Securities Law & Instruments

Headnote

Mutual Reliance Review System for ExemptiveRelief Applications -- relief from registration and prospectusrequirements for trades made in connection with an arrangement-- relief granted from certain continuous disclosure requirement,subject to conditions -- issuer deemed to be a reporting issuer--relief from "current AIF" requirement, subject tocertain conditions.

Applicable Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 25, 53, 74(1), 80(b)(iii), 83.1(1) and 88(2)(b).

Applicable Instruments

Multilateral Instrument 45-102 Resale of Securities.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

ALBERTA, BRITISH COLUMBIA,SASKATCHEWAN,

MANITOBA, ONTARIO, QUÉBEC,NEW BRUNSWICK,

PRINCE EDWARD ISLAND, NOVASCOTIA, NEWFOUNDLAND

AND LABRADOR, THE NORTHWESTTERRITORIES,

THE YUKON TERRITORY AND NUNAVUT

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

BONAVISTA PETROLEUM LTD.,NUVISTA ENERGY LTD.,

BONAVISTA ENERGY TRUST, BONAVISTAACQUISITION CORP.,

BONAVISTA EXCHANGECO LTD.AND BONAVISTA OIL & GAS LTD.

 

MRRS DECISION DOCUMENT

1. WHEREAS the local securities regulatoryauthority or regulator (collectively, the "Decision Makers")in each of Alberta, British Columbia, Saskatchewan, Manitoba,Ontario, Québec, New Brunswick, Prince Edward Island,Newfoundland and Labrador, Nova Scotia, the Yukon Territory,the Northwest Territories and Nunavut (the "Jurisdictions")has received an application from Bonavista Energy Trust (the"Trust"), Bonavista Petroleum Ltd. ("Bonavista"),Bonavista Acquisition Corp. ("AcquisitionCo"), NuVistaEnergy Ltd. ("NuVista"), Bonavista ExchangeCo Ltd.("ExchangeCo") and Bonavista Oil & Gas Ltd.("BOGL") for a decision under the securities legislationof the Jurisdictions (the "Legislation") that:

1.1 the requirements contained in the Legislationto be registered to trade in a security (the "RegistrationRequirement") and to file a preliminary prospectusand a prospectus, and to receive receipts therefor (the"Prospectus Requirement"), in certain of the Jurisdictions,shall not apply to certain trades of securities to be madein connection with a proposed plan of arrangement (the "Arrangement")under section 193 of the Business Corporations Act(Alberta) (the "ABCA") involving the Trust, AcquisitionCo,Bonavista, NuVista, ExchangeCo, BOGL and the security holdersof Bonavista;

1.2 the requirements contained in the Legislationwith respect to AcquisitionCo (or its successor on amalgamationwith Bonavista ("AmalgamationCo")), in those Jurisdictionsin which it becomes a reporting issuer or the equivalentunder the Legislation, to issue a press release and filea report with the Jurisdictions upon the occurrence of amaterial change, file an annual report, where applicable,file interim financial statements and audited annual financialstatements with the Jurisdictions and deliver such statementsto the security holders of AmalgamationCo, file and deliveran information circular or make an annual filing with theJurisdictions in lieu of filing an information circular,file an annual information form and provide management'sdiscussion and analysis of financial condition and resultsof operations (the "Continuous Disclosure Requirements"),shall not apply to AcquisitionCo or AmalgamationCo;

1.3 NuVista be deemed or declared to bea reporting issuer at the effective date (the "EffectiveDate") of the Arrangement for the purposes of the Legislationof the Jurisdictions, other than Manitoba, Nova Scotia,Newfoundland, New Brunswick, Prince Edward Island, Yukon,Northwest Territories and Nunavut; and

1.4 the requirement of NuVista to have a"current AIF" filed on SEDAR under MultilateralInstrument 45-102 -- Resale of Securities ("MI 45-102")not apply.

