By-Law No. 1

A BY-LAW RELATING GENERALLY TO THE TRANSACTION

OF THE BUSINESS AND AFFAIRS OF

NORTH ATLANTIC REFINING LIMITED

BE IT ENACTED and it is hereby enacted as a by-law of

NORTH ATLANTIC REFINING LIMITED

(hereinafter called the “Corporation”)

GENERAL BUSINESS

REGISTERED OFFICE

1. The directors may from time to time by resolution fix the location of the registered office of the Corporation within the place in Newfoundland and Labrador designated as such by the Articles of Incorporation.

SEAL

2. The Corporation may have a seal which shall be adopted and may be changed by a resolution of the directors.

FINANCIAL YEAR

3. The first financial year of the Corporation shall terminate on a date to be determined by the directors of the Corporation and thereafter on the anniversary date thereof in each year, until changed by resolution of the directors of the Corporation.

BANKING ARRANGEMENTS

4. The banking business of the Corporation, or any part thereof, shall be transacted with such bank, trust company or other firm or corporation carrying on a banking business as the directors may designate, appoint or authorize from time to time by resolution and all such banking business or any part thereof shall be transacted on the Corporation’s behalf by such one or more officers and/or other persons as the board may designate, direct or authorize from time to time by resolution and to the extent therein provided, including, without restricting the generality of the foregoing, the operation of the Corporation’s accounts; the making, signing, drawing, accepting, endorsing, negotiating, depositing or transferring of any cheques, promissory notes, drafts, acceptances, bills of exchange and orders for the payment of money; the giving of receipts for and orders relating to any property of the Corporation; the execution of any agreement relating to any banking business and defining the rights and powers of the parties thereto; and the authorizing of

any officer of such banker to do any act or thing on the Corporation’s behalf to facilitate such banking business.

EXECUTION OF INSTRUMENTS

5. The directors shall have authority to sign in the name and on behalf of the Corporation all instruments in writing and any instruments in writing so signed shall be binding upon the Corporation without any further authorization or formality. The Board of Directors shall have power from time to time by resolution to appoint any other officer or officers or any person or persons on behalf of the Corporation either to sign instruments in writing generally or to sign specific instruments in writing. The signing officer may affix the corporate seal to any instrument requiring the same. The term “instruments in writing” as used herein shall, without limiting the generality thereof, include contracts, documents, powers of attorney, deeds, mortgages, hypothecs, charges, conveyances, transfers and assignments of property (real or personal, immovable or movable), agreements, tenders, releases, receipts and discharges for the payment of money or other obligations, conveyances, transfers and assignments of shares, stocks, bonds, debentures or other securities, instruments of proxy and all paper writing.

DIRECTORS

6. Powers of Directors — The directors shall manage the business and affairs of the Corporation.

7. Number of Directors and Quorum —Subject to the Articles of the Corporation, the number of directors of the Corporation shall be that number of directors appointed by the incorporators or elected by the shareholders from time to time within the minimum and maximum as permitted by the Articles of the Corporation, of whom a majority shall constitute a quorum for the transaction of the business at any meeting of the directors. Notwithstanding vacancies, the remaining directors may exercise all the powers of the Board of Directors so long as the quorum of the Board of Directors remains in office.

8. Qualifications - Each director shall be nineteen (19) or more years of age and no person who is not an individual, who has the status of a bankrupt or who is of unsound mind and has been so found by a court in Canada or elsewhere shall be a director. If a director acquires the status of a bankrupt or becomes of unsound mind and is so found, he shall thereupon cease to be a director.

9. Resident Canadian - Twenty-five percent (25%) of the directors shall be resident Canadians and no business shall be transacted by the Board of Directors unless twenty-five percent (25%) of the directors present are resident Canadians unless a resident Canadian director who is unable to be present, approves in writing or by telephone or other communications facilities, the business transacted at the meeting and at least twenty-five percent (25%) resident Canadian directors would have been present had the director been present at the meeting.

10. Election and Term - The directors shall be elected yearly to hold office until the next annual meeting of the shareholders of the Corporation or until their successors shall have been duly elected. The whole board shall be elected at each annual meeting and all the

directors then in office shall retire, but, if qualified, are eligible for re-election. The election may be by a show of hands or by a resolution of the shareholders unless a ballot is demanded by any shareholder.

REMOVAL OF DIRECTORS

11. Removal of Directors - The shareholders may be resolution passed by a majority of votes cast at a special meeting, of which notice specifying the intention to pass such resolution has been given, remove any director or directors from office before the expiration of his term of office, and may by a majority of votes cast at that meeting elect any person in his/her stead for the remainder of the term.

12. Vacancies - Vacancies on the Board of Directors, except a vacancy resulting from an increase in the minimum number of directors or from a failure to elect the minimum number of directors required by the Articles, may be filled for the remainder of a term of office by qualified persons selected by the remaining directors if they constitute a quorum. If there is not a quorum of directors, of if a vacancy results from an increase in the minimum number of directors or if there has been a failure to elect the minimum number of directors required by the Articles of the Corporation, the directors then in office shall forthwith call a special meeting of shareholders to fill the vacancy and if they fail to call a meeting or if there are no directors then in office, the meeting may be called by any shareholder.

13. Calling of Meetings - Meetings of the Board of Directors shall be held from time to time at such place, at such time and on such day as the President or Vice-President who is a director or any two (2) directors may determine, and the Secretary shall call meetings when directed or authorized by the President or by a Vice-President who is a director or by any two (2) directors. Notice of every meeting so called shall be given to each director not less than forty-eight hours (excluding any part of a Sunday or holiday as defined by The Interpretation Act, Chapter 19, SN, 1990 for the time being in force) for the time when the meeting is to be held and such notice shall specify the general nature of any business to be transacted, save that no notice of a meeting shall be necessary if all the directors are present, and do not object to the holding of the meeting, or if those absent have waived notice of or have otherwise signified their consent to the holding of such meeting.

14. First Meeting of New Board - Each newly elected board may, without notice, hold its first meeting for the purpose of organization and the election and appointment of officers immediately following the meeting of the shareholders at which such board was elected, provided a quorum of directors be present.

15. Adjourned Meeting - Notice of an adjourned meeting of directors is not required if the time and place of the adjourned meeting is announced at the original meeting.

16. Regular Meetings - The directors may appoint a day or days in any month or months for regular meetings and shall designate the place and time at which such meetings are to be held. A copy of any resolution of directors fixing the place and time of regular meetings of the board shall be sent to each director forthwith after being passed and no other notice shall be required for any such regular meeting.

17. Chairman - The Chairman of the Board, or in his absence the President if a director, or in his absence a director chosen by the directors at the meeting, shall be the chairman of any meeting of directors.

18. Place of Meeting - Meetings of the board may be held at the registered office of the Corporation or at any other place within or outside of Canada.

19. Participation by Telephone - With the unanimous consent of all the directors, a director may participate in any meeting of directors by means of such telephone or other communications facilities which will permit all persons participating in the meeting to hear each other, and a director participating in such a meeting by such means is deemed to be present at that meeting.

20. Votes to Govern - At all meetings of the Board of Directors, every question shall be decided by a majority of the votes cast on the question.

21. Remuneration of Directors - The directors of the Corporation shall be paid such remuneration as may be determined by the Board of Directors. Any remuneration so payable to a director who is also an officer or any employee of the Corporation or who is counsel or solicitor to the Corporation or otherwise serves it in a professional capacity shall be in addition to his salary as such office or his professional fees as the case may be. The directors shall also be paid such sums in respect of their out-of-pocket expenses incurred in attending board, committee or shareholders meetings or otherwise in respect of the performance by them or their duties as the Board of Directors may from time to time determine.

22. Transaction of Business by Signature - A resolution in writing signed by all the directors entitled to vote on that resolution at a meeting of directors is as valid as if it had been passed at a meeting of directors duly called, constituted and held for that purpose.

23. One Director - Where a Corporation has only one director, the business and affairs of the Corporation shall be managed by such director and all business which may be transacted at a meeting of the Board of Directors shall be transacted by such director in the manner provided for in paragraph 22 hereof.

24. Declaration of Interest - Every director or officer of the Corporation who is a party to a material contract or a proposed material contract for the Corporation or who is the director or an officer of or has a material interest in any person who is a party to a material contract, or a proposed material contract with the Corporation, shall disclose in writing to the Corporation or request to have entered in the minutes of meetings of directors, the nature and extent of his interest. All such disclosures shall be made at the time required by the applicable provisions of the Act and directors shall refrain from voting in respect of the material contract or proposed material contract if and when prohibited by the Act.

25. Avoidance Standards - A material contract between the Corporation and one or more of its directors or officers or between the Corporation and another person of which a director or officer of the Corporation is a director or officer or in which he has a material interest is neither void or voidable by reason only of that relationship or by reason only that a

director with an interest in the contract is present at or is counted to determine the presence of a quorum at a meeting of directors that authorized the contract, if the director disclosed his interest in accordance with paragraph 24 and the contract was approved by the directors or the shareholders and it was reasonable and fair to the Corporation at the time it was approved.

26. Protection of Directors and Officers - No director or officer of the Corporation shall be liable for the acts, receipts, neglects or defaults of any other director or officer or for joining in any receipts or other acts for conformity or for any loss or expense happening to the Corporation through the insufficiency or deficiency of title to any property acquired by the order of the Board of Directors for or on behalf of the Corporation or for the insufficiency or deficiency of any security in or upon which any of the monies of the Corporation shall be invested or for any loss or damage arising from the bankruptcy, insolvency or tortuous act of any person with whom any of the monies, securities or effects of the Corporation shall be deposited, or for any loss occasioned by the error of judgment or oversight on his part or for any loss, damage or misfortune, whatever which shall happen in the execution of the duties of his office or in relations thereto unless in or as a result of any action, suit or proceeding is adjudged to be in breach of any duty or responsibility imposed on him under the Act or under any other statute.

27. Indemnity of Directors and Officers - The Corporation shall indemnify the directors or officers of the Corporation, former directors or officers of the Corporation or any person who acts or acted at the Corporation’s request as a director or officer of a body corporate of which the Corporation is or was a shareholder or creditor and his heirs and legal representatives against all costs, charges and expenses including any amount paid to settle an action or satisfy a judgment reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he has been made a party by reason of being or having been a director or officer of such Corporation or body corporate if:

(a) he acted honestly and in good faith with a view to the best interest of the Corporation; and

(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful.

28. Insurance for Directors and Officers - The Corporation may purchase and maintain insurance for the benefit of any director of officer against liabilities, costs, charges and expenses sustained or incurred by such director or officer for failure to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

29. Loans to Shareholders - The directors of the Corporation may from time to time give financial assistance by means of a loan, guarantee or otherwise:

(a) on account of expenditures incurred or to be incurred on behalf of the Corporation;

(b) to a holding body corporate if the Corporation is a wholly owned subsidiary of the holding body corporate;

(d) to enable to assist them to purchase or erect living accommodation for their own occupation; or

(e) in accordance with a plan for the purchase of shares of the Corporation or any of its affiliates to be held by a trustee; and

(f) in any other case, unless there are reasonable grounds for believing that:

(g) the Corporation is or would after giving the financial assistance be unable to pay its liabilities as they become due or;

(h) the realizable value of the Corporation’s assets excluding the amount of any financial assistance in the form of a loan and in the form of assets pledged or encumbered to secure a guarantee would, after giving the financial assistance, be less than the aggregate of the Corporation’s liabilities and stated capital of all classes.

OFFICERS

30. Appointed Officers - At the first meeting of the Board of Directors after the election of directors, the directors shall appoint from among its members, the President. The prior incumbent, if a member of the Board of Directors shall continue to hold office until after the election at such meeting and, in default of such election, shall continue to hold office after such meeting. In case the office of President becomes vacant at any time, such vacancy may be filled by the board from among its members. The Board of Directors shall also appoint a Secretary and may appoint a Chairman of the Board, one or more Vice-Presidents, a General Manager, a Treasurer and such other officers as the Board of Directors may determine including one or more assistants to any of the officers so appointed. The officers so appointed, other than the President, may but need not be members of the Board of Directors. One person may hold more than one office and if the same person holds both the office of Secretary and the office of Treasurer, he may be known as the Secretary-Treasurer.

31. Term of Office and Remuneration - In absence of a written agreement to the contrary, the Board of Directors may remove at its pleasure any officer of the Corporation. The terms of employment and remuneration of the President and other officers and appointed by it shall be settled from time to time by the Board of Directors.

32. President - The President shall, when present, preside at all meetings of the shareholders and of the Board of Directors shall be charged with the general supervision of the business and affairs of the Corporation. Except when the Board of Directors has appointed a general manager or managing director, the President shall also have the powers and be charged with the duties of that office.

33. Chairman of the Board - During the absence or inability of the President, his duties may be performed and his powers may be exercised by the Chairman of the Board.

34. Vice-President - During the absence or inability of the President, duties may be performed and powers may be exercised by the Vice-President, or if there are more than one, by the Vice-President in order of seniority (as determined by the Board of Directors) save that no Vice-President shall preside at a meeting of the Board of Directors or at a meeting of shareholders who is not qualified to attend the meeting as a director, as the case may be. If a Vice-President exercises any such duty or power, the absence or inability of the President and Chairman of the Board shall be presumed with reference thereto. A Vice-President shall also perform such duties and exercise such powers as the board may prescribe.

35. General Manager - The General Manager, if one be appointed, shall have the general management and direction, subject to the authority of the Board of Directors and the supervision of the President, of the Corporation’s business and affairs and the power to appoint and remove any and all officers, employees and agents of’ the Corporation not elected or appointed directly by the Board of Directors and to settle the terms of their employment and remuneration. If and so long as the general manager is a director, he may but need not be known as the managing director.

36. Secretary - The Secretary shall give, or cause to be given, all notices required to be given to shareholders, directors, auditors and members of committees; he shall attend all meetings of the directors and of the shareholders and shall enter or cause to be entered in books kept for that purpose minutes of all proceedings at such meetings; he shall be the custodian of the stamp or mechanical device generally used for affixing the corporate seal of the Corporation and of all books, papers, records, documents and other instruments belonging to the Corporation; and he shall perform such other duties as may from time to time be prescribed by the Board of Directors.

37. Treasurer - The Treasurer shall keep full and accurate books of account in which shall be recorded all receipts and disbursements of the Corporation and, under the direction of the Board of Directors, shall control the deposit of money, the safekeeping of securities and the disbursements of the funds of the Corporation; he shall render to the Board of Directors at the meetings thereof, or whenever required of him an account of all his transactions as Treasurer and of the financial position of the Corporation; and he shall perform such other duties as may from time to time be prescribed by the Board of Directors.

38. Other Officers - The duties of all other officers of the Corporation shall be such as the terms of their engagement call for or the Board of Directors requires of them. Any of the powers and duties of an officer to whom an assistant has been appointed may be exercised and performed by such assistant, unless the Board of Directors otherwise directs.

39. Variation of Duties - From time to time the board may vary, add to or limit the powers and duties of any officer or officers.

40. Agents and Attorneys - The Board of Directors shall have power from time to time to appoint agents or attorneys for the Corporation in or out of Canada with such powers of management or otherwise (including the power to sub-delegate) as may be thought fit.

41. Fidelity Bonds - The Board of Directors may require such officers, employees and agents of the Corporation as the Board of Directors deems advisable to furnish bonds for the faithful discharge of their duties, in such form and with such surety as the Board of Directors may from time to time prescribe.

SHARES

42. Allotment - The Board of Directors may from time to time allot or grant options to purchase the whole or any part of the authorized and unissued shares in the Corporation including any shares created by an amendment to the articles of the Corporation to such person or persons or class of persons as the Board of Directors shall by resolution determine.

43. Payment of Commission - The directors acting in good faith and with a view to the best interest of the Corporation may authorize the Corporation to pay a commission to any person in consideration of his purchasing or agreeing to purchase shares of the Corporation from the Corporation or from any other person or procuring or agreeing to procure purchasers for any such shares.

44. Share Certificates - Every shareholder shall be entitled, in the case of initial issuance without payment, and in the case of any subsequent transfer upon payment of a fee of not more than three dollars ($3.00) to a share certificate stating the number and class of shares held by him as shown by the books of the Corporation. Share certificates shall be in such form or form as the Board of Directors shall from time to time approve. Unless otherwise ordered by the Board of Directors, they shall be signed by the President or Vice-President and by the Secretary or an Assistant Secretary and need not be under the corporate seal; provided that certificates representing shares in respect of which a transfer agent and registrar (which term shall include a branch transfer agent and registrar) have been appointed shall not be valid unless countersigned by or on behalf of such transfer agent and registrar. If authorized by resolution of the Board of Directors, the corporate seal of the Corporation and the signature of one of the signing officers, or in the case of share certificates representing shares in respect of which a transfer agent and registrar have been appointed, the signatures of both signing officers, may be printed, engraved, lithographed, or otherwise mechanically reproduced in facsimile upon share certificates and every such facsimile signature shall for all purposes be deemed to be the signature of the officer whose signature it reproduces and shall be valid notwithstanding that one or both of the officers whose signature (whether manual or facsimile) appears thereon no longer holds office at the date of issue or delivery of the certificate.

45. Replacement of Share Certificates - The Board of Directors may by resolution prescribe, either generally or in a particular case, reasonable conditions upon which a new share certificate may be issued in lieu of and upon cancellation of the share certificate which has become mutilate or in substitution for a certificate which has been lost, stolen or destroyed.

46. Central and Branch Registers - The Corporation shall maintain a central securities register and may from time to time maintain one or more branch securities registers. The Board of Directors may from time to time by resolution appoint a registrar to keep the register of security holders and a transfer agent to keep the register of transfers and may also appoint one or more branch registrars to keep branch registers of security holders and one or more branch transfer agents to keep branch registers of transfers. A registrar and transfer agent may but need not be the same individual or corporation.

47. Transfer of Securities - Transfers of securities of the Corporation shall be registerable on the register of transfers or on one of the branch registers of transfers (if any) kept by or for the Corporation in respect thereof upon surrender of the security properly endorsed together with such additional assurance as the Corporation shall require and subject to the provisions of the Act and the restrictions on transfer set forth in the Articles of the Corporation.

