notices of special meetings - and - … i - june 5, 2017 dear shareholders: on may 1, 2017, veresen...

NOTICES OF SPECIAL MEETINGS

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NOTICE OF ORIGINATING APPLICATION TO THE COURT OF

QUEEN’S BENCH OF ALBERTA

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MANAGEMENT INFORMATION CIRCULAR

FOR SPECIAL MEETINGS OF THE COMMON SHAREHOLDERS AND

THE PREFERRED SHAREHOLDERS OF VERESEN INC.

EACH MEETING TO BE HELD JULY 11, 2017

with respect to a proposed

PLAN OF ARRANGEMENT

involving

VERESEN INC.

and

PEMBINA PIPELINE CORPORATION

June 5, 2017

These materials are important and require your immediate attention. Please carefully read this management

information circular, including its appendices and the documents incorporated by reference herein, as they contain

detailed information related to, among other things, the proposed plan of arrangement that will be voted upon at

the special meetings. If you are in doubt as to how to deal with these materials or the matters they describe, please

consult your professional advisor. If you have any questions or require more information with regards to voting

your shares, please contact our strategic shareholder advisor and proxy solicitation agent, Kingsdale Advisors at

1-888-518-6554 toll-free, or 416-867-2272 (collect), or email at [email protected].

mailto:[email protected]

TABLE OF CONTENTS

NOTICE OF SPECIAL MEETING OF

COMMON SHAREHOLDERS ............................ ii

NOTICE OF SPECIAL MEETING OF

PREFERRED SHAREHOLDERS ........................iv

GENERAL QUESTIONS AND ANSWERS ......... 1

GLOSSARY OF TERMS........................................ 9

CONVENTIONS ................................................... 20


................................................................................. 21 Introduction ........................................................ 21 Supplemental Disclosure – Non-U.S. GAAP and

Non-IFRS Measures ........................................... 21 Information for United States Shareholders ........ 22 Currency ............................................................. 23

FORWARD-LOOKING STATEMENTS ........... 23

INFORMATION FOR BENEFICIAL HOLDERS

................................................................................. 26

SUMMARY ............................................................ 28

THE ARRANGEMENT ........................................ 43 General................................................................ 43 Details of the Arrangement ................................. 44 Background to the Arrangement ......................... 47 Reasons for the Arrangement ............................. 50 Attributes of the Combined Company ................ 51 Fairness Opinions ............................................... 53 Recommendation of the Board of Directors ....... 58 The Arrangement Agreement ............................. 59 Support Agreements ........................................... 66

PROCEDURE FOR THE ARRANGEMENT TO

BECOME EFFECTIVE ........................................ 67 Procedural Steps ................................................. 67 Shareholder Approvals ....................................... 67 Court Approval ................................................... 68 Regulatory Approvals ......................................... 69 Securities Law Matters ....................................... 72 Making an Election Regarding the Consideration

to be Received..................................................... 74 Pro-rationing Provisions ..................................... 74 Procedure for Exchange of Veresen Share

Certificates or DRS Advices ............................... 76

INTERESTS OF CERTAIN PERSONS OR

COMPANIES IN THE ARRANGEMENT ......... 78 Veresen Shares.................................................... 78 Veresen Incentive Awards .................................. 78 Severance ............................................................ 78 Continuing Insurance Coverage for Directors and

Officers of Veresen ............................................. 79 Combined Company Appointments .................... 80 Summary of Interests of Directors and Executive

Officers in the Arrangement ............................... 80

DISSENT RIGHTS................................................ 82

CERTAIN CANADIAN FEDERAL INCOME

TAX CONSIDERATIONS ................................... 84 Holders Resident in Canada ................................ 85 Holders Not Resident in Canada ......................... 88 Dissenting Non-Resident Holders....................... 89

CERTAIN UNITED STATES FEDERAL

INCOME TAX CONSIDERATIONS .................. 91 Scope of This Disclosure .................................... 91 Certain U.S. Federal Income Tax Consequences of

the Arrangement ................................................. 93 U.S. Federal Income Tax Consequences of the

Ownership and Disposition of Pembina Common

Shares.................................................................. 96 Additional Considerations .................................. 97

TIMING.................................................................. 99

PRO FORMA INFORMATION OF PEMBINA

AFTER GIVING EFFECT TO THE

ARRANGEMENT ................................................. 99 General................................................................ 99 Officers and Directors of Pembina ..................... 99 Selected Unaudited Pro Forma Financial

Information ....................................................... 100 Pro Forma Consolidated Capitalization of

Pembina ............................................................ 100 Description of Share Capital ............................. 103 Principal Holders of Pembina Common Shares

Following the Arrangement .............................. 103 Auditors, Registrar and Transfer Agent ............ 103

RISK FACTORS ................................................. 103

INTERESTS OF EXPERTS ............................... 106

INFORMATION CONCERNING VERESEN

INC. ....................................................................... 106

INFORMATION CONCERNING PEMBINA

PIPELINE CORPORATION ............................. 106

MATTERS TO BE CONSIDERED AT THE

MEETINGS .......................................................... 107 Common Shareholders’ Meeting ...................... 107 Preferred Shareholders’ Meeting ...................... 107

GENERAL PROXY MATTERS ........................ 107 Solicitation of Proxies ....................................... 107 Appointment and Revocation of Proxies .......... 108 Proxy Voting ..................................................... 108 General.............................................................. 109 Voting Securities of Veresen and Principal

Holders thereof ................................................. 109 Procedure and Votes Required ......................... 110

QUESTIONS AND OTHER ASSISTANCE ..... 110

APPENDICES

APPENDIX A – Common Shareholder Arrangement

Resolution

APPENDIX B – Preferred Shareholder Arrangement

Resolution

APPENDIX C – Arrangement Agreement

APPENDIX D – Plan of Arrangement

APPENDIX E – Interim Order

APPENDIX F – Section 191 of the Business

Corporation Act (Alberta)

APPENDIX G – Common Shareholder Fairness

Opinion

APPENDIX H – Preferred Shareholder Fairness

Opinion

APPENDIX I – Pro Forma Consolidated Financial

Statements of Pembina Pipeline Corporation

APPENDIX J – Information Concerning Veresen

Inc.

APPENDIX K – Information Concerning Pembina

Pipeline Corporation

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June 5, 2017

Dear Shareholders:

On May 1, 2017, Veresen entered into an agreement with Pembina Pipeline Corporation to create a premier Canadian energy

infrastructure company, supporting some of North America’s most prolific resource plays. Our board of directors and senior

management determined that the agreement with Pembina offers both a compelling valuation and that the combined company

will be greater than the sum of its parts.

Included with this letter is a package of information with respect to the transaction, that is referred to as the “Arrangement”,

which includes details of the Arrangement and directions on how to vote on the Arrangement, as well as what to do with your

shares if the Arrangement is approved. The management information circular included with this letter is a lengthy document

that includes very detailed information prescribed by law. That said, I would encourage you to review it for complete details

of the proposed transaction, as well as its impact on you.

Summarizing what the agreement means for you as a common shareholder, each of your common shares of Veresen would

be exchanged for common shares of Pembina, on the basis of 0.4287 common shares of Pembina, or for $18.65 in cash. You

will be able to specify if you’d prefer to receive all cash or all shares, however, the total consideration offered by Pembina

for Veresen common shares is approximately three quarters Pembina common shares and one quarter cash. Depending on

the choices made by all of the common shareholders, you may receive a combination of shares and cash. Complete details

are provided in the attached materials.

I draw your attention to the section of the enclosed circular entitled “Attributes of the Combined Company” which provides

details on why our management expects the combined company will:

be better positioned to successfully deliver an aggregated growth program of approximately $6.0 billion, optimize

the integrated asset base, and compete for future investment opportunities in order to drive significant growth over

the long term;

pay a meaningful cash dividend that is expected to grow, while offering a lower payout ratio and cash flows

supported primarily with fee-for-service contracts and high-quality counterparties; and

offer a stronger balance sheet and superior access to the capital markets, resulting in a greater ability to grow on a

per share basis and to execute a broad suite of potential projects.

I invite you to attend the shareholder meeting on July 11, 2017 to vote on approval of the Arrangement. If you cannot attend

the meeting in person, please complete and deliver the enclosed proxy form as soon as possible.

As part of the Arrangement, holders of Veresen preferred shares are being asked to approve an exchange for Pembina

preferred shares with the same terms and conditions as the existing Veresen preferred shares.

If you have any questions, please consult your financial or other advisors, or Kingsdale Advisors, who we’ve hired for this

purpose, at 1-888-518-6554 toll-free, or 416-867-2272 (collect), or email [email protected].

I should note that our board of directors unanimously recommends that you vote in favour of the Arrangement.

I would like to express my gratitude for the support of our shareholders over the past years. I would also like to thank all

Veresen employees for their hard work and their support. I look forward to seeing you at the meeting.

Yours very truly,

Don Althoff

President and Chief Executive Officer

Veresen Inc.


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NOTICE OF SPECIAL MEETING OF COMMON SHAREHOLDERS

NOTICE IS HEREBY GIVEN that a special meeting (the “Common Shareholders’ Meeting”) of the holders

(“Common Shareholders”) of common shares (“Common Shares”) of Veresen Inc. (“Veresen”) will be held at

10:00 a.m. (Calgary time) on July 11, 2017 at Livingston Place (South Tower) in the Livingston Club Conference

Centre, Plus 15, 222 – 3rd Avenue S.W., Calgary, Alberta, Canada for the following purposes:

1. to consider, pursuant to an interim order (the “Interim Order”) of the Court of Queen’s Bench of Alberta

dated June 5, 2017, and, if deemed advisable, to approve, with or without variation, a special resolution of

the Common Shareholders (the “Common Shareholder Arrangement Resolution”), the full text of which

is set forth in Appendix A to the accompanying management information circular dated June 5, 2017 (the

“Information Circular”), to approve a plan of arrangement (the “Arrangement”) under Section 193 of the

Business Corporations Act (Alberta) (the “ABCA”) involving Veresen, Common Shareholders, holders of

cumulative redeemable preferred shares, series A, B, C, D, E and F, of Veresen and Pembina Pipeline

Corporation (“Pembina”), whereby, among other things, Pembina will acquire all of the issued and

outstanding Common Shares, all as more particularly described in the Information Circular; and

2. to transact such further and other business as may properly be brought before the Common Shareholders’

Meeting or any adjournment(s) or postponement(s) thereof.

Specific details of the matters to be put before the Common Shareholders’ Meeting are set forth in the Information

Circular.

The board of directors of Veresen unanimously recommends that Common Shareholders vote in favour of the

Common Shareholder Arrangement Resolution. It is a condition to the completion of the Arrangement that the

Common Shareholder Arrangement Resolution be approved at the Common Shareholders’ Meeting.

The full text of the plan of arrangement (the “Plan of Arrangement”) implementing the Arrangement is attached as

Appendix D to the Information Circular. The Interim Order is attached as Appendix E to the Information Circular.

Each Common Share entitled to be voted in respect of the Common Shareholder Arrangement Resolution will entitle

the holder to one vote at the Common Shareholders’ Meeting. The Common Shareholder Arrangement Resolution

must be approved by at least 66⅔% of the votes cast by Common Shareholders present in person or by proxy at the

Common Shareholders’ Meeting.

The record date (the “Record Date”) for determination of Common Shareholders entitled to receive notice of and to

vote at the Common Shareholders’ Meeting is the close of business on May 23, 2017. Common Shareholders whose

names have been entered in the register of holders of Common Shares on the close of business on the Record Date

will be entitled to receive notice of and to vote at the Common Shareholders’ Meeting, provided that, to the extent

that a Common Shareholder transfers the ownership of any Common Shares after the Record Date and the transferee

of those Common Shares establishes ownership of such Common Shares and demands, not later than ten (10) days

before the Common Shareholders’ Meeting, to be included in the list of Common Shareholders eligible to vote at the

Common Shareholders’ Meeting, such transferee will be entitled to vote those Common Shares at the Common

Shareholders’ Meeting.

Registered Common Shareholders may attend the Common Shareholders’ Meeting in person or may be represented

by proxy. Common Shareholders who are unable to attend the Common Shareholders’ Meeting or any adjournments

thereof in person are requested to date, sign and return the accompanying form of proxy for use at the Common

Shareholders’ Meeting or any adjournment thereof. To be effective, the enclosed form of proxy must be dated, signed

and deposited with Veresen’s registrar and transfer agent, Computershare Trust Company of Canada: (i) by mail using

the enclosed return envelope or one addressed to Computershare Trust Company of Canada, 8th Floor North Tower,

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100 University Avenue, Toronto, Ontario, M5J 2Y1; (ii) by facsimile 1-866-249-7775; or (iii) through the internet at

www.investorvote.com, no later than: (a) 10:00 a.m. (Calgary time) on July 7, 2017 or, if the Common Shareholders’

Meeting is adjourned or postponed, no later than forty-eight (48) hours (excluding Saturdays, Sundays and statutory

holidays in Alberta) before the beginning of any adjourned or postponed Common Shareholders’ Meeting. The time

limit for the deposit of proxies may be waived or extended by the Chairman of the applicable Meeting at his discretion

without notice. To vote through the internet you will require your 15-digit control number found on your proxy form.

If a Common Shareholder receives more than one form of proxy because such holder owns Common Shares

registered in different names or addresses, each form of proxy should be completed and returned.

A proxyholder has discretion under the accompanying form of proxy in respect of amendments or variations to matters

identified in this Notice and with respect to other matters which may properly come before the Common Shareholders’

Meeting, or any adjournment thereof. As of the date hereof, management of Veresen knows of no amendments,

variations or other matters to come before the Common Shareholders’ Meeting other than the matters set forth in this

Notice. Common Shareholders who are planning to return the form of proxy are encouraged to review the Information

Circular carefully before submitting the proxy form.

It is the intention of the persons named in the enclosed form of proxy, if not expressly directed to the contrary

in such form of proxy, to vote in favour of the Common Shareholder Arrangement Resolution.

Pursuant to the Interim Order, registered holders of Common Shares have been granted the right to dissent with respect

to the Common Shareholder Arrangement Resolution and, if the Arrangement becomes effective, to be paid the fair

value of their Common Shares in accordance with the provisions of Section 191 of the ABCA, as modified by the

Interim Order and the Plan of Arrangement. The right of a Common Shareholder to dissent is more particularly

described in the Information Circular and in the Interim Order and the text of Section 191 of the ABCA, which are set

forth in Appendices E and F, respectively, to the accompanying Information Circular. To exercise such right to dissent,

a dissenting Common Shareholder must send to Veresen, c/o Osler, Hoskin & Harcourt LLP, Suite 2500, TransCanada

Tower, 450 – 1st Street S.W., Calgary, Alberta, T2P 5H1, Attention: Colin Feasby, a written objection to the Common

Shareholder Arrangement Resolution, which written objection must be received by 4:00 p.m. (Calgary time) on July

4, 2017 or the fifth business day immediately preceding the date of any adjournment of the Common Shareholders’

Meeting.

Failure to strictly comply with the requirements set forth in Section 191 of the ABCA, as modified by the

Interim Order and the Plan of Arrangement, may result in the loss of any right of dissent. Persons who are

beneficial owners of Common Shares registered in the name of a broker, dealer, bank, trust company or other

nominee who wish to dissent should be aware that only the registered holders of such Common Shares are

entitled to dissent. Accordingly, a beneficial owner of Common Shares desiring to exercise the right of dissent

must make arrangements for the Common Shares beneficially owned by such holder to be registered in the

holder’s name prior to the time the written objection to the Common Shareholder Arrangement Resolution is

required to be received by Veresen or, alternatively, make arrangements for the registered holder of such

Common Shares to dissent on behalf of the beneficial holder. It is strongly recommended that any Common

Shareholders wishing to dissent seek independent legal advice.

Dated at Calgary, Alberta, this 5th day of June, 2017.

BY ORDER OF THE BOARD OF DIRECTORS OF

VERESEN INC.