2. AND WHEREAS pursuant to the MutualReliance Review System for Exemptive Relief Applications (the"System") the Alberta Securities Commission is theprincipal regulator for this application;

3. AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 Definitions or Quebec Commission Notice 14-101;

4. AND WHEREAS the Trust, Bonavista,AcquisitionCo, NuVista, ExchangeCo and BOGL have representedto the Decision Makers that:

4.1 Bonavista is a corporation amalgamatedand subsisting pursuant to the provisions of the ABCA;

4.2 the head and principal office of Bonavistais located at 1100, 321 -- 6th Avenue S.W., Calgary, Alberta,T2P 3H3 and its registered office is located at 1400, 350-- 7th Avenue S.W., Calgary, Alberta T2P 3N9;

4.3 Bonavista is actively engaged in theexploration for, and the acquisition, development and productionof, oil and natural gas in the Provinces of Alberta, Saskatchewanand British Columbia;

4.4 the authorized capital of Bonavistaconsists of an unlimited number of common shares ("CommonShares"), and an unlimited number of first preferredshares (the "Preferred Shares"), issuable in series;

4.5 as at May 23, 2003, 32,595,712 CommonShares and nil Preferred Shares were issued and outstanding.Bonavista has also reserved a total of 2,249,337 CommonShares for issuance pursuant to outstanding options ("Options")to purchase Common Shares;

4.6 the Common Shares are listed on theToronto Stock Exchange (the "TSX");

4.7 Bonavista is a reporting issuer in theProvinces of British Columbia, Alberta, Saskatchewan, Manitoba,Ontario and Québec and has been for more than 12months;

4.8 Bonavista has filed all the informationthat it has been required to file as a reporting issuerin each of the Provinces of British Columbia, Alberta, Saskatchewan,Manitoba, Ontario, and Québec and is not in defaultof the securities legislation in any of these jurisdictions;

4.9 the Trust is an open-end unincorporatedinvestment trust governed by the laws of the Province ofAlberta and created pursuant to a trust indenture datedMay 23, 2003 between Bonavista and Valiant Trust Company,as trustee;

4.10 the Trust was established for the purposeof, among other things:

4.10.1 investing in shares of AcquisitionCoand acquiring the Common Shares and the unsecured, subordinatepromissory notes issuable by AcquisitionCo (the "Notes")pursuant to the Arrangement;

4.10.2 acquiring a net profits interestpursuant to a net profits interest agreement to be enteredinto between AmalgamationCo and the Trust; and

4.10.3 acquiring or investing in othersecurities of AmalgamationCo and in the securities ofany other entity including without limitation bodies corporate,partnerships or trusts, and borrowing funds or otherwiseobtaining credit for that purpose;

4.11 the head and principal office of theTrust is located at 1100, 321 -- 6th Avenue S.W., Calgary,Alberta, T2P 3H3;

4.12 the Trust was established with nominalcapitalization and currently has only nominal assets andno liabilities. The only activity which will initially becarried on by the Trust will be the holding of securitiesof AcquisitionCo and AmalgamationCo;

4.13 the Trust is authorized to issue anunlimited number of trust units ("Trust Units")and an unlimited number of special voting rights ("SpecialVoting Rights");

4.14 as of the date hereof, there is oneTrust Unit issued and outstanding, which is owned by Bonavista,and no Special Voting Rights are outstanding;

4.15 the Trust has received conditionalapproval from the TSX for the listing on the TSX of theTrust Units to be issued in connection with the Arrangementsubject to, among other things, completion of the Arrangement.The Trust Units issuable from time to time in exchange forseries A exchangeable shares ("Exchangeable Shares")of AcquisitionCo will also be listed on the TSX, subjectto receipt of final approval from the TSX;

4.16 the Trust is not a reporting issuerin any of the Jurisdictions;

4.17 AcquisitionCo is a wholly-owned subsidiaryof the Trust and was incorporated pursuant to the ABCA onApril 8, 2003. AcquisitionCo was incorporated to participatein the Arrangement by acquiring Common Shares of Bonavista;

4.18 the head and principal office of AcquisitionCois located at 1100, 321 -- 6th Avenue S.W., Calgary, Alberta,T2P 3H3 and its registered office will be located at 1400,350 - 7th Avenue S.W., Calgary, Alberta, T2P 3N9;

4.19 the authorized capital of AcquisitionCocurrently consists of an unlimited number of common sharesand an unlimited number of exchangeable shares, issuablein series. Prior to the Arrangement, the articles of AcquisitionCowill be amended to create the Exchangeable Shares;

