share Provisions.
"Liquidation Call Right" has the meaning given to that term in the
Share Provisions;
"List" has the meaning given to that term in Section 4.6.
"Officer's Certificate" means, with respect to ARC Resources, a
certificate signed by any officer or director of ARC Resources.
"person" includes any individual, firm, partnership, joint venture,
venture capital fund, limited liability company, unlimited liability
company, association, trust, trustee, executor, administrator,
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legal personal representative, estate, group, body corporate,
corporation, unincorporated association or organization, government
body, syndicate or other entity, whether or not having legal status.
"Redemption Call Right" has the meaning given to that term in the Share
Provisions.
"Retracted Shares" has the meaning given to that term in Section 5.7.
"Retraction Call Right" has the meaning given to that term in the Share
Provisions.
"Securities Act" means the Securities Act (Alberta), as amended.
"Share Provisions" means the rights, privileges, restrictions and
conditions attaching to the Exchangeable Shares, all as set forth in
the Articles of Amendment of ARC Resources dated the date hereof.
"Special Voting Unit" means the one special voting unit of ARC, issued
by ARC to and deposited with the Trustee, which entitles the holders of
record of Exchangeable Shares who are Beneficiaries to a number of
votes at meetings of ARC Unitholders equal to the Aggregate Equivalent
Vote Amount.
"Support Agreement" means that certain amended and restated support
agreement made as of even date herewith among ARC, ARC Subco, ARC
Resources and the Trustee.
"Trust" means the trust created by this Agreement.
"Trust Estate" means the Voting Rights, the Exchange Rights, the
Automatic Exchange Rights and any money or other property which may be
held by the Trustee from time to time pursuant to this Agreement.
"Trustee" means Computershare Trust Company of Canada and, subject to
the provisions of Article 9, includes any successor trustee.
"Voting Rights" means the voting rights attached to the Special Voting
Unit.
1.2 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this Agreement into Articles, Sections and other
portions and the insertion of headings are for convenience of reference only and
should not affect the construction or interpretation of this Agreement. Unless
otherwise indicated, all references to an "Article" or "section" followed by a
number and/or a letter refer to the specified Article or Section of this
Agreement. The terms "this Agreement", "hereof", "herein" and "hereunder" and
similar expressions refer to this Agreement and not to any particular Article,
Section or other portion hereof and include any agreement or instrument
supplementary or ancillary hereto.
1.3 NUMBER, GENDER, ETC.
Words importing the singular number only shall include the plural
and vice versa. Words importing any gender shall include all genders.
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1.4 DATE FOR ANY ACTION
If any date on which any action is required to be taken under
this Agreement is not a Business Day, such action shall be required to be taken
on the next succeeding Business Day.
ARTICLE 2
PURPOSE OF AGREEMENT
2.1 ESTABLISHMENT OF TRUST
The purpose of this Agreement is to create the Trust for the
benefit of the Beneficiaries, as herein provided. The Trustee will hold the
Voting Rights and the Exchange Rights and the Automatic Exchange Rights in order
to enable the Trustee to exercise such rights, in each case as trustee for and
on behalf of the Beneficiaries as provided in this Agreement.
ARTICLE 3
SPECIAL VOTING UNIT
3.1 ISSUANCE AND OWNERSHIP OF THE SPECIAL VOTING UNIT
ARC has issued to and has deposited with the Trustee the Special
Voting Unit to be hereafter held of record by the Trustee as trustee for and on
behalf of, and for the use and benefit of, the Beneficiaries and in accordance
with the provisions of this Agreement. ARC hereby acknowledges receipt from the
Trustee as trustee for and on behalf of the Beneficiaries of good and valuable
consideration (and the adequacy thereof) for the issuance of the Special Voting
Unit by ARC to the Trustee. During the term of the Trust and subject to the
terms and conditions of this Agreement, the Trustee shall possess and be vested
with full legal ownership of the Special Voting Unit and shall be entitled to
exercise all of the rights and powers of an owner with respect to the Special
Voting Unit, provided that the Trustee shall:
(a) hold the Special Voting Unit and the legal title thereto as trustee
solely for the use and benefit of the Beneficiaries in accordance with
the provisions of this Agreement; and
(b) except as specifically authorized by this agreement, have no power or
authority to sell, transfer, vote or otherwise deal in or with the
Special Voting Unit, and the Special Voting Unit shall not be used or
disposed of by the Trustee for any purpose other than the purposes for
which this Trust is created pursuant to this Agreement.
3.2 LEGENDED SHARE CERTIFICATES
ARC Resources will cause each certificate representing
Exchangeable Shares to bear an appropriate legend notifying the Beneficiaries of
their right to instruct the Trustee with respect to the exercise of the Voting
Rights with respect to the Exchangeable Shares held by a Beneficiary.
3.3 SAFE KEEPING OF CERTIFICATE
The certificate representing the Special Voting Unit shall at all
times be held in safe keeping by the Trustee or its agent.
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ARTICLE 4
EXERCISE OF VOTING RIGHTS
4.1 VOTING RIGHTS
The Trustee, as the holder of record of the Special Voting Unit,
shall be entitled to all of the Voting Rights, including the right to consent to
or to vote in person or by proxy the Special Voting Unit, on any matter,
question or proposition whatsoever that may properly come before the ARC
Unitholders at an ARC Meeting or in connection with an ARC Consent (in each
case, as hereinafter defined). The Voting Rights shall be and remain vested in
and exercised by the Trustee. Subject to Section 6.15 hereof, the Trustee shall
exercise the Voting Rights only on the basis of instructions received pursuant
to this Article 4 from Beneficiaries entitled to instruct the Trustee as to the
voting thereof at the time at which an ARC Consent is sought or an ARC Meeting
is held. To the extent that no instructions are received from a Beneficiary with
respect to the Voting Rights to which such Beneficiary is entitled, the Trustee
shall not exercise or permit the exercise of such Beneficiary's Voting Rights.
4.2 NUMBER OF VOTES
With respect to all meetings of ARC Unitholders at which
Beneficiaries of ARC Energy Units are entitled to vote (an "ARC Meeting") and
with respect to all written consents sought by ARC from ARC Unitholders (an "ARC
Consent"), each Beneficiary shall be entitled to instruct the Trustee to cast
and exercise, in the manner instructed, one vote for each Exchangeable Share
owned of record by such Beneficiary on the record date established by ARC or by
applicable law for such ARC Meeting or ARC Consent, as the case may be, (the
"Beneficiary Votes") in respect of each matter, question or proposition to be
voted on at such ARC Meeting or to be consented to in connection with such ARC
Consent.
4.3 MAILINGS TO UNITHOLDERS
With respect to each ARC Meeting and ARC Consent, the Trustee
will mail or cause to be mailed (or otherwise communicate in the same manner as
ARC utilizes in communications to ARC Unitholders, subject to the Trustee's
ability to provide this method of communication and upon being advised in
writing of such method) to each of the Beneficiaries named in the List on the
same day as the initial mailing or notice (or other communication) with respect
thereto is given by ARC to ARC Unitholders:
(a) a copy of such notice, together with any proxy or information statement
and related materials (but excluding proxies to vote ARC Energy Units)
to be provided to ARC Unitholders;
(b) a statement that such Beneficiary is entitled to instruct the Trustee
as to the exercise of the Beneficiary Votes with respect to such ARC
Meeting or ARC Consent, as the case may be, or, pursuant to Section 4.7
hereof, to attend such ARC Meeting and to exercise personally the
Beneficiary Votes thereat;
(c) a statement as to the manner in which such instructions may be given to
the Trustee, including an express indication that instructions may be
given to the Trustee to give:
(i) a proxy to such Beneficiary or such Beneficiary's designee to
exercise personally the Beneficiary Votes; or
(ii) a proxy to a designated agent or other representative of the
management of ARC to exercise such Beneficiary Votes;
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(d) a statement that if no such instructions are received from the
Beneficiary, the Beneficiary Votes to which such Beneficiary is
entitled will not be exercised;
(e) a form of direction whereby the Beneficiary may so direct and instruct
the Trustee as contemplated herein; and
(f) a statement of (i) the time and date by which such instructions must be
received by the Trustee in order to be binding upon it, which in the
case of a ARC Meeting shall not be earlier than 24 hours prior to such
meeting, and (ii) the method for revoking or amending such
instructions.
The materials referred to above are to be provided by ARC to the
Trustee, but shall be subject to review and comment by the Trustee.
For the purposes of determining Beneficiary Votes to which a
Beneficiary is entitled in respect of any such ARC Meeting or ARC Consent, the
number of Exchangeable Shares owned as of record by the Beneficiary shall be
determined at the close of business on the record date established by ARC or by
applicable law for purposes of determining ARC Unitholders entitled to vote at
such ARC Meeting or to give written consent in connection with such ARC Consent.
ARC will notify the Trustee in writing of any decision of the board of directors
of ARC Resources with respect to the calling of any such ARC Meeting or the
seeking of such ARC Consent and shall provide all necessary information and
materials to the Trustee in each case promptly and in any event in sufficient
time to enable the Trustee to perform its obligations contemplated by this
Section 4.3.