48. Dealings with Registered Holder - The Corporation may, subject to the Act, treat as absolute owner of the security the person in whose name the security is registered in a securities register as if that person had full legal capacity and authority to exercise all rights of ownership irrespective of any knowledge or notice to the contrary or any description in its records or on the security certificate indicating a pledge, a representative or fiduciary relationship, a reference to any other instrument or the rights of any other person.

49. Joint Holders - If two or more persons are registered as joint holders of any security, any one of such persons may give effectual receipts for the certificate in respect thereof and for any dividend, bonus, return of capital or other money payable or warrant issueable in respect of such security.

50. Record Date - The directors may fix in advance a date preceding by not more than fifty (50) days or by less than twenty-one (21) days a record date for the determination of persons entitled to receive notice of a meeting of shareholders and notice of every general meeting shall specify the place, day and hour of the meeting, and when special business is to be considered, the general nature of such business, and shall be given to members entitled to be present at such meeting by notice sent by post or otherwise given in accordance with the provisions of the Act. The directors may also fix in advance a date as the record date for determination of shareholders entitled to receive payment of a dividend, entitled to participate in a liquidation distribution, or for any other purpose except the right to receive notice or the right to vote at a meeting, which such record date shall not precede by more than fifty (50) days, the date on which such particular action is to be taken.

SHAREHOLDERS

51. Annual Meetings - The annual meeting of shareholders shall be held subject to the provisions of paragraph 66 hereof, at such place within Newfoundland and Labrador as the directors may determine or at such place outside of Newfoundland and Labrador as the directors may determine and all the shareholders entitled to vote at that meeting so agree at such time and on such date in each year as the directors may from time to time by resolution determine for the purpose of hearing and receiving the financial reports and

statements and any other documentation as required to be read and laid before the shareholders at any annual meeting, electing directors, appointing, if necessary, the auditor and fixing or authorizing the Board of Directors to fix his remuneration and for the transaction of such other business as may properly be brought before the meeting.

52. Special Meeting - The Board of Directors or the President or a Vice-President who is a director shall have the power at any time to call a special meeting of the shareholders of the Corporation to be held at such time and at such place within Canada as the directors may determine or at such place outside of Canada as the directors may determine and all the Shareholders entitled to vote at that meeting so agree. The phrase “meeting of shareholders” wherever it occurs in this by-law shall mean and include the annual meeting of shareholders and a special meeting of shareholders and shall also include a meeting of any class or classes of shareholders.

53. Notices - No public notice or advertisement of any meeting of shareholders shall be required, but notice of the time and place of each such meeting shall be given not less than twenty-one (21) days nor more than fifty (50) days before the date on which the meeting is to be held, to the auditor, if any, the directors and to each shareholder of record entitled to vote at the meeting. Notice of a special meeting of shareholders shall state the nature of the business to be transacted in sufficient detail to permit the shareholder to form a reasoned judgment thereon together with the text of any special resolution to be submitted to the meeting. A meeting of shareholders may be held at any time without notice if all the shareholders entitled to vote thereat are present or represented by proxy and do not object to the holding of the meeting or those not so present or represented by a proxy have waived notice, if all the directors are present or have waived notice and if the auditor, if any, is present or has waived such notice.

54. Reports to Shareholders - Subject to the provisions of the Act, a copy of the financial statements and a copy of the auditor’s report, if any, shall be sent to each shareholder not less than twenty-one (21) days before each annual meeting of shareholders or before the transaction of the annual business of the Corporation pursuant to paragraph 66 hereof.

55. Persons Entitled to be Present - Persons entitled to attend a meeting of shareholders shall be those entitled to vote thereat, the auditor, if any, of the Corporation and others who although not entitled to vote are entitled or required under the provisions of the Act or by-laws of the Corporation to be present at the meeting. Any other person may be admitted only on the invitation of the Chairman of the meeting or with the consent of the meeting.

56. Quorum - Subject to paragraph 57, two (2) persons present in person and each entitled to vote thereat shall constitute a quorum for the transaction of business at any meeting of shareholders.

57. Right to Vote - At such meeting of shareholders every shareholder shall be entitled to vote who is, subject to paragraph 49, entered on the books of the Corporation as a holder of one (1) or more shares carrying the right to vote at such meeting or where a record date has been fixed, satisfactory evidence is produced not later than two (2) days before the meeting that such person owns shares in the Corporation and demands that his name be included on the list of shareholders entitled to vote at the meeting; save that, if the share

or shares in question have been mortgaged or hypothecated, the person who mortgaged or hypothecated such share or shares (or his proxy) may nevertheless represent the shares at meetings and vote in respect thereof unless in the instrument creating the mortgage or hypothec he has expressly empowered the holder of such mortgage or hypothec to vote thereon, in which case such holder (or his proxy) may attend meetings to vote in respect of such shares upon filing with the Secretary of the meeting sufficient proof of the terms of such instrument.

58. Representatives - An executor, administrator, committee of a mentally incompetent person, guardian or trustee and where a corporation is such executor, administrator, committee, guardian or trustee of a testator, intestate, mentally incompetent person, ward or cestui que trust, any person duly appointed a proxy for such corporation, upon filing with the Secretary of the meeting sufficient proof of his appointment, shall represent the shares in his or its hands at all meetings of the shareholders of the Corporation and may vote accordingly as a shareholder in the same manner and to the same extent as the shareholder of record. If there be more than one executor, administrator, committee, guardian or trustee, the provisions of paragraph 59 shall apply.

59. Proxies - Every shareholder, including a corporate shareholder, entitled to vote at meetings of shareholders may by instrument in writing appoint a proxy, who need not be a shareholder, to attend and act at the meeting in the same manner, to the same extent and with the same power as if the shareholder were present at the meeting in the manner, to the extent and with the power conferred by the proxy. The instrument appointing a proxy shall be in writing under the hand of the appointed or his attorney, authorized in writing, or if the appointed is a corporation, under the corporate seal or under the hand of an officer or attorney, authorized in writing, and shall cease to be valid after the expiration of one (1) year from the date thereof. The instrument appointing a proxy may be in such form as the directors may from time to time prescribed or in such other form as the chairman of the meeting may accept as sufficient, and shall be deposited with the Secretary of the meeting before any vote is cast under its authority, or at such earlier time and in such manner as the Board of Directors may prescribe in accordance with the Act.

60. Joint Shareholders - If shares are held jointly by two (2) or more persons, any one of them present or represented by proxy at a meeting of the shareholders of the Corporation, may, in the absence of the other or others vote thereon, but if more than one of them are present or represented by proxy they shall vote together as one on the shares jointly held by them.

61. Scrutineers - At each meeting of shareholders one or more scrutineers may be appointed by a resolution of the meeting or by the Chairman with the consent of the meeting to serve at the meeting. Such scrutineers need not be shareholders of the Corporation.

62. Votes to Govern - At all meetings of shareholders every question shall, unless otherwise required by articles or by-laws of the Corporation or by law, be decided by the majority of the votes duly cast on the question.

63. Show of Hands - At all meetings of shareholders every question shall be decided by a show of hands unless a poll thereon be required by the Chairman or be demanded by any shareholder present in person or represented by proxy and entitled to vote. Upon a show

of hands every shareholder present in person and entitled to vote shall have one vote for each share held by such shareholder, but the shareholder represented by proxy shall have no vote. After a show of hands has been taken upon any question the Chairman may require or any shareholder present in person or represented by proxy and entitled to vote may demand a poll thereon, and a majority of the votes recorded pursuant to any such request shall decide the question. Whenever a vote by show of hands shall have been taken upon a question, unless a poll thereon be so required or demanded, a declaration by the Chairman of the meeting that the vote upon the question has been carried or carried by a particular majority or not carried and an entry to that effect in the minutes of the proceedings at the meeting shall be prima facie evidence of the fact without proof of the number or proportions of the votes recorded in favour of or against any resolution or other proceeding in respect of the said question, and the result of the vote so taken shall be the decision of the Corporation in annual or special meeting, as the case may be, upon the question. A demand for a poll may be withdrawn at any time prior to the taking of the poll.

64. Polls - If a poll be required by the Chairman of the meeting or be duly demanded by any shareholder and the demand be not withdrawn, a poll upon the question shall be taken in such manner as the Chairman of the meeting shall direct. Upon a poll, each shareholder who is present in person or represented by proxy shall be entitled to vote for each share in respect of which he/she is entitled to vote at the meeting and the result of the poll shall be the decision of the Corporation in annual or special meeting, as the case may be, upon the question.

65. Adjournment - The Chairman of a meeting of shareholders may, with the consent of the meeting and subject to such conditions as the meeting may decide, adjourn the meeting from time to time and from place to place.

66. Transaction of Business by Signature - Subject to the provisions of the Act, a resolution in writing signed by all the shareholders entitled to vote on that resolution at a meeting of shareholders and a resolution in writing dealing with all matters required by the Act to be dealt with at a meeting of shareholders and signed by all the shareholders entitled to vote at that meeting are as valid and effective as if passed at a meeting of the shareholders duly called, constituted and held for that purpose.

67. One Shareholder - Where the Corporation has only one shareholder, all business which the Corporation may transact at an annual or special meeting of shareholders shall be transacted in the manner provided for in paragraph 66 hereof.

68. Dividends - The Board of Directors may from time to time declare dividends payable to the shareholders according to their respective rights and interests in the Corporation. A dividend payable in cash shall be paid by cheque drawn on the Corporation’s bankers or one of them to the order of each registered holder of shares of the class in respect of which it has been declared and mailed by ordinary mail, postage prepaid, to such registered holder at his last address appearing on the books of the Corporation. In the case of joint holders the cheque shall, unless such joint holders otherwise direct, be made payable to the order of all such joint holders and if more than one address appears on the books of the Corporation in respect of such joint holding the cheque shall be mailed to

the first address so appearing. The mailing of such cheque as aforesaid shall satisfy and discharge all liability for the dividend to the extent of the sum represented thereby, unless such cheque be not paid at par on due presentation. In the event of non-receipt of any cheques for dividends by the person to whom it is so sent as aforesaid, the Corporation on proof of such non-receipt and upon satisfactory indemnity be given to it, shall issue to such person a replacement cheque for a like amount. Any dividend which remains unclaimed after a period of twelve (12) years after the date on which it has been declared payable shall be forfeited and revert to the Corporation.

NOTICES

69. Method of Giving - Any notice, communication or other document to be given by the Corporation to a shareholder, director, officer, or auditor of the Corporation under any provision of the Articles or by-laws shall be sufficiently given if delivered personally to the person to whom it is to be given or if delivered to his last address as recorded in the books of the Corporation or if mailed by prepaid ordinary or air mail in a sealed envelope addressed to him at his last address as recorded in the books of the Corporation or if sent by means of wire or wireless or any other form of transmitted or recorded communication. The Secretary may change the address on the books of the Corporation of any shareholder in accordance with any information believed by him to be reliable. A notice, communication or document so delivered shall be deemed to have been given when it is delivered personally or at the address aforesaid; and a notice, communication or document so mailed shall be deemed to have been given when deposited in a post office or public letter box; and a notice sent by any means of wire or wireless or any other form of transmitted or recorded communication shall be deemed to have been given when delivered to the appropriate communication company or agency or its representative for dispatch.

70. Computation of Time - In computing the date when notice must be given under any provision of the Articles or By-Laws requiring a specified number of days’ notice of any meeting or other event, the date of giving the notice and the date of the meeting or other event shall be excluded.

71. Omissions and Errors - The accidental omission to give any notice to any shareholder, director, officer or auditor or any error in any notice not affecting the substance thereof shall not invalidate any action taken at any meeting held pursuant to such notice or otherwise funded thereon.

72. Notice to Joint Shareholders - All notices with respect to any shares registered in more than one name may if more than one address appears on the books of the Corporation in respect of such joint holding, be given to such joint shareholders at the first address so appearing, and notice so given shall be sufficient notice to all the holders of such shares.

73. Persons Entitled by Death or Operation of Law - Every person who by operation of law, transfer, death of a shareholder or by any means whatsoever, shall become entitled to any share or shares, shall be bound by every notice in respect of such share or shares which shall have been duly given to the person from whom he derives his title to such share or shares, previously to his name and address being entered on the books of the

By-Law No. 2

A BY-LAW RELATING GENERALLY TO THE TRANSACTION
OF THE BUSINESS AND AFFAIRS OF

NORTH ATLANTIC REFINING LIMITED

BE IT ENACTED and it is hereby enacted as a by-law of

NORTH ATLANTIC REFINING LIMITED

(hereinafter called the “Corporation”)

BORROWING POWERS

The Directors on behalf of the Corporation may from time to time in their discretion:-

1. Raise or borrow money for the purpose of the Corporation or any of them;

2. Secure the repayment of monies so raised or borrowed in such manner and upon such terms and conditions in all respects as they think fit, and in particular, by the execution and delivery of mortgages of the Corporation’s debentures or debenture stock of the Corporation secured by mortgage or other charge upon all or any part of the property of the Corporation, both present and future, including its uncalled capital for the time being, or unsecured;

3. Sign or endorse bills, notes, acceptances, cheques, contracts, and other evidence of or securities for money borrowed or to be borrowed for the purpose aforesaid;

4. Pledge debentures as security for loans;

5. Assign bonds, debentures and other securities free from any equities between the Company and the person to whom such securities were issued;

6. Issue bonds, debentures and other securities at a discount, premium or otherwise and with special privileges as to redemption, surrender, drawings, allotment of shares, attending and voting at general meeting of the Corporation, appointment of directors and other matters.

EFFECTIVE as of October 19, 2006.

	/s/ John Zahary
	JOHN ZAHARY, President

	BUSINESS CORPORATIONS ACT	FORM 1

Alberta		Articles of Incorporation

1. Name of Corporation

1496965 ALBERTA LTD.

2. The classes of shares, and any maximum number of shares that the corporation is authorized to issue:

The attached Schedule of Share Capital is incorporated into and forms part of this form.

3. Restrictions on share transfers (if any):

The attached Schedule of Restrictions on Share Transfers is incorporated into and forms part of this form.

4. Number, or minimum and maximum number, of directors that the corporation may have:

Not less than One (1) director and not more than Seven (7) directors.

5. If the corporation is restricted FROM carrying on a certain business, or restricted TO carrying on a certain business, specify the restriction(s):

None

6. Other rules or provisions (if any):

The attached Schedule of Other Provisions is incorporated into and forms part of this form.

7. Dated: October 21, 2009

Incorporators

Name of Person Authorizing (please print)	Address: (including postal code)	Signature

Colin R. Perry	4500, 855 - 2nd Street S.W. Calgary, Alberta T2P 4K7	/s/ Colin R. Perry


		REGISTERED ON THE ALBERTA REGISTRIES CORES SYSTEM OCT 21 2009

SCHEDULE OF SHARE CAPITAL

The Corporation is authorized to issue:

(a) One class of shares, to be designated as “Common Shares”, in an unlimited number; and

(b) One class of shares, to be designated as “Preferred Shares”, issuable in series, in an unlimited number;

such shares having attached thereto the following rights, privileges, restrictions and conditions:

A. Common Shares

The Common Shares shall have attached thereto the following rights, privileges, restrictions and conditions:

(i) the right to one vote at all meetings of shareholders of the Corporation, except meetings at which only holders of a specified class of shares are entitled to vote;

(ii) subject to the prior rights and privileges attaching to any other class of shares of the Corporation, the right to receive any dividend declared by the Corporation; and

(iii) subject to the prior rights and privileges attaching to any other class of shares of the Corporation, the right to receive the remaining property and assets of the Corporation upon dissolution.

B. Preferred Shares

The Preferred Shares shall have attached thereto the following rights, privileges, restrictions and conditions:

(i) the Preferred Shares may at any time and from time to time be issued in one or more series, each series to consist of such number of shares as may, before the issue thereof, be determined by resolution of the directors of the Corporation; and

(ii) subject to the provisions of the Business Corporations Act (Alberta), the directors of the Corporation may by resolution fix from time to time before the issue thereof the designation, rights, privileges, restrictions and conditions attaching to each series of the Preferred Shares.

INDEX

		Page

DEFINITIONS		5

REGISTERED OFFICE		5

SEAL		6

DIRECTORS		6
Number		6
Vacancies		6
Powers		6
Duties		6
Qualification		6
Term of Office		7
Election		7
Consent to Election		7
Removal		7
Vacation of Office		7
Validity of Acts		8

MEETINGS OF DIRECTORS		8
Place of Meeting		8
Notice		8
Waiver of Notice		8
Omission of Notice		9
Telephone Participation		9
Adjournment		9
Quorum and Voting		9
Resolution in Lieu of Meeting		9

COMMITTEES OF DIRECTORS		9
General		9
Audit Committee		10

REMUNERATION OF DIRECTORS, OFFICERS AND EMPLOYEES		11

SUBMISSION OF CONTRACTS OR TRANSACTIONS TO SHAREHOLDERS FOR APPROVAL		11

CONFLICT OF INTEREST		11

FOR THE PROTECTION OF DIRECTORS AND OFFICERS		12

INDEMNITIES TO DIRECTORS AND OTHERS		12

OFFICERS		13
Appointment of Officers		13
Removal of Officers and Vacation of Office		13
Vacancies		14
Chairman of the Board		14
President		14
Vice-President		14
Secretary		14
Treasurer		14
Assistant Secretary and Assistant Treasurer		15
Managing Director		15
Duties of Officers may be Delegated		15

SHAREHOLDERS’ MEETINGS		15
Annual Meeting		15
Special Meetings		15
Meeting on Requisition of Shareholders		15
Notice		16
Waiver of Notice		16
Omission of Notice		16
Record Dates		16
Chairman of the Meeting		17
Votes		17
Right to Vote		18
Proxies		18
Telephone Participation		19
Adjournment		19
Quorum		20
Resolution in Lieu of Meeting		20

SHARES AND TRANSFERS		20
Issuance		20
Security Certificates		20
Agent		20
Dealings with Registered Holder		21
Surrender of Security Certificates		21
Defaced, Destroyed, Stolen or Lost Security Certificates		21
Enforcement of Lien for Indebtedness		21

DIVIDENDS		22

VOTING SECURITIES IN OTHER BODIES CORPORATE		22

NOTICES, ETC.		22
Service		22
Failure to Locate Shareholder		23
Shares Registered in More than one Name		23
Persons Becoming Entitled by Operation of Law		23
Deceased Shareholder		23

1496965 ALBERTA LTD.

BY-LAW NO. 1

A by-law relating generally to the conduct of the business and affairs of 1496965 Alberta Ltd. (hereinafter called the “Corporation”).