Don Althoff


Veresen Inc.

http://www.investorvote.com/

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NOTICE OF SPECIAL MEETING OF PREFERRED SHAREHOLDERS

NOTICE IS HEREBY GIVEN that a special meeting (the “Preferred Shareholders’ Meeting”) of the holders

(“Preferred Shareholders”) of cumulative redeemable preferred shares, series A, B, C, D, E and F (collectively, the

“Preferred Shares”) of Veresen Inc. (“Veresen”) will be held at 11:00 a.m. (Calgary time) on July 11, 2017 at

Livingston Place (South Tower) in the Livingston Club Conference Centre, Plus 15, 222 – 3rd Avenue S.W., Calgary,

Alberta, Canada for the following purposes:

1. to consider, pursuant to an interim order (the “Interim Order”) of the Court of Queen’s Bench of Alberta

dated June 5, 2017, and, if deemed advisable, to approve, voting as a single class, with or without variation,

a special resolution of the Preferred Shareholders (the “Preferred Shareholder Arrangement Resolution”),

the full text of which is set forth in Appendix B to the accompanying management information circular dated

June 5, 2017 (the “Information Circular”), to approve a plan of arrangement (the “Arrangement”) under

Section 193 of the Business Corporations Act (Alberta) (the “ABCA”) involving Veresen, holders of

common shares of Veresen, Preferred Shareholders and Pembina Pipeline Corporation (“Pembina”),

whereby, among other things, Pembina will, in addition to acquiring all of the common shares of Veresen,

exchange all of the issued and outstanding Preferred Shares for preferred shares of Pembina, all as more

particularly described in the Information Circular; and

2. to transact such further and other business as may properly be brought before the Preferred Shareholders’

Meeting or any adjournment(s) or postponement(s) thereof.

Specific details of the matters to be put before the Preferred Shareholders’ Meeting are set forth in the Information

Circular.

The board of directors of Veresen unanimously recommends that Preferred Shareholders vote in favour of the

Preferred Shareholder Arrangement Resolution. Completion of the Arrangement is not conditional upon

receiving the approval of Preferred Shareholders for the Preferred Shareholder Arrangement Resolution. If

the Preferred Shareholders do not approve the Preferred Shareholder Arrangement Resolution, the Preferred

Shares will remain outstanding following completion of the Arrangement and will not be exchanged for

preferred shares of Pembina.

The full text of the plan of arrangement (the “Plan of Arrangement”) implementing the Arrangement is attached as

Appendix D to the Information Circular. The Interim Order is attached as Appendix E to the Information Circular.

Each Preferred Share entitled to be voted in respect of the Preferred Shareholder Arrangement Resolution will entitle

the holder to one vote at the Preferred Shareholders’ Meeting. The Preferred Shareholder Arrangement Resolution

must be approved by at least 66⅔% of the votes cast by Preferred Shareholders present in person or by proxy at the

Preferred Shareholders’ Meeting, voting as a single class.

The record date (the “Record Date”) for determination of Preferred Shareholders entitled to receive notice of and to

vote at the Preferred Shareholders’ Meeting is the close of business on May 23, 2017. Only Preferred Shareholders

whose names have been entered in the register of holders of Preferred Shares on the close of business on the Record

Date will be entitled to receive notice of and to vote at the Preferred Shareholders’ Meeting, provided that, to the

extent that a Preferred Shareholder transfers the ownership of any Preferred Shares after the Record Date and the

transferee of those Preferred Shares establishes ownership of such Preferred Shares and demands, not later than ten

(10) days before the Preferred Shareholders’ Meeting, to be included in the list of Preferred Shareholders eligible to

vote at the Preferred Shareholders’ Meeting, such transferee will be entitled to vote those Preferred Shares at the

Preferred Shareholders’ Meeting.

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Registered Preferred Shareholders may attend the Preferred Shareholders’ Meeting in person or may be represented

by proxy. Preferred Shareholders who are unable to attend the Preferred Shareholders’ Meeting or any adjournment

or postponement thereof in person are requested to date, sign and return the accompanying form of proxy for use at

the Preferred Shareholders’ Meeting or any adjournment thereof. To be effective, the enclosed form of proxy must be

dated, signed and deposited with Veresen’s registrar and transfer agent, Computershare Trust Company of Canada:

(i) by mail using the enclosed return envelope or one addressed to Computershare Trust Company of Canada, 8th

Floor North Tower, 100 University Avenue, Toronto, Ontario, M5J 2Y1; (ii) by facsimile 1-866-249-7775; or (iii)

through the internet at www.investorvote.com, no later than: (a) 11:00 a.m. (Calgary time) on July 7, 2017 or, if the

Preferred Shareholders’ Meeting is adjourned, no later than forty-eight (48) hours (excluding Saturdays, Sundays and

statutory holidays in Alberta) before the beginning of any adjourned or postponed Preferred Shareholders’ Meeting.

To vote through the internet you will require your 15-digit control number found on your proxy form.

If a Preferred Shareholder receives more than one form of proxy because such holder owns Preferred Shares

registered in different names or addresses, each form of proxy should be completed and returned.

A proxyholder has discretion under the accompanying form of proxy in respect of amendments or variations to matters

identified in this Notice and with respect to other matters which may properly come before the Preferred Shareholders’

Meeting, or any adjournment thereof. As of the date hereof, management of Veresen knows of no amendments,

variations or other matters to come before the Preferred Shareholders’ Meeting other than the matters set forth in this

Notice. Preferred Shareholders who are planning to return the form of proxy are encouraged to review the Information

Circular carefully before submitting the proxy form.


in such form of proxy, to vote in favour of the Preferred Shareholder Arrangement Resolution.

Pursuant to the Interim Order, registered holders of Preferred Shares have been granted the right to dissent with respect

to the Preferred Shareholder Arrangement Resolution and, if the Arrangement becomes effective (and the Preferred

Shareholders participate therein), to be paid the fair value of their Preferred Shares in accordance with the provisions

of Section 191 of the ABCA, as modified by the Interim Order and the Plan of Arrangement. The right of a Preferred

Shareholder to dissent is more particularly described in the Information Circular and in the Interim Order and the text

of Section 191 of the ABCA, which are set forth in Appendices E and F, respectively, to the accompanying Information

Circular. To exercise such right to dissent, a dissenting Preferred Shareholder must send to Veresen, c/o Osler, Hoskin

& Harcourt LLP, Suite 2500, TransCanada Tower, 450 – 1st Street S.W., Calgary, Alberta, T2P 5H1, Attention: Colin

Feasby, a written objection to the Preferred Shareholder Arrangement Resolution, which written objection must be

received by 4:00 p.m. (Calgary time) on July 4, 2017 or the fifth business day immediately preceding the date of any

adjournment of the Preferred Shareholders’ Meeting. Notwithstanding the foregoing, registered Preferred

Shareholders who have validly exercised their right to dissent shall not be entitled to be paid the fair value of their

Preferred Shares in the event that the approval of the Preferred Shareholders is not obtained at the Preferred

Shareholders’ Meeting or if the Preferred Shares are not acquired by Pembina pursuant to the Plan of Arrangement.


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Failure to strictly comply with the requirements set forth in Section 191 of the ABCA, as modified by the

Interim Order and the Plan of Arrangement may result in the loss of any right of dissent. Persons who are

beneficial owners of Preferred Shares registered in the name of a broker, dealer, bank, trust company or other

nominee who wish to dissent should be aware that only the registered holders of such Preferred Shares are

entitled to dissent. Accordingly, a beneficial owner of Preferred Shares desiring to exercise the right of dissent

must make arrangements for the Preferred Shares beneficially owned by such holder to be registered in the

holder’s name prior to the time the written objection to the Preferred Shareholder Arrangement Resolution is

required to be received by Veresen or, alternatively, make arrangements for the registered holder of such

Preferred Shares to dissent on behalf of the beneficial holder. It is strongly recommended that any Preferred

Shareholders wishing to dissent seek independent legal advice.

Dated at Calgary, Alberta, this 5th day of June, 2017.


VERESEN INC.

Don Althoff


Veresen Inc.

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Court File No. 1701-07563

IN THE COURT OF QUEEN’S BENCH OF ALBERTA

JUDICIAL CENTRE OF CALGARY

IN THE MATTER OF SECTION 193 OF THE BUSINESS CORPORATIONS ACT,

R.S.A. 2000, c. B-9, AS AMENDED

AND IN THE MATTER OF A PROPOSED ARRANGEMENT INVOLVING VERESEN INC., THE

HOLDERS OF COMMON SHARES OF VERESEN INC., THE HOLDERS OF CUMULATIVE

REDEEMABLE PREFERRED SHARES, SERIES A, B, C, D, E AND F, OF VERESEN INC. AND


NOTICE OF ORIGINATING APPLICATION

NOTICE IS HEREBY GIVEN that an originating application (the “Application”) has been filed with the Court of

Queen’s Bench of Alberta, Judicial Centre of Calgary (the “Court”) on behalf of Veresen Inc. (“Veresen”) with

respect to a proposed arrangement (the “Arrangement”) under Section 193 of the Business Corporations Act, R.S.A.

2000, c. B-9, as amended (the “ABCA”), involving Veresen, the holders of common shares of Veresen (the “Common

Shareholders”), the holders of cumulative redeemable preferred shares, series A, B, C, D, E and F of Veresen (the

“Preferred Shareholders”) and Pembina Pipeline Corporation (“Pembina”), which Arrangement is described in

greater detail in the management information circular dated June 5, 2017 accompanying this Notice of Originating

Application. At the hearing of the Application, Veresen intends to seek:

1. a declaration that the terms and conditions of the Arrangement, and the procedures relating thereto, are fair

to the Common Shareholders, the Preferred Shareholders and other affected persons, both from a substantive

and procedural perspective;

2. an order approving the Arrangement pursuant to the provisions of Section 193 of the ABCA;

3. an order declaring that registered Common Shareholders shall have the right to dissent in respect of the

Arrangement pursuant to the provisions of Section 191 of the ABCA, as modified by the interim order (the

“Interim Order”) of the Court dated June 5, 2017;

4. an order declaring that registered Preferred Shareholders shall have the right to dissent in respect of the

Arrangement (provided the Preferred Shareholders participate therein) pursuant to the provisions of Section

191 of the ABCA, as modified by the Interim Order;

5. a declaration that the Arrangement will, upon the filing of Articles of Arrangement pursuant to the provisions

of Section 193 of the ABCA, be effective in accordance with its terms and shall be binding on and after the

Effective Time, as defined in the Arrangement; and

6. such other and further orders, declarations or directions as the Court may deem just,

(collectively, the “Final Order”).

AND NOTICE IS FURTHER GIVEN that the said Application is directed to be heard before a Justice of the Court,

at the Calgary Courts Centre, 601 - 5th Street, S.W., Calgary, Alberta, Canada, on July 12, 2017 at 10:00 a.m. (Calgary

time) or as soon thereafter as counsel may be heard. Any Common Shareholder, Preferred Shareholder (if

applicable) or other interested party desiring to support or oppose the Application may appear at the time of

the hearing in person or by counsel for that purpose provided such Common Shareholder, Preferred

Shareholder or other interested party files with the Court and serves upon Veresen on or before 5:00 p.m.

(Calgary time) on July 4, 2017, a notice of intention to appear (the “Notice of Intention to Appear”) setting out

such Common Shareholder’s, Preferred Shareholder’s or interested party’s address for service and indicating

whether such Common Shareholder, Preferred Shareholder or interested party intends to support or oppose

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the Application or make submissions, together with any evidence or materials which are to be presented to the

Court. Service on Veresen is to be effected by delivery to its solicitors at the address set forth below.

AND NOTICE IS FURTHER GIVEN that, at the hearing and subject to the foregoing, Common Shareholders,

Preferred Shareholders and any other interested persons will be entitled to make representations as to, and the Court

will be requested to consider, the fairness of the Arrangement. If you do not attend, either in person or by counsel, at

that time, the Court may approve or refuse to approve the Arrangement as presented, or may approve it subject to such

terms and conditions as the Court may deem fit, without any further notice.

AND NOTICE IS FURTHER GIVEN that the Court, by the Interim Order, has given directions as to the calling

and holding of special meetings of the Common Shareholders and Preferred Shareholders for the purposes of such

Common Shareholders and Preferred Shareholders voting upon applicable special resolutions to approve the

Arrangement and, in particular, has directed that registered Common Shareholders and registered Preferred

Shareholders have the right to dissent under the provisions of Section 191 of the ABCA, as modified by the terms of

the Interim Order in respect of the Arrangement.

AND NOTICE IS FURTHER GIVEN that the Final Order approving the Arrangement will, if granted, serve as the

basis for an exemption from the registration requirements of the United States Securities Act of 1933, as amended,

pursuant to Section 3(a)(10) thereof with respect to (i) the issuance of common shares in the capital of Pembina

issuable to Common Shareholders, and (ii) the issuance of preferred shares in the capital of Pembina issuable to

Preferred Shareholders, all pursuant to the Arrangement.

AND NOTICE IS FURTHER GIVEN that further notice in respect of these proceedings will only be given to those

persons who have filed a Notice of Intention to Appear.

AND NOTICE IS FURTHER GIVEN that a copy of the said Application and other documents in the proceedings

will be furnished to any Common Shareholder, Preferred Shareholder or other interested party requesting the same by

the under-mentioned solicitors for Veresen upon written request delivered to such solicitors as follows:

Solicitors for Veresen:

Osler, Hoskin & Harcourt LLP

Suite 2500, TransCanada Tower

450 – 1st Street S.W.

Calgary, Alberta T2P 5H1

Facsimile Number: (403) 260-7024

Attention: Colin Feasby

DATED at the City of Calgary, in the Province of Alberta, this 5th day of June, 2017.


VERESEN INC.

Don Althoff


Veresen Inc.

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If you have any questions or need assistance completing your form of proxy or voting instruction form, please contact Kingsdale Advisors at

1-888-518-6554 toll-free, or 416-867-2272 (collect), or email at [email protected]

GENERAL QUESTIONS AND ANSWERS

All capitalized terms used herein but not otherwise defined have the meanings set forth under “Glossary of Terms” in

this Information Circular

Q: Where and when will the Meetings be held?

A: The Common Shareholders’ Meeting will be held at Livingston Place (South Tower) in the Livingston Club

Conference Centre, Plus 15, 222 – 3rd Avenue S.W., Calgary, Alberta, Canada at 10:00 a.m. (Calgary time)

on July 11, 2017.

The Preferred Shareholders’ Meeting will be held at Livingston Place (South Tower) in the Livingston Club

Conference Centre, Plus 15, 222 – 3rd Avenue S.W., Calgary, Alberta, Canada at 11:00 a.m. (Calgary time)

on July 11, 2017.

Q: What are Shareholders being asked to vote on?

A: At the Common Shareholders’ Meeting, Common Shareholders will be asked to vote on the Common

Shareholder Arrangement Resolution approving the Arrangement under Section 193 of the ABCA involving

Veresen, Common Shareholders, Preferred Shareholders and Pembina, whereby, among other things,

Pembina will acquire all of the issued and outstanding Common Shares, all as more particularly described in

this Information Circular.

At the Preferred Shareholders’ Meeting, Preferred Shareholders will be asked to vote on the Preferred

Shareholder Arrangement Resolution approving the Arrangement under Section 193 of the ABCA involving

Veresen, Common Shareholders, Preferred Shareholders and Pembina, whereby, among other things,

Pembina will exchange all of the issued and outstanding Preferred Shares for preferred shares of Pembina,

all as more particularly described in the Information Circular.

Q: What is the consideration offered to Shareholders?

A: The Arrangement Agreement provides for, among other things, the acquisition of all of the issued and

outstanding Common Shares. Pursuant to the Arrangement, Common Shareholders may elect, subject to

certain pro-rationing provisions, to receive for each Common Share held, either:

(a) 0.4287 of a Pembina Common Share; or

(b) $18.65 in cash,

provided that the cash payments paid by Pembina in connection with such elections shall not exceed

$1,522,500,000 (Maximum Cash Consideration) nor shall the aggregate number of Pembina Common Shares

to be issued by Pembina in connection with such elections exceed 99,500,000 Pembina Common Shares

(Maximum Share Consideration). For clarity, Common Shareholders will have the right to elect to receive

Pembina Common Shares or cash in respect of their aggregate holdings of Common Shares, subject to the

above-mentioned limits.