4.4 COPIES OF UNITHOLDER INFORMATION
ARC will deliver to the Trustee copies of all proxy materials,
(including notices of ARC Meetings, but excluding proxies to vote ARC Energy
Units), information statements, reports (including without limitation all
interim and annual financial statements) and other written communications that
are to be distributed from time to time to beneficiaries of ARC Energy Units in
sufficient quantities and in sufficient time so as to enable the Trustee to send
those materials to each Beneficiary at the same time as such materials are first
sent to ARC Unitholders. The Trustee will mail or otherwise send to each
Beneficiary, at the expense of ARC, copies of all such materials (and all
materials specifically directed to the Beneficiaries or to the Trustee for the
benefit of the Beneficiaries by ARC) received by the Trustee from ARC at the
same time as such materials are first sent to ARC Unitholders. The Trustee will
make copies of all such materials available for inspection by any Beneficiary at
the Trustee's principal transfer office in the cities of Calgary and Toronto.
4.5 OTHER MATERIALS
Immediately after receipt by ARC or any Unitholder of ARC of any
material sent or given generally to the ARC Unitholders by or on behalf of a
third party, including without limitation dissident proxy and information
circulars (and related information and material) and tender and exchange offer
circulars (and related information and material), ARC shall use its reasonable
efforts to obtain and deliver to the Trustee copies thereof in sufficient
quantities so as to enable the Trustee to forward such material (unless the same
has been provided directly to Beneficiaries by such third party) to each
Beneficiary as soon as possible thereafter. As soon as practicable after receipt
thereof, the Trustee will mail or otherwise send to each Beneficiary, at the
expense of ARC, copies of all such materials received by the Trustee from ARC.
The Trustee will also make copies of all such materials available for inspection
by any Beneficiary at the Trustee's principal transfer office in the cities of
Calgary and Toronto.
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4.6 LIST OF PERSONS ENTITLED TO VOTE
ARC Resources shall, (i) prior to each annual, general or special
ARC Meeting or the seeking of any ARC Consent and (ii) forthwith upon each
request made at any time by the Trustee in writing, prepare or cause to be
prepared a list (a "List") of the names and addresses of the Beneficiaries
arranged in alphabetical order and showing the number of Exchangeable Shares
held of record by each such Beneficiary, in each case at the close of business
on the date specified by the Trustee in such request or, in the case of a List
prepared in connection with ARC Meeting or a ARC Consent, at the close of
business on the record date established by ARC or pursuant to applicable law for
determining the ARC Unitholders entitled to receive notice of and/or to vote at
such ARC Meeting or to give consent in connection with such ARC Consent. Each
such List shall be delivered to the Trustee promptly after receipt by ARC
Resources of such request on the record date for such meeting or seeking of
consent, as the case may be, and in any event within sufficient time as to
enable the Trustee to perform its obligations under this agreement. ARC agrees
to give ARC Resources written notice (with a copy to the Trustee) of the calling
of any ARC Meeting or the seeking of any ARC Consent, together with the record
dates therefor, sufficiently prior to the date of the calling of such meeting or
seeking of such consent so as to enable ARC Resources to perform its obligations
under this Section 4.6
4.7 ENTITLEMENT TO DIRECT VOTES
Any Beneficiary named in a List prepared in connection with any
ARC Meeting or any ARC Consent will be entitled (i) to instruct the Trustee in
the manner described in Section 4.3 hereof with respect to the exercise of the
Beneficiary Votes to which such Beneficiary is entitled or (ii) to attend such
meeting and personally to exercise thereat (or to exercise with respect to any
written consent), as the proxy of the Trustee, the Beneficiary Votes to which
such Beneficiary is entitled.
4.8 VOTING BY TRUSTEE, AND ATTENDANCE OF TRUSTEE REPRESENTATIVE, AT
MEETING
(a) In connection with each ARC Meeting and ARC Consent, the Trustee shall
exercise, either in person or by proxy, in accordance with the
instructions received from a Beneficiary pursuant to Section 4.3
hereof, the Beneficiary Votes as to which such Beneficiary is entitled
to direct the vote (or any lesser number thereof as may be set forth in
the instructions); provided, however, that such written instructions
are received by the Trustee from the Beneficiary prior to the time and
date fixed by it for receipt of such instructions in the notice given
by the Trustee to the Beneficiary pursuant to section 4.3 hereof;
(b) The Trustee shall cause such representatives as are empowered by it to
sign and deliver, on behalf of the Trustee, proxies for Voting Rights
to attend each ARC Meeting. Upon submission by a Beneficiary (or its
designee) of identification satisfactory to the Trustee's
representatives, and at the Beneficiary's request, such representatives
shall sign and deliver to such Beneficiary (or its designee) a proxy to
exercise personally the Beneficiary Votes as to which such Beneficiary
is otherwise entitled hereunder to direct the vote, if such Beneficiary
either:
(i) has not previously given the Trustee instructions pursuant to
Section 4.3 hereof in respect of such meeting; or
(ii) submits to the Trustee's representatives written revocation of
any such previous instructions.
At such meeting, the Beneficiary exercising such Beneficiary Votes shall have
the same rights as the Trustee to speak at the meeting in respect of any matter,
question or proposition, to vote by way of ballot
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at the meeting in respect of any matter, question or proposition and to vote at
such meeting by way of a show of hands in respect of any matter, question or
proposition.
4.9 DISTRIBUTION OF WRITTEN MATERIALS
Any written materials to be distributed by the Trustee to the
Beneficiaries pursuant to this Agreement shall be delivered or sent by mail (or
otherwise communicated in the same manner as ARC utilizes in communications to
beneficiaries of ARC Energy Units subject to the Trustee's ability to provide
this method of communication and upon being advised in writing of such method)
to each Beneficiary at its address as shown on the books of ARC Resources. ARC
Resources shall provide or cause to be provided to the Trustee for this purpose,
on a timely basis and without charge or other expense:
(a) current lists of the Beneficiaries; and
(b) on the request of the Trustee, mailing labels to enable the Trustee to
carry out it duties under this agreement.
The materials referred to above are to be provided by ARC Resources to the
Trustee, but shall be subject to review and comment by the Trustee.
4.10 TERMINATION OF VOTING RIGHTS
Except as otherwise provided herein or in the Share Provisions,
all of the rights of a Beneficiary with respect to the Beneficiary Votes
exercisable in respect of the Exchangeable Shares held by such Beneficiary,
including the right to instruct the Trustee as to the voting of or to vote
personally such Beneficiary Votes, shall be deemed to be surrendered by the
Beneficiary to ARC, and such Beneficiary Votes and the Voting Rights represented
thereby shall cease immediately, upon the delivery by such Beneficiary to the
Trustee of the certificates representing such Exchangeable Shares in connection
with the exercise by the Beneficiary of the Exchange Rights or the occurrence of
the Automatic Exchange Rights (unless in any case ARC or ARC Subco shall not
have delivered the consideration deliverable in exchange therefor to the Trustee
for delivery to the Beneficiaries), or upon the redemption of Exchangeable
Shares pursuant to Article 4 or Article 5 of the Share Provisions, or upon the
effective date of the liquidation, dissolution or winding-up of ARC Resources or
any other distribution of the assets of ARC Resources among its shareholders for
the purpose of winding up its affairs pursuant to Article 6 of the Share
Provisions, or upon the purchase of Exchangeable Shares from the Beneficiary
thereof by ARC or ARC Subco pursuant to the exercise by ARC or ARC Subco of the
Retraction Call Right, the Redemption Call Right or the Liquidation Call Right.
ARTICLE 5
EXCHANGE RIGHTS AND AUTOMATIC EXCHANGE
5.1 GRANT AND OWNERSHIP OF THE EXCHANGE RIGHTS
Each of ARC and ARC Subco hereby grants to the Trustee as trustee
for and on behalf of, and for the use and benefit of, the Beneficiaries:
(a) the right (the "Exchange Rights"), upon the occurrence and during the
continuance of an Insolvency Event to require ARC or ARC Subco to
purchase from each or any Beneficiary all or any part of the
Exchangeable Shares held by that Beneficiary; and
(b) the Automatic Exchange Rights;
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all in accordance with the provisions of this Agreement. Each of ARC and ARC
Subco hereby acknowledges receipt from the Trustee as trustee for and on behalf
of the Beneficiaries of good and valuable consideration (and the adequacy
thereof) for the grant of the Exchange Rights and the Automatic Exchange Rights
by ARC and ARC Subco to the Trustee. During the term of the Trust and subject to
the terms and conditions of this Agreement, the Trustee shall possess and be
vested with full legal ownership of the Exchange Rights and the Automatic
Exchange Rights and shall be entitled to exercise all of the rights and powers
of an owner with respect to the Exchange Rights and the Automatic Exchange
Rights, provided that the Trustee shall:
(c) hold the Exchange Rights and the Automatic Exchange Rights and the legal
title thereto as trustee solely for the use and benefit of the
Beneficiaries in accordance with the provisions of this Agreement; and
(d) except as specifically authorized by this Agreement, have no power or
authority to exercise or otherwise deal in or with the Exchange Rights
or the Automatic Exchange Rights, and the Trustee shall not exercise any
such rights for any purpose other than the purposes for which the Trust
is created pursuant to this Agreement.