IT IS HEREBY ENACTED as a by-law of the Corporation as follows:

DEFINITIONS

1. In this by-law and all other by-laws of the Corporation, unless the context otherwise specifies or requires:

(a) “Act” means the Business Corporations Act (Alberta) and the regulations made thereunder, as from time to time amended, and in the case of such amendment any reference in the by-laws shall be read as referring to the amended provisions thereof;

(b) “board” means the board of directors of the Corporation;

(d) all terms contained in the by-laws which are defined in the Act shall have the meanings given to such terms in the Act;

(e) words importing the singular number only shall include the plural and vice versa; words importing the masculine gender shall include the feminine and neuter genders; and

(f) the headings used in the by-laws are inserted for reference purposes only and are not to be considered or taken into account in construing the terms or provisions thereof or to be deemed in any way to clarify, modify or explain the effect of any such terms or provisions.

REGISTERED OFFICE

2. The Corporation shall at all times have a registered office within Alberta. Subject to subsection (4) of section 20 of the Act, the directors of the Corporation may at any time:

(a) change the address of the registered office within Alberta;

(b) designate, or revoke or change a designation of, a records office within Alberta; or

(c) designate, or revoke or change a designation of, a post office box within Alberta as the address for service by mail of the Corporation.

SEAL

3. The corporate seal of the Corporation shall be such as the directors may by resolution from time to time adopt.

DIRECTORS

4. Number. The number of directors shall be the number fixed by the articles, or where the articles specify a variable number, the number shall be not less than the minimum and not more than the maximum number so specified and shall be determined from time to time within such limits by resolution of the shareholders or the board of directors. At least 25% of the directors shall be resident Canadians.

5. Vacancies. Subject to section 111 of the Act, a quorum of directors may fill a vacancy among the directors, except a vacancy resulting from an increase in the number or minimum number of directors or from a failure to elect the number or minimum number of directors required by the articles. If there is not a quorum of directors, or if there has been a failure to elect the number or minimum number of directors required by the articles, the directors then in office shall forthwith call a special meeting of shareholders to fill the vacancy and, if they fail to call a meeting or if there are no directors then in office, the meeting may be called by any shareholder. If the shareholders have adopted an amendment to the articles to increase the number or minimum number of directors, and have not, at the meeting at which they adopted the amendment, elected an additional number of directors authorized by the amendment, the directors then in office shall forthwith call a special meeting of shareholders to fill the vacancy.

A director appointed or elected to fill a vacancy holds office for the unexpired term of his predecessor.

6. Powers. Subject to any unanimous shareholder agreement, the directors shall manage the business and affairs of the Corporation and may exercise all such powers and do all such acts and things as may be exercised or done by the Corporation and are not expressly directed or required to be done in some other manner by the Act, the articles, the by-laws, any special resolution of the Corporation, a unanimous shareholder agreement or by statute.

7. Duties. Every director and officer of the Corporation in exercising his powers and discharging his duties shall:

(a) act honestly and in good faith with a view to the best interests of the Corporation; and

(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

8. Qualification. The following persons are disqualified from being a director of the Corporation:

(a) anyone who is less than 18 years of age;

(b) anyone who

(i) is a dependent adult as defined in the Dependent Adults Act or is the subject of a certificate of incapacity under that Act,

(ii) is a formal patient as defined in the Mental Health Act,

(iii) is the subject of an order under The Mentally Incapacitated Persons Act appointing a committee of his person or estate or both, or

(iv) has been found to be a person of unsound mind by a court elsewhere than in Alberta;

(d) a person who has the status of bankrupt.

Unless the articles otherwise provide, a director of the Corporation is not required to hold shares issued by the Corporation.

9. Term of Office. A director’s term of office (subject to the provisions, if any, of the Corporation’s articles or any unanimous shareholder agreement, and subject to his election for an expressly stated term) shall be from the date of the meeting at which he is elected or appointed until the close of the first annual meeting of shareholders following his election or appointment or until his successor is elected or appointed.

10. Election. Subject to sections 106 and 107 of the Act, shareholders of the Corporation shall, by ordinary resolution at the first meeting of shareholders and at each succeeding annual meeting at which an election of directors is required, elect directors to hold office for a term expiring not later than the close of the next annual meeting of shareholders following the election. A director not elected for an expressly stated term ceases to hold office at the close of the first annual meeting of shareholders following his election but, if qualified, is eligible for re-election. Notwithstanding the foregoing, if directors are not elected at a meeting of shareholders, the incumbent directors continue in office until their successors are elected.

If a meeting of shareholders fails to elect the number or the minimum number of directors required by the articles by reason of the disqualification or death of any candidate, the directors elected at that meeting may exercise all the powers of the directors if the number of directors so elected constitutes a quorum.

11. Consent to Election. A person who is elected or appointed a director is not a director unless he was present at the meeting when he was elected or appointed and did not refuse to act as a director or, if he was not present at the meeting when he was elected or appointed, he consented to act as a director in writing before his election or appointment or within 10 days after it or he has acted as a director pursuant to the election or appointment.

12. Removal. Subject to sections 107 and 109 of the Act, the shareholders of the Corporation may by ordinary resolution at a special meeting remove any director from office before the expiration of his term of office and may, by a majority of votes cast at the meeting, elect any person in his stead for the remainder of his term.

13. Vacation of Office. A director of the Corporation ceases to hold office when:

(a) he dies or resigns;

(b) he is removed from office; or

A resignation of a director becomes effective at the time a written resignation is sent to the Corporation, or at the time specified in the resignation, whichever is later.

14. Validity of Acts. An act of a director or officer is valid notwithstanding an irregularity in his election or appointment or a defect in his qualification. An act of the directors or a committee of directors is valid notwithstanding non-compliance with paragraphs 4, 21 or 23 hereof.

MEETINGS OF DIRECTORS

15. Place of Meeting. Unless the articles otherwise provide, meetings of directors and of any committee of directors may be held at any place. A meeting of directors may be convened by the Chairman of the Board (if any), the President or any director at any time and the Secretary shall upon direction of any of the foregoing convene a meeting of directors.

16. Notice. Notice of the time and place for the holding of any meeting of directors or of any committee of directors shall be sent to each director or each director who is a member of such committee, as the case may be, not less than forty-eight (48) hours before the time of the meeting; provided that a meeting of directors or of any committee of directors may be held at any time without notice if all the directors or members of such committee are present (except where a director attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called) or if all the absent directors waive notice of the meeting. The notice of a meeting of directors shall specify any matter referred to in subsection (3) of section 115 of the Act that is to be dealt with at the meeting, but need not specify the purpose or the business to be transacted at the meeting.

For the first meeting of directors to be held following the election of directors at an annual or special meeting of the shareholders or for a meeting of directors at which a director is appointed to fill a vacancy in the board, no notice of such meeting need be given to the newly elected or appointed director or directors in order for the meeting to be duly constituted, provided a quorum of the directors is present.

17. Waiver of Notice. Notice of any meeting of directors or of any committee of directors or the time for the giving of any such notice or any irregularity in any meeting or in the notice thereof may be waived by any director in writing or by telecopy, telegram, cable or telex addressed to the Corporation or in any other manner, and any such waiver may be validly given either before or after the meeting to which such waiver relates. Attendance of a director at any meeting of directors or of any committee of directors is a waiver of notice of such meeting, except when a director attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

18. Omission of Notice. The accidental omission to give notice of any meeting of directors or of any committee of directors to or the non-receipt of any notice by any person shall not invalidate any resolution passed or any proceeding taken at such meeting.

19. Electronic Participation. A director may participate in a meeting of directors or of any committee of directors by means of telephone or other communication facilities that permit all persons participating in the meeting to communicate with each other, and a director participating in a meeting by those means is deemed for the purposes of the Act and this by-law to be present at that meeting.

20. Adjournment. Any meeting of directors or of any committee of directors may be adjourned from time to time by the chairman of the meeting, with the consent of the meeting, to a fixed time and place. Notice of an adjourned meeting of directors or committee of directors is not required to be given if the time and place of the adjourned meeting is announced at the original meeting. Any adjourned meeting shall be duly constituted if held in accordance with the terms of the adjournment and a quorum is present thereat. The directors who formed a quorum at the original meeting are not required to form the quorum at the adjourned meeting. If there is no quorum present at the adjourned meeting, the original meeting shall be deemed to have terminated forthwith after its adjournment. Any business may be brought before or dealt with at the adjourned meeting which might have been brought before or dealt with at the original meeting in accordance with the notice calling the same.

21. Quorum and Voting. Subject to the articles, a majority of the number of directors constitutes a quorum at any meeting of directors and, notwithstanding any vacancy among the directors, a quorum of directors may exercise all the powers of the directors. Subject to subsections (3) and (4) of section 114 of the Act, directors shall not transact business at a meeting of directors unless a quorum is present and at least 25% of the directors present are resident Canadians. Questions arising at any meeting of directors shall be decided by a majority of votes. In the case of an equality of votes, the chairman of the meeting in addition to his original vote shall have a second or casting vote.

22. Resolution in Lieu of Meeting. Subject to the articles or a unanimous shareholder agreement, a resolution in writing, signed by all the directors entitled to vote on that resolution at a meeting of directors or committee of directors, is as valid as if it had been passed at a meeting of directors or committee of directors. A resolution in writing dealing with all matters required by the Act or this by-law to be dealt with at a meeting of directors, and signed by all the directors entitled to vote at that meeting, satisfies all the requirements of the Act and this by-law relating to meetings of directors.

COMMITTEES OF DIRECTORS

23. General. The directors may from time to time appoint from their number a managing director, who must be a resident Canadian, or a committee of directors, at least 25% of whom shall be resident Canadians, and may delegate to the managing director or such committee any of the powers of the directors, except that no managing director or committee shall have the authority to:

(a) submit to the shareholders any question or matter requiring the approval of the shareholders;

(b) fill a vacancy among the directors or in the office of auditor;

(d) declare dividends;

(e) purchase, redeem or otherwise acquire shares issued by the Corporation, except in the manner and on the terms authorized by the directors;

(f) pay a commission referred to in section 42 of the Act;

(g) approve a management proxy circular;

(h) approve any annual financial statements to be placed before the shareholders of the Corporation; or

(i) adopt, amend or repeal by-laws of the Corporation.

Notwithstanding the foregoing and subject to the articles or any unanimous shareholder agreement, the directors may, by resolution, delegate to a director, managing director or committee of directors the power to:

(a) borrow money on the credit of the Corporation;

(b) issue, reissue, sell or pledge debt obligations of the Corporation;

(c) subject to section 45 of the Act, give a guarantee on behalf of the Corporation to secure performance of an obligation of any person; and

(d) mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the Corporation, owned or subsequently acquired, to secure any obligation of the Corporation.

24. Audit Committee. Subject to subsection (3) of section 171 of the Act, if any of the issued shares of the Corporation, or securities of the Corporation which may or might be exchanged for or converted into shares of the Corporation, were part of a distribution to the public and the Corporation has more than fifteen shareholders, the directors shall elect annually from among their number an audit committee to be composed of not fewer than three directors, a majority of whom are not officers or employees of the Corporation or any of its affiliates.

Each member of the audit committee shall serve during the pleasure of the board of directors and, in any event, only so long as he shall be a director. The directors may fill vacancies in the audit committee by election from among their number.

The audit committee shall have power to fix its quorum at not less than a majority of its members and to determine its own rules of procedure subject to any regulations imposed by the board of directors from time to time and to the following paragraph.

The auditor of the Corporation is entitled to receive notice of every meeting of the audit committee and, at the expense of the Corporation, to attend and be heard thereat, and, if so

requested by a member of the audit committee, shall attend every meeting of the committee held during the term of office of the auditor. The auditor of the Corporation or any member of the audit committee may call a meeting of the committee.

The audit committee shall review the financial statements of the Corporation prior to approval thereof by the board and shall have such other powers and duties as may from time to time by resolution be assigned to it by the board.

REMUNERATION OF DIRECTORS, OFFICERS AND EMPLOYEES

25. Subject to the articles or any unanimous shareholder agreement, the directors of the Corporation may fix the remuneration of the directors, officers and employees of the Corporation. Any remuneration paid to a director of the Corporation shall be in addition to the salary paid to such director in his capacity as an officer or employee of the Corporation. The directors may also by resolution award special remuneration to any director in undertaking any special services on the Corporation’s behalf other than the routine work ordinarily required of a director of the Corporation. The confirmation of any such resolution by the shareholders shall not be required. The directors, officers and employees shall also be entitled to be paid their travelling and other expenses properly incurred by them in connection with the affairs of the Corporation.

The aggregate remuneration paid to the directors and the aggregate remuneration paid to the five highest paid officers and employees, other than directors, shall be disclosed to the shareholders at every annual meeting.

SUBMISSION OF CONTRACTS OR TRANSACTIONS TO SHAREHOLDERS FOR APPROVAL

26. The directors in their discretion may submit any contract, act or transaction for approval, ratification or confirmation at any annual meeting of the shareholders or at any special meeting of the shareholders called for the purpose of considering the same and any contract, act or transaction that shall be approved, ratified or confirmed by resolution passed by a majority of the votes cast at any such meeting (unless any different or additional requirement is imposed by the Act or by the Corporation’s articles or any other by-law) shall be as valid and as binding upon the Corporation and upon all the shareholders as though it had been approved, ratified and/or confirmed by every shareholder of the Corporation.

CONFLICT OF INTEREST

27. A director or officer of the Corporation who is a party to a material contract or proposed material contract with the Corporation, or is a director or an officer of or has a material interest in any person who is a party to a material contract or proposed material contract with the Corporation shall disclose the nature and extent of his interest at the time and in the manner provided in the Act. Except as provided in the Act, no such director of the Corporation shall vote on any resolution to approve such contract. If a material contract is made between the Corporation and one or more of its directors or officers, or between the Corporation and another person of which a director or officer of the Corporation is a director or officer or in which he has a material interest, (i) the contract is neither void nor voidable by reason only of that

relationship, or by reason only that a director with an interest in the contract is present at or is counted to determine the presence of a quorum at a meeting of directors or committee of directors that authorized the contract, and (ii) a director or officer or former director or officer of the Corporation to whom a profit accrues as a result of the making of the contract is not liable to account to the Corporation for that profit by reason only of holding office as a director or officer, if the director or officer disclosed his interest in accordance with the provisions of the Act and the contract was approved by the directors or the shareholders and it was reasonable and fair to the Corporation at the time it was approved. This paragraph is subject to any unanimous shareholder agreement.

FOR THE PROTECTION OF DIRECTORS AND OFFICERS

28. No director or officer for the time being of the Corporation shall be liable to the Corporation for the acts, receipts, neglects or defaults of any other director or officer or employee or for joining in any receipt or act for conformity or for any loss, damage or expense happening to the Corporation through the insufficiency or deficiency of title to any property acquired by the Corporation or for or on behalf of the Corporation or for the insufficiency or deficiency of any security in or upon which any of the monies of or belonging to the Corporation shall be placed out or invested or for any loss or damage arising from the bankruptcy, insolvency or tortious act of any person, firm or corporation including any person, firm or corporation with whom or which any monies, securities or effects shall be lodged or deposited or for any loss, conversion, misapplication or misappropriation of or any damage resulting from any dealings with any monies, securities or other assets belonging to the Corporation or for any other loss, damage or misfortune whatever which may happen in the execution of the duties of his respective office of trust or in relation thereto, unless the same shall happen by or through his failure to exercise the powers and to discharge the duties of his office honestly, in good faith with a view to the best interests of the Corporation, and in connection therewith to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances, provided that nothing herein contained shall relieve a director or officer from the duty to act in accordance with the Act or relieve him from liability under the Act. The directors for the time being of the Corporation shall not be under any duty or responsibility in respect of any contract, act or transaction whether or not made, done or entered into in the name or on behalf of the Corporation, except such as shall have been submitted to and authorized or approved by the directors. If any director or officer of the Corporation shall be employed by or shall perform services for the Corporation otherwise than as a director or officer or shall be a member of a firm or a shareholder, director or officer of a body corporate which is employed by or performs services for the Corporation, the fact of his being a shareholder, director or officer of the Corporation or body corporate or member of the firm shall not disentitle such director or officer or such firm or body corporate, as the case may be, from receiving proper remuneration for such services.

INDEMNITIES TO DIRECTORS AND OTHERS

29. (1) Subject to section 124 of the Act, except in respect of an action by or on behalf of the Corporation or body corporate to procure a judgment in its favour, the Corporation shall indemnify a director or officer of the Corporation, a former director or officer of the Corporation or a person who acts or acted at the Corporation’s request as a director or officer of a body corporate of which the Corporation is or was a shareholder or creditor, and his heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle

an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the Corporation or body corporate, if:

(a) he acted honestly and in good faith with a view to the best interests of the Corporation; and

(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful.

(2) The Corporation shall, subject to the approval of a Court (as defined in the Act), indemnify a person referred to in subparagraph 29(1) hereof in respect of an action by or on behalf of the Corporation or a body corporate to procure a judgment in its favour, to which he is made a party by reason of being or having been a director or an officer of the Corporation or body corporate, against all costs, charges and expenses reasonably incurred by him in connection with such action if he fulfills the conditions set out in subparagraph 29(1)(a) and (b) hereof.

(3) Notwithstanding anything in this paragraph 29, a person referred to in subparagraph 29(1) shall be entitled to indemnity from the Corporation in respect of all costs, charges and expenses reasonably incurred by him in connection with the defence of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the Corporation or body corporate, if the person seeking indemnity:

(a) was substantially successful on the merits of his defence of the action or proceeding; and

(b) fulfills the conditions set out in subparagraph 29(1)(a) and (b) hereof.