If the Arrangement is approved by Preferred Shareholders then, pursuant to the Arrangement, Preferred

Shareholders will receive, for each Preferred Share held, one Pembina Exchange Share with the same terms

and conditions as the Preferred Share so exchanged.


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Q: What is the expected ownership structure of the combined company on completion of the

Arrangement?

A: As of June 5, 2017, there were issued and outstanding 313,652,781 Common Shares and 401,129,872

Pembina Common Shares. Upon completion of the Arrangement, assuming the issuance of the Maximum

Share Consideration, current holders of Pembina Common Shares are expected to own approximately 80%

of the combined company, and Common Shareholders are expected to own approximately 20% of the

combined company.

Q: Does the Board support the Arrangement?

A: Yes. The Board UNANIMOUSLY: (a) determined that the Arrangement and the entry into the Arrangement

Agreement are in the best interests of Veresen and the Arrangement is fair to the Common Shareholders and

the Preferred Shareholders; and (b) recommends that the Common Shareholders and the Preferred

Shareholders vote in favour of the Arrangement.

In determining that the Arrangement is in the best interests of Veresen and is fair to the Shareholders, and in

recommending to Shareholders that they approve the Arrangement, the Board considered and relied upon a

number of factors, including, among others, the following:

the consideration offered for the Common Shares, based on the Cash Consideration of $18.65, represents

a 21.8% premium to the 20-day weighted average price of the Common Shares on the TSX of $15.31 as

of April 28, 2017 (the last trading day prior to announcement of the Arrangement), and a 22.5% premium

to the closing price of the Common Shares on the TSX of $15.23 on April 28, 2017;

the Board’s view, based on both external and internal analysis, that the consideration to be paid pursuant

to the Arrangement offers a compelling value for assets currently in service and generating cash flows,

as well as for future opportunities on a risked and present valued basis, including placing the Sunrise,

Tower and Saturn Phase II processing facilities into service, the potential to sanction additional

midstream projects through Veresen Midstream, the potential extension of long-term transportation

agreements on Alliance Pipeline and subsequent ability to explore optimizing the capital structure of

Alliance Pipeline, the potential expansion of Alliance Pipeline through additional compression, the

potential for increased revenue and potential to advance Jordan Cove LNG and Pacific Connector Gas

Pipeline on a regulatory and commercial basis;

Common Shareholders will have the opportunity to continue to participate in the growth opportunities

associated with Veresen’s business as well as of the combined business. As described under the heading

“The Arrangement – Attributes of the Combined Company” the combined company is expected to be

better positioned than a stand-alone Veresen to deliver on Veresen’s existing strategy;

the Arrangement offers an opportunity for Common Shareholders to participate in Pembina’s low-risk,

highly-contracted asset base which is well integrated across the hydrocarbon value chain;

the Board’s view, after negotiations with Pembina, that the consideration offered by Pembina represented

the highest per share consideration reasonably attainable within a reasonable forecast period; and

Pembina’s reputation as a leading transportation and midstream service provider in North America with

a focus on enhancing shareholder value in a safe, environmentally responsible manner positioned it as

an ideal partner for a business combination with Veresen.

Q: What will be the attributes of the combined company?

A: Management of Veresen expects the combined company, after completion of the Arrangement, will be one

of Canada’s premier energy infrastructure companies, supporting some of North America’s most prolific


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resource plays and securing increased market access for its customers. The combined company will feature

a largely integrated asset base that is supported by long-life, economic hydrocarbon reserves and comprises

crude oil, liquids and natural gas pipelines, terminal, storage and midstream operations, gas gathering and

processing facilities, as well as fractionation facilities. Veresen’s management believes the combined

company will be greater than the sum of its parts and better positioned than a stand-alone Veresen entity to

deliver on its growth strategy.

The combined company will be better positioned to successfully deliver an aggregated growth program of

approximately $6.0 billion, optimize the integrated asset base, and compete for future investment

opportunities in order to drive meaningful growth over the long term.

the combined company will have approximately $6.0 billion in growth projects under construction, and

will enjoy the benefit of Pembina’s proven track record of safe, on-time and on-budget project delivery,

and decades of operating experience, which will provide a strong foundation to support attractive long-

term adjusted cash flow per share growth;

in addition to the projects currently under construction by each of Pembina and Veresen, the combined

company is expected to have a growth portfolio of unsecured development opportunities of

approximately $20 billion to potentially sanction in the future, including Jordan Cove LNG and Pacific

Connector Gas Pipeline in Oregon, a Propane Dehydrogenation and Propylene Production facility in

Alberta, as well as various midstream opportunities in western Canada;

the majority of the combined asset base is already physically connected or presents the opportunity to

be connected in the future, which will enable operational integration, creating the opportunity to realize

significant operational synergies, as well as overall enhancements to customer service within existing

commercial arrangements;

increasing integration across the value chain will allow the combined company to offer a superior range

of services and flexibility in how these services are provided to customers, which is expected to improve

the combined company’s competitiveness in securing new business opportunities, and offer the potential

to develop other ancillary business lines in the future in response to customer needs;

the combined company will have an established footprint in some of the most prolific resource plays in

North America, including the BC Montney, the Alberta Montney and the Duvernay, strategically

positioning the combined company in the principal areas for future midstream infrastructure investment

in western Canada; and

potential for significant financial synergies, including reduction in administrative overhead, operating

costs, optimization of capital structure and integrated tax planning, estimated by Pembina at $75 million

to $100 million on a run-rate basis.

The combined company will pay a meaningful cash dividend that is expected to grow, while offering a

lower payout ratio and cash flows supported primarily with fee-for-service contracts and high-quality

counterparties.

upon completion of the Arrangement, and after taking into the account the proposed increase in the

dividend on Pembina Common Shares announced by Pembina, the combined company will pay an

attractive cash dividend of approximately $2.16 per Pembina Common Share on an annualized basis;

the combined company will have a significantly lower payout ratio, which, when combined with line-

of-sight to significant growth in cash flows, will advantageously position the combined company to

continue Pembina’s long-term track record of dividend growth and reinvestment in the business;


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the dividend is expected to be underpinned by over 85% of cash flows from low-risk, stable take-or-pay

and fee-for-service contract structures with a diverse set of counterparties, over 80% of which hold

investment grade ratings, split ratings or provide security in the form of letters of credit;

significant horizontal diversification across the hydrocarbon value chains in terms of crude oil, natural

gas liquids and natural gas focused segments each constituting approximately one-third of pro forma

cash flows, as well as vertical diversification within value chains, including long-haul pipelines,

terminals, storage, midstream operations, gathering and processing facilities as well as fractionation

facilities; and

the combined company will have significant geographic diversification across the western Canada – U.

S. Midwest – Pacific Northwest triangle.

The combined company is expected to have a stronger balance sheet and superior access to the capital

markets, resulting in a greater ability to grow on a per share basis and to execute a broad suite of potential

projects.

with a pro forma enterprise value of approximately $35 billion and as one of the top 25 public companies

in Canada, the combined company will have greater access to both debt and equity capital markets,

providing a lower aggregate cost of capital to maximize investment returns to enable higher growth on

a per share basis;

Pembina and its management team have built a very strong track record in the capital markets, further

enhancing access to capital markets, the ability to finance large-scale, long-term projects, and to pursue

a broader range of potential business development opportunities to drive future growth; and

the combined company is expected to maintain a strong BBB investment grade credit rating, with a focus

on continued prudent financial management. The stronger and larger balance sheet of the combined

company will provide a better financial position to pursue large-scale projects such as Jordan Cove LNG

and Pacific Connector Gas Pipeline as well as a Propane Dehydrogenation and Propylene Production

facility.

Q: What approvals are required for the Arrangement?

A: The Arrangement requires a number of approvals to become effective, including the approval of the Common

Shareholder Arrangement Resolution by at least 66⅔% of the votes cast by Common Shareholders at the


In addition, completion of the Arrangement is subject to a number of conditions including, among other

things, the receipt of all Required Regulatory Approvals and the granting of the Final Order.

Completion of the Arrangement is not contingent on approval of the Preferred Shareholder Arrangement

Resolution at the Preferred Shareholders’ Meeting. Should such approval not be obtained, the Preferred

Shares will be excluded from the Arrangement and will remain outstanding following completion of the

Arrangement. The Preferred Shareholder Arrangement Resolution requires approval by at least 66⅔% of the

votes cast by the Preferred Shareholders at the Preferred Shareholders’ Meeting, voting as a single class.

Q: When will the Arrangement become effective?

A: Subject to the satisfaction of all conditions precedent, Veresen and Pembina expect the Effective Date to

occur in the second half of 2017.


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Q: Who is entitled to vote at the Meetings?

A: Common Shareholders of record at the close of business on May 23, 2017 are entitled to vote at the Common

Shareholders’ Meeting and Preferred Shareholders of record at the close of business on May 23, 2017 are

entitled to vote at the Preferred Shareholders’ Meeting.

Q: What is the voting deadline?

A: Shareholders are encouraged to submit their proxies as soon as possible to ensure that their votes are counted.

Proxies must be received by Computershare Trust Company of Canada (“Computershare”), the transfer

agent of Veresen, no later than: (a) 10:00 a.m. (Calgary time) on July 7, 2017 (in the case of proxies for

Common Shareholders), (b) 11:00 a.m. (Calgary time) on July 7, 2017 (in the case of proxies for Preferred

Shareholders), or (c) if the Common Shareholders’ Meeting or Preferred Shareholders’ Meeting is adjourned,

forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in Alberta) before the beginning

of any adjournment of such meeting. The time limit for the deposit of proxies may be waived or extended by

the Chairman of the applicable Meeting at his discretion without notice.

A non-registered Shareholder exercising voting rights through a nominee should consult the voting

instruction form from such Shareholder’s nominee as the nominee may have different and earlier deadlines.

Q: How can a registered Shareholder vote?

A: A registered Shareholder is a person whose Common Shares or Preferred Shares are registered in the

Shareholder’s own name and may vote in any of the ways set out below.

On the Internet: A Shareholder can go to the website at www.investorvote.com and follow the instructions

on the screen. The Shareholder’s voting instructions are then conveyed electronically over the Internet. The

Shareholder will need the 15-digit control number found on his or her proxy.

By Telephone: A Shareholder can call the number located on such Shareholder’s proxy. The Shareholder

will need the 15-digit control number found on his or her proxy.

By Mail: A Shareholder can complete the proxy as directed and return it in the business reply envelope

provided to Computershare Trust Company of Canada, Proxy Department, 135 West Beaver Creek, P.O. Box

300, Richmond Hill, Ontario, L4B 4R5.

By Hand Delivery: A Shareholder can complete the proxy as directed and return it in the business reply

envelope provided by hand delivery to Computershare Trust Company of Canada, Proxy Department, 100

University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1.

In Person: A Common Shareholder who plans to vote in person does not need to do anything except attend

the Common Shareholders’ Meeting. A Preferred Shareholder who plans to vote in person does not need to

do anything except attend the Preferred Shareholders’ Meeting. Shareholders should register with the

representatives of Computershare upon arrival at the applicable Meeting.

By Proxy: A registered Shareholder can vote by proxy by using the enclosed instrument of proxy, or any

other appropriate proxy form, to appoint the Shareholder’s proxyholder and to indicate how such Shareholder

wants his or her Common Shares or Preferred Shares voted. The persons named in the enclosed instrument

of proxy are directors or officers of Veresen and intend to vote in favour of the Common Shareholder

Arrangement Resolution and the Preferred Shareholder Arrangement Resolution, as applicable.



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Q: How can a non-registered Shareholder vote?

A: A non-registered Shareholder is a person whose Common Shares or Preferred Shares are held in an account

in the name of a nominee, including a bank, trust company or securities broker and may vote in any of the

ways set out below.

On the Internet: A Shareholder can go to the website at www.proxyvote.com and follow the instructions on

the screen. The Shareholder’s voting instructions are then conveyed electronically over the Internet. The

Shareholder will need the 16-digit control number found on his or her voting instruction form.

By Telephone: A Shareholder can call the number located on such Shareholder’s voting instruction form.

The Shareholder will need the 16-digit control number found on his or her voting instruction form.

By Mail: A Shareholder can complete the voting instruction form as directed and return it in the business

reply envelope provided to the Shareholder by the nominee’s cut-off date and time.

By Broadridge QuickVote: Veresen may utilize the Broadridge QuickVote service to assist non-registered

Shareholders with voting their Common Shares or Preferred Shares over the telephone. Alternatively,

Kingsdale Advisors may contact such non-registered Shareholders to assist them with conveniently voting

their Common Shares or Preferred Shares directly over the phone.

By Proxy: A non-registered Shareholder should have received a notice from such Shareholder’s nominee

providing instructions on how to access an electronic copy of this Information Circular, together with a voting

instruction form. A Shareholder should contact his or her nominee if such Shareholder did not receive a

request for voting instructions. Each nominee has its own signing and return instructions, which should be

followed carefully to ensure that all votes are tabulated. A Shareholder’s nominee is required to seek

instructions as to the manner in which to vote such Shareholder’s Common Shares or Preferred Shares. If a

Shareholder does not complete a voting instruction form, such Shareholder’s nominee cannot vote the

Shareholder’s Common Shares or Preferred Shares at the applicable Meeting.

Q: How can a non-registered Shareholder vote in person at the Meetings?

A: If a non-registered Common Shareholder wishes to vote in person at the Common Shareholders’ Meeting or

a non-registered Preferred Shareholder wishes to vote in person at the Preferred Shareholders’ Meeting, such

Shareholder should fill in his or her name in the space provided for designating a proxy on the voting

instruction form sent by such Shareholder’s nominee. In so doing, the Shareholder is instructing the nominee

to appoint such Shareholder as proxyholder. The Shareholder should then follow the execution and return

instructions provided by his or her nominee. It is not necessary to otherwise complete the form, as the

Shareholder will be voting in person at the applicable Meeting. For further details, a Shareholder should

contact his or her nominee directly.

Q: What if my Veresen Shares are registered in more than one name or in the name of a company?

A: If your Common Shares or Preferred Shares are registered in more than one name, all registered persons must

sign the instrument of proxy. If your Common Shares or Preferred Shares are registered in a company’s name

or any name other than your own, you may be required to provide documents proving your authorization to

sign the instrument of proxy for that company or name. For any questions about the proper supporting

documents, contact Computershare before submitting your instrument of proxy.

Q: Who is soliciting my proxy?

A: The management of Veresen is soliciting your proxy and has engaged Kingsdale to act as strategic

shareholder advisor and proxy solicitation agent with respect to the matters to be considered at the Meetings.

Solicitation of proxies will be primarily by mail, but proxies may also be solicited personally, by


http://www.proxyvote.com/

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advertisement, by telephone, by directors, officers or employees of Veresen and/or Kingsdale or by any other

means management may deem necessary.

Management will receive no additional compensation for these services, but will be reimbursed by Veresen

for any expenses incurred by them in connection with these services. Arrangements may also be made with

brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation material

to the non-registered owners of Common Shares or Preferred Shares registered in the names of these persons,

and Veresen may reimburse them for their reasonable transaction and clerical expenses. Costs of solicitation

of proxies will be borne by Veresen. Veresen will pay the cost of Kingsdale’s services and any related

expenses, which is estimated to be approximately $400,000 plus disbursements.

Q: How do I complete the voting instructions on my instrument of proxy?

A: On the instrument of proxy, a Shareholder has two choices: (1) the Shareholder can indicate how such

shareholder wants his or her proxyholder to vote such holder’s Common Shares or Preferred Shares; or (2)

the Shareholder can let his or her proxyholder decide how to vote the holder’s Common Shares or Preferred

Shares.