5.2 LEGENDED SHARE CERTIFICATES
ARC Resources will cause each certificate representing
Exchangeable Shares to bear an appropriate legend notifying the Beneficiaries
of:
(a) their right to instruct the Trustee with respect to the exercise of the
Exchange Rights in respect of the Exchangeable Shares held by a
Beneficiary; and
(b) the Automatic Exchange Rights.
5.3 GENERAL EXERCISE OF EXCHANGE RIGHTS
The Exchange Rights shall be and remain vested in and exercisable
by the Trustee. Subject to Section 6.15, the Trustee shall exercise the Exchange
Rights only on the basis of instructions received pursuant to this Article 5
from Beneficiaries entitled to instruct the Trustee as to the exercise thereof.
To the extent that no instructions are received from a Beneficiary with respect
to the Exchange Rights, the Trustee shall not exercise or permit the exercise of
the Exchange Rights.
5.4 PURCHASE PRICE
The purchase price payable by ARC or ARC Subco, as applicable,
for each Exchangeable Share to be purchased by ARC or ARC Subco, as applicable,
under the Exchange Rights shall be an amount per share equal to the amount
determined by multiplying the Exchange Ratio on the last Business Day prior to
the date of closing of the purchase and sale of such Exchangeable Shares under
the Exchange Rights (as provided for in Section 5.6) by the Current Market Price
of an ARC Energy Unit on the last Business Day prior to such date.
In connection with each exercise of the Exchange Rights, ARC or
ARC Subco shall provide to the Trustee an Officer's Certificate setting forth
the calculation of the purchase price for each Exchangeable Share. The purchase
price for each such Exchangeable Share so purchased may be satisfied only by ARC
or ARC Subco, as applicable, delivering or causing to be delivered to the
Trustee, on behalf of the relevant Beneficiary, a certificate or certificates
representing that number of ARC Energy Units (which securities shall be duly
issued as fully paid and non-assessable and shall be free and clear of any lien,
claim or encumbrance) equal to the Exchange Ratio as at the last Business Day
prior to the date
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of closing of the purchase and sale of such Exchangeable Shares
under the Exchange Rights, such purchase price to be paid in accordance with
Section 5.6 (but less any amounts withheld pursuant to Section 5.13). Upon
payment by ARC or ARC Subco, as applicable, of such purchase price, the relevant
Beneficiary shall cease to have any right to be paid any amount in respect of
accrued and unpaid dividends (but not in respect of dividends which have been
declared and are unpaid) on each such Exchangeable Share by ARC Resources.
5.5 EXERCISE INSTRUCTIONS
Subject to the terms and conditions herein set forth, a
Beneficiary shall be entitled, upon the occurrence and during the continuance of
an Insolvency Event, to instruct the Trustee to exercise the Exchange Rights
with respect to all or any part of the Exchangeable Shares registered in the
name of such Beneficiary on the books of ARC Resources. To cause the exercise of
the Exchange Rights by the Trustee, the Beneficiary shall deliver to the
Trustee, in person or by certified or registered mail, at its principal office
in Calgary or Toronto or at such other places in Canada as the Trustee may from
time to time designate by written notice to the Beneficiaries, the certificates
representing the Exchangeable Shares which such Beneficiary desires ARC or ARC
Subco to purchase, duly endorsed in blank for transfer, and accompanied by such
other documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the Act and the by-laws of ARC Resources and such
additional documents and instruments as the Trustee, ARC, ARC Subco and ARC
Resources may reasonably require, together with:
(a) a duly completed form of notice of exercise of the Exchange Rights,
contained on the reverse of or attached to the Exchangeable Share
certificates, stating (i) that the Beneficiary thereby instructs the
Trustee to exercise the Exchange Rights so as to require ARC or ARC
Subco to purchase from the Beneficiary the number of Exchangeable Shares
specified therein, (ii) that such Beneficiary has good title to and owns
all such Exchangeable Shares to be acquired by ARC or ARC Subco, as
applicable, free and clear of all liens, claims and encumbrances, (iii)
the names in which the certificates representing ARC Energy Units
issuable in connection with the exercise of the Exchange Rights are to
be issued, and (iv) the names and addresses of the persons to whom such
new certificates should be delivered; and
(b) payment (or evidence satisfactory to the Trustee, ARC, ARC Subco and ARC
Resources of payment) of the taxes (if any) payable as contemplated by
Section 5.8 of this Agreement. If only a part of the Exchangeable Shares
represented by any certificate or certificates delivered to the Trustee
are to be purchased by ARC or ARC Subco under the Exchange Rights, a new
certificate for the balance of such Exchangeable Shares shall be issued
to the holder at the expense of ARC Resources.
5.6 DELIVERY OF ARC ENERGY UNITS; EFFECT OF EXERCISE
Promptly after the receipt of the certificates representing the
Exchangeable Shares which the Beneficiary desires ARC or ARC Subco to purchase
under the Exchange Rights, together with such documents and instruments of
transfer and a duly completed form of notice of exercise of the Exchange Rights
(and payment of taxes, if any, payable as contemplated by Section 5.8 or
evidence thereof), duly endorsed for transfer to ARC or ARC Subco, as
applicable, the Trustee shall notify ARC, ARC Subco and ARC Resources of its
receipt of the same, which notice to ARC, ARC Subco and ARC Resources shall
constitute exercise of the Exchange Rights by the Trustee on behalf of the
holder of such Exchangeable Shares, and ARC or ARC Subco, as applicable, shall
promptly thereafter deliver or cause to be delivered to the Trustee, for
delivery to the holder of such Exchangeable Shares (or to such other persons, if
any, properly designated by such holder) the number of ARC Energy Units issuable
in
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connection with the exercise of the Exchange Rights, provided, however, that no
such delivery shall be made unless and until the Beneficiary requesting the same
shall have paid (or provided evidence satisfactory to the Trustee, ARC, ARC
Subco and ARC Resources of the payment of) the taxes (if any) payable as
contemplated by Section 5.8 of this Agreement. Immediately upon the giving of
notice by the Trustee to ARC, ARC Subco and ARC Resources of the exercise of the
Exchange Rights as provided in this Section 5.6, the closing of the transaction
of purchase and sale contemplated by the Exchange Rights shall be deemed to have
occurred and the holder of such Exchangeable Shares shall be deemed to have
transferred to ARC or ARC Subco, as determined by ARC at the time, all of such
holder's right, title and interest in and to such Exchangeable Shares and the
related interest in the Trust Estate and shall cease to be a holder of such
Exchangeable Shares and shall not be entitled to exercise any of the rights of a
holder in respect thereof, other than: (i) the right to receive his
proportionate part of the total purchase price therefor, unless the requisite
number of ARC Energy Units is not delivered by ARC or ARC Subco, as applicable,
to the Trustee within three Business Days of the date of the giving of such
notice by the Trustee, in which case the rights of the Beneficiary shall remain
unaffected until such ARC Energy Units are so delivered, by ARC or ARC Subco, as
applicable; and (ii) the right to receive declared but unpaid dividends in
respect of such Exchangeable Shares. Upon delivery to the Trustee of such ARC
Energy Units, the Trustee shall deliver such ARC Energy Units to such
Beneficiary (or to such other persons, if any, properly designated by such
Beneficiary). Concurrently with such Beneficiary ceasing to be a holder of
Exchangeable Shares, the Beneficiary shall be considered and deemed for all
purposes to be the holder of the ARC Energy Units delivered to it pursuant to
the Exchange Rights.
5.7 EXERCISE OF EXCHANGE RIGHTS SUBSEQUENT TO RETRACTION
In the event that a Beneficiary has exercised its right under
Article 4 of the Share Provisions to require ARC Resources to redeem any or all
of the Exchangeable Shares held by the Beneficiary (the "Retracted Shares") and
is notified by ARC Resources pursuant to Section 4.6 of the Share Provisions
that ARC Resources will not be permitted as a result of solvency requirements of
applicable law to redeem all such Retracted Shares, and provided that neither
ARC nor ARC Subco shall have exercised the Retraction Call Right with respect to
the Retracted Shares and that the Beneficiary has not revoked the retraction
request delivered by the Beneficiary to ARC Resources pursuant to Section 4.1 of
the Share Provisions and provided further that the Trustee has received written
notice of same from ARC, ARC Subco or ARC Resources, the retraction request will
constitute and will be deemed to constitute notice from the Beneficiary to the
Trustee instructing the Trustee to exercise the Exchange Rights with respect to
those Retracted Shares that ARC Resources is unable to redeem. In any such
event, ARC Resources hereby agrees with the Trustee and in favour of the
Beneficiary promptly to forward or cause to be forwarded to the Trustee all
relevant materials delivered by the Beneficiary to ARC Resources or to the
transfer agent of the Exchangeable Shares (including without limitation, a copy
of the retraction request delivered pursuant to Section 4.1 of the Share
Provisions) in connection with such proposed redemption of the Retracted Shares
and the Trustee will thereupon exercise the Exchange Rights with respect to the
Retracted Shares that ARC Resources is not permitted to redeem and will require
ARC or ARC Subco to purchase such shares in accordance with the provisions of
this Article 5.