OFFICERS

30. Appointment of Officers. Subject to the articles or any unanimous shareholder agreement, the directors annually or as often as may be required may appoint from among themselves a Chairman of the Board and shall appoint a President and a Secretary and if deemed advisable may appoint one or more Vice-Presidents, a Treasurer and one or more Assistant Secretaries and/or one or more Assistant Treasurers. None of such officers except the Chairman of the Board need be a director of the Corporation although a director may be appointed to any office of the Corporation. Two or more offices of the Corporation may be held by the same person. In case and whenever the same person holds the offices of Secretary and Treasurer he may but need not be known as the Secretary-Treasurer. The directors may from time to time appoint such other officers, employees and agents as they shall deem necessary who shall have such authority and shall perform such functions and duties as may from time to time be prescribed by resolution of the directors. The directors may from time to time and subject to the provisions of the Act, vary, add to or limit the duties and powers of any officer, employee or agent.

31. Removal of Officers and Vacation of Office. Subject to the articles or any unanimous shareholder agreement, all officers, employees and agents, in the absence of

agreement to the contrary, shall be subject to removal by resolution of the directors at any time, with or without cause.

An officer of the Corporation ceases to hold office when he dies, resigns or is removed from office. A resignation of an officer becomes effective at the time a written resignation is sent to the Corporation, or at the time specified in the resignation, whichever is later.

32. Vacancies. If the office of President, Vice-President, Secretary, Assistant Secretary, Treasurer, Assistant Treasurer, or any other office created by the directors pursuant to paragraph 30 hereof shall be or become vacant by reason of death, resignation or in any other manner whatsoever, the directors shall, in the case of the President and Secretary, and may, in the case of any other officers, appoint an individual to fill such vacancy.

33. Chairman of the Board. The Chairman of the Board (if any) shall, if present, preside as chairman at all meetings of the board and of shareholders. He shall sign such contracts, documents or instruments in writing as require his signature and shall have such other powers and shall perform such other duties as may from time to time be assigned to him by resolution of the directors.

34. President. The President shall be the chief executive officer of the Corporation (except as may otherwise be specified by the board of directors) and shall, subject to the direction of the board of directors, exercise general supervision and control over the business and affairs of the Corporation. In the absence of the Chairman of the Board (if any), and if the President is also a director of the Corporation, the President shall, when present, preside as chairman at all meetings of directors and shareholders. He shall sign such contracts, documents or instruments in writing as require his signature and shall have such other powers and shall perform such other duties as may from time to time be assigned to him by resolution of the directors or as are incident to his office.

35. Vice-President. The Vice-President or, if more than one, the Vice-Presidents in order of seniority, shall be vested with all the powers and shall perform all the duties of the President in the absence or inability or refusal to act of the President, provided, however, that a Vice-President who is not a director shall not preside as chairman at any meeting of directors or shareholders. The Vice-President or, if more than one, the Vice-Presidents shall sign such contracts, documents or instruments in writing as require his or their signatures and shall have such other powers and shall perform such other duties as may from time to time be assigned to him or them by resolution of the directors.

36. Secretary. The Secretary shall give or cause to be given notices for all meetings of directors, any committee of directors and shareholders when directed to do so and shall, subject to the provisions of the Act, maintain the records referred to in subsections (1), (3) and (5) of section 21 of the Act. He shall sign such contracts, documents or instruments in writing as require his signature and shall have such other powers and shall perform such other duties as may from time to time be assigned to him by resolution of the directors or as are incident to his office.

37. Treasurer. Subject to the provisions of any resolution of the directors, the Treasurer shall have the care and custody of all the funds and securities of the Corporation and

shall deposit the same in the name of the Corporation in such bank or banks or with such other depositary or depositaries as the directors may by resolution direct. He shall prepare and maintain adequate accounting records. He shall sign such contracts, documents or instruments in writing as require his signature and shall have such other powers and shall perform such other duties as may from time to time be assigned to him by resolution of the directors or as are incident to his office. He may be required to give such bond for the faithful performance of his duties as the directors in their uncontrolled discretion may require and no director shall be liable for failure to require any such bond or for the insufficiency of any such bond or for any loss by reason of the failure of the Corporation to receive any indemnity thereby provided.

38. Assistant Secretary and Assistant Treasurer. The Assistant Secretary or, if more than one, the Assistant Secretaries in order of seniority, and the Assistant Treasurer or, if more than one, the Assistant Treasurers in order of seniority, shall be vested with all the powers and shall perform all the duties of the Secretary and Treasurer, respectively, in the absence or inability or refusal to act of the Secretary or Treasurer as the case may be. The Assistant Secretary or, if more than one, the Assistant Secretaries and the Assistant Treasurer or, if more than one, the Assistant Treasurers shall sign such contracts, documents or instruments in writing as require his or their signatures respectively and shall have such other powers and shall perform such other duties as may from time to time be assigned to him or them by resolution of the directors.

39. Managing Director. The directors may from time to time appoint from their number a Managing Director who must be a resident Canadian and may delegate to the Managing Director any of the powers of the directors subject to the limits on authority provided by subsection (3) of section 115 of the Act. The Managing Director shall conform to all lawful orders given to him by the directors and shall at all reasonable times give to the directors or any of them all information they may require regarding the affairs of the Corporation. Any agent or employee appointed by the Managing Director shall be subject to discharge by the directors.

40. Duties of Officers may be Delegated. In case of the absence or inability or refusal to act of any officer of the Corporation or for any other reason that the directors may deem sufficient, the directors may delegate all or any of the powers of such officer to any other officer or to any director for the time being.

SHAREHOLDERS’ MEETINGS

41. Annual Meeting. Subject to sections 131 and 132 of the Act, the annual meeting of shareholders shall be held at the registered office of the Corporation or at a place elsewhere within Alberta determined by the directors on such day in each year and at such time as the directors may determine.

42. Special Meetings. The directors of the Corporation may at any time call a special meeting of shareholders to be held on such day and at such time and, subject to section 131 of the Act, at such place within Alberta as the directors may determine.

43. Meeting on Requisition of Shareholders. The holders of not less than five percent (5%) of the issued shares of the Corporation that carry the right to vote at a meeting sought to be held may requisition the directors to call a meeting of shareholders for the purposes stated in the

requisition. The requisition shall state the business to be transacted at the meeting and shall be sent to each director and to the registered office of the Corporation. Subject to subsection (3) of section 142 of the Act, upon receipt of the requisition, the directors shall call a meeting of shareholders to transact the business stated in the requisition. If the directors do not within twenty-one days after receiving the requisition call a meeting, any shareholder who signed the requisition may call the meeting.

44. Notice. A notice in writing of a meeting of shareholders stating the day, hour and place of meeting and if special business is to be transacted thereat, stating (i) the nature of that business in sufficient detail to permit the shareholder to form a reasoned judgment on that business and (ii) the text of any special resolution to be submitted to the meeting, shall be sent to each shareholder entitled to vote at the meeting, who on the record date for notice is registered on the records of the Corporation or its transfer agent as a shareholder, to each director of the Corporation and to the auditor of the Corporation not less than 21 days and not more than 50 days (exclusive of the day of mailing and of the day for which notice is given) before the date of the meeting; provided that a meeting of shareholders may be held for any purpose on any day and at any time and, subject to section 131 of the Act, at any place without notice if all the shareholders and all other persons entitled to attend such meeting are present in person or represented by proxy at the meeting (except where a shareholder or other person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called) or if all the shareholders and all other persons entitled to attend such meeting and not present in person nor represented by proxy thereat waive notice of the meeting.

A director of the Corporation is entitled to receive notice of and to attend and be heard at every meeting of shareholders of the Corporation.

The auditor of the Corporation is entitled to receive notice of every meeting of shareholders of the Corporation and, at the expense of the Corporation, to attend and be heard at every meeting on matters relating to his duties as auditor.

45. Waiver of Notice. Notice of any meeting of shareholders or the time for the giving of any such notice or any irregularity in any meeting or in the notice thereof may be waived by any shareholder, the duly appointed proxy of any shareholder, any director or the auditor of the Corporation in writing or by telecopy, telegram, cable or telex addressed to the Corporation or in any other manner, and any such waiver may be validly given either before or after the meeting to which such waiver relates. Attendance of a shareholder or any other person entitled to attend a meeting of shareholders is a waiver of notice of such meeting, except when he attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

46. Omission of Notice. The accidental omission to give notice of any meeting of shareholders to or the non-receipt of any notice by any person shall not invalidate any resolution passed or any proceeding taken at any such meeting.

47. Record Dates. The directors may fix in advance a date as the record date for the determination of shareholders (i) entitled to receive payment of a dividend, (ii) entitled to participate in a liquidation distribution or (iii) for any other purpose except the right to receive

notice of or to vote at a meeting of shareholders, but such record date shall not precede by more than 50 days the particular action to be taken.

The directors may also fix in advance a date as the record date for the determination of shareholders entitled to receive notice of a meeting of shareholders, but such record date shall not precede by more than 50 days or by less than 21 days the date on which the meeting is to be held.

If no record date is fixed,

(a) the record date for the determination of shareholders entitled to receive notice of a meeting of shareholders shall be

(i) at the close of business on the last business day preceding the day on which the notice is sent; or

(ii) if no notice is sent, the day on which the meeting is held; and

(b) the record date for the determination of shareholders for any purpose other than to establish a shareholder’s right to receive notice of a meeting or to vote shall be at the close of business on the day on which the directors pass the resolution relating to that purpose.

48. Chairman of the Meeting. In the absence of the Chairman of the Board (if any), the President and any Vice-President who is a director, the shareholders present entitled to vote shall elect another director as chairman of the meeting and if no director is present or if all the directors present decline to take the chair then the shareholders present shall elect one of their number to be chairman.

49. Votes. Votes at meetings of shareholders may be given either personally or by proxy. Every question submitted to any meeting of shareholders shall be decided on a show of hands except when a ballot is required by the chairman of the meeting or is demanded by a shareholder or proxyholder entitled to vote at the meeting. A shareholder or proxyholder may demand a ballot either before or on the declaration of the result of any vote by show of hands. At every meeting at which he is entitled to vote, every shareholder present in person and every proxyholder shall have one (1) vote on a show of hands. Upon a ballot at which he is entitled to vote every shareholder present in person or by proxy shall (subject to the provisions, if any, of the articles) have one (1) vote for every share registered in his name. In the case of an equality of votes the chairman of the meeting shall not, either on a show of hands or on a ballot, have a second or casting vote in addition to the vote or votes to which he may be entitled as a shareholder or proxyholder.

At any meeting, unless a ballot is demanded by a shareholder or proxyholder entitled to vote at the meeting a declaration by the chairman of the meeting that a resolution has been carried unanimously or by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of the fact without proof of the number or proportion of votes recorded in favour of or against the resolution.

If at any meeting a ballot is demanded on the election of a chairman or on the question of adjournment or termination, the ballot shall be taken forthwith without adjournment. If a ballot is demanded on any other question or as to the election of directors, the ballot shall be taken in such manner and either at once or later at the meeting or after adjournment as the chairman of the meeting directs. The result of a ballot shall be deemed to be the resolution of the meeting at which the ballot was demanded. A demand for a ballot may be withdrawn.

50. Right to Vote. Subject to section 139 of the Act or unless the articles otherwise provide, each share of the Corporation entitles the holder of it to one vote at a meeting of shareholders.

Where a body corporate or association is a shareholder of the Corporation, any individual authorized by a resolution of the directors or governing body of the body corporate or association to represent it at meetings of shareholders of the Corporation is the person entitled to vote at all such meetings of shareholders in respect of the shares held by such body corporate or association.

Where a person holds shares as a personal representative, such person or his proxy is the person entitled to vote at all meetings of shareholders in respect of the shares so held by him.

Where a person mortgages, pledges or hypothecates his shares, such person or his proxy is the person entitled to vote at all meetings of shareholders in respect of such shares so long as such person remains the registered owner of such shares unless, in the instrument creating the mortgage, pledge or hypothec, he has expressly empowered the person holding the mortgage, pledge or hypothec to vote in respect of such shares, in which case, subject to the articles, such holder or his proxy is the person entitled to vote in respect of the shares.

Where two or more persons hold shares jointly, one of those holders present at a meeting of shareholders may in the absence of the others vote the shares, but if two or more of those persons who are present, in person or by proxy, vote, they shall vote as one on the shares jointly held by them.

51. Proxies. Every shareholder, including a shareholder that is a body corporate, entitled to vote at a meeting of shareholders may by means of a proxy appoint a proxyholder and one or more alternate proxyholders, who are not required to be shareholders, to attend and act at the meeting in the manner and to the extent authorized by the proxy and with the authority conferred by the proxy.

An instrument appointing a proxyholder shall be in written or printed form and shall be executed by the shareholder or by his attorney authorized in writing and is valid only at the meeting in respect of which it is given or any adjournment of that meeting.

An instrument appointing a proxyholder may be in the following form or in any other form which complies with the requirements of the Act:

The undersigned shareholder of hereby appoints of , whom failing, of as the

nominee of the undersigned to attend and act for and on behalf of the undersigned at the meeting of the shareholders of the said Corporation to be held on the day of , 20 and at any adjournment thereof in the same manner, to the same extent and with the same power as if the undersigned were personally present at the said meeting or such adjournment thereof.

Dated the day of , 20 .



	Signature of Shareholder

The directors may specify in a notice calling a meeting of shareholders a time not exceeding forty-eight (48) hours, excluding Saturdays, Sundays and holidays, preceding the meeting or an adjournment of the meeting before which time proxies to be used at the meeting must be deposited with the Corporation or its agent.

The chairman of the meeting of shareholders may in his discretion accept any written communication (including without limitation any telecopy, telegram, cable or telex) as to the authority of anyone claiming to vote on behalf of and to represent a shareholder notwithstanding that no instrument of proxy conferring such authority has been deposited with the Corporation, and any votes given in accordance with such written communication accepted by the chairman of the meeting shall be valid and shall be counted.

52. Electronic Participation. A shareholder or any other person entitled to attend a meeting of shareholders may participate in the meeting by means of telephone or other communication facilities that permit all persons participating in the meeting to communicate with each other and a person participating in such a meeting by those means is deemed for the purposes of the Act and this by-law to be present at the meeting.

53. Adjournment. The chairman of the meeting may with the consent of the meeting adjourn any meeting of shareholders from time to time to a fixed time and place and if the meeting is adjourned by one or more adjournments for an aggregate of less than thirty (30) days it is not necessary to give notice of the adjourned meeting other than by announcement at the time of an adjournment. If a meeting of shareholders is adjourned by one or more adjournments for an aggregate of thirty (30) days or more, notice of the adjourned meeting shall be given as for an original meeting but, unless the meeting is adjourned by one or more adjournments for an aggregate of more than ninety (90) days, subsection (1) of section 149 of the Act does not apply.

Any adjourned meeting shall be duly constituted if held in accordance with the terms of the adjournment and a quorum is present thereat. The persons who formed a quorum at the original meeting are not required to form the quorum at the adjourned meeting. If there is no quorum present at the adjourned meeting, the original meeting shall be deemed to have terminated forthwith after its adjournment. Any business may be brought before or dealt with at the adjourned meeting which might have been brought before or dealt with at the original meeting in accordance with the notice calling the same.

54. Quorum. Two (2) persons present and each holding or representing by proxy at least one (1) issued share of the Corporation shall be a quorum at any meeting of shareholders for the election of a chairman of the meeting and for the adjournment of the meeting to a fixed time and place but not for the transaction of any other business; for all other purposes two (2) persons present and holding or representing by proxy one-twentieth of the shares entitled to vote at the meeting shall be a quorum. If a quorum is present at the opening of a meeting of shareholders, the shareholders present may proceed with the business of the meeting, notwithstanding that a quorum is not present throughout the meeting.

Notwithstanding the foregoing, if the Corporation has only one shareholder, or one shareholder holding a majority of the shares entitled to vote at the meeting, that shareholder present in person or by proxy constitutes a meeting and a quorum for such meeting.

55. Resolution in Lieu of Meeting. A resolution in writing signed by all the shareholders entitled to vote on that resolution is as valid as if it had been passed at a meeting of the shareholders. A resolution in writing dealing with all matters required by the Act or this by-law to be dealt with at a meeting of shareholders, and signed by all the shareholders entitled to vote at that meeting, satisfies all the requirements of this Act or the by-law relating to meetings of shareholders.

SHARES AND TRANSFERS

56. Issuance. Subject to the articles, any unanimous shareholder agreement and to section 30 of the Act, shares in the Corporation may be issued at the times and to the persons and for the consideration that the directors determine; provided that a share shall not be issued until the consideration for the share is fully paid in money or in property or past service that is not less in value than the fair equivalent of the money that the Corporation would have received if the share had been issued for money.

57. Security Certificates. A security holder is entitled at his option to a security certificate that complies with the Act or a non-transferable written acknowledgment of his right to obtain a security certificate from the Corporation in respect of the securities of the Corporation held by him. Security certificates shall (subject to compliance with section 48 of the Act) be in such form as the directors may from time to time by resolution approve and such certificates shall be signed by at least one director or officer of the Corporation or by or on behalf of a registrar, transfer agent or branch transfer agent of the Corporation, or by a trustee who certifies it in accordance with a trust indenture. Any signatures required on a security certificate may be printed or otherwise mechanically reproduced on it. If a security certificate contains a printed or mechanically reproduced signature of a person, the Corporation may issue the security certificate, notwithstanding that the person has ceased to be a director or an officer of the Corporation, and the security certificate is as valid as if he were a director or an officer at the date of its issue.

58. Agent. The directors may from time to time by resolution appoint or remove (i) one or more trust companies registered under the Trust Companies Act as its agent or agents to maintain a central securities register or registers or (ii) an agent or agents to maintain a branch securities register or registers for the Corporation.

59. Dealings with Registered Holder. Subject to the Act, the Corporation may treat the registered owner of a security as the person exclusively entitled to vote, to receive notices, to receive any interest, dividend or other payments in respect of the security, and otherwise to exercise all the rights and powers of an owner of the security.