If a Shareholder has specified on the instrument of proxy how such holder wants his or her Common Shares

or Preferred Shares to be voted on a particular matter, then such holder’s proxyholder must vote the holder’s

Common Shares or Preferred Shares accordingly in the case of either a vote by show of hands or a vote by

ballot. If a Shareholder has chosen to let such holder’s proxyholder decide how to vote on behalf of the

Shareholder, such holder’s proxyholder can then vote in accordance with his or her judgment.

Unless contrary instructions are provided, Common Shares or Preferred Shares represented by proxies

received by Veresen will be voted FOR each matter to be presented at the Meetings.

Q: Can I appoint someone other than the person(s) designated by management of Veresen to vote my

Common Shares or Preferred Shares?

A: Yes. A Shareholder can appoint a person (who need not be a Shareholder) to attend and act for him, her or it

and on his, her or its behalf at the Meetings other than the persons designated in the instrument of proxy or

voting instruction form. The Shareholder may exercise such right by inserting the name in full of the desired

person in the blank space provided in the instrument of proxy or the voting instruction form and striking out

the names now designated and date and submit the form. If you appoint a non-management proxyholder

please make sure they are aware and ensure they will attend the applicable Meeting in order for your vote to

count.

Q: Can I change my vote after I have voted by proxy?

A: Yes. If a registered Shareholder has submitted a proxy, such holder may revoke it (a) by instrument in writing

executed by the Shareholder or such Shareholder’s attorney authorized in writing or if the Shareholder is a

corporation, under its corporate seal or by an officer or attorney thereof, duly authorized, indicating the

capacity under which such officer or attorney is signing and deposit with Computershare, the transfer agent

of Veresen, at the office designated in the Notice of Common Shareholders’ Meeting or Notice of Preferred

Shareholders’ Meeting not later than 5:00 p.m. (Calgary time), on the Business Day preceding the day of the

applicable Meeting, (or any adjournment or postponement thereof) or with the Chair on the day of the

applicable Meeting (or any adjournment or postponement thereof); (b) by a duly executed and deposited

proxy as provided herein bearing a later date or time than the date or time of the proxy being revoked; or (c)

as permitted by law.

Only registered Shareholders have the right to revoke a proxy. If a non-registered Shareholder wishes to

change his or her vote, the Shareholder should contact his or her nominee to obtain information on the

procedure to follow and if necessary revoke their proxy in accordance with the revocation procedures.


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Q: How many Veresen Shares are outstanding?

A: As at June 5, 2017, there were 313,652,781 Common Shares issued and outstanding. Each Common Share

entitles the holder thereof to one vote per share at the Common Shareholders’ Meeting.

As at June 5, 2017, there were 8,000,000 Veresen Series A Shares, 6,000,000 Veresen Series C Shares,

8,000,000 Veresen Series E Shares and no Veresen Series B Shares, Veresen Series D Shares or Veresen

Series F Shares issued and outstanding. Each Preferred Share entitles the holder thereof to one vote per share

at the Preferred Shareholders’ Meeting.

To the knowledge of the directors and officers of Veresen, as of the date hereof, no person or company

beneficially owns, or exercises control or direction over, directly or indirectly, more than 10% of the voting

rights attached to all of the outstanding Common Shares or Preferred Shares.

Q: Who will count the votes?

A: Proxies and votes of Shareholders attending the Meetings will be counted by Computershare, who will act as

the scrutineer of the Meetings.

Q: What are the quorums for the Meetings?

A: The quorum required at the Common Shareholders’ Meeting will be two Common Shareholders present in

person, or represented by proxy, at the opening of the Common Shareholders’ Meeting, and holding or

representing at least 25% of the Common Shares entitled to be voted at the Common Shareholders’ Meeting.

The quorum required at the Preferred Shareholders’ Meeting will be two Preferred Shareholders present in

person, or represented by proxy, at the opening of the Preferred Shareholders’ Meeting, and holding or

representing at least 25% of the Preferred Shares entitled to be voted at the Preferred Shareholders’ Meeting.

Q: What if I have other questions?

A: Shareholders who have questions regarding the Meetings, the Arrangement or who have additional questions

about the procedures for voting their Common Shares or Preferred Shares should contact their broker or

Kingsdale at the telephone numbers or e-mail below:

Toll-Free Number: 1-888-518-6554

Collect Calls: 416-867-2272

By E-mail: [email protected]


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GLOSSARY OF TERMS

The following is a glossary of certain terms used in this Information Circular including the Summary and Appendices

J and K. Terms and abbreviations used in the Appendices to this Information Circular other than Appendices J and K

are defined separately and the terms and abbreviations defined below are not used therein, except where otherwise

indicated.

“1933 Act” means the United States Securities Act of 1933, including the rules and regulations promulgated

thereunder, as amended from time to time;

“1934 Act” means the United States Securities and Exchange Act of 1934, including the rules and regulations

promulgated thereunder, as amended from time to time;

“ABCA” means the Business Corporations Act (Alberta), R.S.A. 2000, c. B-9, including the regulations promulgated


“Acquisition Proposal” means any inquiry or the making of any proposal to Veresen or Common Shareholders from

any Person or group of Persons “acting jointly or in concert” (within the meaning of NI 62-104) which constitutes, or

may reasonably be expected to lead to (in either case whether in one transaction or a series of transactions): (a) an

acquisition or purchase from Veresen or Common Shareholders of 20% or more of the voting securities of Veresen or

its Subsidiaries; (b) any acquisition of a substantial amount of assets (or any lease, long-term supply agreement or

other arrangement having the same economic effect as a purchase or sale of a substantial amount of assets) of Veresen

and its Subsidiaries taken as a whole; (c) an amalgamation, arrangement, merger, business combination, or

consolidation involving Veresen or its Subsidiaries; (d) any take-over bid, issuer bid, exchange offer, recapitalization,

liquidation, dissolution, reorganization or similar transaction involving Veresen or its Subsidiaries; or (e) any other

transaction, the consummation of which would or could reasonably be expected to impede, interfere with, prevent or

delay the transactions contemplated by the Arrangement Agreement or the Arrangement or which would or could

reasonably be expected to materially reduce the benefits to Pembina under the Arrangement Agreement or the

Arrangement, provided, however, that the transactions relating to the Veresen Power Business Sale, in all material

respects on the terms and conditions as disclosed to Pembina in writing by Veresen prior to the date of the Arrangement

Agreement, shall not constitute an “Acquisition Proposal”;

“Affiliate” means any Person that is affiliated with another Person in accordance with meaning of the Securities Act

(Alberta);

“Alliance Pipeline” means a natural gas transmission pipeline that runs from northwestern Alberta and northeastern

British Columbia to Channahon, Illinois;

“Amalco” means, in the event the Preferred Shareholder Arrangement Resolution receives the requisite approval of

Preferred Shareholders at the Preferred Shareholders’ Meeting, or the Preferred Shareholders have approved a special

resolution with similar effect to the Preferred Shareholder Arrangement Resolution prior to the Effective Time such

that Pembina is the sole holder of the Preferred Shares prior to the amalgamation contemplated in the Plan of

Arrangement and the Plan of Arrangement is not otherwise amended pursuant to its terms to exclude the Preferred

Shares, the corporation resulting from the amalgamation of Pembina and Veresen pursuant to the Plan of Arrangement;

“Arrangement” means the arrangement involving Veresen, the Common Shareholders, the Preferred Shareholders

and Pembina pursuant to Section 193 of the ABCA set forth in the Plan of Arrangement, as supplemented, modified

or amended in accordance with the Plan of Arrangement or made at the direction of the Court in the Final Order;

“Arrangement Agreement” means the arrangement agreement between Veresen and Pembina dated May 1, 2017,

providing for, among other things, the Plan of Arrangement and the Arrangement and all amendments thereto, a copy

of which is attached as Appendix C to this Information Circular;


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“Articles of Arrangement” means the articles of arrangement in respect of the Arrangement required under

Subsection 193(10) of the ABCA to be filed with the Registrar after the Final Order has been granted, giving effect to

the Arrangement;

“Beneficial Holders” means Shareholders who do not hold their Common Shares or Preferred Shares, as applicable,

in their own name;

“Board” or “Board of Directors” means the board of directors of Veresen;

“Broadridge” means Broadridge Financial Solutions, Inc.;

“Business Day” means, with respect to any action to be taken, any day, other than a Saturday, Sunday or a statutory

holiday in the place where such action is to be taken;

“Canada Transportation Act” means the Canada Transportation Act, R.S.C. 1996, C. 10, as amended;

“Cash Consideration” means $18.65 per Common Share;

“CDS” means CDS Clearing and Depository Services Inc.;

“Certificate” means the certificate or proof of filing to be issued by the Registrar pursuant to subsection 193(11) or

193(12) of the ABCA in respect of the Articles of Arrangement giving effect to the Arrangement;

“Code” has the meaning given to it under the heading “Certain United States Federal Income Tax Considerations”;

“Commissioner” means the Commissioner of Competition appointed under subsection 7(1) of the Competition Act,

or his designee;

“Common Shareholder Arrangement Resolution” means a special resolution of the Common Shareholders in

respect of the Arrangement to be considered at the Common Shareholders’ Meeting, the full text of which is set forth

in Appendix A to this Information Circular;

“Common Shareholder Fairness Opinion” means the written opinion of Scotia Capital dated April 30, 2017, a copy

of which is attached as Appendix G to this Information Circular.

“Common Shareholder Letter of Transmittal and Election Form” means the shareholder letter of transmittal and

election form forwarded to Common Shareholders pursuant to which Common Shareholders are required to deliver

certificates or DRS Advices representing Common Shares to the Depositary and may elect to receive, on completion

of the Arrangement, in exchange for each Common Share, the Share Consideration or the Cash Consideration, subject

in each case to pro-rationing;

“Common Shareholders” means the holders from time to time of Common Shares;

“Common Shareholders’ Meeting” means the special meeting of Common Shareholders (including any

adjournment(s) or postponement(s) thereof permitted under the Arrangement Agreement) that is to be convened to

consider and, if deemed advisable, to approve the Common Shareholder Arrangement Resolution;

“Common Shares” means common shares in the capital of Veresen;

“Competition Act” means the Competition Act, R.S.C. 1985, c. C-34, including the rules and regulations promulgated


“Competition Act Approval” means, in respect of the Arrangement, the occurrence of one of the following: (a) the

receipt of an advance ruling certificate under subsection 102(1) of the Competition Act in respect of the Arrangement;


- 11 -



or (b) (i) the applicable waiting period under subsection 123(1) of the Competition Act, and any extension thereof,

shall have expired or shall have been terminated under subsection 123(2) of the Competition Act, or the obligation to

submit a notification under Part IX of the Competition Act shall have been waived by the Commissioner pursuant to

paragraph 113(c) of the Competition Act and (i) unless such requirement is waived in writing by Pembina in its sole

discretion, the Commissioner shall have advised the Parties in writing that the Commissioner does not, at that time,

intend to make an application under Section 92 of the Competition Act and such advice shall remain in full force and

effect;

“Confidentiality Agreement” means the confidentiality, exclusivity and standstill agreement dated April 14, 2017

between Pembina and Veresen;

“Convention” has the meaning given to it under the heading “Certain Canadian Federal Income Tax Considerations”;

“Court” means the Court of Queen’s Bench of Alberta;

“CTA Approval” means the occurrence of one of the following: (a) Pembina shall have received a notice from the

Minister of Transport pursuant to subsection 53.1(4) of the Canada Transportation Act that the Minister of Transport

is of the opinion that the Arrangement contemplated by the Arrangement Agreement does not raise issues with respect

to the public interest as it relates to national transportation, in accordance with subsection 53.1(4) of the Canada

Transportation Act; or (b) the Arrangement contemplated by the Arrangement Agreement shall have been approved

by the Governor in Council in accordance with subsections 53.2(7) of the Canada Transportation Act, and in either

case the completion of the Arrangement contemplated by the Arrangement Agreement shall not be prohibited under

subsection 53.2(1) of the Canada Transportation Act;

“CRA” has the meaning given to it under the heading “Certain Canadian Federal Income Tax Considerations”;

“Depositary” means Computershare Investor Services Inc., or such other Person that may be appointed by the Parties

in connection with the Arrangement for the purpose of receiving deposits of certificates or DRS Advices formerly

representing Common Shares and Preferred Shares;

“Dissent Rights” means, collectively, the rights of registered Common Shareholders and registered Preferred

Shareholders to dissent in respect of the Common Shareholder Arrangement Resolution and the Preferred Shareholder

Arrangement Resolution, respectively, and to be paid the fair value of the Common Shares or Preferred Shares in

respect of which the holder dissents, all in accordance with the provisions of Section 191 of the ABCA, as modified

by the Plan of Arrangement and the Interim Order;

“Dissenting Shareholders” means registered Common Shareholders and, in the event the Preferred Shareholder

Arrangement Resolution receives the requisite approval of Preferred Shareholders at the Preferred Shareholders’

Meeting, registered Preferred Shareholders who validly exercise the Dissent Rights with respect to the Common

Shareholder Arrangement Resolution or the Preferred Shareholder Arrangement Resolution, as applicable, provided

to them under the Interim Order, which exercise of Dissent Rights has not been withdrawn, or is not deemed to have

been withdrawn, before the Effective Time;

“DRS Advice” means a Direct Registration System (DRS) advice;

“Effective Date” means the effective date of the Arrangement, being the date shown on the Certificate;

“Effective Time” means 12:01 a.m. (Calgary time) on the Effective Date or such other time on the Effective Date as

may be agreed to in writing by Pembina and Veresen;

“Election Deadline” means 5:00 p.m. (Calgary time) on the date announced by Veresen by means of a news release

disseminated on a national newswire in Canada and the U.S. as the deadline for Common Shareholders to make an

election to receive Pembina Common Shares or cash pursuant to the Arrangement, which announcement shall be made

at least ten (10) Business Days in advance of the Election Deadline;


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“Encumbrance” includes any mortgage, pledge, assignment, charge, lien, security interest, adverse interest in

property, other third party interest or encumbrance of any kind whether contingent or absolute, and any agreement,

option, right or privilege (whether by Law, contract or otherwise) capable of becoming any of the foregoing;

“Environmental Laws” means, with respect to any Person or its business, activities, property, assets or undertaking,

all Laws, including the common law, relating to environmental or health and safety matters in the jurisdictions

applicable to such Person or its business, activities, property, assets or undertaking, including, without limitation,

legislation governing the reduction of greenhouse gas emissions and the use, transportation, storage and release of any

waste or other substance that is prohibited, listed, defined, designated or classified as dangerous, hazardous,

radioactive, explosive or toxic or a pollutant or a contaminant under or pursuant to any applicable environmental

Laws, and specifically including hydraulic fracturing fluids, chemicals and proppants, as well as petroleum and all

derivatives thereof or synthetic substitutes therefor;

“Fairness Opinions” means collectively, the Common Shareholder Fairness Opinion and the Preferred Shareholder

Fairness Opinion;

“Final Order” means the order of the Court approving the Arrangement pursuant to Subsection 193(9)(a) of the

ABCA, as such order may be amended at any time prior to the Effective Date or, if appealed, then unless such appeal

is withdrawn or denied, as affirmed;

“Governmental Entity” means any: (a) multinational, federal, provincial, territory, state, regional, municipal, local

or other government or any governmental or public department, court, tribunal, arbitral body, commission, board,

bureau or agency; (b) subdivision, agent, commission, board or authority of any of the foregoing; (c) quasi-

governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of

any of the foregoing; or (d) the TSX or NYSE, as applicable;

“Holder” has the meaning given to it under the heading “Certain Canadian Federal Income Tax Considerations”;

“HSR Act” means the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

“HSR Approval” means the applicable waiting period (and any extension thereof) in respect of the Arrangement

under the HSR Act shall have expired or been earlier terminated;

“IFRS” means International Financial Reporting Standards as incorporated in the Chartered Professional Accountants

of Canada Handbook, at the relevant time applied on a consistent basis;

“Information Circular” means this management information circular dated June 5, 2017, together with all

Appendices hereto, distributed to the Common Shareholders and Preferred Shareholders in connection with the