5.8 STAMP OR OTHER TRANSFER TAXES
Upon any sale of Exchangeable Shares to ARC or ARC Subco pursuant
to the Exchange Rights or the Automatic Exchange Rights, the certificate or
certificates representing ARC Energy Units to be delivered in connection with
the payment of the total purchase price therefor shall be issued in the name of
the Beneficiary of the Exchangeable Shares so sold or in such names as such
Beneficiary may otherwise direct in writing without charge to the holder of the
Exchangeable Shares so sold; provided, however, that such Beneficiary (a) shall
pay (and none of ARC, ARC Subco, ARC Resources or the Trustee shall be required
to pay) any documentary, stamp, transfer or other taxes that may be payable in
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respect of any transfer involved in the issuance or delivery of such shares to a
person other than such Beneficiary, or (b) shall have evidenced to the
satisfaction of the Trustee, ARC, ARC Subco and ARC Resources that such taxes,
if any, have been paid.
5.9 NOTICE OF INSOLVENCY EVENT, CALL RIGHTS NOT EXERCISED
As soon as practicable following the occurrence of either an
Insolvency Event or any event that with the giving of notice or the passage of
time or both would be an Insolvency Event, ARC, ARC Subco and ARC Resources
shall give written notice thereof to the Trustee. As soon as practicable
following the receipt of notice from ARC, ARC Subco and ARC Resources of the
occurrence of an Insolvency Event, or upon the Trustee becoming aware of an
Insolvency Event, the Trustee will mail to each Beneficiary, at the expense of
ARC, a notice of such Insolvency Event in the form provided by ARC, which notice
shall contain a brief statement of the rights of the Beneficiaries with respect
to the Exchange Rights.
5.10 QUALIFICATION OF ARC ENERGY UNITS
ARC and ARC Subco covenant that if any ARC Energy Units to be
issued and delivered pursuant to the Exchange Rights or the Automatic Exchange
Rights require registration or qualification with or approval of or the filing
of any document, including any prospectus or similar document, or the taking of
any proceeding with or the obtaining of any order, ruling or consent from any
governmental or regulatory authority under any Canadian, federal or provincial
law or regulation or pursuant to the rules and regulations of any regulatory
authority or the fulfillment of any other Canadian federal or provincial legal
requirement before such securities may be issued and delivered by or on behalf
of ARC or ARC Subco to the initial holder thereof or in order that such
securities may be freely traded thereafter (other than any restrictions of
general application on transfer by reason of a holder being a "control person"
of ARC for purposes of Canadian provincial securities law), ARC and ARC Subco
will in good faith expeditiously take all such actions and do all such things as
are necessary or desirable to cause such ARC Energy Units to be and remain duly
registered, qualified or approved. ARC and ARC Subco will in good faith
expeditiously take all such actions and do all such things as are reasonably
necessary or desirable to cause all ARC Energy Units to be delivered pursuant to
the Exchange Rights or the Automatic Exchange Rights to be listed, quoted or
posted for trading on the Toronto Stock Exchange or such other stock exchanges
or quotation systems on which outstanding ARC Energy Units are then principally
listed, quoted or posted for trading at such time.
5.11 ARC ENERGY UNITS
ARC and ARC Subco hereby represent, warrant and covenant that the
ARC Energy Units issuable as described herein will be duly authorized and
validly issued as fully paid and non-assessable and shall be free and clear of
any lien, claim or encumbrance.
5.12 AUTOMATIC EXCHANGE ON LIQUIDATION OF ARC
(a) ARC will give the Trustee written notice of each of the following
events at the time set forth below:
(i) in the event of any determination by the board of directors of
ARC Resources to institute voluntary liquidation, dissolution or
winding-up proceedings with respect to ARC or to effect any other
distribution of assets of ARC among its unitholders for the
purpose of winding up its affairs, at least 60 days prior to the
proposed effective date of such liquidation, dissolution,
winding-up or other distribution; and
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(ii) as soon as practicable following the earlier of (A) receipt by
ARC or ARC Resources of notice of, and (B) ARC or ARC Resources
otherwise becoming aware of, any threatened or instituted claim,
suit, petition or other proceedings with respect to the
involuntary liquidation, dissolution or winding-up of ARC or to
effect any other distribution of assets of ARC among its
unitholders for the purpose of winding up its affairs, in each
case where ARC has failed to contest in good faith any such
proceeding commenced in respect of ARC within 30 days of becoming
aware thereof.
(b) As soon as practicable following receipt by the Trustee from ARC of
notice of any event (an "ARC Liquidation Event") contemplated by Section
5.12(a)(i) or 5.12(a)(ii) above, the Trustee will give notice thereof,
in the form provided by ARC, to the Beneficiaries. Such notice shall
include a brief description of the Automatic Exchange Rights.
(c) In order that the Beneficiaries will be able to participate on a pro
rata basis with the holders of ARC Energy Units in the distribution of
assets of ARC in connection with an ARC Liquidation Event, on the fifth
Business Day prior to the effective date (the "ARC Liquidation Event
Effective Date") of an ARC Liquidation Event all of the then outstanding
Exchangeable Shares shall be automatically exchanged for ARC Energy
Units (the benefit in favour of Beneficiaries of the obligation of ARC
and ARC Subco to effect the automatic exchange of Exchangeable Shares
for ARC Energy Units as aforesaid is defined as the "Automatic Exchange
Rights"). To effect such automatic exchange, ARC or ARC Subco shall
purchase on the fifth Business Day prior to the ARC Liquidation Event
Effective Date each Exchangeable Share then outstanding and held by
Beneficiaries, and each Beneficiary shall sell the Exchangeable Shares
held by it at such time, for a purchase price per share determined by
multiplying the Current Market Price of an ARC Energy Unit on the sixth
Business Day prior to the ARC Liquidation Event Effective Date and the
Exchange Ratio as at the sixth Business Day prior to the ARC Liquidation
Event Effective Date. ARC or ARC Subco shall provide the Trustee with an
Officer's Certificate in connection with each automatic exchange setting
forth the calculation of the purchase price for each Exchangeable Share.
The purchase price for each such Exchangeable Share so purchased may be
satisfied only by ARC or ARC Subco, as applicable, delivering or causing
to be delivered to the Trustee, on behalf of the relevant Beneficiary,
that number of ARC Energy Units equal to the Exchange Ratio as at the
sixth Business Day prior to the ARC Liquidation Event Effective Date,
such purchase price to be paid in accordance with Section 5.12(d) (but
less any amounts withheld pursuant to Section 5.13).
(d) On the fifth Business Day prior to the ARC Liquidation Event Effective
Date:
(i) the closing of the transaction of purchase and sale contemplated
by the automatic exchange of Exchangeable Shares for ARC Energy
Units shall be deemed to have occurred;
(ii) each Beneficiary shall be deemed to have transferred to ARC or
ARC Subco, as determined by ARC at that time, all of the
Beneficiary's right, title and interest in and to such
Beneficiary's Exchangeable Shares and the related interest in the
Trust Estate;
(iii) any right of each such Beneficiary to receive declared and unpaid
dividends from ARC Resources shall be deemed to be satisfied and
discharged;
(iv) each such Beneficiary shall cease to be a holder of such
Exchangeable Shares; and
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(v) ARC or ARC Subco, as applicable, shall deliver or cause to be
delivered to the Trustee on behalf of such Beneficiary the ARC
Energy Units issuable upon the automatic exchange of Exchangeable
Shares for ARC Energy Units.
(e) Concurrently with such Beneficiary ceasing to be a holder of
Exchangeable Shares, the Beneficiary shall be considered and deemed for
all purposes to be the holder of the ARC Energy Units issued pursuant to
the automatic exchange of Exchangeable Shares for ARC Energy Units and
the certificates held by the Beneficiary previously representing the
Exchangeable Shares exchanged by the Beneficiary with ARC or ARC Subco,
as applicable, pursuant to such automatic exchange shall thereafter be
deemed to represent ARC Energy Units issued to the Beneficiary pursuant
to such automatic exchange. Upon the request of a Beneficiary and the
surrender by the Beneficiary of Exchangeable Share certificates deemed
to represent ARC Energy Units, duly endorsed in blank and accompanied by
such instruments of transfer as ARC and ARC Subco may reasonably
require, ARC or ARC Subco, as applicable, shall deliver or cause to be
delivered to the Beneficiary certificates representing ARC Energy Units
of which the Beneficiary is the holder.
5.13 WITHHOLDING RIGHTS
ARC, ARC Subco and the Trustee shall be entitled to deduct and
withhold from any consideration otherwise payable under this Agreement to any
holder of Exchangeable Shares or ARC Energy Units such amounts as ARC, ARC Subco
or the Trustee is required to deduct and withhold with respect to such payment
under the Income Tax Act (Canada) or any provision of provincial, local or
foreign tax law, in each case as amended or succeeded. The Trustee may act on
the advice of counsel with respect to such matters. To the extent that amounts
are so withheld, such withheld amounts shall be treated for all purposes as
having been paid to the holder of the shares in respect of which such deduction
and withholding was made, provided that such withheld amounts are actually
remitted to the appropriate taxing authority. To the extent that the amount so
required to be deducted or withheld from any payment to a holder exceeds the
cash portion of the consideration otherwise payable to the holder, ARC, ARC
Subco and the Trustee are hereby authorized to sell or otherwise dispose of such
portion of the consideration as is necessary to provide sufficient funds to ARC,
ARC Subco or the Trustee, as the case may be, to enable it to comply with such
deduction or withholding requirement and ARC, ARC Subco or the Trustee shall
notify the holder thereof and remit to such holder any unapplied balance of the
net proceeds of such sale.