60. Surrender of Security Certificates. Subject to the Act, no transfer of a security issued by the Corporation shall be registered unless or until the security certificate representing the security to be transferred has been presented for registration or, if no security certificate has been issued by the Corporation in respect of such security, unless or until a duly executed transfer in respect thereof has been presented for registration.

61. Defaced, Destroyed, Stolen or Lost Security Certificates. In case of the defacement, destruction, theft or loss of a security certificate, the fact of such defacement, destruction, theft or loss shall be reported by the owner to the Corporation or to an agent of the Corporation (if any), on behalf of the Corporation, with a statement verified by oath or statutory declaration as to the defacement, destruction, theft or loss and the circumstances concerning the same and with a request for the issuance of a new security certificate to replace the one so defaced, destroyed, stolen or lost. Upon the giving to the Corporation (or if there be an agent, hereinafter in this paragraph referred to as the “Corporation’s agent”, then to the Corporation and the Corporation’s agent) of a bond of a surety company (or other security approved by the directors) in such form as is approved by the directors or by the Chairman of the Board (if any), the President, a Vice-President, the Secretary or the Treasurer of the Corporation, indemnifying the Corporation (and the Corporation’s agent if any) against all loss, damage or expense, which the Corporation and/or the Corporation’s agent may suffer or be liable for by reason of the issuance of a new security certificate to such owner, and provided the Corporation or the Corporation’s agent does not have notice that the security has been acquired by a bona fide purchaser and before a purchaser described in section 67 of the Act has received a new, reissued or re-registered security, a new security certificate may be issued in replacement of the one defaced, destroyed, stolen or lost, if such issuance is ordered and authorized by any one of the Chairman of the Board (if any), the President, a Vice-President, the Secretary or the Treasurer of the Corporation or by resolution of the directors.

62. Enforcement of Lien for Indebtedness. Subject to subsection (8) of section 48 of the Act, if the articles of the Corporation provide that the Corporation has a lien on the shares registered in the name of a shareholder or his legal representative for a debt of that shareholder to the Corporation, the directors of the Corporation may sell any such shares in such manner as they think fit until the debt has been paid in full. No sale shall be made until such time as the debt ought to be paid and until a demand and notice in writing stating the amount due and demanding payment and giving notice of intention to sell in default shall have been served on the holder or his legal representative of the shares subject to the lien and default shall have been made in payment of such debt for seven days after service of such notice. Upon any such sale, the proceeds shall be applied, firstly, in payment of all costs of such sale, and, secondly, in satisfaction of such debt and the residue (if any) shall be paid to such shareholder or his legal representative or as he shall direct. Upon any such sale, the directors may enter or cause to be entered the purchaser’s name in the securities register of the Corporation as holder of the shares, and the purchaser shall not be bound to see to the regularity or validity of, or be affected by, any irregularity or invalidity in the proceedings, or be bound to see to the application of the purchase

money, and after his name or the name of his legal representative has been entered in the securities register, the regularity and validity of the sale shall not be impeached by any person.

DIVIDENDS

63. The directors may from time to time by resolution declare and the Corporation may pay dividends on its issued shares, subject to the provisions (if any) of the Corporation’s articles.

The directors shall not declare and the Corporation shall not pay a dividend if there are reasonable grounds for believing that:

(a) the Corporation is, or would be after the payment be, unable to pay its liabilities as they become due; or

(b) the realizable value of the Corporation’s assets would thereby be less than the aggregate of its liabilities and stated capital of all classes.

The Corporation may pay a dividend by issuing fully paid shares of the Corporation and, subject to section 43 of the Act, the Corporation may pay a dividend in money or property.

64. In case several persons are registered as the joint holders of any securities of the Corporation, any one of such persons may give effectual receipts for all dividends and payments on account of dividends, principal, interest and/or redemption payments in respect of such securities.

VOTING SECURITIES IN OTHER BODIES CORPORATE

65. All securities of any other body corporate carrying voting rights held from time to time by the Corporation may be voted at all meetings of shareholders, bondholders, debenture holders or holders of such securities, as the case may be, of such other body corporate and in such manner and by such person or persons as the directors of the Corporation shall from time to time determine and authorize by resolution. The duly authorized signing officers of the Corporation may also from time to time execute and deliver for and on behalf of the Corporation proxies and arrange for the issuance of voting certificates or other evidence of the right to vote in such names as they may determine without the necessity of a resolution or other action by the directors.

NOTICES, ETC.

66. Service. Any notice or document required by the Act, the articles or the by-laws to be sent to any shareholder or director of the Corporation may be delivered personally to or sent by mail addressed to:

(a) the shareholder at his latest address as shown in the records of the Corporation or its transfer agent; and

(b) the director at his latest address as shown in the records of the Corporation or in the last notice filed under section 106 or 113 of the Act.

Such notice or document shall be deemed to have been sent on the day of personal delivery or mailing. With respect to every notice or document sent by mail it shall be sufficient to prove that the envelope or wrapper containing the notice or document was properly addressed and put into a post office or into a post office letter box.

67. Failure to Locate Shareholder. If the Corporation sends a notice or document to a shareholder and the notice or document is returned on three consecutive occasions because the shareholder cannot be found, the Corporation is not required to send any further notices or documents to the shareholder until he informs the Corporation in writing of his new address.

68. Shares Registered in More than one Name. All notices or documents shall, with respect to any shares in the capital of the Corporation registered in more than one name, be sent to whichever of such persons is named first in the records of the Corporation and any notice or document so sent shall be deemed to have been duly sent to all the holders of such shares.

69. Persons Becoming Entitled by Operation of Law. Every person who by operation of law, transfer or by any other means whatsoever shall become entitled to any shares in the capital of the Corporation shall be bound by every notice or document in respect of such shares which prior to his name and address being entered on the records of the Corporation in respect of such shares shall have been duly sent to the person or persons from whom he derives his title to such shares.

70. Deceased Shareholder. Any notice or document sent to any shareholder in accordance with paragraph 66 hereof shall, notwithstanding that such shareholder be then deceased and whether or not the Corporation has notice of his decease, be deemed to have been duly sent in respect of the shares held by such shareholder (whether held solely or with other persons) until some other person be entered in his stead in the records of the Corporation as the holder or one of the holders thereof and shall be deemed to have been duly sent to his heirs, executors, administrators and legal representatives and all persons (if any) interested with him in such shares.

71. Signatures upon Notices. The signature of any director or officer of the Corporation upon any notice may be written, stamped, typewritten or printed or partly written, stamped, typewritten or printed.

72. Computation of Time. All computations of time required to be made pursuant to the articles or by-laws of the Corporation shall be made (i) in accordance with the provisions of the Interpretation Act, to the extent such provisions are applicable, and (ii) in any other case, in accordance with the customary meaning ascribed to the words requiring such computation of time.

73. Proof of Service. A certificate of any officer of the Corporation in office at the time of the making of the certificate or of an agent of the Corporation as to facts in relation to the sending of any notice or document to any shareholder, director, officer or auditor or publication of any notice or document shall be conclusive evidence thereof and shall be binding on every shareholder, director, officer or auditor of the Corporation, as the case may be.

CUSTODY OF SECURITIES

74. All securities (including without limitation warrants) owned by the Corporation may be lodged (in the name of the Corporation) with a chartered bank or a trust company or in a safety deposit box or, if so authorized by resolution of the directors, with such other depositaries or in such other manner as may be determined from time to time by the directors.

All securities (including without limitation warrants) belonging to the Corporation may be issued and held in the name of a nominee or nominees of the Corporation (and if issued or held in the names of more than one nominee shall be held in the names of the nominees jointly with right of survivorship) and shall be endorsed in blank with endorsement guaranteed in order to enable transfer thereof to be completed and registration thereof to be effected.

EXECUTION OF CONTRACTS, ETC.

75. Contracts, documents or instruments in writing requiring the signature of the Corporation may be signed by any director(s) or officer(s) or any person(s) authorized by resolution of the directors and all contracts, documents or instruments in writing so signed shall be binding upon the Corporation without any further authorization or formality. The directors are authorized from time to time by resolution to appoint any person or persons on behalf of the Corporation either to sign contracts, documents or instruments in writing generally or to sign specific contracts, documents or instruments in writing.

The corporate seal of the Corporation may, when required, be affixed by any director or officer to contracts, documents or instruments in writing signed by him as aforesaid or by the person or persons appointed as aforesaid by resolution of the directors.

The term “contracts, documents or instruments in writing” as used in this by-law shall include deeds, mortgages, hypothecs, charges, cheques, drafts, orders for the payment of money, notes, acceptances, bills of exchange, conveyances, transfers and assignments of property, real or personal, immovable or movable, agreements, releases, receipts and discharges for the payment of money or other obligations, conveyances, transfers and assignments of securities and all paper writings.

The signature or signatures of any director, officer or any person or persons appointed as aforesaid by resolution of the directors may, if specifically authorized by resolution of the directors, be printed, engraved, lithographed or otherwise mechanically reproduced upon all contracts, documents or instruments in writing or bonds, debentures or other securities of the Corporation executed or issued by or on behalf of the Corporation and all contracts, documents or instruments in writing or securities of the Corporation on which the signature or signatures of any of the foregoing persons shall be so reproduced, by authorization by resolution of the directors, shall be deemed to have been manually signed by such persons whose signature or signatures is or are so reproduced and shall be as valid to all intents and purposes as if they had been signed manually and notwithstanding that the persons whose signature or signatures is or are so reproduced may have ceased to hold office at the date of the delivery or issue of such contracts, documents or instruments in writing or securities of the Corporation.

1496965 ALBERTA LTD.

BY-LAW NO. 2

A by-law respecting the borrowing of money, the giving of guarantees and the giving of security by 1496965 Alberta Ltd. (hereinafter called the “Corporation”).

IT IS HEREBY ENACTED as a by-law of the Corporation as follows:

The directors of the Corporation may from time to time:

(a) borrow money on the credit of the Corporation;

(b) issue, reissue, sell or pledge debt obligations of the Corporation, including without limitation, bonds, debentures, notes or other evidences of indebtedness or guarantee of the Corporation, whether secured or unsecured;

(c) give a guarantee on behalf of the Corporation to secure performance of an obligation of any individual, partnership, association, body corporate, trustee, executor, administrator or legal representative;

(d) mortgage, hypothecate, pledge or otherwise create an interest in or charge on all or any property of the Corporation, owned or subsequently acquired, to secure payment of a debt or performance of any other obligation of the Corporation;

(e) delegate to one or more directors, a committee of directors or one or more officers of the Corporation as may be designated by the directors, all or any of the powers conferred by the foregoing clauses of this by-law to such extent and in such manner as the directors shall determine at the time of each such delegation.

In the event any provision of any other by-law of the Corporation now in force is inconsistent with or in conflict with any provision of this by-law, the provisions of this by-law shall prevail to the extent necessary to remove the inconsistency or conflict.

This by-law shall remain in force and be binding upon the Corporation as regards any party acting on the faith thereof until a copy, certified by the Secretary of the Corporation, of a by-law repealing or replacing this by-law shall have been received by such party and duly acknowledged in writing.

ENACTED the 21st day of October, 2009.
	/s/ Dr. Seong Hoon Kim
	Dr. Seong Hoon Kim
	President and Secretary

TABLE OF CONTENTS

			Page

ARTICLE 1	INTERPRETATION		1
1.1		Definitions	1
1.2		Meaning of “Outstanding”	4
1.3		Income Tax Act	5
1.4		Headings	5
1.5		Construction of Terms	5
1.6		References to Acts Performed by the Trust	5
1.7		References to Acts Performed by the Trustee	5

ARTICLE 2	DECLARATION OF TRUST		5
2.1		Settlement of Trust	5
2.2		Declaration of Trust	5
2.3		Name	6
2.4		Nature of the Trust	6
2.5		Legal Entitlements and Restrictions of Unitholders	6
2.6		Liability of Unitholders	6
2.7		Head Office of Trust	7

ARTICLE 3	ISSUE AND SALE OF TRUST UNITS		7
3.1		Nature and Ranking of Trust Units	7
3.2		Authorized Number of Priority Units	7
3.3		Authorized Number of Subordinated Units	8
3.4		No Fractional Trust Units	8
3.5		Offerings of Trust Units and Indebtedness	8
3.6		Trust Units Fully Paid and Non-Assessable	8
3.7		No Conversion, Retraction, Redemption or Pre-Emptive Rights	8
3.8		Consolidation of Trust Units	8

ARTICLE 4	INVESTMENTS OF TRUST FUND		8
4.1		Purpose of the Trust	8
4.2		Permitted Investments	9

ARTICLE 5	DISTRIBUTIONS		9
5.1		Determination of Distributions	9
5.2		Enforcement	10
5.3		Payment of Amounts Payable	10
5.4		Distribution of Additional Subordinated Units	10
5.5		Withholding Taxes	10

ARTICLE 6	APPOINTMENT, RESIGNATION AND REMOVAL OF TRUSTEE		10
6.1		Trustee’s Term of Office	10
6.2		Resignation of Trustee	11
6.3		Removal of Trustee	11
6.4		Appointment of Successor to Trustee	11
6.5		Failure to Appoint Successor	11
6.6		Qualifications of Trustee	11

`ARTICLE 7	CONCERNING THE TRUSTEE		12
7.1		Powers of the Trustee	12
7.2		Specific Powers and Authorities	12
7.3		Restrictions on the Trustee’s Powers	14
7.4		Banking	15
7.5		Standard of Care	15
7.6		Fees and Expenses	15
7.7		Limitations on Liability of Trustee	15

TABLE OF CONTENTS

(continued)

			Page

7.8		Indemnification of Trustee	16
7.9		Environmental Indemnity	16
7.10		Apparent Authority	17
7.11		Conditions Precedent to Trustee’s Obligations to Act	17
7.12		Survival of Indemnities	17
7.13		Trustee May Have Other Interests	17
7.14		Documents Held by Trustee	18
7.15		General Delegation of Powers	18

ARTICLE 8	AMENDMENT		18
8.1		Amendment	18

ARTICLE 9	VOTING RIGHTS OF UNITHOLDERS		19
9.1		Voting Rights of Unitholders	19
9.2		Resolutions	19
9.3		No Breach	19

ARTICLE 10	CERTIFICATES, REGISTRATION AND TRANSFER OF TRUST UNITS		19
10.1		Nature of Trust Units	19
10.2		Certificates	19
10.3		Register of Unitholders	20
10.4		Transfer of Trust Units	20
10.5		Trust Units Held Jointly or in a Fiduciary Capacity	20
10.6		Performance of Trust	21
10.7		Lost Certificates	21
10.8		Death of a Unitholder	21
10.9		Unclaimed Interest or Distribution	21
10.10		Exchanges of Trust Certificates	22

ARTICLE 11	TERMINATION		22
11.1		Termination Date	22
11.2		Termination by Resolution of Unitholders	22
11.3		Procedure Upon Termination	22
11.4		Powers of the Trustee upon Termination	22
11.5		Sale of Investments	22
11.6		Distribution of Proceeds	22
11.7		Further Notice to Unitholders	23
11.8		Responsibility of Trustee after Sale and Conversion	23

ARTICLE 12	SUPPLEMENTAL INDENTURES		23
12.1		Provision for Supplemental Indentures	23
12.2		Provision for Amended and Restated Indenture	23

ARTICLE 13	NOTICES TO UNITHOLDERS		24
13.1		Notices	24
13.2		Failure to Give Notice	24
13.3		Joint Holders	24
13.4		Service of Notice	24

ARTICLE 14	ACCOUNTS, RECORDS AND FINANCIAL STATEMENTS		24
14.1		Records	24
14.2		Annual Reporting to Unitholders	24
14.3		Information Available to Unitholders	25
14.4		Income Tax: Obligation of the Trustee	25
14.5		Income Tax: Designations	25
14.6		Income Tax: Deductions, Allowances and Credits	25

HARVEST BREEZE TRUST NO. 1

This AMENDED AND RESTATED TRUST INDENTURE made the 7th day of October, 2004.