Common Shareholders’ Meeting or the Preferred Shareholders’ Meeting, as the case may be;

“Interim Order” means the interim order of the Court dated June 5, 2017 under Subsection 193(4) of the ABCA,

containing declarations and directions with respect to the Arrangement and the holding of the Meetings, as such order

may be affirmed, amended or modified by any court of competent jurisdiction, a copy of which order is attached as

Appendix E to this Information Circular;

“IRS” has the meaning given to it under the heading “Certain United States Federal Income Tax Considerations”;

“Kingsdale” refers to Kingsdale Advisors, Veresen’s strategic shareholder advisor and proxy solicitation agent;

“Laws” means all laws, by-laws, statutes, rules, regulations, principles of law, orders, ordinances, protocols, codes,

guidelines, policies, notices, directions and judgments or other requirements and the terms and conditions of any grant

of approval, permission, authority or license of any Governmental Entity (including the TSX and the NYSE) or self-

regulatory authority and the term “applicable” with respect to such Laws and in a context that refers to one or more

Persons, means such Laws as are applicable to such Persons or its business, undertaking, property or securities and


- 13 -



emanate from a Person having jurisdiction over the Person or Persons or its or their business, undertaking, property

or securities; and “Laws” includes Environmental Laws;

“Letters of Transmittal” means collectively, the Common Shareholder Letter of Transmittal and Election Form and

the Preferred Shareholder Letter of Transmittal and “Letter of Transmittal” means either one of them;

“Listed Preferred Shares” has the meaning given to it under the heading “Procedure for the Arrangement to Become

Effective – Regulatory Approvals – Stock Exchange Listings”;

“LNG” means liquefied natural gas;

“Material Adverse Change” or “Material Adverse Effect” means, with respect to any Person, any fact or state of

facts, circumstance, change, effect, occurrence or event which:

(a) either individually is or in the aggregate are, or individually or in the aggregate would reasonably be expected

to be, material and adverse to the business, operations, results of operations, properties, assets, liabilities,

obligations (whether absolute, accrued, conditional or otherwise) or condition (financial or otherwise) of such

Person and its Subsidiaries, taken as a whole, except to the extent of any fact or state of facts, circumstance,

change, effect, occurrence or event resulting from or arising in connection with: (i) any matter or prospective

matter which has, at or prior to the date of the Arrangement Agreement, been publicly disclosed by such

Person or has been disclosed in writing to the other Party as at or prior to the date of the Arrangement

Agreement or the failure of such Party to meet any internal or published projections, forecasts, estimates or

predictions in respect of revenues, earnings or other financial or operating metrics before, on or after the date

of the Arrangement Agreement; (ii) any change in IFRS or U.S. GAAP or changes in regulatory accounting

requirements applicable to the oil, natural gas (including liquefied natural gas) and natural gas liquids

transportation, storage, processing, terminalling and fractionation or other midstream business (the “Relevant

Business”) as a whole; (iii) conditions affecting the Relevant Business as a whole, including changes in Laws

(including tax Laws); (iv) any change in global, national or regional political conditions (including the

outbreak of war or acts of terrorism) or in general economic, business, regulatory, or market conditions or in

national or global financial or capital markets or commodity markets; (v) any natural disaster; (vi) any

changes in the trading price or trading volumes of the Pembina Common Shares or Common Shares, as

applicable, or any credit rating downgrade, negative outlook, watch or similar event relating to Pembina or

Veresen, as applicable (provided, however, that the causes underlying such changes may be considered to

determine whether such causes constitute a Material Adverse Change or Material Adverse Effect); (vii) any

actions taken (or omitted to be taken) at the written request or with the prior written consent of the other Party

hereto; (viii) the announcement of the Arrangement Agreement or any action taken by the Person or any of

its Subsidiaries that is required pursuant to the Arrangement Agreement (including any steps taken pursuant

to Section 5.3 of the Arrangement Agreement to obtain any required regulatory approvals but excluding any

obligation to act in the ordinary course of business); or (ix) the failure by Veresen to complete the Veresen

Power Business Sale; provided, however, that with respect to paragraphs (ii), (iii), (iv) and (v) such matter

does not have a materially disproportionate effect on the Person and its Subsidiaries, taken as a whole, relative

to comparable entities operating in the Relevant Business, in which case, the relevant exclusion from this

definition of “Material Adverse Change” or “Material Adverse Effect” referred to in paragraphs (ii), (iii), (iv)

and (v) above would not apply, and references in certain sections of the Arrangement Agreement to dollar

amounts are not intended to be, and shall not be deemed to be, illustrative or interpretative for purposes of

determining whether a “Material Adverse Change” or a “Material Adverse Effect” has occurred; or

(b) either individually or in the aggregate prevents or materially delays, or individually or in the aggregate would

reasonably be expected to prevent or materially delay, the Person from performing its material obligations

under the Arrangement Agreement in any material respect;

“Maximum Cash Consideration” means $1,522,500,000;

“Maximum Share Consideration” means 99,500,000 Pembina Common Shares;


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“Meetings” means, collectively, the Common Shareholders’ Meeting and the Preferred Shareholders’ Meeting and

“Meeting” means either one of them;

“MI 61-101” means Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions;

“Minister” means the Minister of Transport under the Canada Transportation Act;

“NGL” means natural gas liquids;

“NI 62-104” means National Instrument 62-104 – Take-Over Bids and Issuer Bids;

“Non-Resident Holder” has the meaning given to it under the heading “Certain Canadian Federal Income Tax

Considerations”;

“NYSE” means the New York Stock Exchange;

“Outside Date” means October 31, 2017, subject to the right of Pembina to postpone the Outside Date for up to an

additional two (2) months if a Required Regulatory Approval has not been obtained, by giving written notice to

Veresen to such effect no later than 5:00 p.m. (Calgary Time) on the date that is not less than five (5) days prior to the

original Outside Date (and any subsequent Outside Date), or such later date as may be agreed to in writing by the

Parties, provided that, notwithstanding the foregoing, Pembina shall not be permitted to postpone the Outside Date if

the failure to obtain a Required Regulatory Approval is primarily the result of Pembina’s failure to comply with its

covenants in the Arrangement Agreement;

“Parties” means, collectively, Pembina and Veresen; and “Party” means any one of them;

“Pembina” means Pembina Pipeline Corporation, a corporation existing under the ABCA, and, following completion

of the Arrangement (provided that the Plan shall not have been amended to exclude the amalgamation of Veresen and

Pembina), means the corporation resulting from the amalgamation of Veresen and Pembina;

“Pembina AIF” means the annual information form of Pembina dated February 23, 2017 for the year ended December

31, 2016;

“Pembina Annual Financial Statements” means the audited consolidated financial statements of Pembina, together

with the notes thereto and the auditors’ reports thereon as at and for the years ended December 31, 2016 and 2015;

“Pembina Annual MD&A” means management’s discussion and analysis of the financial and operating results of

Pembina for the year ended December 31, 2016;

“Pembina Board” means the board of directors of Pembina;

“Pembina Class A Preferred Shares” means the class A preferred shares of Pembina, issuable in series, and where

the context requires includes the Pembina Series 1 Shares, the Pembina Series 2 Shares, the Pembina Series 3 Shares,

the Pembina Series 4 Shares, the Pembina Series 5 Shares, the Pembina Series 6 Shares, the Pembina Series 7 Shares,

the Pembina Series 8 Shares, the Pembina Series 9 Shares, the Pembina Series 10 Shares, the Pembina Series 11

Shares, the Pembina Series 12 Shares, the Pembina Series 13 Shares and the Pembina Series 14 Shares;

“Pembina Class B Preferred Shares” means class B preferred shares of Pembina;

“Pembina Common Shares” means the common shares in the capital of Pembina;

“Pembina Damages Event” has the meaning given to it under the heading “The Arrangement – The Arrangement

Agreement – Non-Completion Fees Payable by Veresen”;


- 15 -



“Pembina Exchange Shares” means the Pembina Series A Exchange Shares, the Pembina Series B Exchange Shares,

the Pembina Series C Exchange Shares, the Pembina Series D Exchange Shares, the Pembina Series E Exchange

Shares and the Pembina Series F Exchange Shares, as constituted on the Effective Date;

“Pembina Interim Financial Statements” means the unaudited condensed consolidated interim financial statements

of Pembina, together with the notes thereto, as at and for the three months ended March 31, 2017 and 2016;

“Pembina Interim MD&A” means management’s discussion and analysis of the financial and operating results of

Pembina for the three months ended March 31, 2017 and 2016;

“Pembina Option Plan” means the stock option plan of Pembina approved by Pembina shareholders on May 26,

2011, as amended effective November 30, 2016;

“Pembina Options” means the options granted by Pembina under the Pembina Option Plan;

“Pembina Series 1 Shares” means the cumulative redeemable rate reset Pembina Class A Preferred Shares, series 1

of Pembina, issued July 26, 2013;

“Pembina Series 2 Shares” means the cumulative redeemable floating rate Pembina Class A Preferred Shares, series

2 of Pembina, issuable on conversion of the Pembina Series 1 Shares;


of Pembina, issued October 2, 2013;




of Pembina, issued January 16, 2014;




of Pembina, issued September 11, 2014;




of Pembina, issued April 10, 2015;



“Pembina Series 11 Shares” means the cumulative redeemable minimum rate reset Pembina Class A Preferred

Shares, series 11 of Pembina, issued January 15, 2016;



“Pembina Series 13 Shares” means the cumulative redeemable minimum rate reset Pembina Class A Preferred

Shares, series 13 of Pembina, issued April 27, 2016;


- 16 -





“Pembina Series A Exchange Shares” means a series of cumulative redeemable rate reset Pembina Class A Preferred

Shares, such shares having identical terms to the Veresen Series A Shares except that the issuer thereof shall be

Pembina and they will be convertible into Pembina Series B Exchange Shares instead of Veresen Series B Shares,

which series when issued, will be designated as the next available number in Pembina’s Class A Preferred Share

sequence (which, if created on the date hereof, would be designated as series 15);

“Pembina Series B Exchange Shares” means a series of cumulative redeemable floating rate Pembina Class A

Preferred Shares, such shares having identical terms to the Veresen Series B Shares except that the issuer thereof shall

be Pembina and they will be convertible into Pembina Series A Exchange Shares instead of Veresen Series A Shares,



“Pembina Series C Exchange Shares” means a series of cumulative redeemable rate reset Pembina Class A Preferred

Shares, such shares having identical terms to the Veresen Series C Shares except that the issuer thereof shall be

Pembina and they will be convertible into Pembina Series D Exchange Shares instead of Veresen Series D Shares,



“Pembina Series D Exchange Shares” means a series of cumulative redeemable floating rate Pembina Class A

Preferred Shares, such shares having identical terms to the Veresen Series D Shares except that the issuer thereof shall

be Pembina and they will be convertible into Pembina Series C Exchange Shares instead of Veresen Series C Shares,



“Pembina Series E Exchange Shares” means a series of cumulative redeemable rate reset Pembina Class A Preferred

Shares, such shares having identical terms to the Veresen Series E Shares except that the issuer thereof shall be

Pembina and they will be convertible into Pembina Series F Exchange Shares instead of Veresen Series F Shares,



“Pembina Series F Exchange Shares” means a series of cumulative redeemable floating rate Pembina Class A

Preferred Shares, such shares having identical terms to the Veresen Series F Shares except that the issuer thereof shall

be Pembina and they will be convertible into Pembina Series E Exchange Shares instead of Veresen Series E Shares,



“Pembina Shares” means collectively, the Pembina Common Shares and Pembina Exchange Shares;

“Person” includes an individual, firm, trust, partnership, association, corporation, joint venture, trustee, executor,

administrator, legal representative or government (including any Governmental Entity);

“PFIC” has the meaning given to it under the heading “Certain United States Federal Income Tax Considerations”;

“Plan” or “Plan of Arrangement” means the plan of arrangement in the form attached as Appendix D to this

Information Circular, and any amendments or variations thereto made in accordance with Section 6.1 of the Plan of

Arrangement or made at the discretion of the Court in the Final Order;

“Preferred Share Consideration” means one Pembina Series A Exchange Share per Veresen Series A Share, without

interest, one Pembina Series B Exchange Share per Veresen Series B Share, without interest, one Pembina Series C

Exchange Share per Veresen Series C Share, without interest, one Pembina Series D Exchange Share per Veresen


- 17 -



Series D Share, without interest, one Pembina Series E Exchange Share per Veresen Series E Share, without interest,

and one Pembina Series F Exchange Share per Veresen Series F Share, without interest, as applicable;

“Preferred Shareholder Arrangement Resolution” means a special resolution of the Preferred Shareholders in

respect of the Arrangement to be considered at the Preferred Shareholders’ Meeting, the full text of which is set forth

in Appendix B to this Information Circular;

“Preferred Shareholder Fairness Opinion” means the written opinion of Scotia Capital dated April 30, 2017, a copy

of which is attached as Appendix H to this Information Circular;

“Preferred Shareholder Letter of Transmittal” means the Letter of Transmittal forwarded to Preferred

Shareholders pursuant to which Preferred Shareholders are required to deliver certificates representing Preferred

Shares to the Depositary;

“Preferred Shareholders” means, collectively, the holders of Veresen Series A Shares, Veresen Series B Shares,

Veresen Series C Shares, Veresen Series D Shares, Veresen Series E Shares and Veresen Series F Shares;

“Preferred Shareholders’ Meeting” means the special meeting of Preferred Shareholders (including any

adjournment(s) or postponement(s) thereof permitted under the Arrangement Agreement) that is to be convened to

consider and, if deemed advisable, to approve the Preferred Shareholder Arrangement Resolution;

“Preferred Shares” means collectively, the Veresen Series A Shares, the Veresen Series B Shares, the Veresen Series

C Shares, the Veresen Series D Shares, the Veresen Series E Shares and the Veresen Series F Shares;

“Proposed Amendments” has the meaning given to it under the heading “Certain Canadian Federal Income Tax

Considerations”;

“QEF” has the meaning given to it under the heading “Certain United States Federal Income Tax Considerations”;

“RDSP” has the meaning given to it under the heading “Certain Canadian Federal Income Tax Considerations”;

“Record Date” means May 23, 2017;

“Registrar” means the Registrar of Corporations for the Province of Alberta appointed under Section 263 of the

ABCA;

“Regulatory Approvals” means any consent, waiver, permit, permission, exemption, review, order, decision or

approval of, or any registration and filing with or withdrawal of any objection or successful conclusion of any litigation

brought by, any Governmental Entity, or the expiry, waiver or termination of any waiting period imposed by Law or

a Governmental Entity or pursuant to a written agreement between the Parties and a Governmental Entity to refrain

from consummating the Arrangement, in each case required or advisable under Laws in connection with the

Arrangement, including the Required Regulatory Approvals;

“Reorganization” has the meaning given to it under the heading “Certain United States Federal Income Tax

Considerations”;

“Required Regulatory Approvals” means the Competition Act Approval, the CTA Approval and the HSR Approval;

“Resident Holder” has the meaning given to it under the heading “Certain Canadian Federal Income Tax

Considerations”;

“RESP” has the meaning given to it under the heading “Certain Canadian Federal Income Tax Considerations”;

“RRIF” has the meaning given to it under the heading “Certain Canadian Federal Income Tax Considerations”;


“RRSP” has the meaning given to it under the heading “Certain Canadian Federal Income Tax Considerations”;

“Scotia Capital” means Scotia Capital Inc., financial advisor to Veresen;

“SEC” means the United States Securities and Exchange Commission;

“SEDAR” means the System for Electronic Document Analysis and Retrieval;

“Share Consideration” means 0.4287 of a Pembina Common Share;

“Shareholders” means collectively, the Common Shareholders and the Preferred Shareholders;

“Subsidiary” has the meaning set forth in the Securities Act (Alberta) and, in the case of Veresen, includes the Veresen

Significant Entities;

“Superior Proposal” means a written bona fide Acquisition Proposal to acquire not less than all of the outstanding