5.14 NON-RESIDENT HOLDERS
Notwithstanding anything contained in this Agreement, the
obligation of ARC or ARC Subco to pay the purchase price for the Exchangeable
Shares pursuant to the Exchange Rights or the Automatic Exchange Rights in
respect of Exchangeable Shares held by a person whom the transfer agent of the
Exchangeable Shares believes is a U.S. person (as defined in the Share
Provisions) or a resident of any foreign country, shall be satisfied by
delivering the ARC Energy Units which would have been received by the Trustee,
on behalf of affected holder to the transfer agent and registrar for the
Exchangeable Shares who shall sell such ARC Energy Units on the stock exchange
on which the ARC Energy Units are then listed and, upon such sale, the rights of
the affected holder shall be limited to receiving the net proceeds of sale (net
of applicable taxes).
5.15 NO FRACTIONAL ENTITLEMENTS
Notwithstanding anything contained in this Agreement, including
without limitation Article 5, no Beneficiary (or the Trustee as trustee for and
on behalf of, and for the use and benefit of a
16
Beneficiary) shall be entitled to and ARC and ARC Subco will not deliver
fractions of ARC Energy Units. Where the application of the provisions of this
Agreement, including, without limitation, Article 5, would otherwise result in a
Beneficiary (or the Trustee, on behalf of the Beneficiary) receiving a fraction
of an ARC Energy Unit the Beneficiary (or the Trustee on behalf of the
Beneficiary) shall be entitled to receive the nearest whole number of ARC Energy
Units.
ARTICLE 6
CONCERNING THE TRUSTEE
6.1 POWERS AND DUTIES OF THE TRUSTEE
The rights, powers, duties and authorities of the Trustee under
this Agreement, in its capacity as Trustee of the Trust, shall include:
(a) receipt and deposit of the Special Voting Unit as Trustee for and on
behalf of the Beneficiaries in accordance with the provisions of this
Agreement;
(b) delivery of proxies and distributing materials to Beneficiaries as
provided in this Agreement;
(c) voting the Beneficiary Votes in accordance with the provisions of this
Agreement;
(d) receiving the grant of the Exchange Rights and the Automatic Exchange
Rights from ARC and ARC Subco as Trustee for and on behalf of the
Beneficiaries in accordance with the provisions of this Agreement;
(e) exercising the Exchange Rights and enforcing the benefit of the
Automatic Exchange Rights, in each case in accordance with the
provisions of this Agreement, and in connection therewith receiving from
Beneficiaries Exchangeable Shares and other requisite documents and
distributing to such Beneficiaries ARC Energy Units and cheques, if any,
to which such Beneficiaries are entitled upon the exercise of the
Exchange Rights or pursuant to the Automatic Exchange Rights, as the
case may be;
(f) holding title to the Trust Estate;
(g) investing any moneys forming, from time to time, a part of the Trust
Estate as provided in this Agreement;
(h) taking action on its own initiative or at the direction of a Beneficiary
or Beneficiaries to enforce the obligations of ARC, ARC Subco and ARC
Resources under this Agreement; and
(i) taking such other actions and doing such other things as are
specifically provided in this Agreement.
In the exercise of such rights, powers, duties and authorities the Trustee shall
have (and is granted) such incidental and additional rights, powers, duties and
authority not in conflict with any of the provisions of this Agreement as the
Trustee, acting in good faith and in the reasonable exercise of its discretion,
may deem necessary, appropriate or desirable to effect the purpose of the Trust.
Any exercise of such discretionary rights, powers, duties and authorities by the
Trustee shall be final, conclusive and binding upon all persons.
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The Trustee in exercising its rights, powers, duties and authorities hereunder
shall act honestly and in good faith and with a view to the best interests of
the Beneficiaries and shall exercise the care, diligence and skill that a
reasonably prudent trustee would exercise in comparable circumstances.
The Trustee shall not be bound to give notice or do or take any act, action or
proceeding by virtue of the powers conferred on it hereby unless and until it
shall be specifically required to do so under the terms hereof; nor shall the
Trustee be required to take any notice of, or to do, or to take any act, action
or proceeding as a result of any default or breach of any provision hereunder,
unless and until notified in writing of such default or breach, which notices
shall distinctly specify the default or breach desired to be brought to the
attention of the Trustee, and in the absence of such notice the Trustee may for
all purposes of this Agreement conclusively assume that no default or breach has
been made in the observance or performance of any of the representations,
warranties, covenants, agreements or conditions contained herein.
6.2 NO CONFLICT OF INTEREST
The Trustee represents to ARC, ARC Subco and ARC Resources that
at the date of execution and delivery of this Agreement there exists no material
conflict of interest in the role of the Trustee as a fiduciary hereunder and the
role of the Trustee in any other capacity. The Trustee shall, within 90 days
after it becomes aware that such material conflict of interest exists, either
eliminate such material conflict of interest or resign in the manner and with
the effect specified in Article 9. If, notwithstanding the foregoing provisions
of this Section 6.2, the Trustee has such a material conflict of interest, the
validity and enforceability of this Agreement shall not be affected in any
manner whatsoever by reason only of the existence of such material conflict of
interest. If the Trustee contravenes the foregoing provisions of this Section
6.2, any interested party may apply to the Court of Queen's Bench of Alberta for
an order that the Trustee be replaced as Trustee hereunder.
6.3 DEALINGS WITH TRANSFER AGENTS, REGISTRARS, ETC.
ARC, ARC Subco and ARC Resources irrevocably authorize the
Trustee, from time to time, to:
(a) consult, communicate and otherwise deal with the respective registrars
and transfer agents, and with any such subsequent registrar or transfer
agent, of the Exchangeable Shares and ARC Energy Units; and
(b) requisition, from time to time, (i) from any such registrar or transfer
agent any information readily available from the records maintained by
it which the Trustee may reasonably require for the discharge of its
duties and responsibilities under this Agreement and (ii) from the
transfer agent of ARC Energy Units, and any subsequent transfer agent of
such ARC Energy Units, the ARC Energy Unit certificates issuable upon
the exercise from time to time of the Exchange Rights and pursuant to
the Automatic Exchange Rights.
ARC and ARC Resources irrevocably authorize their respective registrars and
transfer agents to comply with all such requests. ARC covenants that it will
supply its transfer agent with duly executed trust unit certificates for the
purpose of completing the exercise from time to time of the Exchange Rights and
the Automatic Exchange Rights.
6.4 BOOKS AND RECORDS
The Trustee shall keep available for inspection by ARC, ARC Subco
and ARC Resources at the Trustee's principal office in Calgary correct and
complete books and records of account relating to
18
the Trust created by this Agreement, including without limitation, all relevant
data relating to mailings and instructions to and from Beneficiaries and all
transactions pursuant to the Special Voting Unit, the Exchange Rights and the
Automatic Exchange Rights. On or before January 15, 2003, and on or before
January 15th in every year thereafter, so long as this Agreement has not been
terminated, the Trustee shall transmit to ARC, ARC Subco and ARC Resources a
brief report, dated as of the preceding December 31st , with respect to:
(a) the property and funds comprising the Trust Estate as of that date;
(b) the number of exercises of the Exchange Rights, if any, and the
aggregate number of Exchangeable Shares received by the Trustee on
behalf of Beneficiaries in consideration of the issuance of ARC Energy
Units in connection with the Exchange Rights, during the calendar year
ended on such December 31st; and
(c) any action taken by the Trustee in the performance of its duties under
this Agreement which it had not previously reported and which, in the
Trustee's opinion, materially affects the Trust Estate.
6.5 INCOME TAX RETURNS AND REPORTS
The Trustee shall, to the extent necessary, prepare and file on
behalf of the Trust appropriate Canadian income tax returns and any other
returns or reports as may be required by applicable law or pursuant to the rules
and regulations of any securities exchange or other trading system through which
the Exchangeable Shares are traded. In connection therewith, the Trustee may
obtain the advice and assistance of such experts or advisors as the Trustee
considers necessary or advisable (who may be experts or advisors to ARC, ARC
Subco and ARC Resources ). If requested by the Trustee, ARC, ARC Subco and ARC
Resources shall retain qualified experts or advisors for the purpose of
providing such tax advice or assistance.
6.6 INDEMNIFICATION PRIOR TO CERTAIN ACTIONS BY TRUSTEE
The Trustee shall exercise any or all of the rights, duties,
powers or authorities vested in it by this Agreement at the request, order or
direction of any Beneficiary upon such Beneficiary furnishing to the Trustee
reasonable funding, security or indemnity against the costs, expenses and
liabilities which may be incurred by the Trustee therein or thereby, provided
that no Beneficiary shall be obligated to furnish to the Trustee any such
security or indemnity in connection with the exercise by the Trustee of any of
its rights, duties, powers and authorities with respect to the Voting Rights
pursuant to Article 4, subject to Section 6.15, and with respect to the Exchange
Rights pursuant to Article 5, subject to Section 6.15, and with respect to the
Automatic Exchange Rights pursuant to Article 5.
None of the provisions contained in this Agreement shall require
the Trustee to expend or risk its own funds or otherwise incur financial
liability in the exercise of any of its rights, powers, duties, or authorities
unless funded, given security and indemnified as aforesaid.
