Enerplus Resources Fund and Focus Energy Trust - MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- s. 14.2 of Form 51-102F5 of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) - exemption from the requirement to include in an information circular to be sent to security holders of reporting issuers engaged in a business combination disclosure (including financial statements) with respect to such reporting issuers as prescribed by the form of prospectus, other than a short form prospectus under National Instrument 44-101 Short Form Prospectus Distributions (NI 44-101) - both reporting issuers eligible to file short form prospectuses - relief given to permit issuers to provide information required by NI 44-101F1 other than certain information circulars filed in 2006 that are superseded by information circulars filed in 2007.

Applicable Ontario Statutory Provisions

NI 51-102 - Continuous Disclosure Obligations.

NI 44-101 - Short Form Prospectus.

Citation: Enerplus Resources Fund and Focus Energy Trust, 2007 ABASC 929

December 21, 2007

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ALBERTA AND ONTARIO

(THE JURISDICTIONS)

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

ENERPLUS RESOURCES FUND (ENERPLUS)

AND

FOCUS ENERGY TRUST (FOCUS)

MRRS DECISION DOCUMENT

Background

1. The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from Focus and Enerplus for a decision under the securities legislation of the Jurisdictions (the Legislation) that:

(a) Focus and Enerplus be exempt from the requirement under Item 14.2 of Form 51-102F5 to National Instrument 51-102 -- Continuous Disclosure Obligations (NI 51-102) to include in an information circular (the Information Circular) to be sent to securityholders of Focus, disclosure (including financial statements) with respect to Focus and Enerplus as prescribed by the form of prospectus, other than a short form prospectus under National Instrument 44-101 - Short Form Prospectus Distributions (NI 44 101 or the Short Form Prospectus Rule), that Focus and Enerplus would be eligible to use for a distribution of securities provided that the Information Circular includes information about Enerplus and Focus as required by the Short Form Prospectus Rule; and

(b) in connection with the foregoing, to exempt Focus and Enerplus from the requirement under Item 11.1(1)(7) of Form 44-101F1 -- Short Form Prospectus (Form 44-101) to incorporate by reference into the Information Circular the following documents (collectively the 2006 Circulars):

(i) the information circular and proxy statement of Focus dated March 15, 2006 (the 2006 Focus Circular) relating to the annual and general meeting of holders (the Focus Unitholders) of trust units of Focus (Focus Units) held on May 17, 2006;

(ii) the joint information circular and proxy statement of Focus and Profico Energy Management Ltd. (Profico) dated May 25, 2006 (the Profico Circular) relating to special meeting of Focus Unitholders and securityholders of Profico held on June 26, 2006; and

(iii) the management information circular and proxy statement of Enerplus dated February 28, 2006 (the 2006 Enerplus Circular) relating to the annual general meeting of holders (the Enerplus Unitholders) of trust units of Enerplus (Enerplus Units) held on April 12, 2006,

(collectively, the Requested Relief).

Application of Principal Regulator System

2. Under Multilateral Instrument 11-101 - Principal Regulator System (MI 11-101) and the Mutual Reliance Review System for Exemption Relief Applications:

(a) the Alberta Securities Commission is the principal regulator for Focus and Enerplus;

(b) Focus and Enerplus are relying on the exemption in Part 3 of MI 11-101 in each of British Columbia, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, Northwest Territories and Nunavut as applicable; and

(c) this MRRS decision document evidences the decision of each Decision Maker.

Interpretation

3. Defined terms contained in National Instrument 14-101 - Definitions have the same meaning in this decision unless they are otherwise defined-in this decision.

Representations

4. This decision is based on the following facts represented by Focus and Enerplus:

(a) Each of Focus and Enerplus was formed under the laws of the Province of Alberta and has its head office located in Calgary, Alberta.

(b) The trust units of Focus are listed and posted for trading on the Toronto Stock Exchange under the trading symbol "FET.UN" and on the New York Stock Exchange under the trading symbol "ERF".

(c) The trust units of Enerplus are listed and posted for trading on the Toronto Stock Exchange under the trading symbol "ERF.UN".

(d) Focus is a reporting issuer in each of the provinces of Canada and has been a reporting issuer in at least one of these jurisdictions since August 2002.

(e) Enerplus is a reporting issuer in each of the provinces and territories of Canada and has been a reporting issuer in at least one of these jurisdictions since July 1986.

(f) To its knowledge, Focus is not in default of any of its obligations as a reporting issuer pursuant to the applicable securities legislation in any of the provinces in which it is a reporting issuer or its equivalent.

(g) To its knowledge, Enerplus is not in default of any of its obligations as a reporting issuer pursuant to the applicable securities legislation in any of the provinces or territories in which it is a reporting issuer or its equivalent.

(h) Enerplus and Focus satisfy the basic qualification criteria as set out in section 2.2 of the Short Form Prospectus Rule.

(i) Enerplus has a current AIF and current annual financial statements as defined in section 1.1 of the Short Form. Prospectus Rule. Focus has a current AIF and current annual financial statements as defined in section 1.1 of the Short Form Prospectus Rule.

(j) Enerplus and Focus have each filed (or have been deemed to have filed) the notice required by section 2.8 of the Short Form Prospectus Rule and each such notice has not been withdrawn.