Common Shares, or all or substantially all of the assets (on a consolidated basis) of Veresen, which: (a) complies with

securities Laws and did not result from or involve a breach of the covenants regarding non-solicitation in the

Arrangement Agreement; (b) is not subject to any financing condition and that the funds or other consideration

necessary to complete the Acquisition Proposal are or are reasonably likely to be available, as demonstrated to the

satisfaction of the Board, acting in good faith, to fund completion of the Acquisition Proposal at the time and on the

basis set out therein; (c) is not subject to any due diligence condition; (d) the Board determines, in good faith, after

consultation with its financial advisor(s) and outside counsel, would or would be reasonably likely to, if consummated

in accordance with its terms and without assuming away the risk of non-completion, result in a transaction more

favourable, from a financial point of view, for Common Shareholders to the transaction contemplated by the

Arrangement Agreement (including after considering the proposal to adjust the terms and conditions of the

Arrangement as contemplated in the Arrangement Agreement); (e) the Board determines, in good faith, after

consultation with its financial advisor(s) and outside counsel, is reasonably likely to be consummated at the time and

on the terms proposed, without undue delay and taking into account all legal, financial, regulatory (including with

respect to the Competition Act, Canada Transportation Act and HSR Act, to the extent applicable) and other aspects

of such Acquisition Proposal and the Person or group of Persons making such proposal; and (f) after receiving the

advice of outside counsel, that the failure by the Board to accept, recommend, approve or enter into a definitive

agreement to implement, as applicable, such Acquisition Proposal would be inconsistent with its fiduciary duties;

“Support Agreements” means the lock-up agreements between Pembina and each of the Supporting Shareholders

pursuant to which the Supporting Shareholders agreed, among other things, to vote the Common Shares held by them

in favour of the Common Shareholder Arrangement Resolution and to otherwise support the Arrangement;

“Supporting Shareholders” means each of the directors and certain of the officers of Veresen;

“Tax Act” means the Income Tax Act (Canada), R.S.C. 1985, c.1 (5th Supp.) and the regulations promulgated

thereunder, each as amended from time to time;

“taxable capital gain” has the meaning given to it under the heading “Certain Canadian Federal Income Tax

Considerations”;

“TFSA” has the meaning given to it under the heading “Certain Canadian Federal Income Tax Considerations”;

“Total Elected Cash Consideration” has the meaning given to it under the heading “Procedure for the Arrangement

to become Effective – Pro Ration Provisions – Elections for Cash”;

“Total Elected Share Consideration” has the meaning given to it under the heading “Procedure for the Arrangement

to become Effective – Pro Ration Provisions – Elections for Pembina Common Shares”;

- 18 -




- 19 -



“TSX” means the Toronto Stock Exchange;

“U.S. GAAP” means generally accepted accounting principles in the United States, at the relevant time applied on a

consistent basis;

“U.S. Holder” has the meaning given to it under the heading “Certain United States Federal Income Tax

Considerations”;

“United States” or “U.S.” means the United States of America, its territories and possessions, any State of the United

States, and the District of Columbia;

“Veresen” means Veresen Inc., a corporation existing under the ABCA;

“Veresen AIF” means the annual information form of Veresen dated March 14, 2017 for the year ended December

31, 2016;

“Veresen Annual 2016 Information Circular” means the proxy statement and information circular of Veresen dated

March 14, 2016 relating to the annual meeting of Common Shareholders held on May 4, 2016;

“Veresen Annual 2017 Information Circular” means the proxy statement and information circular of Veresen dated

March 14, 2017 relating to the annual meeting of Common Shareholders held on May 3, 2017;

“Veresen Annual Financial Statements” means the audited consolidated financial statements of Veresen, together

with the notes thereto and the auditors’ reports thereon as at and for the years ended December 31, 2016 and 2015;

“Veresen Annual MD&A” means management’s discussion and analysis of the financial and operating results of

Veresen for the year ended December 31, 2016;

“Veresen DSU Plans” means the Veresen Directors Deferred Share Unit Plan dated December 8, 2016 and the

Veresen Senior Executive Deferred Share Unit Plan dated January 1, 2012;

“Veresen DSUs” means deferred share units awarded pursuant to the Veresen DSU Plans, including any related

dividend equivalent units;

“Veresen Incentive Awards” means, collectively, the Veresen RSUs, Veresen DSUs and Veresen PSUs;

“Veresen Interim Financial Statements” means the unaudited consolidated financial statements of Veresen, together

with the notes thereto, as at and for the three months ended March 31, 2017 and 2016;

“Veresen Interim MD&A” means management’s discussion and analysis of the financial and operating results of

Veresen for the for the three months ended March 31, 2017 and 2016;

“Veresen February 2017 MCR” means the material change report of Veresen dated February 27, 2017;

“Veresen LTIP” means the amended and restated Veresen Long-Term Incentive Plan dated January 1, 2016;

“Veresen May 2017 MCR” means the material change report of Veresen dated May 2, 2017;

“Veresen Midstream” means Veresen Midstream Limited Partnership, a limited partnership owned by a wholly-

owned subsidiary of Veresen and affiliates of Kohlberg Kravis Roberts & Co. L.P.;

“Veresen Power Business Sale” means the sale of Veresen’s power generation business, as announced by Veresen

on February 21, 2017 including all updates, amendments and changes disclosed to Pembina in writing by Veresen

prior to the date of the Arrangement Agreement;


- 20 -



“Veresen PSUs” means performance share units awarded pursuant to the Veresen LTIP, including any related

dividend equivalent units;

“Veresen RSUs” means restricted share units awarded pursuant to the Veresen LTIP, including any related dividend

equivalent units;

“Veresen Series A Shares” means the cumulative redeemable preferred shares, series A of Veresen;

“Veresen Series B Shares” means the cumulative redeemable preferred shares, series B of Veresen;

“Veresen Series C Shares” means the cumulative redeemable preferred shares, series C of Veresen;

“Veresen Series D Shares” means the cumulative redeemable preferred shares, series D of Veresen;

“Veresen Series E Shares” means the cumulative redeemable preferred shares, series E of Veresen;

“Veresen Series F Shares” means the cumulative redeemable preferred shares, series F of Veresen;

“Veresen Shares” means collectively, the Common Shares and the Preferred Shares;

“Veresen Significant Entities” means, collectively, Aux Sable Canada LP, Aux Sable Canada Ltd., Alliance Canada

Marketing L.P., Alliance Canada Marketing Ltd., Alliance Pipeline Limited Partnership, Alliance Pipeline Ltd.,

Veresen Midstream Limited Partnership, Veresen Midstream General Partner Inc., NRGreen Power L.P., NRGreen

Power Ltd., Alliance Pipeline L.P., Alliance Pipeline Inc., Aux Sable Liquid Products LP, Aux Sable Liquid Products

Inc., Aux Sable Midstream LLC, Ruby Pipeline Holding Company, L.L.C. and Ruby Pipeline, LLC; and

“Voting Instruction Form” means the voting instruction form provided by Broadridge to Beneficial Holders.

Words importing the singular include the plural and vice versa and words importing any gender include all genders.

CONVENTIONS

Certain terms used herein are defined in the “Glossary of Terms”. Unless otherwise indicated, references herein to “$”

or “dollars” are to Canadian dollars and references herein to “US$” or “U.S. dollars” are to United States dollars. All

financial information under the heading “Pro Forma Information of Pembina after Giving Effect to the Arrangement”

and in Appendices I and K to this Information Circular has been presented in Canadian dollars in accordance with

IFRS. All financial information in Appendix J to this Information Circular has been presented in Canadian dollars in

accordance with U.S. GAAP.


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Introduction

This Information Circular is furnished in connection with the solicitation of proxies by the management of

Veresen for use at the Meetings, and at any adjournment(s) thereof. No person has been authorized to give any

information or make any representation in connection with the Arrangement or any other matters to be

considered at the Meetings other than those contained in this Information Circular and if given or made, any

such information or representation must not be relied upon as having been authorized.

The information concerning Pembina contained and incorporated by reference in this Information Circular,

including but not limited to the information in Appendix K to this Information Circular, has been provided by

Pembina. Although Veresen has no knowledge that would indicate that any of such information is untrue or

incomplete, Veresen does not assume any responsibility for the accuracy or completeness of such information

or the failure by Pembina to disclose events which may have occurred or may affect the completeness or

accuracy of such information but which are unknown to Veresen.

This Information Circular does not constitute an offer to sell or a solicitation of an offer to purchase any securities or

the solicitation of a proxy by any person in any jurisdiction in which such an offer or solicitation is not authorized or

in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful

to make such an offer or solicitation of an offer or a proxy solicitation. Neither the delivery of this Information Circular

nor any distribution of the securities referred to in this Information Circular will, under any circumstances, create an

implication that there has been no change in the information set forth herein since the date as of which such information

is given in this Information Circular.

Information contained in or otherwise accessed through Veresen’s website or Pembina’s website, or any website, other

than those documents incorporated by reference herein and filed on SEDAR, does not constitute part of this

Information Circular.

All summaries of, and references to, the Arrangement Agreement and the Arrangement or Plan of Arrangement in this

Information Circular are qualified in their entirety by reference to the complete text of the Arrangement Agreement

and the Plan of Arrangement, copies of which are attached as Appendices C and D, respectively, to this Information

Circular. You are urged to carefully read the full text of the Arrangement Agreement and the Plan of

Arrangement.

All capitalized terms used in this Information Circular (including Appendices J and K hereto) but not otherwise defined

herein have the meanings set forth herein under “Glossary of Terms”. The terms and abbreviations used in the

Appendices to this Information Circular, other than in Appendices J and K, are defined separately therein. Information

contained in this Information Circular is given as of June 5, 2017, unless otherwise specifically stated. Details of the

Arrangement are set forth under the heading “The Arrangement”. For details of the matters to be considered by the

Common Shareholders and Preferred Shareholders, see “Matters to be Considered at the Meetings – Common

Shareholders’ Meeting” and “Matters to be Considered at the Meetings – Preferred Shareholders’ Meeting”,

respectively.

Supplemental Disclosure – Non-U.S. GAAP and Non-IFRS Measures

This Information Circular and certain documents incorporated by reference herein make reference to certain non-U.S.

GAAP and non-IFRS financial measures to assist in assessing Veresen’s and Pembina’s respective financial

performance, including references in this Information Circular to adjusted EBITDA. Non-U.S. GAAP and non-IFRS

financial measures do not have standard meanings prescribed by U.S. GAAP or IFRS, as applicable, and are therefore

unlikely to be comparable to similar measures presented by other issuers. Such non-U.S. GAAP and non-IFRS

financial measures should not be considered as an alternative to, or more meaningful than measures of financial

performance as determined in accordance with U.S. GAAP or IFRS, as applicable, as an indicator of performance.

For additional information regarding these non-U.S. GAAP and non-IFRS measures, see the advisories in the Veresen


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Annual MD&A, the Veresen Interim MD&A, the Pembina Annual MD&A and the Pembina Interim MD&A, as

applicable, all of which are incorporated by reference herein.

Information for United States Shareholders

The Pembina Shares issuable to Shareholders in exchange for their Veresen Shares, as applicable, pursuant to the

Arrangement have not been and will not be registered under the 1933 Act, and will be issued in reliance upon the

exemption from the registration requirements of the 1933 Act set forth in Section 3(a)(10) thereof. Section 3(a)(10)

of the 1933 Act exempts the issuance of any security issued in exchange for one or more bona fide outstanding

securities from the general requirement of registration where the terms and conditions of such issuance and exchange

have been approved by a court of competent jurisdiction, after a hearing upon the fairness of the terms and conditions

of such issuance and exchange at which all persons to whom it is proposed to issue the securities have the right to

appear and receive timely notice thereof. The solicitation of proxies for the Meetings by means of this Information

Circular is not subject to the requirements of Section 14(a) of the 1934 Act. Accordingly, the solicitations and

transactions contemplated in this Information Circular are being made in the United States for securities of a Canadian

issuer in accordance with Canadian corporate and securities laws, and this Information Circular has been prepared

solely in accordance with disclosure requirements applicable in Canada. Shareholders in the United States should be

aware that such requirements are different from those of the United States applicable to registration statements under

the 1933 Act and proxy statements under the 1934 Act.

The Pembina Shares issuable to Shareholders, as applicable, pursuant to the Arrangement will be, following

completion of the Arrangement, freely tradable under the 1933 Act, except by persons who will be “affiliates” of

Pembina after the Effective Date or were affiliates of Pembina within 90 days before the Effective Date. Persons who

may be deemed to be “affiliates” of an issuer include individuals or entities that control, are controlled by, or are under

common control with, the issuer, whether through the ownership of voting securities, by contract, or otherwise, and

generally include executive officers and directors of the issuer as well as principal shareholders of the issuer. Any

resale of such Pembina Shares by such an affiliate (or former affiliate) may be subject to the registration requirements

of the 1933 Act, absent an exemption or exclusion therefrom. See “Procedure for the Arrangement to Become Effective

– Securities Law Matters – United States”.

The financial statements of Pembina included or incorporated by reference, as applicable, in this Information Circular

have been prepared in accordance with IFRS and, except as described below, are subject to Canadian auditing

standards which differ from U.S. GAAP and auditing standards in certain material respects and thus are not directly

comparable to financial statements of United States companies.

The Pembina Common Shares are listed on the NYSE and registered pursuant to Section 12 of the 1934 Act. Therefore

Pembina is required to file reports with the SEC, including annual reports on Form 40-F. Pembina has filed with the

SEC an annual report on Form 40-F for the fiscal year ended December 31, 2016. Pembina’s Form 40-F for the fiscal

year ended December 31, 2016 does not include a reconciliation of Pembina’s financial statements to U.S. GAAP.

Pembina’s filings with the SEC may be viewed for free at the SEC’s website at www.sec.gov.

Shareholders subject to United States federal income taxation should be aware that the description of tax consequences

to them of the Arrangement under certain United States federal income tax laws provided in this Information Circular

is a summary only. They are advised to consult their tax advisors to determine the particular tax consequences to them

of participating in the Arrangement and the ownership and disposition of Pembina Shares acquired pursuant to the

Arrangement.

The enforcement by Shareholders of civil liabilities under United States federal securities laws may be affected

adversely by the fact that both Pembina and Veresen are organized under the laws of Alberta, Canada, that some or

all of their officers and directors are residents of countries other than the United States, that the experts named in this

Information Circular are residents of countries other than the United States, and that all or a substantial portion of the

assets of Pembina, Veresen and such persons are located outside the United States. As a result, it may be difficult or

impossible for Shareholders in the United States to effect service of process within the United States upon Pembina

and Veresen and their directors or officers, or to realize against them upon judgments of courts of the United States

predicated upon civil liabilities under the federal securities laws of the United States or the securities laws of any state


http://www.sec.gov/

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within the United States. In addition, Shareholders in the United States should not assume that the courts of Canada:

(a) would enforce judgments of United States courts obtained in actions against such persons predicated upon civil

liabilities under the federal securities laws of the United States or the securities laws of any state within the United

States; or (b) would enforce, in original actions, liabilities against such persons predicated upon civil liabilities under

the federal securities laws of the United States or the securities laws of any state within the United States.

No broker, dealer, salesperson or other person has been authorized to give any information or make any representation

other than those contained in this Information Circular and, if given or made, such information or representation must

not be relied upon as having been authorized by Pembina or Veresen.

THE PEMBINA SHARES ISSUABLE TO SHAREHOLDERS PURSUANT TO THE ARRANGEMENT

HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR THE SECURITIES REGULATORY

AUTHORITY OF ANY STATE, NOR HAS THE SEC OR THE SECURITIES REGULATORY

AUTHORITY OF ANY STATE PASSED ON THE ADEQUACY OR ACCURACY OF THIS

INFORMATION CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL

OFFENCE.