BETWEEN:

1115638 ALBERTA LTD., a body corporate incorporated under the laws of the Province of Alberta, with offices in the City of Calgary, in the Province of Alberta (hereinafter called the “Trustee”)

OF THE FIRST PART

and

HARVEST SASK ENERGY TRUST, a trust governed by the laws of Alberta (hereinafter called the “Initial Unitholder”), and all persons who after the date hereof become holders of Trust Units as herein provided

OF THE SECOND PART

WHEREAS the Trustee and the Initial Unitholder are parties to a trust indenture dated July 8, 2004, as amended and restated on August 31, 2004 (the “Original Trust Indenture”);

AND WHEREAS the Trustee and the Initial Unitholder wish to amend and restate the Original Trust Indenture;

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

ARTICLE 1
INTERPRETATION

1.1 Definitions

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

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

(b) “Affiliate” has the meaning set forth in the Securities Act (Alberta), as amended from time to time, and for the purposes hereof includes a partnership of which the relevant person is a partner or a trust of which it is a beneficiary;

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

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

(f) “Commodity Price and Currency Swaps” means swap, hedging and other arrangements in respect of commodity prices or rates of exchange of currencies, the purpose of which is to mitigate or eliminate exposure to fluctuations in prices of commodities or rates of exchange of one currency for another and any transactions, confirmations or other agreements arising therefrom or incidental thereto;

(g) “Corporation” means Harvest Operations Corp., a corporation amalgamated under the ABCA;

(h) “Counsel” means a law firm reasonably acceptable to the Trustee;

(i) “Distribution Priority Amount” has the meaning set forth in Section 3.1(c);

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

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

(l) “Initial Unitholder” means Harvest Sask Energy Trust;

(m) “Interest Rate Swaps” means interest rate swap, hedging and other arrangements, the purpose of which is to mitigate or eliminate exposure to fluctuations in interest rates and any transactions, confirmations or other agreements arising therefrom or related thereto;

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

(o) “Lender” means the lender or lenders (or any of its or their Affiliates) providing one or more credit or debt facilities, hedging or swap facilities or any other ancillary facilities to the Trust, the Partnership, Harvest Energy Trust or the Corporation or any of their Affiliates;

(p) “Liquidation Priority Amount” has the meaning set forth in Section 3.1(c);

(q) “Material Contracts” means this Trust Indenture, as amended, restated or replaced from time to time, and any loan agreement, credit agreement, royalty agreement, indenture or other agreement entered into by the Trust for the purpose of making any Subsequent Investment;

(r) “NPI Agreement” means the Amended and Restated Net Profit Interest Agreement between the Corporation and Harvest Energy Trust dated effective September 27, 2002, including any amendments thereto;

(s) “NPI Payment” has the meaning set forth in the NPI Agreement;

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

(u) “Offering Documents” means any one or more of a prospectus, information memorandum, private placement memorandum and similar public or private offering document, or any understanding, commitment or agreement to issue or offer Trust Units;

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

(w) “Partnership” means Breezes Resources Partnership, a partnership organized under the laws of the
Province of Alberta;

(x) “Payment Date” has the meaning set forth in Section 5.3;

(y) “Permitted Investments” means:

(i) loan advances or other forms of financial assistance to the Partnership, Harvest Energy Trust, the Corporation and any of their Affiliates, as the case may be;

(ii) interest bearing accounts of certain financial institutions, including Canadian chartered banks;

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

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

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

(vi) investments in any entity including without limitation, bodies corporate, partnerships (including the Partnership) or trusts engaged in the oil and natural gas business; and

(vii) such other investment as is approved by the Trustee;

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

(aa) “Priority Unit” means a priority trust unit of the Trust created, issued and certified hereunder and for the time being outstanding and entitled to the benefits hereof;

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

(cc) “Properties” means the working, royalty or other interests of the Trust from time to time in any petroleum and natural gas rights, tangibles and miscellaneous interests acquired by the Trust from time to time;

(dd) “Resolution” means a resolution in writing executed by all Unitholders;

(ee) “Settled Amount” means the amount of one hundred dollars in lawful money of Canada paid by the Initial Unitholder to the Trustee for the purpose of settling the Trust;

(ff) “Subordinated Unit” means a subordinated trust unit of the Trust created, issued and certified hereunder and for the time being outstanding and entitled to the benefits hereof;

(gg) “Subsequent Investment” means any of the investments which the Trust may make pursuant to Section 4.1;

(hh) “Swap Arrangements” means Commodity Price and Currency Swaps and Interest Rate Swaps;

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

(jj) “Transfer Agent” means the Trustee, its successors or assigns, in its capacity as transfer agent for the Trust Units, or such other company as may from time to time be appointed by the Trustee to act as transfer agent for the Trust Units;

(kk) “Trust” means Harvest Breeze Trust No. 1 and refers to the trust relationship between the Trustee and the Unitholders with respect to the Trust Fund, upon the terms and conditions set out herein from time to time and, if the context requires, may also refer to the Trust Fund;

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

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

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

(i) the Settled Amount;

(ii) all funds realized from the issuance of Trust Units;

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

(iv) all rights in respect of and income generated from Properties;

(v) any Subsequent Investment;

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

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

(oo) “Trustee” means 1115633 Alberta Ltd., or its successor or successors for the time being as trustee hereunder;

(pp) “Trust Unit” means, as the context requires, a Priority Unit or a Subordinated Unit;

(qq) “Unitholders” means the holders from time to time of one or more Trust Units and on the date hereof means the Initial Unitholder; and

(rr) “year” means initially, the period commencing on the date hereof and ending on December 31, 2004, and thereafter means a calendar year.

1.2 Meaning of “Outstanding”

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

1.3 Income Tax Act

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

1.4 Headings

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

1.5 Construction of Terms

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

1.6 References to Acts Performed by the Trust

Any reference in this Indenture to an act to be performed by the Trust shall be construed and applied for all purposes as if it referred to an act to be performed by the Trustee on behalf of the Trust.

1.7 References to Acts Performed by the Trustee

Any reference in this Indenture to an act to be performed or decision made by the Trustee shall be construed and applied for all purposes as if it referred to an act to be performed by or a decision made by any one director or officer of the Trustee and/or other persons as the Trustee may designate, appoint or authorize from time to time (who may be directors, officers or employees of the Corporation).

ARTICLE 2
DECLARATION OF TRUST

2.1 Settlement of Trust

The Initial Unitholder is paying concurrent with the execution of this Trust Indenture, the Settled Amount to the Trustee for the purpose of creating and settling the Trust and in consideration therefor the Initial Unitholder has been issued one hundred Subordinated Units in the Trust. Receipt of the Settled Amount is hereby acknowledged by the Trustee.

2.2 Declaration of Trust

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

2.3 Name

The Trust shall be known and designated as “Harvest Breeze Trust No. 1” and, whenever lawful and convenient, the affairs of the Trust shall be conducted and transacted under that name. If the Trustee determines that the use of the name “Harvest Breeze Trust No. 1” is not practicable, legal or convenient, it may use such other designation or it may adopt such other name for the Trust as it deems appropriate and the Trust may hold property and conduct its activities under such other designation or name.

2.4 Nature of the Trust

The Trust is an open-end unincorporated investment trust, established for the purposes specified in Section 4.1 hereof. The Trust is not and is not intended to be, shall not be deemed to be and shall not be treated as a general partnership, limited partnership, syndicate, association, joint venture, company, corporation or joint stock company, nor shall the Trustee or the Unitholders or any of them (or any of their beneficiaries, if any, or the beneficiaries of any of their beneficiaries, if any) or any person be, or be deemed to be, treated in any way whatsoever as liable or responsible hereunder as partners or joint venturers. The Trustee shall not be, or be deemed to be, an agent of the Unitholders (or any of their beneficiaries, if any, or the beneficiaries of any of their beneficiaries, if any). The relationship of the Unitholders to the Trustee shall be solely that of beneficiaries of the Trust and their rights shall be limited to those conferred upon them by this indenture.

2.5 Legal Entitlements and Restrictions of Unitholders

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

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

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

2.6 Liability of Unitholders

No Unitholder, in its capacity as such, shall incur or be subject to any liability in contract or in tort or of any other kind whatsoever (nor any of their beneficiaries, if any, nor the beneficiaries of any of their beneficiaries, if any) to any person in connection with the Trust Fund or the obligations or the affairs of the Trust or with respect to any act performed by the Trustee or by any other person pursuant to this Indenture or with respect to any act or omission of the Trustee or any other person in the performance or exercise, or purported performance or exercise, of any obligation, power, discretion or authority conferred upon the Trustee or such other person hereunder or with respect to any transaction entered into by the Trustee or by any other person pursuant to this Indenture. No Unitholder (nor any of their beneficiaries, if any, nor the beneficiaries of any of their beneficiaries, if any) shall be liable to indemnify the Trustee or any such other person with respect to any such liability or liabilities incurred by the Trustee or by any such other person or persons or with respect to any taxes payable by the Trust or by the Trustee or by any other person on behalf of or in connection with the Trust. Notwithstanding the foregoing, to the extent that any Unitholders (or any of their beneficiaries, if any, or the beneficiaries of any of their beneficiaries, if any) are found by a court of competent jurisdiction to be subject to any such liability, such liability shall be enforceable only against, and shall be satisfied only out of, the Trust Fund and the Trust (to the extent of the Trust Fund) is liable to, and shall indemnify and save harmless any Unitholder (including its own beneficiaries, if any, and

the beneficiaries of any of their beneficiaries, if any) against any costs, damages, liabilities, expenses, charges or losses suffered by any Unitholder from or arising as a result of such Unitholder not having any such limited liability.

2.7 Head Office of Trust

The head office of the Trust hereby created shall be located at 1900, 330 – 5th Avenue S.W., Calgary, Alberta T2P 0A or at such other place or places in Canada as the Trustee may from time to time designate.

ARTICLE 3
ISSUE AND SALE OF TRUST UNITS

3.1 Nature and Ranking of Trust Units

(a) The beneficial interests in the Trust shall be divided into interests of two classes of trust units, described and designated as Priority Units and as Subordinated Units, which shall be entitled to the rights and subject to the limitations, restrictions and conditions set out herein; and the interest of each Unitholder shall be determined by the number of Priority Units or Subordinated Units registered in the name of the Unitholder.

(b) Each Trust Unit shall entitle the holder or holders thereof to one vote at any meeting of the Unitholders.

(c) The holders of Priority Units as a class shall be entitled to receive, in priority to holders of Subordinated Units, distributions from the Trust in an amount (the “Distribution Priority Amount”) equal to, from time to time, the cumulative cost to such holders of the funds borrowed by them to subscribe for the Priority Units held by them (excluding funds borrowed by such holders which are deducted in determining the NPI Payment payable to Harvest Energy Trust pursuant to the NPI Agreement) plus 10 basis points. All Priority Units outstanding from time to time represent an equal fractional undivided beneficial interest in and shall be entitled to equal shares in any distributions by the Trust of the Distribution Priority Amount. All Priority Units shall rank among themselves equally and rateably without discrimination, preference or priority. The holders of Priority Units as a class shall be entitled to receive, in priority to holders of Subordinated Units, net assets of the Trust in the event of termination or winding up of the Trust, in an amount (the “Liquidation Priority Amount”) equal to the total of (i) any portion of the Distribution Priority Amount which has not been paid to them and (ii) the amounts paid to the Trust by such holders to subscribe for the Priority Units held by them. All Priority Units outstanding from time to time represent an equal fractional undivided beneficial interest in and shall be entitled to equal shares in any net assets of the Trust having a value equal to the Liquidation Priority Amount. All Priority Units shall rank among themselves equally and rateably without discrimination, preference or priority regardless of the actual date or terms of issue thereof.

(d) Subject to the prior satisfaction of all preferential rights to distributions from the Trust and net assets of the Trust in the event of termination or winding up of the Trust attached to Priority Units, the holders of Subordinated Units as a class shall be entitled to receive distributions from the Trust (which amounts payable to the holders of Subordinated Units shall equal the net income of the Trust as computed in accordance with the Tax Act less the Distribution Priority Amount) and in the event of termination or winding up of the Trust the holders of Subordinated Units as a class shall be entitled to receive the remaining net assets of the Trust after payment to the holders of Priority Units of the Liquidation Priority Amount. All Subordinated Units outstanding from time to time represent an equal fractional undivided beneficial interest in and shall be entitled to equal shares in any such distributions by the Trust and, in the event of termination or winding up of the Trust, in any such net assets of the Trust. All Subordinated Units shall rank among themselves equally and rateably without discrimination, preference or priority regardless of the actual date or terms of issue thereof.

3.2 Authorized Number of Priority Units

The aggregate number of Priority Units which are authorized and may be issued hereunder unlimited.

3.3 Authorized Number of Subordinated Units

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

3.4 No Fractional Trust Units

Fractions of Trust Units shall not be issued, except pursuant to distributions of additional Trust Units to all Unitholders who hold Subordinated Units pursuant to Section 5.4.

3.5 Offerings of Trust Units and Indebtedness

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

(b) The Trustee may authorize the creation and issuance of debentures, notes and other evidences of indebtedness of the Trust, which debentures, notes or other evidences of indebtedness may be created and issued from time to time on such terms and conditions, to such persons and for such consideration as the Trustee may determine.

3.6 Trust Units Fully Paid and Non-Assessable

Trust Units shall be issued only when fully paid in money or property or past service, provided that property will include a promissory note or promise to pay given by the allottee. The Unitholders shall not thereafter be required to make any further contribution to the Trust with respect to such Trust Units.

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

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

3.8 Consolidation of Trust Units

Immediately after any pro rata distribution of additional Subordinated Units to all Unitholders who hold Subordinated Units pursuant to Article 5, the number of outstanding Subordinated Units will be consolidated such that each Unitholder who holds Subordinated Units will hold after the consolidation the same number of Subordinated Units as the Unitholder held before the distribution of additional Subordinated Units. In such case, each Trust Unit Certificate representing a number of Subordinated Units prior to the distribution of additional Subordinated Units is deemed to represent the same number of Subordinated Units after the distribution of additional Subordinated Units and the consolidation. Such consolidation shall not constitute a redemption or cancellation of the Subordinated Units so consolidated and a Unitholder whose Subordinated Units are consolidated shall not receive, and shall not be entitled to receive, any proceeds of disposition in respect thereof.

ARTICLE 4
INVESTMENTS OF TRUST FUND

4.1 Purpose of the Trust

The Trust is hereby created for the following purposes:

(a) investing in securities of or acquiring an interest in the Partnership;

(b) acquiring or investing in the securities of any other entity, including without limitation bodies corporate, partnerships or trusts, through an acquisition of assets or an acquisition of shares or other form of ownership interest;

(d) acquiring, holding, transferring, disposing of, investing in and otherwise dealing with Permitted Investments;

(e) making loans to the Partnership, Harvest Energy Trust, the Corporation and any of their Affiliates;

(f) acquiring royalties in respect of Canadian resource properties as defined in the Tax Act and making any deferred royalty purchase payments which may be required with respect to such royalties; provided however that in no event shall the Trust invest in any royalties which constitute an interest in land or a covenant running with the properties with respect to which such royalties relate;

(g) disposing of any part of the Trust Fund, including, without limitation, any securities of or interest in the Partnership;

(h) temporarily holding cash and investments for the purposes of paying the expenses and the liabilities of the Trust, making other investments as contemplated by Section 4.2 hereof and making distributions to Unitholders;

(i) issuing Trust Units and rights, warrants, special warrants or other securities to purchase, to convert into or exchange into Trust Units;

(j) creating and issuing debentures, notes and other evidences of indebtedness, whether secured or unsecured, and repaying such indebtedness;

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

(l) borrowing funds, incurring indebtedness or otherwise obtaining credit for the purposes, directly or indirectly set forth in paragraphs (a) through (k) above and providing support, through the provision of guarantees, indemnities, agreeing to be bound on a joint and several basis or otherwise (which may include but is not limited to entering into any agreement related to the indebtedness, obligations and liabilities of, or borrowings by, others as hereinafter referred to) in respect of the indebtedness, obligations and liabilities of others, including, without limitation, Harvest Energy Trust, the Partnership, the Corporation and any of their Affiliates; and

(m) engaging in activities ancillary or incidental to those activities set forth in paragraphs (a) through (l) above.

4.2 Permitted Investments

Any funds within the Trust Fund that are not invested as provided in Section 4.1 shall be used by the Trust to acquire Permitted Investments or as otherwise permitted herein.

ARTICLE 5
DISTRIBUTIONS

5.1 Determination of Distributions

each Unitholder in the amount so payable shall be the Pro Rata Share of such Unitholder determined as at that Distribution Record Date; and such amount shall be payable on that Distribution Record Date. Notwithstanding the foregoing, all income of the Trust in an amount not less than the income of the Trust for any taxation year of the Trust computed in accordance with the provisions of the Tax Act shall be payable for such year.

Distributions or amounts payable to Unitholders pursuant to this Article 5 shall be deemed to be distributions of net income, net realized capital gains, trust capital or other items in such amounts as the Trustee shall, in its discretion, determine. Any amounts payable to holders of Subordinated Units pursuant to this Section 5.1 may, at the option of the Trustee, be paid through a distribution of additional Subordinated Units having a value equal to the amount payable. For the purposes of this Section 5.1, the value of the additional Subordinated Units issued shall be determined by the Trustee upon the recommendation of the Corporation.

5.2 Enforcement

Each Unitholder shall have the right to enforce payment of any amount payable to the Unitholder under this Article 5 (or a distribution of additional Subordinated Units under Section 5.1, if applicable) at the time the amount became payable. Absent a demand from a Unitholder to enforce payment, such amount shall be paid to Unitholders on the Payment Date specified in Section 5.1.

5.3 Payment of Amounts Payable

Amounts payable to Unitholders pursuant to Section 5.1 may be paid by the Trust on any date (the “Payment Date”) specified by the Trustee as the applicable Distribution Record Date, or a day within 30 days after the applicable Distribution Record Date and in the same calendar year.

5.4 Distribution of Additional Subordinated Units

If on any Distribution Record Date the Trust does not have cash in an amount sufficient to pay the full distribution to be made to Unitholders who hold Subordinated Units on such Distribution Record Date in cash, the distribution payable to Unitholders who hold Subordinated Units on such Distribution Record Date may, at the option of the Trustee, include a distribution of additional Subordinated Units having a value equal to the cash shortfall, in which case the amount of cash to be distributed on the distribution shall be reduced by the amount of such cash shortfall. For the purposes of this Section 5.4, the value of the additional Subordinated Units to be issued shall be determined by the Trustee in its sole discretion.

5.5 Withholding Taxes

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

ARTICLE 6
APPOINTMENT, RESIGNATION AND REMOVAL OF TRUSTEE

6.1 Trustee’s Term of Office

Subject to Sections 6.2 and 6.3, 1115638 Alberta Ltd. is hereby appointed as Trustee hereunder for the term of this Indenture.

6.2 Resignation of Trustee

The Trustee may resign from the office of trustee hereunder on giving not less than 60 days’ notice in writing to the Corporation or such lesser period of notice as is agreed to by the Corporation; provided that no such resignation shall be effective until (i) the appointment of, and acceptance of such appointment by, a new Trustee in the place of the resigning Trustee has been made in the manner set out in Section 6.4, and (ii) the legal and valid assumption by the new Trustee of all obligations of the Trustee related hereto in the same capacities as the resigning Trustee.

6.3 Removal of Trustee

The Trustee shall be removed by notice in writing delivered by the Corporation to the Trustee in the event that, at any time, the Trustee shall no longer satisfy all of the requirements in Section 6.6, or shall be declared bankrupt or insolvent, or shall enter into liquidation, whether compulsory or voluntary (and not being merely a voluntary liquidation for the purposes of amalgamation or reconstruction), or if the assets of the Trustee shall otherwise become liable to seizure or confiscation by any public or governmental authority, or if the Trustee shall otherwise become incapable of performing, or shall fail in any material respect to perform its responsibilities under this Indenture. No decision to remove a Trustee under this Section 6.3 shall become effective until (i) approved by a Resolution of the Unitholders (ii) the appointment of, and acceptance of such appointment by, a new Trustee under Section 6.4 in the place of the Trustee to be removed, and (iii) the legal and valid assumption by the new Trustee of all obligations of the Trustee related hereto in the same capacities as the resigning Trustee.