4.20 as of the date hereof there are onehundred common shares of AcquisitionCo issued and outstanding,which are owned by the Trust. All common shares of AmalgamationCowill be owned beneficially (directly or indirectly) by theTrust, for as long as any outstanding Exchangeable Sharesare owned by any person other than the Trust or any of theTrust's subsidiaries and other affiliates;

4.21 AcquisitionCo is not a reporting issuerin any of the Jurisdictions;

4.22 NuVista was incorporated pursuant tothe ABCA on April 7, 2003. NuVista has not carried on anyactive business since incorporation;

4.23 the head and principal office of NuVistais located at 1100, 321 -- 6th Avenue S.W., Calgary, Alberta,T2P 3H3, and its registered office is located at 1400, 350-- 7th Avenue S.W., Calgary, Alberta, T2P 3N9;

4.24 pursuant to the Arrangement, NuVistawill acquire, directly and indirectly, certain oil and gasassets from Bonavista. Upon completion of the Arrangement,NuVista will be engaged in the exploration for, and acquisition,development and production of, oil and natural gas reserves,primarily in the Province of Alberta;

4.25 the authorized capital of NuVista consistsof an unlimited number of common shares ("NuVista Shares")and an unlimited number of class B performance shares;

4.26 as of the date hereof, one (1) NuVistaShare and nil class B performance shares are issued andoutstanding;

4.27 NuVista has received conditional approvalfrom the TSX for the listing on the TSX of the NuVista Sharesto be issued in connection with the Arrangement subjectto, among other things, completion of the Arrangement. TheNuVista Shares issuable from time to time will also be listedon the TSX, subject to receipt of final approval from theTSX;

4.28 NuVista is not a reporting issuer inany of the Jurisdictions;

4.29 ExchangeCo was incorporated pursuantto the ABCA on April 7, 2003. ExchangeCo has not carriedon any active business since incorporation;

4.30 the head and principal office of ExchangeCois located at 1100, 321 -- 6th Avenue S.W., Calgary, Alberta,T2P 3H3, and its registered office is located at 1400, 350- 7th Avenue S.W., Calgary, Alberta, T2P 3N9;

4.31 the authorized capital of ExchangeCoconsists of an unlimited number of common shares;

4.32 as of the date hereof, one hundredcommon shares were issued and outstanding and owned by theTrust;

4.33 BOGL was incorporated pursuant to theABCA. BOGL is a wholly-owned subsidiary of Bonavista andis engaged in the oil and natural gas business;

4.34 the head and principal office of BOGLis located at 1100, 321 -- 6th Avenue S.W., Calgary, Alberta,T2P 3H3, and its registered office is located at 1400, 350- 7th Avenue S.W., Calgary, Alberta, T2P 3N9;

4.35 the Arrangement will be effected byway of plan of arrangement (the "Plan") pursuantto section 193 of the ABCA. The Arrangement will require:(i) approval by not less than two-thirds of the votes castby the shareholders (the "Shareholders") and theoptionholders of Bonavista (collectively, the "Securityholders")(present in person or represented by proxy), voting togetheras a single class, at the special meeting (the "Meeting")of Securityholders to be held for the purpose of approvingthe Arrangement, and thereafter; (ii) approval of the Courtof Queen's Bench of Alberta;

4.36 Bonavista's information circular datedMay 23, 2003 (the "Information Circular") containsprospectus-level disclosure concerning the respective businessand affairs of Bonavista, NuVista, the Trust and AmalgamationCoand a detailed description of the Arrangement, and has beenmailed to Securityholders in connection with the Meeting.The Information Circular has been prepared in conformitywith the provisions of the ABCA and applicable securitieslaws and policies;

4.37 the assets that will make up the businessof NuVista have been the subject of continuous disclosureon an ongoing basis for more than 12 months, in accordancewith Bonavista's responsibilities as a reporting issuersubject to the Continuous Disclosure Requirements;

4.38 the Arrangement provides for a transactionwhere, commencing at the time the Arrangement takes effect(the "Effective Time"), the events set out belowshall be deemed to occur in the following order:

4.38.1 the Common Shares and Options heldby dissenting Securityholders who have exercised dissentrights which remain valid immediately prior to the EffectiveTime shall, as of the Effective Time, be deemed to havebeen transferred to Bonavista and be cancelled and ceaseto be outstanding, and as of the Effective Time, suchdissenting Securityholders shall cease to have any rightsas securityholders of Bonavista other than the right tobe paid the fair value of their Common Shares or Options;

4.38.2 each Option (whether vested orunvested) may, at the election of the holder, be transferredto Bonavista in consideration of a cash payment, lessstatutory withholdings, equal to the Exercise Price Differential(as defined in the Plan);

4.38.3 NuVista will grant to Bonavistaone right to purchase a NuVista Share (the "NuVistaExchange Right") for each outstanding Common Sharefor the purpose of their distribution to Shareholdersunder the Arrangement;

4.38.4 the class A shares (the "ClassA Shares") of Bonavista shall be created as a newclass of shares of Bonavista and each Common Share willbe exchanged pursuant to a reorganization of the capitalof Bonavista for one (1) Class A Share and one (1) NuVistaExchange Right;

4.38.5 subject to the Plan, each ClassA Share held by a Shareholder (other than Class A Sharesheld by non-resident Shareholders and tax-exempt Shareholders)who has elected to exercise NuVista Exchange Rights forcash will be transferred to AcquisitionCo in accordancewith the election or deemed election of the holder ofsuch Class A Share in exchange for two (2) Notes or two(2) Exchangeable Shares plus for each Note or ExchangeableShare, as the case may be, a fraction of a Note or anExchangeable Share equal to $2.00 divided by the WeightedAverage Trading Price (as defined in the Plan), less $2.00;

4.38.6 the class B shares (the "ClassB Shares") of Bonavista and the class C shares (the"Class C Shares") of Bonavista shall be createdas a new class of shares of Bonavista and each Class AShare, other than Class A Shares held by AcquisitionCo,will be exchanged pursuant to a reorganization of thecapital of Bonavista for one (1) Class B Share and one(1) unsecured promissory note (a "NuVista Share Note")of Bonavista, and each Class A Share held by AcquisitionCowill be exchanged pursuant to a reorganization of thecapital of Bonavista for one (1) Class C Share;

4.38.7 subject to the Plan, each ClassB Share, other than Class B Shares held by non-residentShareholders and tax-exempt Shareholders, will be transferredto AcquisitionCo in accordance with the election or deemedelection of the holder of such Class B Share for two (2)Notes or two (2) Exchangeable Shares;

4.38.8 each Class B Share held by non-residentShareholders and tax-exempt Shareholders will be transferredto AcquisitionCo in exchange for two (2) Notes;

4.38.9 each Note shall be transferredby the holder thereof to the Trust in exchange for one(1) Trust Unit;

4.38.10 Bonavista and AcquisitionCo shallbe amalgamated and continued as one corporation, AmalgamationCo;

4.38.11 subject to the Plan, each NuVistaExchange Right held by a Shareholder who has elected toexercise such NuVista Exchange Right for cash and whohas deposited payment in accordance with the instructionset forth in the letter of transmittal and election formwill be deemed to be exercised and the depositary shalltransfer the purchase price to NuVista and NuVista shallissue one (1) NuVista Share for each NuVista ExchangeRight deemed to be exercised;

4.38.12 each remaining NuVista ExchangeRight and NuVista Share Note held by a Shareholder willbe exchanged with NuVista on the basis of one (1) NuVistaShare for each NuVista Exchange Right and NuVista ShareNote so exchanged;

4.38.13 any remaining outstanding Optionsshall cease to represent the right to acquire Common Sharesand shall only entitle the holder to acquire two (2) TrustUnits for each Common Share which the holder was previouslyentitled to acquire under the Option at a price per TrustUnit calculated in accordance with the following formula:

Trust Unit Exercise Price

=

Option ExercisePrice - $2.00

 

 

_____________________________

 

 