Currency

Except as otherwise indicated, all dollar amounts in this Information Circular are expressed in Canadian dollars. The

following table sets forth: (i) the rates of exchange for Canadian dollars, expressed in United States dollars, in effect

at the end of each of the periods indicated; and (ii) the high, low and average exchange rates during each such period,

in the case of rates for 2014, 2015 and 2016, based on the rate, published on the Bank of Canada’s website as being

in effect at approximately noon on each trading day and, in the case of rates for 2017, based on the daily average

exchange rate, published on the Bank of Canada’s website as being in effect at approximately 4:30 p.m. (Eastern time)

on each trading day.

Three Months Ended

March 31, 2017

Year Ended December 31

2016 2015 2014

Rate at end of Period US$0.7513 US$0.7448 US$0.7225 US$0.8620

Average rate during Period US$0.7555 US$0.7548 US$0.7820 US$0.9054

High US$0.7683 US$0.7972 US$0.8527 US$0.9422

Low US$0.7400 US$0.6854 US$0.7148 US$0.8589

On June 5, 2017, the Bank of Canada rate for $1.00 Canadian dollar was $0.7417 United States dollars.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Information Circular and in the documents incorporated by reference herein

constitute forward-looking information and forward-looking statements (collectively referred to as “forward-looking

statements”) within the meaning of applicable securities laws. These statements relate to future events or future

performance. All statements other than statements of historical fact may be forward-looking statements. Forward-

looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”,

“continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”,

“might”, “should”, “believe” and similar expressions or the negative thereof.

In particular, this Information Circular (including Appendices I, J and K, respectively, to this Information Circular)

contains forward-looking statements pertaining to the following:

the perceived benefits of the Arrangement and expected attributes of the combined company resulting from

the Arrangement, including the combined company’s potential for financial and operational synergies and

the combined company’s strategic positioning, balance sheet strength and superior access to capital markets;


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the timing of the Meetings and the Final Order;

the anticipated Effective Date;

the satisfaction of conditions for listing of the Pembina Common Shares issuable pursuant to the Arrangement

on the TSX and the NYSE and the timing thereof, and the satisfaction of conditions for listing of the Pembina

Exchange Shares issuable pursuant to the Arrangement on the TSX;

the composition of the Pembina Board upon the Arrangement becoming effective;

future dividends, including the increase in the amount thereof, which may be declared on the Pembina

Common Shares, and the anticipated payout ratio of the combined company;

the delisting of the Veresen Shares from the TSX and the anticipated timing thereof;

the treatment of Shareholders under securities and tax Laws;

the anticipated receipt of all required regulatory and third party approvals for the Arrangement, including

under the Competition Act;

the exercise of Dissent Rights by Shareholders with regards to the Arrangement;

the anticipated credit rating of the combined company; and

timing for completion of the sale of Veresen’s remaining power assets pursuant to the Veresen Power

Business Sale.

These forward-looking statements are based on certain expectations and assumptions, including expectations and

assumptions respecting:

the perceived benefits of the Arrangement and expected attributes of the combined company resulting from

the Arrangement are based upon a number of facts, including the terms and conditions of the Arrangement

Agreement and current industry, economic and market conditions (see “The Arrangement – Reasons for the

Arrangement”, “The Arrangement – Attributes of the Combined Company” and “The Arrangement –

Recommendation of the Board of Directors”);

certain steps in, and timing of, the Arrangement and the Effective Date of the Arrangement are based upon

the terms of the Arrangement Agreement and advice received from counsel to Veresen relating to timing

expectations (see “The Arrangement”);

the listing of the Pembina Common Shares and the Pembina Exchange Shares issuable pursuant to the

Arrangement on the TSX and the NYSE, as applicable, and the delisting of the Veresen Shares, as applicable,

from the TSX is based on receiving approval from, and fulfilling all of the requirements of the TSX and the

NYSE, as applicable;

the treatment of Shareholders under tax Laws is subject to the statements under “Certain Canadian Federal

Income Tax Considerations” and “Certain United States Federal Income Tax Considerations”;

the effects of the Arrangement on Veresen and Pembina are based on Veresen management’s current

expectations regarding the intentions of Pembina; and

the timing for completion of the sale of Veresen’s remaining power assets pursuant to the Veresen Power

Business Sale is based on the terms of the agreements governing the transactions comprising the Veresen


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Power Business Sale and Veresen management’s current expectations regarding satisfaction of all conditions

precedent to completion of such transactions, including the receipt of all necessary approvals.

By their very nature, forward-looking statements involve known and unknown risks, uncertainties and other factors

that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.

Veresen believes the expectations reflected in those forward-looking statements are reasonable but no assurance can

be given that these expectations will prove to be correct and such forward-looking statements included in this

Information Circular and in the documents incorporated by reference herein should not be unduly relied upon. These

statements speak only as of the date of this Information Circular.

Some of the risks that could cause results to differ materially from those expressed in the forward-looking statements

include:

Pembina and Veresen may fail to realize the anticipated benefits of the Arrangement;

there may be unforeseen difficulties in integrating the respective businesses of Pembina and Veresen;

the conditions to completion of the Arrangement, including receiving all Required Regulatory

Approvals, Court approval, TSX and NYSE approval, as applicable, for the listing of the Pembina

Common Shares and subject to the Preferred Shareholder Arrangement Resolution receiving the

requisite approval, the Pembina Exchange Shares issuable pursuant to the Arrangement, may not be

satisfied or waived which may result in the Arrangement not being completed;

the timing of the Meetings and Final Order and the anticipated Effective Date may be changed or

delayed;

Pembina and Veresen will incur significant costs relating to the Arrangement, regardless of whether the

Arrangement is completed or not completed;

the Arrangement Agreement could be terminated by either Party under certain circumstances, including

as a result of the occurrence of a Material Adverse Change respecting the other Party;

if the Arrangement is not completed, Shareholders will not realize the benefits of the Arrangement and

Veresen’s future business and operations could be adversely affected;

changes in income tax Laws or actions taken by taxing authorities could have adverse implications on

Pembina, Veresen or their respective securityholders;

completion of the sale of Veresen’s remaining power assets pursuant to the Veresen Power Business

Sale may not occur when anticipated; or

all future dividends, including in respect of any expected future increases to current dividend levels, are

subject to the approval of the board of directors of the applicable corporation.

With regard to the forward-looking statements in Veresen’s and Pembina’s documents incorporated by reference

herein, please refer to the forward-looking statements advisories in such documents in respect of the forward-looking

statements contained therein, the assumptions upon which they are based and the risk factors in respect of such

forward-looking statements.

Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking statements contained

in this Information Circular are expressly qualified by this cautionary statement. Except as required by Law, Veresen

does not undertake any obligation to publicly update or revise any forward-looking statements.


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Readers should also carefully consider the matters discussed under the headings “Risk Factors”, “Certain Canadian

Federal Income Tax Considerations”, “Certain United States Federal Income Tax Considerations” and other risks

described elsewhere in this Information Circular and in the documents incorporated by reference herein, including

Appendices J and K, the Veresen AIF, the Veresen Annual MD&A, the Pembina AIF and the Pembina Annual

MD&A, which are incorporated by reference herein. Additional information on these and other factors that could

affect the operations or financial results of Veresen or Pembina are included in documents on file with applicable

Canadian Securities Administrators and may be accessed on Veresen’s and Pembina’s respective issuer profiles

through the SEDAR website (www.sedar.com). Such documents, unless expressly incorporated by reference herein,

do not form part of this Information Circular.

INFORMATION FOR BENEFICIAL HOLDERS

The information set forth in this section is of significant importance to many Shareholders, as a substantial number of

such Shareholders do not hold Veresen Shares in their own name. Beneficial Holders should note that only proxies

deposited by Shareholders whose names appear on the records of the registrar and transfer agent for Veresen as the

registered holders of Veresen Shares can be recognized and acted upon at the Meetings, as applicable. If Veresen

Shares are listed in an account statement provided to a Shareholder by a broker, then, in almost all cases, those Veresen

Shares will not be registered in a holder’s name on the records of Veresen. Such Veresen Shares will most likely be

registered in the name of the holder’s broker or an agent of the broker. In Canada, the vast majority of such Veresen

Shares are registered under the name of CDS & Co. (the registration name for CDS, which acts as nominee for many

Canadian brokerage firms). Veresen Shares held by brokers or their nominees can only be voted (for or against

resolutions) upon instructions of the Beneficial Holder. Without specific instructions, brokers/nominees are prohibited

from voting Veresen Shares for their clients. Beneficial Holders should therefore ensure that instructions

regarding the voting of their Veresen Shares are properly communicated to the appropriate Person or that the

Veresen Shares are duly registered in their name well in advance of the applicable Meeting.

Applicable regulatory policies require intermediaries/brokers to seek voting instructions from Beneficial Holders in

advance of shareholder meetings. Every intermediary/broker has its own mailing procedures and provides its own

return instructions which should be carefully followed by Beneficial Holders in order to ensure that their Veresen

Shares are voted at the applicable Meeting. Often, the form of proxy supplied to a Beneficial Holder by its broker is

identical to that provided to a registered shareholder. However, its purpose is limited to instructing the registered

shareholder on how to vote on behalf of the Beneficial Holder. The majority of brokers now delegate responsibility

for obtaining instructions from clients to Broadridge. Broadridge typically mails a scannable Voting Instruction Form

in lieu of the applicable form of proxy. The Beneficial Holder is requested to complete and return the Voting

Instruction Form by mail or facsimile. Alternatively, the Beneficial Holder can call a toll-free telephone number or

access the internet to vote the Veresen Shares held by the Beneficial Holder. Broadridge then tabulates the results of

all instructions received and provides appropriate instructions respecting the voting of Veresen Shares to be

represented at the applicable Meeting. A Beneficial Holder receiving a form of proxy or Voting Instruction Form from

its broker or other intermediary (or an agent or nominee of such broker or other intermediary) cannot use that form to

vote Veresen Shares directly at the applicable Meeting. Voting instructions must be communicated to the broker,

intermediary, agent or nominee (in accordance with the instructions provided by it or on its behalf) well in advance of

the applicable Meeting in order to have the Veresen Shares to which such instructions relate voted at the applicable

Meeting.

If you are a Beneficial Holder and wish to vote in person at the applicable Meeting, please contact your broker or

agent well in advance of the applicable Meeting to determine how you can do so.

Although a Beneficial Holder may not be recognized directly at the applicable Meeting for the purpose of voting

Veresen Shares registered in the name of its broker or other intermediary, a Beneficial Holder may vote those Veresen

Shares as a proxyholder for the registered shareholder. To do so, a Beneficial Holder should enter such Beneficial

Holder’s own name in the blank space on the applicable form of proxy provided to the Beneficial Holder and return

the document to such Beneficial Holder’s broker or other intermediary (or the agent of such broker or other

intermediary) in accordance with the instructions provided by such broker, intermediary or agent well in advance of

the applicable Meeting.


http://www.sedar.com/

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Shareholders who do not hold their Veresen Shares in their own name should also instruct their broker or other

intermediary to complete the Common Shareholder Letter of Transmittal and Election Form or Preferred Shareholder

Letter of Transmittal, as applicable, regarding the Arrangement with respect to such holder’s Veresen Shares, once

such has been provided, in order to receive the consideration issuable pursuant to the Arrangement in exchange for

such holder’s Veresen Shares.


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SUMMARY

This Summary is qualified in its entirety by the more detailed information appearing elsewhere in this Information

Circular, including the Appendices hereto. Terms with initial capital letters in this Summary are defined in the

Glossary of Terms set out elsewhere in this Information Circular.

Veresen Inc.

Veresen is an ABCA corporation that owns and operates energy infrastructure assets across North America. Veresen

is engaged in two principal businesses: a pipeline transportation business comprised of interests in the Alliance

Pipeline, the Ruby Pipeline and the Alberta Ethane Gathering System; and a midstream business which includes a

partnership interest in Veresen Midstream Limited Partnership, which owns assets in western Canada, and an

ownership interest in Aux Sable, which owns a world-class NGL extraction facility near Chicago, and other natural

gas and NGL processing energy infrastructure. Veresen is also developing Jordan Cove LNG, a 7.8 million tonne per

annum natural gas liquefaction facility proposed to be constructed in Coos Bay, Oregon, and the associated Pacific

Connector Gas Pipeline. Veresen expects to complete the remainder of the Veresen Power Business Sale during the

second quarter of 2017.

Veresen is a reporting issuer or the equivalent under the securities laws of each of the provinces of Canada. The

Common Shares and the Veresen Series A Shares, Veresen Series C Shares and Veresen Series E Shares are each

listed and posted for trading on the TSX under the symbols VSN, VSN.PR.A, VSN.PR.C and VSN.PR.E, respectively.

Pursuant to the Arrangement, all of the Common Shares will be acquired by Pembina and, in the event that Preferred

Shareholders approve the Preferred Shareholder Arrangement Resolution and the Preferred Shares are not otherwise

excluded from the Arrangement pursuant to the terms of the Arrangement Agreement, all of the Preferred Shares will

be exchanged by Pembina for the Pembina Exchange Shares. Following completion of the Arrangement, it is

anticipated that the Common Shares and, in the event that the Preferred Shares are exchanged by Pembina, the Listed

Preferred Shares, will be delisted from the TSX.

The head, principal and registered office of Veresen is located at Suite 900, Livingston Place, 222 - 3rd Avenue S.W.,

Calgary, Alberta T2P 0B4.

See Appendix J – “Information Concerning Veresen Inc.”.

Pembina Pipeline Corporation

Pembina is an ABCA corporation that owns and operates an integrated system of pipelines that transport various

products derived from natural gas and hydrocarbon liquids produced primarily in western Canada. Pembina also owns

and operates gas gathering and processing facilities and an oil and natural gas liquids infrastructure and logistics

business. Pembina’s integrated assets and commercial operations along the majority of the hydrocarbon value chain

allow it to offer a full spectrum of midstream and marketing services to the energy sector.

Pembina is a reporting issuer or the equivalent under the securities laws of each of the provinces of Canada. The

Pembina Common Shares are listed and posted for trading on the TSX under the symbol “PPL” and the NYSE under

the symbol “PBA”. Pembina’s Class A Preferred Shares, Series 1, 3, 5, 7, 9, 11 and 13, are also listed and posted for

trading on the TSX.

The head, principal and registered office of Pembina is located at Suite 4000, 585 - 8th Avenue S.W., Calgary, Alberta,

T2P 1G1.

See Appendix K – “Information Concerning Pembina Pipeline Corporation”.


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The Common Shareholders’ Meeting

The Common Shareholders’ Meeting will be held at Livingston Place (South Tower) in the Livingston Club

Conference Centre, Plus 15, 222 – 3rd Avenue S.W., Calgary, Alberta, Canada at 10:00 a.m. (Calgary time) on July

11, 2017, for the purposes set forth in the accompanying notice of meeting. The business of the Common Shareholders’

Meeting will be to consider and vote upon the Common Shareholder Arrangement Resolution. See “Matters to be

Considered at the Meetings – Common Shareholders’ Meeting.”

The Record Date for determining Common Shareholders entitled to receive notice of, and to vote at, the Common

Shareholders’ Meeting is May 23, 2017. Only Common Shareholders of record as at the Record Date are entitled to

receive notice of the Common Shareholders’ Meeting. Common Shareholders of record will be entitled to vote those

Common Shares included in the list of Common Shareholders prepared as at the Record Date. If a Common

Shareholder transfers Common Shares after the Record Date and the transferee of those Common Shares, having

produced properly endorsed certificates evidencing such Common Shares or having otherwise established that the

transferee owns such Common Shares, demands, at least 10 days before the Common Shareholders’ Meeting, that the

transferee’s name be included in the list of Common Shareholders entitled to vote at the Common Shareholders’

Meeting, such transferee shall be entitled to vote such Common Shares at the Common Shareholders’ Meeting. See

“General Proxy Matters”.

The Preferred Shareholders’ Meeting

The Preferred Shareholders’ Meeting will be held at Livingston Place (South Tower) in the Livingston Club

Conference Centre, Plus 15, 222 – 3rd Avenue S.W., Calgary, Alberta, Canada at 11:00 a.m. (Calgary time) on July

11, 2017, for the purposes set forth in the accompanying notice of meeting. The business of the Preferred Shareholders’

Meeting will be to consider and vote upon the Preferred Shareholder Arrangement Resolution. See “Matters to be

Considered at the Meetings – Preferred Shareholders’ Meeting.”

