Exemption Orders (Discretionary)

CIBC WORLD MARKETS INC.


IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c.418

AND

IN THE MATTER OF CIBC WORLD MARKETS INC. AND SCOTIAMCLEOD INC.

AND

IN THE MATTER OF PRIMEWEST ENERGY TRUST

Exemption Order Under Section 48

WHEREAS CIBC World Markets Inc. and ScotiaMcLeod Inc. (the “Applicants”) have applied to the Executive Director for an order under section 48 of the Securities Act, R.S.B.C. 1996, c.418 that the Applicants are exempt from the requirements of section 78(2)(b) of the Securities Rules, R.B.C. Reg. 194/97, as modified by an order of the Superintendent of Brokers (now Executive Director) entitled “In the Matter of the Limitations on a Registrant Underwriting Securities of a Related Party or Connected Party of the Registrant” (“BOR #92/2”), in connection with the proposed offering (the “Offering”) of trust units of PrimeWest Energy Trust (the “Trust”) to be made by means of a prospectus;

AND WHEREAS the Applicants have represented to the Executive Director that:

1. the Trust is an open-end investment trust established under the laws of Alberta pursuant to a declaration of trust dated August 2, 1996;

2. the Trust is a reporting issuer under the Act and is not in default of any requirement of the Act or the Rules;

3. the Trust's principle asset is a royalty in certain petroleum and natural gas properties owned by PrimeWest Energy Inc. (“PrimeWest”). That royalty entitles the Trust to receive 99% of the net cash flow generated by those properties, after certain costs and deductions;

4. the Trust is authorized to issue an unlimited number of transferable, redeemable trust units (the "Trust Units");

5. the Trust Units are listed and posted for trading on The Toronto Stock Exchange;

6. the Trust intends to file a preliminary prospectus (the “Prospectus”) with the securities regulatory authority or regulator in each province to qualify the Offering of the Trust Units;

7. the Trust has entered into an underwriting agreement (the “Underwriting Agreement”) with the Applicants, Nesbitt Burns Inc. (“Nesbitt”), Merrill Lynch Canada Inc., RBC Dominion Securities Inc., National Bank Financial and TD Securities Inc. (collectively, the “Underwriters”), whereby the Underwriters will agree to act as underwriters in connection with the distribution of the Trust Units;

8. the Prospectus will contain a certificate signed by each Underwriter in accordance with Item 20(2) of Appendix B of National Policy 47 and section 69(1) of the Act;

9. the proportionate share of the Offering to be underwritten by each of the Underwriters is set out below:

Underwriter NameProportionate Share of Offering

CIBC World Markets Inc. 35%
ScotiaMcLeod Inc. 15%
Nesbitt Burns Inc. 20%
Merrill Lynch Canada Inc. 10%
RBC Dominion Securities Inc. 10%
National Bank Financial 5%
TD Securities Inc. 5%

10. the Trust and PrimeWest have a revolving credit facility to a maximum of $120,000,000 (the "Credit Facility") under which the lenders are Canadian Imperial Bank of Commerce ("CIBC") and The Bank of Nova Scotia ("BNS"). CIBC World Markets Inc., one of the Applicants, is a wholly-owned subsidiary of CIBC and ScotiaMcLeod Inc., the other Applicant, is a wholly-owned subsidiary of BNS;

11. as at June 30, 1999, there was $84,518,000 outstanding under the Credit Facility;

12. a portion of the net proceeds of the Offering will be used to reduce the indebtedness of the Trust and PrimeWest under the Credit Facility;

13. the Trust is not a “related party”, within the meaning of section 75(1) of the Rules, of the Applicants;

14. the Trust is, by virtue of the Credit Facility, a “connected party”, within the meaning of section 75(1) of the Rules, of each of the Applicants;

15. the Trust will not be a “related party” or a “connected party”, within the meaning of section 75(1) of the Rules, of Nesbitt;

16. the decision to issue the Trust Units, including the determination of the distribution, was made and will continue to be made through negotiations between the Trust and the Underwriters, without the involvement of CIBC or BNS;

17. the Prospectus will contain disclosure regarding the relationship between the Trust and the Applicants, the existence and terms of the Credit Facility and that a portion of the proceeds will be used to reduce the Credit Facility;

18. Nesbitt will participate in the drafting of the Prospectus, and in the due diligence relating to the Offering, and will participate in negotiating and establishing the terms of the Trust Units and the price at which they will be purchased by the Underwriters from the Trust;

19. the Underwriters will receive no benefit relating to the Offering other than the payment of their fees in connection therewith;

20. the Trust is not in financial difficulty and is not a “specified party” as defined in draft Multi-Jurisdictional Instrument 33-105 “Underwriting Conflicts”; and

21. the Underwriters do not comply with the proportional requirements of section 78(2)(b) of the Rules, as modified by BOR#92/2;

AND WHEREAS the Executive Director considers that to do so would not be prejudicial to the public interest;

IT IS ORDERED under Section 48 of the Act that the Applicants are exempt from the requirements of section 78(2)(b) of the Rules, as modified by BOR#92/2 in respect of the Offering, provided that:

1. Nesbitt underwrites at least 20% of the Offering;

2. Nesbitt participates in the due diligence, prospectus drafting and pricing in relation to the Offering and the extent of its participation is fully described in the Prospectus; and

3. Nesbitt signs the underwriter’s certificate in the Prospectus.
      DATED at Vancouver, British Columbia, on September 14, 1999.



                          Ross P. McLennan
                          Director
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