6.7 ACTION OF BENEFICIARIES
No Beneficiary shall have the right to institute any action, suit
or proceeding or to exercise any other remedy authorized by this Agreement for
the purpose of enforcing any of its rights or for the execution of any trust or
power hereunder unless the Beneficiary has requested the Trustee to take or
institute such action, suit or proceeding and furnished the Trustee with the
funding, security or indemnity referred to in Section 6.6 and the Trustee shall
have failed to act within a reasonable time thereafter. In such case, but not
otherwise, the Beneficiary shall be entitled to take proceedings in
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any court of competent jurisdiction such as the Trustee might have taken; it
being understood and intended that no one or more Beneficiaries shall have any
right in any manner whatsoever to affect, disturb or prejudice the rights hereby
created by any such action, or to enforce any right hereunder or the Voting
Rights, the Exchange Rights or the Automatic Exchange Rights except subject to
the conditions and in the manner herein provided, and that all powers and trusts
hereunder shall be exercised and all proceedings at law shall be instituted, had
and maintained by the Trustee, except only as herein provided, and in any event
for the equal benefit of all Beneficiaries.
6.8 RELIANCE UPON DECLARATIONS
The Trustee shall not be considered to be in contravention of any
of its rights, powers, duties and authorities hereunder if, when required, it
acts and relies in good faith upon statutory declarations, certificates,
opinions or reports furnished pursuant to the provisions hereof or required by
the Trustee to be furnished to it in the exercise of its rights, powers, duties
and authorities hereunder if such statutory declarations, certificates, opinions
or reports comply with the provisions of Section 6.9, if applicable, and with
any other applicable provisions of this Agreement.
6.9 EVIDENCE AND AUTHORITY TO TRUSTEE
ARC, ARC Subco and/or ARC Resources shall furnish to the Trustee
evidence of compliance with the conditions provided for in this Agreement
relating to any action or step required or permitted to be taken by ARC, ARC
Subco and/or ARC Resources or the Trustee under this Agreement or as a result of
any obligation imposed under this Agreement, including, without limitation, in
respect of the Voting Rights, the Exchange Rights or the Automatic Exchange
Rights and the taking of any other action to be taken by the Trustee at the
request of or on the application of ARC, ARC Subco and/or ARC Resources promptly
if and when:
(a) such evidence is required by any other Section of this Agreement to be
furnished to the Trustee in accordance with the terms of this Section
6.9; or
(b) the Trustee, in the exercise of its rights, powers, duties and
authorities under this Agreement, gives ARC, ARC Subco and/or ARC
Resources written notice requiring it to furnish such evidence in
relation to any particular action or obligation specified in such
notice.
Such evidence shall consist of an Officer's Certificate of ARC Subco and/or ARC
Resources or a statutory declaration or a certificate made by persons entitled
to sign an Officer's Certificate stating that any such condition has been
complied with in accordance with the terms of this Agreement.
Whenever such evidence relates to a matter other than the Voting Rights, the
Exchange Rights or the Automatic Exchange Rights or the taking of any other
action to be taken by the Trustee at the request or on the application of ARC,
ARC Subco and/or ARC Resources, and except as otherwise specifically provided
herein, such evidence may consist of a report or opinion of any solicitor,
attorney, auditor, accountant, appraiser, valuer, engineer or other expert or
any other person whose qualifications give authority to a statement made by him,
provided that if such report or opinion is furnished by a director, officer or
employee of ARC Subco and/or ARC Resources it shall be in the form of an
Officer's Certificate or a statutory declaration.
Each statutory declaration, Officer's Certificate, opinion or report furnished
to the Trustee as evidence of compliance with a condition provided for in this
Agreement shall include a statement by the person giving the evidence:
20
(c) declaring that he or she has read and understands the provisions of
this Agreement relating to the condition in question;
(d) describing the nature and scope of the examination or investigation
upon which he or she based the statutory declaration, certificate,
statement or opinion; and
(e) declaring that he or she has made such examination or investigation as
he or she believes is necessary to enable him or her to make the
statements or give the opinions contained or expressed therein.
6.10 EXPERTS, ADVISERS AND AGENTS
The Trustee may:
(a) in relation to these presents act and rely on the opinion or advice of
or information obtained from any solicitor, attorney, auditor,
accountant, appraiser, valuer, engineer or other expert, whether
retained by the Trustee or by ARC, ARC Subco and/or ARC Resources or
otherwise, and may retain or employ such assistants as may be necessary
to the proper discharge of its powers and duties and determination of
its rights hereunder and may pay proper and reasonable compensation for
all such legal and other advice or assistance as aforesaid; and
(b) employ such agents and other assistants as it may reasonably require
for the proper determination and discharge of its powers and duties
hereunder, and may pay reasonable remuneration for all services
performed for it (and shall be entitled to receive reasonable
remuneration for all services performed by it) in the discharge of the
trusts hereof and compensation for all disbursements, costs and
expenses made or incurred by it in the discharge of its duties
hereunder and in the management of the Trust.
6.11 INVESTMENT OF MONEYS HELD BY TRUSTEE
Unless otherwise provided in this Agreement, any moneys held by
or on behalf of the Trustee which under the terms of this Agreement may or ought
to be invested or which may be on deposit with the Trustee or which may be in
the hands of the Trustee may be invested and reinvested in the name or under the
control of the Trustee, in trust for ARC Resources, in securities in which,
under the laws of the Province of Alberta, trustees are authorized to invest
trust moneys, provided that such securities are stated to mature within two
years after their purchase by the Trustee, and the Trustee shall so invest such
moneys on the written direction of ARC Resources. Pending the investment of any
moneys as hereinbefore provided, such moneys may be deposited in the name of the
Trustee in any chartered bank in Canada (including an affiliate of the Trustee)
or, with the consent of ARC Resources, in the deposit department of the Trustee
or any other loan or trust company authorized to accept deposits under the laws
of Canada or any province thereof at the rate of interest then current on
similar deposits, and the Trustee shall be entitled to receive a fee from such
bank, loan or trust company for so depositing such moneys.
6.12 TRUSTEE NOT REQUIRED TO GIVE SECURITY
The Trustee shall not be required to give any bond or security in
respect of the execution of the trusts, rights, duties, powers and authorities
of this Agreement or otherwise in respect of the premises.
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6.13 TRUSTEE NOT BOUND TO ACT ON REQUEST
Except as in this Agreement otherwise specifically provided, the
Trustee shall not be bound to act in accordance with any direction or request of
ARC, ARC Subco and/or ARC Resources or of the directors thereof until a duly
authenticated copy of the instrument or resolution containing such direction or
request shall have been delivered to the Trustee, and the Trustee shall be
empowered to act upon any such copy purporting to be authenticated and believed
by the Trustee to be genuine.
6.14 AUTHORITY TO CARRY ON BUSINESS
The Trustee represents to ARC, ARC Subco and/or ARC Resources
that at the date of execution and delivery by it of this Agreement it is
authorized to carry on the business of a trust company in each of the Provinces
of Canada but if, notwithstanding the provisions of this Section 6.14, it ceases
to be so authorized to carry on business, the validity and enforceability of
this Agreement and the Voting Rights, the Exchange Rights and the Automatic
Exchange Rights shall not be affected in any manner whatsoever by reason only of
such event but the Trustee shall, within 90 days after ceasing to be authorized
to carry on the business of a trust company in any Province of Canada, either
become so authorized or resign in the manner and with the effect specified in
Article 9.
6.15 CONFLICTING CLAIMS
If conflicting claims or demands are made or asserted with
respect to any interest of any Beneficiary in any Exchangeable Shares, including
any disagreement between the heirs, representatives, successors or assigns
succeeding to all or any part of the interest of any Beneficiary in any
Exchangeable Shares, resulting in conflicting claims or demands being made in
connection with such interest, then the Trustee shall be entitled, at its sole
discretion, to refuse to recognize or to comply with any such claims or demands.
In so refusing, the Trustee may elect not to exercise any portion of the Voting
Rights, Exchange Rights or Automatic Exchange Rights subject to such conflicting
claims or demands and, in so doing, the Trustee shall not be or become liable to
any person on account of such election or its failure or refusal to comply with
any such conflicting claims or demands. The Trustee shall be entitled to
continue to refrain from acting and to refuse to act until:
(a) the rights of all adverse claimants with respect to the Voting Rights,
Exchange Rights or Automatic Exchange Rights subject to such
conflicting claims or demands have been adjudicated by a final judgment
of a court of competent jurisdiction; or
(b) all differences with respect to the Voting Rights, Exchange Rights or
Automatic Exchange Rights subject to such conflicting claims or demands
have been conclusively settled by a valid written agreement binding on
all such adverse claimants, and the Trustee shall have been furnished
with an executed copy of such agreement certified to be in full force
and effect.
If the Trustee elects to recognize any claim or comply with any demand made by
any such adverse claimant, it may in its discretion require such claimant to
furnish such surety bond or other security satisfactory to the Trustee as it
shall deem appropriate to fully indemnify it as between all conflicting claims
or demands.