2

4.38.14 Bonavista Petroleum, a generalpartnership, the partners of which are Bonavista and BOGL(the "Bonavista Partnership") will convey: (A)Bonavista's one hundred percent undivided interest insubstantially all of the undeveloped land in Bonavista'seastern region to NuVista for a cash purchase price; and(B) Bonavista's one hundred percent undivided interestin substantially all of the producing assets in Bonavista'seastern region to NuVista Energy, a general partnership,the partners of which will be, after the completion ofthe Arrangement, NuVista and the Bonavista Partnership(the "NuVista Partnership"), in considerationof partnership units and a promissory note (the "NuVistaPromissory Note");

4.38.15 NuVista will convey all of theNuVista Share Notes and cash to the NuVista Partnershipin consideration of 70% of the partnership units of theNuVista Partnership and BOGL's partnership interest willbe redeemed for a cash payment of $1,000;

4.38.16 the NuVista Partnership will exchangeall of the NuVista Share Notes and cash for the NuVistaPromissory Note to the Bonavista Partnership;

4.38.17 the Bonavista Partnership willconvey: (A) that portion of all of the Canadian resourceproperties of the Bonavista Partnership as is equal tothe equity interest of AmalgamationCo in the BonavistaPartnership at the time the step set forth in this subparagraphis carried out (the "AmalgamationCo Carried WorkingInterest") to AmalgamationCo; and (B) that portionof all of the Canadian resource properties of the BonavistaPartnership as is equal to the equity interest of BOGLin the Bonavista Partnership at the time the step setforth in this subparagraph is carried out (the "BOGLCarried Working Interest") to BOGL as a return ofcapital;

4.38.18 BOGL will dividend the BOGL CarriedWorking Interest to AmalgamationCo;

4.38.19 AmalgamationCo will grant a netprofits interest (the "NPI") pursuant to a netprofits interest agreement to be entered into betweenAmalgamationCo and the Trust on: (A) the AmalgamationCoCarried Working Interest; and (B) the BOGL Carried WorkingInterest, to the Trust in consideration of the returnof Notes in an amount equal to the fair market value ofthe NPI as determined by AmalgamationCo;

4.38.20 AmalgamationCo will convey: (A)the AmalgamationCo Carried Working Interest (which issubject to the NPI) to the Bonavista Partnership in returnfor a promissory note; and (B) the BOGL Carried WorkingInterest (which is subject to the NPI) to BOGL in returnfor a promissory note; and

4.38.21 BOGL will convey the BOGL CarriedWorking Interest (which is subject to the NPI) to theBonavista Partnership in return for a promissory note;

4.39 AmalgamationCo will become a reportingissuer under the Legislation in British Columbia, Alberta,Saskatchewan, Manitoba, Ontario and Québec, and willbe subject to the Continuous Disclosure Requirements insuch Jurisdictions;

4.40 the Trust will become a reporting issuerunder the Legislation in British Columbia, Alberta, Saskatchewan,Ontario, and Québec and will be subject to the ContinuousDisclosure Requirements in such Jurisdictions;

4.41 NuVista will not be a reporting issuerwithin the definitions of all of the applicable Jurisdictionsat the Effective Time;

4.42 following the completion of the Arrangement,NuVista anticipates the need to carry out one or more privateplacements of NuVista Shares in order to fund its explorationand production activities;

4.43 the Exchangeable Shares provide a holderwith a security having economic and voting rights whichare, as nearly as practicable, equivalent to those of theTrust Units;

4.44 under the terms of the ExchangeableShares and certain rights to be granted in connection withthe Arrangement, holders of Exchangeable Shares will beable to exchange them at their option for Trust Units;

4.45 under the terms of the ExchangeableShares and certain rights to be granted in connection withthe Arrangement, the Trust, ExchangeCo or AmalgamationCowill redeem, retract or otherwise acquire Exchangeable Sharesin exchange for Trust Units in certain circumstances;

4.46 in order to ensure that the ExchangeableShares remain the voting and economic equivalent of theTrust Units prior to their exchange, the Arrangement providesfor:

4.46.1 a voting and exchange trust agreementto be entered into among the Trust, AcquisitionCo, ExchangeCoand Valiant Trust Company (the "Voting and ExchangeAgreement Trustee") which will, among other things,(i) grant to the Voting and Exchange Agreement Trustee,for the benefit of holders of Exchangeable Shares, theright to require the Trust or ExchangeCo to exchange theExchangeable Shares for Trust Units, and (ii) triggerautomatically the exchange of the Exchangeable Sharesfor Trust Units upon the occurrence of certain specifiedevents;