6.4 Appointment of Successor to Trustee

(a) A successor Trustee to a Trustee which has been removed by a Resolution of the Unitholders under Section 6.3, shall be appointed by a Resolution of the Unitholders, provided the successor meets the requirements of Section 6.6.

(b) Subject to Section 6.6, the Corporation may appoint a successor to any Trustee which has been removed by a Resolution of the Unitholders under Section 6.3.

(c) Subject to Section 6.6, the Corporation may appoint a successor to any trustee which has given a notice of resignation under Section 6.2.

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

6.5 Failure to Appoint Successor

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

6.6 Qualifications of Trustee

The Trustee and any successor to the Trustee or new Trustee appointed under this Article 6 shall be a corporation incorporated under the laws of Canada or of a province thereof and shall be a resident of Canada for the purposes of the Tax Act.

ARTICLE 7
CONCERNING THE TRUSTEE

7.1 Powers of the Trustee

The Trustee may exercise from time to time in respect of the Trust Fund any and all rights, powers and privileges that could be exercised by a beneficial owner thereof.

7.2 Specific Powers and Authorities

In addition to any powers and authorities conferred by this Indenture (including, without limitation, Section 4.1 and 7.1 hereof) or which the Trustee may have by virtue of any present or future statute or rule of law, the Trustee, without an action or consent by the Unitholders, shall have the following powers and authorities which may be exercised by it from time to time or delegated by it, as herein provided, in its sole judgment and discretion and in such manner and upon such terms and conditions as it may from time to time deem proper:

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

(b) to maintain books and records;

(d) to effect payment of distributions to Unitholders;

(e) to apply for ARTC;

(f) subject to section 7.3, to sell or dispose of all or any part of the assets of the Trust;

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

(h) to, directly or indirectly, borrow money from or incur indebtedness, liability or obligation to any person and to guarantee, indemnify, be jointly and severally liable for, or act as a surety with respect to payment or performance of any indebtedness, liabilities or obligation of any kind of any person, including, without limitation, the Partnership, the Corporation, Harvest Energy Trust and any of their Affiliates; to enter into any other obligations on behalf of the Trust; enter into any priority, subordination or postponement agreement on behalf of the Trust or any other person; and to assign, charge, pledge, hypothecate, convey, transfer, mortgage, subordinate, postpone and grant any security interest, mortgage or encumbrance over or with respect to all or any of the Trust Fund or to subordinate or postpone the interests of the Trust in the Trust Fund to any other person;

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

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

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

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

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

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

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

(p) except as prohibited by law, to delegate any or all of the management and administrative powers and duties of the Trustee to Harvest Energy Trust, the Corporation or any other Affiliate of the Trust or Harvest Energy Trust or the Corporation or to any one or more agents, representatives, officers, employees, independent contractors or other persons without liability to the Trustee;

(q) to guarantee or act as surety of or become jointly and severally liable for the obligations, liabilities and indebtedness of the Partnership, the Corporation, Harvest Energy Trust or any of their Affiliates pursuant to any debt for borrowed money or obligations resulting or arising from Swap Arrangements or other hedging obligations, liabilities or indebtedness incurred by the Partnership, the Corporation or Harvest Energy Trust or any of their Affiliates, as the case may be, and pledging securities issued by the Corporation or Harvest Energy Trust or any such Affiliate, as the case may be, as security for such guarantee or surety or joint and several liability;

(r) notwithstanding any limitations contained in this Indenture or any other contracts or obligations of the Trustee or the Trust and the introductory proviso to this Section 7.2, to enter into on behalf of the Trust and observe and perform its obligations and the obligations of the Trust under any agreements with any Lender including, without limitation, compliance with any provisions thereof which may restrict the powers of the Trustee hereunder or preclude the Trustee from acting in certain circumstances on resolutions of the Unitholders as might otherwise he provided for hereunder, and each such agreement entered into by the Trustee shall be binding upon, and enforceable in accordance with its terms against, the Trust;

(s) to enter into a priority, subordination, postponement or standstill agreement with any Lender pursuant to which the Trust agrees to subordinate or postpone its right to receive income (or any other obligations of the Partnership, the Corporation or Harvest Energy Trust or any of their Affiliates) to the right of any such Lender to be paid obligations owing to it by the Corporation or Harvest Energy Trust or any other Affiliates and which agreement may further provide, without limitation, that in the event of a default by the Trust, the Partnership, the Corporation or Harvest Energy Trust or any of their Affiliates to any of its Lenders, including any such default in connection with credit or debt facilities, Swap Arrangements or any other ancillary facilities, none of the Trust, the Partnership, the Corporation or Harvest Energy Trust or any of their Affiliates will make any further payments in respect of such obligations to the Trust and the Trust will

not make any further cash distributions to Unitholders, and each such subordination entered into by the Trustee shall be binding upon, and enforceable in accordance with its terms against, the Trust;

(t) to advance any amount to the Partnership, the Corporation, Harvest Energy Trust or any of their Affiliates as a loan;

(u) to enter into, perform and enforce the Material Contracts;

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

(i) amounts in respect of Permitted Investments and Subsequent Investments; and

(ii) Issue Expenses;

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

(w) to charge, mortgage, hypothecate and/or pledge on behalf of the Trust all or any of the currently owned or subsequently acquired monies, properties and assets comprising the Trust Fund to secure any liabilities, indebtedness or obligations of the Trust and to execute and deliver a guarantee, indemnity, surety or other assurance (including becoming jointly and severally liable) in favour of any Lender for the obligations of the Partnership, the Corporation, Harvest Energy Trust or any of their Affiliates and any security, deposit or offset agreements or arrangements in respect of any such guarantee, indemnity, surety or other assurance and each such agreement entered into by the Trustee shall be binding upon, and enforceable in accordance with its terms against, the Trust;

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

(y) to provide indemnities for the directors and officers of the Trustee or any Affiliates;

(z) to vote Subsequent Investments held by the Trust which carry voting rights in such manner as may be approved by the Trustee;

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

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

(cc) to enter into, perform and enforce any Swap Arrangements.

7.3 Restrictions on the Trustee’s Powers

Notwithstanding anything contained in this Indenture, the Trustee shall not authorize any sale, lease or other disposition of, or any interest in, all or substantially all of the assets of the Trust, except in conjunction with an internal reorganization of the direct or indirect assets of the Trust as a result of which the Trust has the same, or substantially similar, interest, whether direct or indirect, in the assets as the interest, whether direct or indirect, that it had prior to the reorganization, without the approval of the Unitholders by Resolution.

7.4 Banking

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

7.5 Standard of Care

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

7.6 Fees and Expenses

As part of the Trust Expenses, the Trustee may pay or cause to be paid reasonable fees, costs and expenses incurred in connection with the administration and management of the Trust, including (without limitation) fees of auditors, lawyers, appraisers and other agents, consultants and advisers employed by or on behalf of the Trust and the cost of reporting or giving notices to Unitholders. The Trustee shall have a lien on the Trust Fund (which shall have priority over the interests of the Unitholders pursuant hereto) to enforce payment of the fees, costs, expenses and other amounts payable or reimbursable by the Trust to the Trustee.

7.7 Limitations on Liability of Trustee

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

7.8 Indemnification of Trustee

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

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

(b) all other costs, charges, taxes, penalties and interest in respect of unpaid taxes; and

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

unless any of the foregoing arise out of the negligence, wilful default or fraud of the Trustee or any of its directors, officers, employees, shareholders or agents, in which case the provisions of this Section 7.8 shall not apply.

7.9 Environmental Indemnity

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

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

(b) the exercise by the Trustee of any rights or obligations hereunder;

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

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

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

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

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

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

therefor) foreseeable and unforeseeable consequential damages suffered by the third party; and (iii) liability of the Indemnified Party for damage to or impairment of the environment.

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

7.10 Apparent Authority

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

7.11 Conditions Precedent to Trustee’s Obligations to Act

The obligation of the Trustee to commence to wind up the affairs of the Trust pursuant to Article 11 shall be conditional upon the Unitholders or another person furnishing, when required by notice in writing by the Trustee, sufficient funds to commence or continue such act, action or proceeding and indemnity (to the extent sufficient funds for such purpose are not available in the Trust Fund) reasonably satisfactory to the Trustee to protect and hold harmless the Trustee against the costs, charges and expenses and liabilities to be incurred therein and any loss and damage it may suffer by reason thereof and the obligation of the Trustee to commence or continue any act, action or proceeding for the purpose of enforcing the rights of the Trustee and of the Unitholders shall, if required by notice in writing by the Trustee, be subject to the same conditions as to funding and indemnity. None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers unless indemnified as aforesaid.

7.12 Survival of Indemnities

All indemnities, all limitations of liability and all other provisions for the protection of the Trustee provided for in this Indenture shall survive the termination of this Indenture under Article 11 and the removal or resignation of the Trustee under Article 6.

7.13 Trustee May Have Other Interests

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

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

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

(c) acquire, hold and dispose of any assets not constituting part of the Trust Fund and exercise all rights of an owner of such assets as if it were not a trustee;

(d) carry on its business in the usual course while it is the Trustee; and

(e) derive direct or indirect benefit, profit or advantage from time to time as a result of dealing with the Trust or the relationships, matters, contracts, transactions, affiliations or other interests stated in this Section 7.13 without being liable to the Trust or any Unitholder for any such direct or indirect benefit, profit or advantage.

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

7.14 Documents Held by Trustee

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

7.15 General Delegation of Powers

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

ARTICLE 8

AMENDMENT

8.1 Amendment

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

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

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

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

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

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

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

ARTICLE 9

VOTING RIGHTS OF UNITHOLDERS

9.1 Voting Rights of Unitholders

Only Unitholders of record shall be entitled to approve and execute Resolutions.

9.2 Resolutions

(a) The Trustee shall in accordance with a Resolution approved by the Unitholders:

(i) subject to Section 8.1, amend this Indenture;

(ii) subdivide or consolidate Trust Units;

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

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

(v) commence to wind-up and wind-up the affairs of the Trust if requested pursuant to Section 11.2.

Except with respect to the above matters set out in this Section 9.2 and the matters set forth in Sections 6.3, 6.4 and 12.2 hereof, no action taken by the Unitholders or Resolution of the Unitholders shall in any way bind the Trustee.

9.3 No Breach

Notwithstanding any provisions of this Indenture, Unitholders shall have no power to effect any amendment hereto which would require the Trustee to take any action or conduct the affairs of the Trust in a manner which would constitute a breach or default by the Trust or the Trustee under any agreement binding on or obligation of the Trust or the Trustee.

ARTICLE 10

CERTIFICATES, REGISTRATION AND TRANSFER OF TRUST UNITS

10.1 Nature of Trust Units

The nature of a Trust Unit and the relationship of a Unitholder to the Trustee and the relationship of one Unitholder to another is as described in Sections 2.4 and Subsection 2.5(c) and the provisions of this Article 10 shall not in any way alter the nature of Trust Units or the said relationships of a Unitholder to the Trustee and of one Unitholder to another, but are intended only to facilitate the issuance of certificates evidencing the beneficial ownership of Trust Units and the recording of all such transactions whether by the Trust, securities dealers, stock exchanges, transfer agents, registrars or other persons.

10.2 Certificates

(a) The form of certificate representing Trust Units shall be substantially as set out in the Schedule hereto or such other form as is authorized from time to time by the Trustee. Each such certificate shall bear an identifying serial number and shall be certified manually by the Trustee. The Trust Certificates may be engraved, printed or lithographed, or partly in one form and partly in another, as the Trustee may determine.

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

10.3 Register of Unitholders

A register shall be maintained at the principal office or, if applicable, principal office of the Trustee in the City of Calgary by the Trustee, which register shall contain the names and addresses of the Unitholders, the respective numbers of Trust Units held by them, the certificate numbers of the certificates representing such Trust Units and a record of all transfers thereof.

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

The register referred to in this Section 10.3 shall at all reasonable times be open for inspection by the Unitholders.

10.4 Transfer of Trust Units

(a) Subject to the provisions of this Article 10, the Trust Units shall be fully transferable without charge as between persons, but no transfer of Trust Units shall be effective as against the Trustee or shall be in any way binding upon the Trustee until the transfer has been recorded on the register maintained by the Trustee. No transfer of a Trust Unit shall be recognized unless such transfer is of a whole Trust Unit.

(b) Subject to the provisions of this Article 10, Trust Units shall be transferable on the register of Unitholders of the Trust only by the Unitholders of record thereof or their executors, administrators or other legal representatives or by their agents hereunto duly authorized in writing, and only upon delivery to the Trustee, of the certificate therefor, if certificates representing Trust Units are issued, properly endorsed or accompanied by a duly executed instrument of transfer and accompanied by all necessary transfer or other taxes imposed by law, together with such evidence of the genuineness of such endorsement, execution and authorization and other matters that may reasonably be required by the Trustee. Upon such delivery the transfer shall be recorded on the register of Unitholders and a new Trust Certificate for the residue thereof (if any) shall be issued to the transferor. Unless the Trustee agrees to assume liability for the transfer and exchange fees the Unitholder shall be responsible for such fees and expenses.

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

10.5 Trust Units Held Jointly or in a Fiduciary Capacity

of any kind and any customary words may be added to the description of the holder to identify the nature of such fiduciary relationship. Where any Trust Certificate is registered in more than one name, the distributions (if any) in respect thereof may be paid to the order of all such holders failing written instructions from them to the contrary and such payment shall be a valid discharge to the Trustee. In the case of the death of one or more joint holders, the distributions (if any) in respect of any Trust Units may be paid to the survivor or survivors of such holders and such payment shall be a valid discharge to the Trustee.

10.6 Performance of Trust

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

10.7 Lost Certificates

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

10.8 Death of a Unitholder

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

10.9 Unclaimed Interest or Distribution

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

10.10 Exchanges of Trust Certificates

Trust Certificates representing any number of Trust Units may be exchanged without charge for Trust Certificates representing an equivalent number of Trust Units in the aggregate. Any exchange of Trust Certificates may be made at the offices of the Trustee where registers are maintained for the Trust Certificates pursuant to the provisions of this Article 10. Any Trust Certificates tendered for exchange shall be surrendered to the Trustee shall be cancelled. The Corporation shall reimburse the Trustee for all exchange fees associated with any such exchange.

ARTICLE 11

TERMINATION

11.1 Termination Date

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

11.2 Termination by Resolution of Unitholders

The Unitholders may approve by Resolution to terminate the Trust, whereupon the Trustee shall commence to wind up the affairs of the Trust.

11.3 Procedure Upon Termination

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

11.4 Powers of the Trustee upon Termination

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

11.5 Sale of Investments

After the date referred to in Section 11.4, the Trustee shall proceed to wind up the affairs of the Trust as soon as may be reasonably practicable and for such purpose shall, subject to the terms of any agreements binding on or obligations of the Trust and the Trustee, sell and convert into money the assets comprising the Trust Fund in one transaction or in a series of transactions at public or private sale and do all other acts appropriate to liquidate the Trust Fund, and shall in all respects act in accordance with the directions, if any, of the Unitholders in respect of a termination authorized under Section 11.2.

11.6 Distribution of Proceeds

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

11.7 Further Notice to Unitholders

In the event that all of the Unitholders shall not surrender their Trust Units for cancellation within six (6) months after the time specified in the notice referred to in Section 11.3, such remaining Trust Units shall be deemed to be cancelled without prejudice to the rights of the holders of such Trust Units to receive their Pro Rata Share of the amounts referred to in Section 11.6 and the Trustee may either take appropriate steps, or appoint an agent to take appropriate steps, to contact such Unitholders (deducting all expenses thereby incurred from the amounts to which such Unitholders are entitled as aforesaid) or, in the discretion of the Trustee, may pay such amounts into court.

11.8 Responsibility of Trustee after Sale and Conversion

The Trustee shall be under no obligation to invest the proceeds of any sale of the Properties or other assets or cash forming part of the Trust Fund after the date referred to in Section 11.4 and, after such sale, the sole obligation of the Trustee under this Indenture shall be to hold such proceeds in trust for distribution under Section 11.6.

ARTICLE 12

SUPPLEMENTAL INDENTURES

12.1 Provision for Supplemental Indentures

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

(a) giving effect to any amendment as provided in Article 8;

(b) giving effect to any Resolution approved by Unitholders as provided in Article 9;

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

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

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

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

12.2 Provision for Amended and Restated Indenture

Notwithstanding Section 12.1, following any amendments to this Indenture, the parties to the Indenture may enter into an amended and restated version of the Indenture which shall include and give effect to all amendments to the Indenture in effect at the applicable time.

ARTICLE 13

NOTICES TO UNITHOLDERS

13.1 Notices

Any notice required to be given under this Indenture to the Unitholders shall be given, at the discretion of the Trustee, by personal delivery or by letter or circular sent through ordinary post addressed to each registered holder at his last address appearing on the register; provided that if there is a general discontinuance of postal service due to strike, lockout or otherwise, such notice may be given by personal delivery. Any notice so given shall be deemed to have been given on the day following that on which the letter or circular was posted or, in the case of notice being given by personal delivery, the day of the personal delivery. In proving notice was posted, it shall be sufficient to prove that such letter or circular was properly addressed, stamped and posted.

13.2 Failure to Give Notice

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

13.3 Joint Holders

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

13.4 Service of Notice

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

ARTICLE 14

ACCOUNTS, RECORDS AND FINANCIAL STATEMENTS

14.1 Records

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

14.2 Annual Reporting to Unitholders

The Trustee will mail:

(a) to each Unitholder, within 120 days after the end of each year, the unaudited consolidated financial statements of the Trust for the most recently completed year; and

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

14.3 Information Available to Unitholders

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

14.4 Income Tax: Obligation of the Trustee

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

14.5 Income Tax: Designations

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

14.6 Income Tax: Deductions, Allowances and Credits

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

14.7 Fiscal Year

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

ARTICLE 15

MISCELLANEOUS

15.1 Successors and Assigns

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

15.2 Counterparts

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

15.3 Severability

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

15.4 Day Not a Business Day

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

15.5 Time of the Essence

Time shall be of the essence in this Indenture.