6.16 ACCEPTANCE OF TRUST
The Trustee hereby accepts the Trust created and provided for by
and in this Agreement and agrees to perform the same upon the terms and
conditions herein set forth and to hold all rights, privileges and benefits
conferred hereby and by law in trust for the various persons who shall from time
to time be Beneficiaries, subject to all the terms and conditions herein set
forth.
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ARTICLE 7
COMPENSATION
7.1 FEES AND EXPENSES OF THE TRUSTEE
ARC, ARC Subco and ARC Resources jointly and severally agree to
pay the Trustee reasonable compensation for all of the services rendered by it
under this Agreement and will reimburse the Trustee for all reasonable expenses
(including, but not limited to, taxes other than taxes based on the net income
of the Trustee, fees paid to legal counsel and other experts and advisors
(provided however that the payment of fees to legal counsel and other experts
and advisors shall be required to be pre-approved by ARC Resources) and travel
expenses) and disbursements, including the cost and expense of any suit or
litigation of any character and any proceedings before any governmental agency
reasonably incurred by the Trustee in connection with its duties under this
Agreement; provided that ARC, ARC Subco and ARC Resources shall have no
obligation to reimburse the Trustee for any expenses or disbursements paid,
incurred or suffered by the Trustee in any suit or litigation in which the
Trustee is determined to have acted in bad faith or with negligence,
recklessness or willful misconduct.
ARTICLE 8
INDEMNIFICATION AND LIMITATION OF LIABILITY
8.1 INDEMNIFICATION OF THE TRUSTEE
ARC, ARC Subco and ARC Resources jointly and severally agree to
indemnify and hold harmless the Trustee and each of its directors, officers,
employees and agents appointed and acting in accordance with this Agreement
(collectively, the "Indemnified Parties") against all claims, losses, damages,
reasonable costs, penalties, fines and reasonable expenses (including reasonable
expenses of the Trustee's legal counsel) which, without fraud, negligence,
recklessness, willful misconduct or bad faith on the part of such Indemnified
Party, may be paid, incurred or suffered by the Indemnified Party by reason or
as a result of the Trustee's acceptance or administration of the Trust, its
compliance with its duties set forth in this Agreement, or any written or oral
instruction delivered to the Trustee by ARC, ARC Subco or ARC Resources pursuant
hereto.
In no case shall ARC, ARC Subco or ARC Resources be liable under
this indemnity for any claim against any of the Indemnified Parties unless ARC,
ARC Subco and ARC Resources shall be notified by the Trustee of the written
assertion of a claim or of any action commenced against the Indemnified Parties,
promptly after any of the Indemnified Parties shall have received any such
written assertion of a claim or shall have been served with a summons or other
first legal process giving information as to the nature and basis of the claim.
Subject to (ii) below, ARC, ARC Subco and ARC Resources shall be entitled to
participate at their own expense in the defense and, if ARC, ARC Subco and ARC
Resources so elect at any time after receipt of such notice, any of them may
assume the defense of any suit brought to enforce any such claim. The Trustee
shall have the right to employ separate counsel in any such suit and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of the Trustee unless: (i) the employment of such counsel has been
authorized by ARC, ARC Subco and ARC Resources ; or (ii) the named parties to
any such suit include both the Trustee and ARC, ARC Subco or ARC Resources and
the Trustee shall have been advised by counsel acceptable to ARC, ARC Subco or
ARC Resources that there may be one or more legal defenses available to the
Trustee that are different from or in addition to those available to ARC, ARC
Subco or ARC Resources and that, in the judgment of such counsel, would present
a conflict of interest were a joint representation to be undertaken (in which
case ARC, ARC Subco and ARC Resources shall not have the right to assume the
defense of such suit on behalf of the Trustee but shall be liable to pay the
reasonable fees and
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expenses of counsel for the Trustee). This indemnity shall survive the
termination of this Agreement and the resignation or removal of the Trustee.
8.2 LIMITATION OF LIABILITY
The Trustee shall not be held liable for any loss which may occur
by reason of depreciation of the value of any part of the Trust Estate or any
loss incurred on any investment of funds pursuant to this Agreement, except to
the extent that such loss is attributable to the fraud, negligence,
recklessness, willful misconduct or bad faith on the part of the Trustee.
ARTICLE 9
CHANGE OF TRUSTEE
9.1 RESIGNATION
The Trustee, or any trustee hereafter appointed, may at any time
resign by giving written notice of such resignation to ARC, ARC Subco and ARC
Resources specifying the date on which it desires to resign, provided that such
notice shall not be given less than thirty (30) days before such desired
resignation date unless ARC, ARC Subco and ARC Resources otherwise agree and
provided further that such resignation shall not take effect until the date of
the appointment of a successor trustee and the acceptance of such appointment by
the successor trustee. Upon receiving such notice of resignation, ARC, ARC Subco
and ARC Resources shall promptly appoint a successor trustee, which shall be a
corporation organized and existing under the laws of Canada and authorized to
carry on the business of a trust company in all provinces of Canada, by written
instrument in duplicate, one copy of which shall be delivered to the resigning
trustee and one copy to the successor trustee. Failing the appointment and
acceptance of a successor trustee, a successor trustee may be appointed by order
of a court of competent jurisdiction upon application of one or more of the
parties to this Agreement. If the retiring trustee is the party initiating an
application for the appointment of a successor trustee by order of a court of
competent jurisdiction, ARC, ARC Subco and ARC Resources shall be jointly and
severally liable to reimburse the retiring trustee for its legal costs and
expenses in connection with same.
9.2 REMOVAL
The Trustee, or any trustee hereafter appointed, may (provided a
successor trustee is appointed) be removed at any time on not less than 30 days'
prior notice by written instrument executed by ARC, ARC Subco and ARC Resources,
in duplicate, one copy of which shall be delivered to the trustee so removed and
one copy to the successor trustee.
9.3 SUCCESSOR TRUSTEE
(a) Any successor trustee appointed as provided under this Agreement shall
execute, acknowledge and deliver to ARC, ARC Subco and ARC Resources and
to its predecessor trustee an instrument accepting such appointment.
Thereupon the resignation or removal of the predecessor trustee shall
become effective and such successor trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers,
duties and obligations of its predecessor under this Agreement, with the
like effect as if originally named as trustee in this Agreement.
However, on the written request of ARC, ARC Subco and ARC Resources or
of the successor trustee, the trustee ceasing to act shall, upon payment
of any amounts then due it pursuant to the provisions of this Agreement,
execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon the
request of any such successor trustee, ARC, ARC Subco, ARC Resources and
such predecessor trustee shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such
successor
24
trustee all such rights and powers. Notwithstanding the foregoing, any
corporation to which all or substantially all of the business of the
Trustee is transferred shall automatically become the successor trustee
without any further act.
(b) Notwithstanding paragraph (a) above and Section 9.4, any corporation
into or with which the Trustee may be merged or consolidated or
amalgamated, or any corporation resulting therefrom to which the Trustee
shall be a party, or any corporation succeeding to the trust business of
the Trustee shall be the successor to the Trustee hereunder without any
further act on its part or any of the parties hereto.
9.4 NOTICE OF SUCCESSOR TRUSTEE
Upon acceptance of appointment by a successor trustee as provided
herein, ARC, ARC Subco or ARC Resources shall cause to be mailed notice of the
succession of such trustee hereunder to each Beneficiary shown on the register
of holders of Exchangeable Shares. If ARC, ARC Subco or ARC Resources shall fail
to cause such notice to be mailed within 10 days after acceptance of appointment
by the successor trustee, the successor trustee shall cause such notice to be
mailed at the expense of ARC, ARC Subco and ARC Resources.
ARTICLE 10
ARC SUCCESSORS
10.1 CERTAIN REQUIREMENTS IN RESPECT OF COMBINATION, ETC.
ARC shall not complete any transaction (whether by way of
reconstruction, reorganization, consolidation, merger, transfer, sale, lease or
otherwise) whereby all or substantially all of its undertaking, property and
assets would become the property of any other person or, in the case of a
merger, of the continuing entity resulting therefrom unless, but may do so if:
(a) such other person or continuing entity (herein called the "ARC
Successor"), by operation of law, becomes, without more, bound by the
terms and provisions of this Agreement or, if not so bound, executes,
prior to or contemporaneously with the consummation of such transaction,
a trust agreement supplemental hereto and such other instruments (if
any) as are satisfactory to the Trustee, acting reasonably, and in the
opinion of legal counsel to the Trustee are reasonably necessary or
advisable to evidence the assumption by the ARC Successor of liability
for all moneys payable and property deliverable hereunder and the
covenant of such ARC Successor to pay and deliver or cause to be
delivered the same and its agreement to observe and perform all the
covenants and obligations of ARC under this Agreement; and
(b) such transaction shall, to the satisfaction of the Trustee, acting
reasonably, and in the opinion of legal counsel to the Trustee, be upon
such terms and conditions as substantially to preserve and not to impair
in any material respect any of the rights, duties, powers and
authorities of the Trustee or of the Beneficiaries hereunder.
10.2 VESTING OF POWERS IN SUCCESSOR
Whenever the conditions of Section 10.1 have been duly observed
and performed, the Trustee, ARC Successor, ARC Subco and ARC Resources shall, if
required by Section 10.1, execute and deliver the supplemental trust agreement
provided for in Article 11 and thereupon ARC Successor shall possess and from
time to time may exercise each and every right and power of ARC under this
Agreement in the name of ARC or otherwise and any act or proceeding by any
provision of this Agreement required to be done or performed by the Board of
Directors of ARC Subco or any officers of
25
ARC Subco on behalf of ARC may be done and performed with like force and effect
by the directors or officers of such ARC Successor.