4.46.2 the deposit by the Trust of a SpecialVoting Right with the Voting and Exchange Agreement Trusteewhich will effectively provide the holders of ExchangeableShares with voting rights equivalent to those attachedto the Trust Units; and

4.46.3 a support agreement to be enteredinto between the Trust, AcquisitionCo, ExchangeCo andthe Voting and Exchange Agreement Trustee which will,among other things, restrict the Trust from issuing ordistributing to the holders of all or substantially allof the outstanding Trust Units:

4.46.3.1 additional Trust Units or securitiesconvertible into Trust Units;

4.46.3.2 rights, options or warrantsfor the purchase of Trust Units; or

4.46.3.3 units or securities of theTrust other than Trust Units, evidence of indebtednessof the Trust or other assets of the Trust;

unless the same or an equivalent distributionis made to holders of Exchangeable Shares, an equivalentchange is made to the Exchangeable Shares, such issuanceor distribution is made in connection with a distributionreinvestment plan instituted for holders of Trust Unitsor a unitholder rights protection plan approved for holdersof Trust Units by the board of directors of AcquisitionCo,or the approval of holders of Exchangeable Shares hasbeen obtained;

4.47 the steps under the Arrangement, theterms of the Exchangeable Shares and the NuVista ExchangeRights, and the exercise of certain rights provided forin connection with the Arrangement, the Exchangeable Sharesand the NuVista Exchange Rights involve a number of tradesor potential trades of securities, including Common Shares,Class A Shares, Class B Shares, Class C Shares, NuVistaShares, Trust Units, Exchangeable Shares, NuVista ExchangeRights, Notes, NuVista Share Notes, NuVista Promissory Notes,NuVista partnership units, Options, the Special Voting Right,certain rights to acquire Trust Units, Exchangeable Sharesand NuVista Shares under the Arrangement, and rights tootherwise make a trade of a security that was derived fromthe Arrangement (collectively, the "Trades");

4.48 there are no exemptions from the RegistrationRequirement or the Prospectus Requirement available underthe Legislation of the Jurisdictions for certain of theTrades;

4.49 the Information Circular disclosesthat the securities that are the subject of the Trades willbe issued in reliance on exemptions, including discretionaryexemptions, from the Registration Requirement and the ProspectusRequirement and discloses that application will be madeto relieve AmalgamationCo from the Continuous DisclosureRequirements; and

4.50 the Trust will concurrently send toholders of Exchangeable Shares resident in the Jurisdictionsall disclosure material it sends to holders of Trust Unitspursuant to the Legislation;

5. AND WHEREAS under the System, thisMRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

6. AND WHEREAS each of the DecisionMakers is satisfied that the test contained in the Legislationthat provides the Decision Maker with the jurisdiction tomake the Decision has been met;

7. THE DECISION of the Decision Makersunder the Legislation is that:

7.1 the Registration Requirement and theProspectus Requirement contained in the Legislation of theJurisdictions (excluding British Columbia, Nova Scotia,Prince Edward Island and Newfoundland and Labrador) shallnot apply to the Trades, provided that the first trade insecurities acquired pursuant to the Arrangement shall bedeemed to be a distribution or a primary distribution tothe public;

7.2 the Prospectus Requirement containedin the Legislation of the Jurisdictions (excluding BritishColumbia) shall not apply to the first trade in securitiesacquired by Shareholders under the Arrangement and the firsttrade of securities acquired on the exercise of all rights,automatic or otherwise, under such securities, providedthat:

7.2.1 except in Québec, the conditionsin subsections (3) or (4) of section 2.6 of MI 45-102are satisfied and, for the purposes of determining theperiod of time that the Trust or NuVista has been a reportingissuer under section 2.6 of MI 45-102, the period of timethat Bonavista was a reporting issuer in at least oneof the jurisdictions listed in Appendix B of MI 45-102immediately before the Arrangement may be included; and

7.2.2 in Québec:

7.2.2.1 the Trust is and has been areporting issuer in Québec for the 12 monthsimmediately preceding the trade, including the periodof time that Bonavista was a reporting issuer in Québecimmediately before the Arrangement;

7.2.2.2 no unusual effort is made toprepare the market or create a demand for the securitiesthat are the subject of the trade;

7.2.2.3 no extraordinary commissionor consideration is paid to a person or company in respectof the trade; and

7.2.2.4 if the selling securityholderis an insider or officer of the Trust, the selling securityholderhas no reasonable grounds to believe that the Trustis in default of securities legislation;

7.3 the Continuous Disclosure Requirementsof those Jurisdictions in which AmalgamationCo becomes areporting issuer or the equivalent under the Legislationshall not apply to AmalgamationCo for so long as:

7.3.1 the Trust is a reporting issuerin Québec and at least one of the jurisdictionslisted in Appendix B of MI 45-102 and is an electronicfiler under National Instrument 13-101;

7.3.2 the Trust sends to all holders ofExchangeable Shares resident in the Jurisdictions alldisclosure material furnished to holders of Trust Unitsunder the Continuous Disclosure Requirements;

7.3.3 the Trust complies with the requirementsof the TSX, or such other market or exchange on whichthe Trust Units may be quoted or listed, in respect ofmaking public disclosure of material information on atimely basis;

7.3.4 AmalgamationCo is in compliancewith the requirements of the Legislation to issue a pressrelease and file a report with the Jurisdictions uponthe occurrence of a material change in respect of theaffairs of AmalgamationCo that is not also a materialchange in the affairs of the Trust;

7.3.5 the Trust includes in all futuremailings of proxy solicitation materials to holders ofExchangeable Shares a clear and concise insert explainingthe reason for the mailed material being solely in relationto the Trust and not to AmalgamationCo, such insert toinclude a reference to the economic equivalency betweenthe Exchangeable Shares and Trust Units and the rightto direct voting at meetings of holders of Trust Units;

7.3.6 the Trust remains the direct orindirect beneficial owner of all of the issued and outstandingvoting securities of AmalgamationCo; and

7.3.7 AmalgamationCo does not issue anypreferred shares or debt obligations other than debt obligationsissued to its affiliates or to banks, loan corporations,trust corporations, treasury branches, credit unions,insurance companies or other financial institutions;

7.4 upon the effectiveness of the Arrangement:

7.4.1 in British Columbia, Alberta, Saskatchewan,Ontario, Nova Scotia and Newfoundland and Labrador therequirement contained in the Legislation to have a "currentAIF" filed on SEDAR in order to be a "QualifyingIssuer" under MI 45-102 shall not apply to NuVistaprovided that:

7.4.1.1 NuVista files:

7.4.1.1.1 a notice on SEDAR advisingthat the Information Circular has been filed as analternate form of annual information form and identifyingthe SEDAR Project Number under which the InformationCircular was filed and Appendix H to the InformationCircular as the portion of the Information Circularcontaining disclosure specific to NuVista; and

7.4.1.1.2 a copy of Appendix H ofthe Information Circular under NuVista's SEDAR profile;and

7.4.1.2 NuVista files a Form 45-102F2on or before the tenth day after the distribution dayof any securities certifying that it is a QualifyingIssuer except for the requirement to have a currentAIF;

such order to expire 140 days after NuVista'sfinancial year ended December 31, 2003; and

7.4.2 in Québec, NuVista will beexempt from the requirements of subparagraph 1(e) of decisionno. 2003-C-0016 of the Commission des valeurs mobilièresdu Québec given that the Information Circular inconnection with the Arrangement contains prospectus leveldisclosure including financial statements for the yearended December 31, 2002, for the purpose of NuVista qualifyingfor the shortened hold period. This exemption will expire140 days after NuVista's financial year ended December31, 2003; and

7.5 NuVista shall be deemed or declareda reporting issuer at the time of the Arrangement becomingeffective for the purposes of the Legislation of the Jurisdictions,other than Saskatchewan, Manitoba, Nova Scotia, Newfoundland,New Brunswick, Prince Edward Island, Yukon, Northwest Territoriesand Nunavut.

July 2, 2003.

"Glenda A. Campbell"
"Stephen R. Murison"