(k) On December 2, 2007, Focus and Enerplus entered into an agreement with respect to a proposed transaction (the Transaction Agreement) pursuant to which Enerplus and Focus will combine their businesses (the Transaction). Pursuant to the Transaction, Focus Unitholders will receive, for each Focus Unit held, 0.425 of a trust unit of an Enerplus Unit. Holders (Focus Exchangeable LP Unitholders) of Class B limited partnership units (Focus Exchangeable LP Units) of Focus Limited Partnership will not exchange their Focus Exchangeable LP Units for Enerplus Units pursuant to the Transaction, but the exchange ratio for their Focus Exchangeable LP Units will be adjusted such that each Focus Exchangeable LP Unit will, following completion of the Transaction, be exchangeable for 0.425 of an Enerplus Unit, based on the exchange ratio contemplated in the Transaction.

(l) The Information Circular detailing the Transaction is anticipated to be mailed to Focus securityholders in early January 2008 for a meeting (the Focus Meeting) expected to take place in mid-February 2008. Closing of the Transaction is expected to take place as soon as is practicable after the Focus Meeting.

(m) Effective June 27, 2007 Focus completed a plan of arrangement pursuant to which Focus acquired all the issued and outstanding common shares of Profico Energy Management Ltd. (the Profico Merger).

(n) At the time of the Profico Merger, Focus was not required to complete a business acquisition report in respect of the Profico Merger as section 8.1(2) of NI 51-102 provided that a business acquisition report was not required so long as the information and financial statements required by section 14.2 of Form 51-102F5 concerning the Profico Merger was contained within the information circular prepared in respect of the Profico Merger. Such information was contained in or incorporated by reference into such information circular (the Profico Financial Statements).

(o) Form 51-102F5 requires that the Information Circular contain, among other things, a detailed description of the Transaction and disclosure (including financial statements) for Enerplus and Focus prescribed by the form of prospectus, other than a short form prospectus under the Short Form Prospectus Rule, that Enerplus and Focus would be eligible to use for a distribution of securities in the Jurisdictions.

(p) The form of prospectus other than a short form prospectus under the Short Form Prospectus Rule that Enerplus and Focus would be eligible to use for a distribution of securities in the Jurisdictions is the form of prospectus prescribed by Ontario Securities Commission Form 41-501F1 - Information Required in a Prospectus.

(q) The Information Circular will include, among other things, a detailed description of the Transaction, the disclosure (including financial statements) for Enerplus and Focus prescribed by Form 44-101F1 (subject to the Requested Relief being granted) and will comply with the applicable requirements of NI 51-102.

(r) The Information Circular will incorporate by reference all documents of the type described in item 11.1 of Form 44-101F1, and specifically, those filed by Enerplus and Focus after the date of the Information Circular and before the date of the Focus Meeting.

(s) The Information Circular will incorporate by reference the information circulars relating to Focus' and Enerplus' annual meetings held on May 17, 2007 and May 4, 2007, respectively.

(t) The Information Circular will incorporate by reference the following:

(i) in respect of Focus:

A. the 2006 Annual Information Form of Focus dated March 21, 2007;

B. the audited consolidated balance sheets of Focus as at December 31, 2006 and 2005 and the consolidated statements of income and accumulated income and cash flows for the years then ended, together with the notes thereto, the auditors' report thereon and the management's discussion and analysis in respect thereof;

C. the unaudited consolidated balance sheets of Focus as at September 30, 2007 and December 31, 2006 and the consolidated statements of income and accumulated income and cash flows for the nine months ended September 30, 2007 and 2006, together with the notes thereto and the management's discussion and analysis in respect thereof;

D. the information circular -- proxy statement of Focus in respect of the annual and special meeting of Focus Unitholders held on May 17, 2007;

E. the Profico Financial Statements which comply with the requirements of Part 8 of NI 51-102 other than the requirement to file a business acquisition report; and

F. the material change report dated December 11, 2007 in respect of the Arrangement and the Letter Agreement.

(ii) in respect of Enerplus:

A. the 2006 Annual information Form of Enerplus dated March 12, 2007;

B. the audited consolidated financial statements as at and for the fiscal years ended December 31, 2006 and 2005, together with a report of Enerplus' independent registered chartered accountants thereon and the management's discussion and analysis of Enerplus in respect thereof;

C. the unaudited consolidated balance sheets of Enerplus as at September 30, 2007 and December 31, 2006 and the consolidated financial statements of income and accumulated income and cash flows for the nine months ended September 30, 2007 and 2006, together with the notes thereto and the management's discussion and analysis in respect thereof;

D. the information circular and proxy statement of Enerplus dated March 12, 2007 relating to the annual general meeting of the Enerplus Unitholders held on May 4, 2007;

E. the material change report dated June 15, 2007 in respect of the impact of certain amendments to the Income Tax Act (Canada) to Enerplus' oil and natural gas reserves; and

F. the material change report dated December 10, 2007 in respect of the Transaction and the Transaction Agreement.

(u) The Information Circular will contain sufficient information for unitholders of Focus to make a reasoned decision about whether to approve the Transaction.

Decision

5. The Decision Makers being satisfied that they each have jurisdiction to make this decision and that the relevant test contained under the Legislation has been met, the Requested Relief is granted, provided that:

(a) at the time of filing of the Information Circular, Enerplus and Focus satisfy the basic qualification criteria as set out in section 2.2 of the Short Form Prospectus Rule; and

(b) the Information Circular (and the documents incorporated by reference in the Information Circular) includes information about Enerplus and Focus required by the Short Form Prospectus Rule to be included or incorporated by reference in a short form prospectus, other than the 2006 Circulars.