10.3 WHOLLY-OWNED SUBSIDIARIES
Nothing herein shall be construed as preventing the combination
of any wholly-owned direct or indirect subsidiary of ARC with or into ARC or the
winding-up, liquidation or dissolution of any wholly-owned subsidiary of ARC
provided that all of the assets of such subsidiary are transferred to ARC or
another wholly-owned direct or indirect subsidiary of ARC and any such
transactions are expressly permitted by this Article 10.
ARTICLE 11
AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
11.1 AMENDMENTS, MODIFICATIONS, ETC.
This Agreement may not be amended or modified except by an
agreement in writing executed by ARC, ARC Subco, ARC Resources and the Trustee
and approved by the Beneficiaries in accordance with Section 10.2 of the Share
Provisions.
11.2 MINISTERIAL AMENDMENTS
Notwithstanding the provisions of Section 11.1, the parties to
this Agreement may in writing, at any time and from time to time, without the
approval of the Beneficiaries, amend or modify this Agreement for the purposes
of:
(a) adding to the covenants of any or all parties hereto for the protection
of the Beneficiaries hereunder provided that the Board of Directors of
each of ARC Subco and ARC Resources shall be of the good faith opinion
that such additions will not be prejudicial to the rights or interests
of the Beneficiaries;
(b) making such amendments or modifications not inconsistent with this
Agreement as may be necessary or desirable with respect to matters or
questions which, in the good faith opinion of the Board of Directors of
each of ARC Subco and ARC Resources and in the opinion of the Trustee,
having in mind the best interests of the Beneficiaries it may be
expedient to make, provided that such Boards of Directors and the
Trustee, acting on the advice of counsel, shall be of the opinion that
such amendments and modifications will not be prejudicial to the
interests of the Beneficiaries; or
(c) making such changes or corrections which, on the advice of counsel to
ARC, ARC Subco, ARC Resources and the Trustee, are required for the
purpose of curing or correcting any ambiguity or defect or inconsistent
provision or clerical omission or mistake or manifest error, provided
that the Trustee, acting on the advice of counsel, and the Board of
Directors of ARC Resources shall be of the opinion that such changes or
corrections will not be prejudicial to the rights and interests of the
Beneficiaries.
11.3 MEETING TO CONSIDER AMENDMENTS
ARC Resources, at the request of ARC, shall call a meeting or
meetings of the Beneficiaries for the purpose of considering any proposed
amendment or modification requiring approval pursuant hereto. Any such meeting
or meetings shall be called and held in accordance with the by-laws of ARC
Resources, the Share Provisions and all applicable laws.
26
11.4 CHANGES IN CAPITAL OF ARC AND ARC RESOURCES
At all times after the occurrence of any event contemplated
pursuant to Section 2.6 or 2.7 of the Support Agreement or otherwise, as a
result of which either ARC Energy Units or the Exchangeable Shares or both are
in any way changed, this Agreement shall forthwith be amended and modified as
necessary in order that it shall apply with full force and effect, mutatis
mutandis, to all new securities into which ARC Energy Units or the Exchangeable
Shares or both are so changed and the parties hereto shall execute and deliver a
supplemental trust agreement giving effect to and evidencing such necessary
amendments and modifications.
11.5 EXECUTION OF SUPPLEMENTAL TRUST AGREEMENTS
No amendment to or modification or waiver of any of the
provisions of this Agreement otherwise permitted hereunder shall be effective
unless made in writing and signed by all of the parties hereto. From time to
time ARC Resources (when authorized by a resolution of its Board of Directors),
ARC (when authorized by a resolution of the Board of Directors of ARC Resources)
and ARC Subco (when authorized by a resolution of the Board of Directors of ARC
Subco) and the Trustee may, subject to the provisions of these presents, and
they shall, when so directed by these presents, execute and deliver by their
proper officers, trust agreements or other instruments supplemental hereto,
which thereafter shall form part hereof, for any one or more of the following
purposes:
(a) evidencing the succession of ARC Successors and the covenants of and
obligations assumed by each such ARC Successor in accordance with the
provisions of Article 10 and the successors of any successor trustee in
accordance with the provisions of Article 9;
(b) making any additions to, deletions from or alterations of the provisions
of this Agreement or the Exchange Rights or the Automatic Exchange
Rights which, in the opinion of the Trustee, will not be prejudicial to
the interests of the Beneficiaries or are, in the opinion of counsel to
the Trustee, necessary or advisable in order to incorporate, reflect or
comply with any legislation the provisions of which apply to ARC, ARC
Subco, ARC Resources, the Trustee or this Agreement; and
(c) for any other purposes not inconsistent with the provisions of this
Agreement, including without limitation, to make or evidence any
amendment or modification to this Agreement as contemplated hereby,
provided that, in the opinion of the Trustee, the rights of the Trustee
and Beneficiaries will not be prejudiced thereby.
ARTICLE 12
TERMINATION
12.1 TERM
The Trust created by this Agreement shall continue until the
earliest to occur of the following events:
(a) no outstanding Exchangeable Shares are held by a Beneficiary;
(b) each of ARC, ARC Subco and ARC Resources elects in writing to terminate
the Trust and such termination is approved by the Beneficiaries in
accordance with Section 10.2 of the Share Provisions; and
27
(c) 21 years after the death of the last survivor of the descendants of His
Majesty King Xxxxxx VI of Canada and the United Kingdom of Great Britain
and Northern Ireland living on the date of the creation of the Trust.
12.2 SURVIVAL OF AGREEMENT
This Agreement shall survive any termination of the Trust and
shall continue until there are no Exchangeable Shares outstanding held by a
Beneficiary; provided, however, that the provisions of Article 7 and Article 8
shall survive any such termination of this Agreement.
ARTICLE 13
GENERAL
13.1 SEVERABILITY
If any provision of this Agreement is held to be invalid, illegal
or unenforceable, the validity, legality or enforceability of the remainder of
this Agreement shall not in any way be affected or impaired thereby and the
agreement shall be carried out as nearly as possible in accordance with its
original terms and conditions.
13.2 ENUREMENT
This Agreement shall be binding upon and enure to the benefit of
the parties hereto and their respective successors and permitted assigns and to
the benefit of the Beneficiaries.
13.3 NOTICES TO PARTIES
All notices and other communications between the parties
hereunder shall be in writing and shall be deemed to have been given if
delivered personally or by confirmed telecopy to the parties at the following
addresses (or at such other address for such party as shall be specified in like
notice):
28
(a) if to ARC, ARC Subco or ARC Resources, at:
c/o ARC Resources Ltd.
Xxxxx 0000, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: President
Telecopier No.: (000) 000-0000
(b) if to the Trustee, at:
Computershare Trust Company of Canada
Xxxxx 000, 000 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Manager, Corporate Trust Department
Telecopier No.: (000) 000-0000
Any notice or other communication given personally shall be deemed to have been
given and received upon delivery thereof and if given by telecopy shall be
deemed to have been given and received on the date of receipt thereof unless
such day is not a Business Day in which case it shall be deemed to have been
given and received upon the immediately following Business Day.
13.4 NOTICE TO BENEFICIARIES
Any and all notices to be given and any documents to be sent to
any Beneficiaries may be given or sent to the address of such Beneficiary shown
on the register of holders of Exchangeable Shares in any manner permitted by the
by-laws of ARC Resources from time to time in force in respect of notices to
shareholders and shall be deemed to be received (if given or sent in such
manner) at the time specified in such by-laws, the provisions of which by-laws
shall apply mutatis mutandis to notices or documents as aforesaid sent to such
Beneficiaries.
13.5 COUNTERPARTS
This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.
13.6 JURISDICTION
This Agreement shall be construed and enforced in accordance with
the laws of the Province of Alberta and the laws of Canada applicable therein.
29
13.7 ATTORNMENT
Each of the Trustee, ARC and ARC Resources agrees that any action
or proceeding arising out of or relating to this Agreement may be instituted in
the courts of Alberta, waives any objection which it may have now or hereafter
to the venue of any such action or proceeding, irrevocably submits to the
jurisdiction of the such courts in any such action or proceeding, agrees to be
bound by any judgment of the such courts and not to seek, and hereby waives, any
review of the merits of any such judgment by the courts of any other
jurisdiction.
IN WITNESS WHEREOF the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
ARC ENERGY TRUST, 908563 ALBERTA LTD.
by its authorized attorney,
ARC RESOURCES LTD.
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------- ------------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Vice President Finance and Title: Vice President Finance and
Chief Financial Officer Chief Financial Officer
ARC RESOURCES LTD. COMPUTERSHARE TRUST COMPANY OF CANADA
By: /s/ Xxxxx X. Xxxxxxx By: /s/ W. Xxxx XxXxxxx
-------------------------------- ------------------------------
Name: Xxxxx X. Xxxxxxx Name: W. Xxxx XxXxxxx
Title: Treasurer Title Manager, Corporate Trust
By: /s/ Xxxxxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxxxxx X. Xxxxx
Title: Professional, Corporate Trust