15.6 Governing Law

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

15.7 Notices to Trustee and the Corporation

(a) Any notice to the Trustee under this Indenture shall be valid and effective if delivered or if given by registered letter, postage prepaid, addressed to the attention of 1115638 Alberta Ltd. at 1900, 330 — 5th Avenue S.W., Calgary, Alberta T2P 0L4, Attention: President (Fax (403) 265-3490), or may be given by personal delivery or electronic or telecommunications device, and shall be deemed to have been given on the date of delivery or, if mailed, effective five days after deposit in the Canadian mail.

(b) Any notice to the Trust under this Indenture shall be valid and effective if delivered or if given by registered letter, postage prepaid, addressed to the Trust c/o 1115638 Alberta Ltd. at 1900, 330 – 5th Avenue S.W., Calgary, Alberta T2P 0L4, Attention: President (Fax (403) 265-3490) may be given by personal delivery or electronic or telecommunications device, and shall be deemed to have been effectively given on the date of delivery or, if mailed, five days after deposit in the Canadian mail.

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

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

15.8 References to Agreements

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

IN WITNESS WHEREOF each of the parties has caused these presents to be executed by its proper officers duly authorized on its behalf as of the 7th day of October, 2004.

	1115638 ALBERTA LTD.
	as Trustee


	By:	/s/ [ILLEGIBLE]


	HARVEST SASK ENERGY TRUST,
	by Harvest Operations Corp.


	By:	/s/ [ILLEGIBLE]


	By:	/s/ [ILLEGIBLE]

SCHEDULE

To the annexed amended and restated indenture dated as of October 7, 2004
and made between

1115638 ALBERTA LTD. (AS TRUSTEE)
and
HARVEST SASK ENERGY TRUST

(Form of Certificate for the Trust
Units in the English Language)

[PRIORITY/SUBORDINATED] TRUST UNITS

HARVEST BREEZE TRUST NO. 1

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

No.	[Priority/Subordinated] Trust Units

THIS CERTIFIES THAT

is the registered holder of fully paid [Priority/Subordinated] Trust Units issued by Harvest Breeze Trust No. 1 (the “Trust”) transferable only on the books of the Trust by the registered holder hereof in person or by attorney duly authorized upon surrender of this certificate properly endorsed.

The Trust Units represented by this certificate are issued upon the terms and subject to the conditions of an indenture (which indenture together with all other instruments supplemental or ancillary thereto is herein referred to as the “Trust Indenture”) dated July 8, 2004 and made between 1115638 Alberta Ltd. (the “Trustee”) and Harvest Sask Energy Trust which Trust Indenture is binding upon all holders of Trust Units and, by acceptance of this certificate, the holder assents to the terms and conditions of the Trust Indenture. Terms defined in the Trust Indenture have the same meaning when used herein.

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

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

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

Harvest Breeze Trust No. I

SUPPLEMENTAL TRUST INDENTURE

THIS SUPPLEMENTAL TRUST INDENTURE is made the 22nd day of December 2009,

BETWEEN:

HARVEST ENERGY TRUST, a trust created and governed by the laws of the Province of Alberta, and all persons who after the date hereof become holders of trust units of the Trust

AND:

1496965 ALBERTA LTD., a body corporate incorporated under the laws of the Province of Alberta, with an office in the City of Calgary, in the Province of Alberta (“TrusteeCo”)

WHEREAS 1115638 Alberta Ltd. has submitted its resignation as the trustee of Harvest Breeze Trust No. 1 (the “Trust”) under the amended and restated trust indenture of the Trust made October 7, 2004 between 1115638 Alberta Ltd., as trustee, and Harvest Sask Energy Trust, as the initial unitholder (the “Trust Indenture”);

AND WHEREAS the removal of 1115638 Alberta Ltd. as trustee of the Trust, and the appointment of TrusteeCo as trustee of the Trust in substitution for, and as successor to, 1115638 Alberta Ltd., constitutes a step in the plan of arrangement under Section 193 of the Business Corporations Act (Alberta) involving, among others, Harvest Energy Trust, Harvest Operations Corp., Korea National Oil Corporation, KNOC Canada Ltd., the Trust, 1115638 Alberta Ltd., TrusteeCo and securityholders of the Trust (the “Arrangement”), which plan of arrangement was approved by the requisite majority of securityholders of the Trust at a special meeting held on December 15, 2009 and by the Court of Queen’s Bench of Alberta by final order dated December 16, 2009;

AND WHEREAS the Arrangement is effective the date hereof and this Supplemental Trust Indenture is intended to confirm the change of trustee contemplated thereby with effect at the Effective Time (as that term is defined in the Arrangement);

AND WHEREAS Harvest Energy Trust is the successor in interest to the trust units of the Trust formerly held by Harvest Sask Energy Trust;

NOW THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties acknowledge and agree as follows:

ARTICLE I

INTERPRETATION

1.1 Incorporation in Trust Indenture

The parties acknowledge and agree that the Trust Indenture is and shall be amended as set out herein and that henceforth this Supplemental Indenture and the Trust Indenture shall form one and the same instrument.

ARTICLE II

TRUSTEE

2.1 New Trustee

TrusteeCo is appointed, and TrusteeCo accepts such appointment, as trustee of Harvest Breeze Trust No. 1 pursuant to Section 6.4 of the Trust Indenture, and TrusteeCo assumes all obligations of the trustee related to the Trust Indenture.

ARTICLE III

GENERAL

3.1 Confirmation

The Trust Indenture, as amended hereby, shall in all other respects remain in full force and effect.

3.2 Counterparts

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

3.3 Governing Law

This Supplemental Indenture shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein and shall be treated in all respects as an Alberta contract. The parties hereby irrevocably submit to the jurisdiction of the courts of the Province of Alberta.

IN WITNESS WHEREOF, each of the parties has caused this Indenture to be duly executed as of the day and year first written above.

	1496965 ALBERTA LTD.


	Per:	/s/ Dr. Seong Hoon Kim
		Dr. Seong Hoon Kim
		President and Secretary


	HARVEST ENERGY TRUST, by its
	Administrator, Harvest Operations Corp.


	Per:	/s/ John Zahary
		John Zahary
		President

TABLE OF CONTENTS

		Page

ARTICLE 1 INTERPRETATION		1
1.1	Definitions	1
1.2	Meaning of “Outstanding”	4
1.3	Income Tax Act	5
1.4	Headings	5
1.5	Construction of Terms	5
1.6	References to Acts Performed by the Trust	5
1.7	References to Acts Performed by the Trustee	5

ARTICLE 2 DECLARATION OF TRUST		5
2.1	Settlement of Trust	5
2.2	Declaration of Trust	5
2.3	Name	6
2.4	Nature of the Trust	6
2.5	Legal Entitlements and Restrictions of Unitholders	6
2.6	Liability of Unitholders	6
2.7	Head Office of Trust	7

ARTICLE 3 ISSUE AND SALE OF TRUST UNITS		7
3.1	Nature and Ranking of Trust Units	7
3.2	Authorized Number of Priority Units	8
3.3	Authorized Number of Subordinated Units	8
3.4	No Fractional Trust Units	8
3.5	Offerings of Trust Units and Indebtedness	8
3.6	Trust Units Fully Paid and Non-Assessable	8
3.7	No Conversion, Retraction, Redemption or Pre-Emptive Rights	8
3.8	Consolidation of Trust Units	8

ARTICLE 4 INVESTMENTS OF TRUST FUND		9
4.1	Purpose of the Trust	9
4.2	Permitted Investments	9

ARTICLE 5 DISTRIBUTIONS		10
5.1	Determination of Distributions	10
5.2	Enforcement	10
5.3	Payment of Amounts Payable	10
5.4	Distribution of Additional Subordinated Units	10
5.5	Withholding Taxes	10

ARTICLE 6 APPOINTMENT, RESIGNATION AND REMOVAL OF TRUSTEE		11
6.1	Trustee’s Term of Office	11
6.2	Resignation of Trustee	11
6.3	Removal of Trustee	11
6.4	Appointment of Successor to Trustee	11
6.5	Failure to Appoint Successor	11
6.6	Qualifications of Trustee	12

ARTICLE 7 CONCERNING THE TRUSTEE		12
7.1	Powers of the Trustee	12
7.2	Specific Powers and Authorities	12
7.3	Restrictions on the Trustee’s Powers	15
7.4	Banking	15
7.5	Standard of Care	15
7.6	Fees and Expenses	15
7.7	Limitations on Liability of Trustee	15

TABLE OF CONTENTS

(continued)

		Page

7.8	Indemnification of Trustee	16
7.9	Environmental Indemnity	16
7.10	Apparent Authority	17
7.11	Conditions Precedent to Trustee’s Obligations to Act	17
7.12	Survival of Indemnities	17
7.13	Trustee May Have Other Interests	17
7.14	Documents Held by Trustee	18
7.15	General Delegation of Powers	18

ARTICLE 8 AMENDMENT		18
8.1	Amendment	18

ARTICLE 9 VOTING RIGHTS OF UNITHOLDERS		19
9.1	Voting Rights of Unitholders	19
9.2	Resolutions	19
9.3	No Breach	19

ARTICLE 10 CERTIFICATES, REGISTRATION AND TRANSFER OF TRUST UNITS		19
10.1	Nature of Trust Units	19
10.2	Certificates	20
10.3	Register of Unitholders	20
10.4	Transfer of Trust Units	20
10.5	Trust Units Held Jointly or in a Fiduciary Capacity	21
10.6	Performance of Trust	21
10.7	Lost Certificates	21
10.8	Death of a Unitholder	21
10.9	Unclaimed Interest or Distribution	22
10.10	Exchanges of Trust Certificates	22

ARTICLE 11 TERMINATION		22
11.1	Termination Date	22
11.2	Termination by Resolution of Unitholders	22
11.3	Procedure Upon Termination	22
11.4	Powers of the Trustee upon Termination	22
11.5	Sale of Investments	22
11.6	Distribution of Proceeds	23
11.7	Further Notice to Unitholders	23
11.8	Responsibility of Trustee after Sale and Conversion	23

ARTICLE 12 SUPPLEMENTAL INDENTURES		23
12.1	Provision for Supplemental Indentures	23
12.2	Provision for Amended and Restated Indenture	24

ARTICLE 13 NOTICES TO UNITHOLDERS		24
13.1	Notices	24
13.2	Failure to Give Notice	24
13.3	Joint Holders	24
13.4	Service of Notice	24

ARTICLE 14 ACCOUNTS, RECORDS AND FINANCIAL STATEMENTS		24
14.1	Records	24
14.2	Annual Reporting to Unitholders	24
14.3	Information Available to Unitholders	25
14.4	Income Tax: Obligation of the Trustee	25
14.5	Income Tax: Designations	25
14.6	Income Tax: Deductions, Allowances and Credits	25

TABLE OF CONTENTS
(continued)

		Page

14.7	Fiscal Year	25

ARTICLE 15 MISCELLANEOUS		25
15.1	Successors and Assigns	25
15.2	Counterparts	25
15.3	Severability	25
15.4	Day Not a Business Day	26
15.5	Time of the Essence	26
15.6	Governing Law	26
15.7	Notices to Trustee and the Corporation	26
15.8	References to Agreements	27

iii

HARVEST BREEZE TRUST NO. 2

This AMENDED AND RESTATED TRUST INDENTURE made the 7th day of October, 2004.

BETWEEN:

1115650 ALBERTA LTD., a body corporate incorporated under the laws of the Province of Alberta, with offices in the City of Calgary, in the Province of Alberta (hereinafter called the “Trustee”)

OF THE FIRST PART

and

HARVEST ENERGY TRUST, a trust governed by the laws of Alberta (hereinafter called the “Initial Unitholder”), and all persons who after the date hereof become holders of Trust Units as herein provided

OF THE SECOND PART

WHEREAS the Trustee and the Initial Unitholder are parties to a trust indenture dated July 8, 2004, as amended and restated on August 31, 2004 (the “Original Trust Indenture”); and

AND WHEREAS the Trustee and the Initial Unitholder wish to amend and restated the Original Trust Indenture;

ARTICLE I
INTERPRETATION

1.1 Definitions

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

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

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

(f) “Commodity Price and Currency Swaps” means swap, hedging and other arrangements in respect of commodity prices or rates of exchange of currencies, the purpose of which is to mitigate or eliminate exposure to fluctuations in prices of commodities or rates of exchange of one currency for another and any transactions, confirmations or other agreements arising therefrom or incidental thereto;

(g) “Corporation” means Harvest Operations Corp., a corporation amalgamated under the ABCA;

(h) “Counsel” means a law firm reasonably acceptable to the Trustee;

(i) “Distribution Priority Amount” has the meaning set forth in Section 3.1(c);

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

(l) “Initial Unitholder” means Harvest Energy Trust;

(m) “Interest Rate Swaps” means interest rate swap, hedging and other arrangements, the purpose of which is to mitigate or eliminate exposure to fluctuations in interest rates and any transactions, confirmations or other agreements arising therefrom or related thereto;

(p) “Liquidation Priority Amount” has the meaning set forth in Section 3.1(c);

(s) “NPI Payment” has the meaning set forth in the NPI Agreement;

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

(w) “Partnership” means Breezes Resources Partnership, a partnership organized under the laws of the Province of Alberta;

(x) “Payment Date” has the meaning set forth in Section 5.3;

(y) “Permitted Investments” means:

(i) loan advances or other forms of financial assistance to the Partnership, Harvest Energy Trust, the Corporation and any of their Affiliates, as the case may be;

(ii) interest bearing accounts of certain financial institutions, including Canadian chartered banks;

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

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

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

(vi) investments in any entity including without limitation, bodies corporate, partnerships (including the Partnership) or trusts engaged in the oil and natural gas business; and

(vii) such other investment as is approved by the Trustee;

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

(aa) “Priority Unit” means a priority trust unit of the Trust created, issued and certified hereunder and for the time being outstanding and entitled to the benefits hereof;

(dd) “Resolution” means a resolution in writing executed by all Unitholders;

(ee) “Settled Amount” means the amount of one hundred dollars in lawful money of Canada paid by the Initial Unitholder to the Trustee for the purpose of settling the Trust;

(ff) “Subordinated Unit” means a subordinated trust unit of the Trust created, issued and certified hereunder and for the time being outstanding and entitled to the benefits hereof;

(gg) “Subsequent Investment” means any of the investments which the Trust may make pursuant to Section 4.1;

(hh) “Swap Arrangements” means Commodity Price and Currency Swaps and Interest Rate Swaps;

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

(kk) “Trust” means Harvest Breeze Trust No. 2 and refers to the trust relationship between the Trustee and the Unitholders with respect to the Trust Fund, upon the terms and conditions set out herein from time to time and, if the context requires, may also refer to the Trust Fund;

(i) the Settled Amount;

(ii) all funds realized from the issuance of Trust Units;

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

(iv) all rights in respect of and income generated from Properties;

(v) any Subsequent Investment;

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

(oo) “Trustee” means 1115650 Alberta Ltd., or its successor or successors for the time being as trustee hereunder;

(pp) “Trust Unit” means, as the context requires, a Priority Unit or a Subordinated Unit;

(qq) “Unitholders” means the holders from time to time of one or more Trust Units and on the date hereof means the Initial Unitholder; and

(rr) “year” means initially, the period commencing on the date hereof and ending on December 31, 2004, and thereafter means a calendar year.

1.2 Meaning of “Outstanding”

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

1.3 Income Tax Act

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

1.4 Headings

1.5 Construction of Terms

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

1.6 References to Acts Performed by the Trust

1.7 References to Acts Performed by the Trustee

ARTICLE 2
DECLARATION OF TRUST

2.1 Settlement of Trust

2.2 Declaration of Trust

2.3 Name

The Trust shall be known and designated as “Harvest Breeze Trust No. 2” and, whenever lawful and convenient, the affairs of the Trust shall be conducted and transacted under that name. If the Trustee determines that the use of the name “Harvest Breeze Trust No. 2” is not practicable, legal or convenient, it may use such other designation or it may adopt such other name for the Trust as it deems appropriate and the Trust may hold property and conduct its activities under such other designation or name.

2.4 Nature of the Trust

2.5 Legal Entitlements and Restrictions of Unitholders

2.6 Liability of Unitholders

Fund) is liable to, and shall indemnify and save harmless any Unitholder (including its own beneficiaries, if any, and the beneficiaries of any of their beneficiaries, if any) against any costs, damages, liabilities, expenses, charges or losses suffered by any Unitholder from or arising as a result of such Unitholder not having any such limited liability.

2.7 Head Office of Trust

The head office of the Trust hereby created shall be located at 1900, 330 – 5th Avenue S.W., Calgary, Alberta T2P 0L4 or at such other place or places in Canada as the Trustee may from time to time designate.

ARTICLE 3
ISSUE AND SALE OF TRUST UNITS

3.1 Nature and Ranking of Trust Units

(b) Each Trust Unit shall entitle the holder or holders thereof to one vote at any meeting of the Unitholders.

3.2 Authorized Number of Priority Units

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

3.3 Authorized Number of Subordinated Units

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

3.4 No Fractional Trust Units

Fractions of Trust Units shall not be issued, except pursuant to distributions of additional Trust Units to all Unitholders who hold Subordinated Units pursuant to Section 5.4.

3.5 Offerings of Trust Units and Indebtedness

3.6 Trust Units Fully Paid and Non-Assessable

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

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

3.8 Consolidation of Trust Units

Immediately after any pro rata distribution of additional Subordinated Units to all Unitholders who hold Subordinated Units pursuant to Article 5, the number of outstanding Subordinated Units will be consolidated such that each Unitholder who holds Subordinated Units will hold after the consolidation the same number of Subordinated Units as the Unitholder held before the distribution of additional Subordinated Units. In such case, each Trust Unit Certificate representing, a number of Subordinated Units prior to the distribution of additional Subordinated Units is deemed to represent the same number of Subordinated Units after the distribution of additional Subordinated Units and the consolidation. Such consolidation shall not constitute a redemption or cancellation of the Subordinated Units so consolidated and a Unitholder whose Subordinated Units are consolidated shall not receive, and shall not be entitled to receive, any proceeds of disposition in respect thereof.