The Record Date for determining Preferred Shareholders entitled to receive notice of, and to vote at, the Preferred

Shareholders’ Meeting is May 23, 2017. Only Preferred Shareholders of record as at the Record Date are entitled to

receive notice of the Preferred Shareholders’ Meeting. Preferred Shareholders of record will be entitled to vote those

Preferred Shares included in the list of Preferred Shareholders prepared as at the Record Date. If a Preferred

Shareholder transfers Preferred Shares after the Record Date and the transferee of those Preferred Shares, having

produced properly endorsed certificates evidencing such Preferred Shares or having otherwise established that the

transferee owns such Preferred Shares, demands, at least 10 days before the Preferred Shareholders’ Meeting, that the

transferee’s name be included in the list of Preferred Shareholders entitled to vote at the Preferred Shareholders’

Meeting, such transferee shall be entitled to vote such Preferred Shares at the Preferred Shareholders’ Meeting. See

“General Proxy Matters”.

The Arrangement

Veresen entered into the Arrangement Agreement with Pembina on May 1, 2017. A copy of the Arrangement

Agreement is attached as Appendix C to this Information Circular. The Arrangement Agreement provides for the

implementation of the Plan of Arrangement (a copy of which is attached as Appendix D to this Information Circular)

pursuant to which, among other things, the following transactions will occur:

Common Shareholders (other than Dissenting Shareholders) will, for each Common Share held, have the

option to receive:


(b) $18.65 in cash,

subject to pro-rationing under the Plan of Arrangement. Assuming full pro-rationing, each Common Shareholder

would receive (i) cash in an amount equal to $4.8494 multiplied by the number of Common Shares held by such


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Common Shareholder, and (ii) 0.3172 of a Pembina Common Share multiplied by the number of Common Shares

held by such Common Shareholder.

Provided that the Preferred Shareholder Arrangement Resolution receives the requisite approval by the

Preferred Shareholders at the Preferred Shareholders’ Meeting and the Preferred Shares are not otherwise

excluded from the Arrangement pursuant to the terms of the Arrangement Agreement:

(a) Veresen shall declare and pay a cash dividend on each Preferred Share in an amount equal to all

accrued and unpaid dividends thereon, and for which a record date for the payment of such dividends

has not occurred prior to the Effective Date, up to, but excluding, the Effective Date; and

(b) each Preferred Shareholder (other than Dissenting Shareholders) shall receive, for each Preferred

Share held, the Preferred Share Consideration.

Provided that the Preferred Shareholder Arrangement Resolution has received the requisite approval of

Preferred Shareholders at the Preferred Shareholders’ Meeting (or the Preferred Shareholders have approved

a special resolution with similar effect to the Preferred Shareholder Arrangement Resolution prior to the

Effective Time such that Pembina has become the sole holder of the Preferred Shares), and the Plan of

Arrangement is not otherwise amended to exclude the Preferred Shares, Pembina and Veresen shall be

amalgamated to form one corporation under the ABCA, being Amalco. If the Preferred Shareholders do not

approve the Preferred Shareholder Arrangement Resolution, or if the Preferred Shares are otherwise excluded

from the Plan of Arrangement pursuant to the terms of the Arrangement Agreement, the Preferred Shares

will remain outstanding following completion of the Arrangement and will not be exchanged for the Pembina

Exchange Shares.

Upon completion of the Arrangement, assuming the issuance of the Maximum Share Consideration, current holders

of Pembina Common Shares are expected to own approximately 80% of the combined company, and Common

Shareholders are expected to own approximately 20% of the combined company.

As the completion of the Arrangement will be considered a “Change of Control” pursuant to the Veresen LTIP and

the Veresen DSU Plans and the provisions of the Arrangement Agreement, all outstanding Veresen RSUs, Veresen

PSUs and Veresen DSUs will vest and be settled in cash immediately prior to the Effective Time.

Subject to the completion of the Arrangement, Pembina has announced that it intends to increase the monthly dividend

on the Pembina Common Shares by 5.9% (from $0.17 to $0.18 per Pembina Common Share per month). Further,

Pembina has agreed to use commercially reasonable efforts to appoint three of the current directors of Veresen to the

Pembina Board as soon as reasonably practicable following completion of the Arrangement to serve until the next

annual meeting of Pembina shareholders or until their successors are duly appointed.

See “The Arrangement – Details of the Arrangement”.

Arrangement Agreement

The obligations of Veresen and Pembina to complete the Arrangement are subject to the satisfaction or waiver of

certain conditions set out in the Arrangement Agreement. These conditions include, among others, approval of the

Common Shareholder Arrangement Resolution by the Common Shareholders, conditional approval or equivalent

approval, as the case may be, of the TSX and the NYSE, as applicable, for the listing of the Pembina Common Shares

and subject to the Preferred Shareholder Arrangement Resolution being approved, the Pembina Exchange Shares

issuable pursuant to the Arrangement, Court approval, receipt of all Required Regulatory Approvals and holders of

not more than 5% of the Common Shares having validly exercised Dissent Rights that have not been withdrawn as of

the Effective Date. Upon all the conditions being fulfilled or waived, Veresen is required to file the Articles of

Arrangement with the Registrar in order to give effect to the Arrangement. Closing of the Arrangement is not

conditional on the approval of the Preferred Shareholder Arrangement Resolution. If the Preferred Shareholders do

not approve the Arrangement, the Preferred Shares will remain outstanding following completion of the Arrangement


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and will not be exchanged for Pembina Exchange Shares. In addition, in the circumstances where the Preferred

Shareholder Arrangement Resolution receives the requisite approval of the Preferred Shareholders, and Dissent Rights

have been validly exercised in respect of more than 5% of the outstanding Preferred Shares, Veresen shall amend the

Plan of Arrangement if requested by Pembina to exclude the Preferred Shares under the Plan of Arrangement and

matters ancillary thereto, including the amalgamation of Pembina and Veresen as contemplated in the Plan of

Arrangement.

In addition to certain covenants, representations and warranties made by each of Veresen and Pembina in the

Arrangement Agreement, Veresen has provided certain non-solicitation covenants, subject to the right of the Board

to, prior to the approval of the Common Shareholder Arrangement Resolution, respond to an Acquisition Proposal

that constitutes or could reasonably be excepted to lead to a Superior Proposal, and the right of Pembina to match any

such Superior Proposal within five Business Days.

In the event of the termination of the Arrangement Agreement as a result of a Pembina Damages Event, including

where: (a) the Board has withdrawn, modified, qualified or changed any of its recommendations or determinations

with respect to the Arrangement in a manner adverse to Pembina; or (b) the Board has accepted, recommended,

approved or entered into an agreement to implement a Superior Proposal, Veresen has agreed to pay to Pembina a

termination fee in the amount of $200 million. The Arrangement Agreement also provides for the payment by Pembina

of a reverse termination fee of $100 million if the Arrangement Agreement is terminated in specified circumstances

where all Required Regulatory Approvals have not been received and Pembina has not complied in all material

respects with certain of its covenants relating to seeking and obtaining such Required Regulatory Approvals. The

Arrangement Agreement may be terminated by mutual written consent of Pembina and Veresen and by either Party

in certain circumstances as more particularly set forth in the Arrangement Agreement. Subject to certain limitations,

each party may also terminate the Arrangement Agreement if the Arrangement is not consummated by October 31,

2017, which date can be unilaterally extended by Pembina, upon the payment of an extension fee of $23.5 million, for

up to an additional two months if a Required Regulatory Approval has not been obtained.

The above is a summary of certain terms of the Arrangement Agreement and is qualified in its entirety by the full text

of the Arrangement Agreement, which is attached as Appendix C to this Information Circular, and to the more detailed

summary contained elsewhere in this Information Circular.

See “The Arrangement – The Arrangement Agreement” and Appendix C for a copy of the Arrangement Agreement.

Attributes of the Combined Company

Management of Veresen expects the combined company, after completion of the Arrangement, will be one of

Canada’s premier energy infrastructure companies, supporting some of North America’s most prolific resource plays

and securing increased market access for its customers. The combined company will feature a largely integrated asset

base that is supported by long-life, economic hydrocarbon reserves and comprises crude oil, liquids and natural gas

pipelines, terminal, storage and midstream operations, gas gathering and processing facilities, as well as fractionation

facilities. Veresen’s management believes the combined company will be greater than the sum of its parts and better

positioned than a stand-alone Veresen entity to deliver on its growth strategy.


approximately $6.0 billion, optimize the integrated asset base, and compete for future investment opportunities in

order to drive meaningful growth over the long term.








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The combined company will pay a meaningful cash dividend that is expected to grow, while offering a lower payout

ratio and cash flows supported primarily with fee-for-service contracts and high-quality counterparties.














facilities; and



The combined company is expected to have a stronger balance sheet and superior access to the capital markets,

resulting in a greater ability to grow on a per share basis and to execute a broad suite of potential projects.




a per share basis;


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facility.

See “The Arrangement – Attributes of the Combined Company”.

Reasons for the Arrangement


recommending to Shareholders that they approve the Arrangement, the Board considered and relied upon a number

of factors, including, among others, the following:
















“The Arrangement – Attributes of the Combined Company” the combined company is expected to be

better positioned than a stand-alone Veresen to deliver on Veresen’s existing strategy;




the highest per share consideration reasonably attainable within a reasonable forecast period;



an ideal partner for a business combination with Veresen;

the Board’s judgment, after discussions with Veresen’s financial advisor and management, that there

were few, if any, potentially interested and capable alternative counterparties to Veresen that would

likely be willing and able to compete with the financial terms proposed by Pembina (including the

potential upside with the combined company), and the potential negative impacts of such discussions on

the negotiations with Pembina;


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the Arrangement provides Common Shareholders with flexibility through the opportunity to receive their

consideration in the form of cash or Pembina Common Shares, subject to the Maximum Cash

Consideration or the Maximum Share Consideration, as applicable, and the potential resultant pro-

rationing. This flexibility of consideration allows the Common Shareholders, to the extent they receive

cash, to lock in the premium represented by the Arrangement, and to the extent they receive Pembina

Common Shares, to benefit from exposure to the upside potential of Pembina’s and Veresen’s combined

business and participate in a value enhancing growing company with increased size, scale and liquidity;

Scotia Capital provided the Fairness Opinions, the full text of which can be found in Appendices G and

H to this Information Circular, that, as of April 30, 2017, and, subject to certain assumptions,

qualifications and limitations, the consideration to be paid to the Common Shareholders and Preferred

Shareholders, as applicable, pursuant to the Arrangement is fair, from a financial point of view, to

Common Shareholders and Preferred Shareholders, respectively;

while the Arrangement contains a covenant prohibiting Veresen from soliciting third-party acquisition

proposals, the Arrangement permits Veresen, prior to the time that Common Shareholders pass the

Common Shareholder Arrangement Resolution, to discuss and negotiate, under specified circumstances,

an unsolicited acquisition proposal should one be received and, if the Board determines in good faith,

after consultation with its legal and financial advisors, that the unsolicited acquisition proposal

constitutes a Superior Proposal within the meaning of the Arrangement Agreement and that the failure

to pursue such Superior Proposal would be inconsistent with the Board’s fiduciary duties under

applicable law, the Board is permitted, after taking certain steps, to terminate the Arrangement in order

to enter into a definitive agreement for that Superior Proposal, subject to payment of a termination fee

to Pembina;

Pembina’s obligation to complete the Arrangement being subject to a limited number of conditions

which the Board believes are reasonable under the circumstances, with the completion of the

Arrangement not being subject to a financing condition, due diligence condition or the approval of

Pembina’s shareholders, the fact that the conditions to completion of the Arrangement are specific and

limited in scope, the business reputation and capabilities of Pembina, and the Board’s assessment that

Pembina is willing to devote the resources necessary to complete the Arrangement in an expeditious

manner;

at least 66⅔% of the votes cast by Common Shareholders at the Common Shareholders’ Meeting are

required to approve the Common Shareholder Arrangement Resolution;

the Arrangement Agreement is a result of arm’s length negotiations with Pembina, and the Board

supervised the negotiation of the key economic and other material terms of the Arrangement Agreement;

all of the directors and certain officers were willing to enter into Support Agreements in connection with

the Arrangement;

the Arrangement is subject to a determination of the Court that the terms and conditions of the

Arrangement, and the procedures relating thereto are fair, substantively and procedurally, to the

Shareholders and the other persons affected;

the Board’s belief that the Arrangement is likely to be completed in accordance with its terms and within

a reasonable time, with closing currently expected to occur in the second half of 2017; and

registered Shareholders may, upon compliance with certain conditions and in certain circumstances,

exercise Dissent Rights.

The information and factors described above and considered by the Board in reaching its determinations and making

its approvals are not intended to be exhaustive but include material factors considered by the Board. In view of the


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wide variety of factors considered in connection with its evaluation of the Arrangement and the complexity of these

matters, the Board did not find it useful to, and did not attempt to, quantify, rank or otherwise assign relative weights

to these factors. In addition, individual members of the Board may have given different weight to different factors.

See “The Arrangement – Recommendation of the Board”.

Fairness Opinions

Scotia Capital was formally retained by Veresen on January 4, 2017 to perform such financial advisory and investment

banking services for Veresen as are customary in transactions similar to the Arrangement including assisting Veresen

in analyzing strategic alternatives and, if requested, structuring, negotiating and effecting a possible transaction

between Veresen and Pembina. In connection with this mandate, Scotia Capital has provided the Board with the

Fairness Opinions, that, as of April 30, 2017, and, subject to certain assumptions, qualifications and limitations, the

consideration to be paid to the Common Shareholders and the Preferred Shareholders, as applicable, pursuant to the

Arrangement is fair, from a financial point of view, to the Common Shareholders and the Preferred Shareholders,

respectively.

The full texts of the Common Shareholder Fairness Opinion and the Preferred Shareholder Fairness Opinion

which set forth, among other things, assumptions made, information reviewed, matters considered and

limitations on the scope of the review undertaken in rendering such Fairness Opinions, are attached as

Appendices G and H, respectively. The Fairness Opinions address only the fairness, from a financial point of

view, as of April 30, 2017, of the consideration to be received by the Shareholders pursuant to the Arrangement

and do not address any other aspect of the Arrangement or any related transaction, including any legal, tax or

regulatory aspects of the Arrangement to Veresen or the Shareholders. Scotia Capital provided the Fairness

Opinions to the Board for its exclusive use only in considering the Arrangement. The Fairness Opinions may

not be relied upon by any other Person. The Fairness Opinions do not address the relative merits of the

Arrangement as compared to other business strategies or transactions that might be available to Veresen or

Veresen’s underlying business decision to effect the Arrangement. The Fairness Opinions do not constitute a

recommendation to any Shareholder as to how such Shareholder should act or vote with respect to the

Arrangement.

Shareholders are urged to read the Fairness Opinions carefully and in their entirety. This summary of the

Fairness Opinions is qualified in its entirety by the full text of such opinions.

See “The Arrangement – Fairness Opinions”. For the full texts of the Fairness Opinions, see Appendix G – “Common

Shareholder Fairness Opinion” and Appendix H – “Preferred Shareholder Fairness Opinion”

Recommendation of the Board of Directors

After considering, among other things, the Fairness Opinions, the Board unanimously: (a) determined that the

Arrangement and the entry into the Arrangement Agreement are in the best interests of Veresen and that the

Arrangement is fair to the Common Shareholders and the Preferred Shareholders; and (b) recommends that

the Common Shareholders and the Preferred Shareholders vote in favour of the Common Shareholder

Arrangement Resolution and the Preferred Shareholder Arrangement Resolution, respectively.


Support Agreements

On May 1, 2017, the Supporting Shareholders, which include all of the directors and certain officers of Veresen,

entered into the Support Agreements with Pembina pursuant to which they agreed, among other things, to do all such

things and take all such steps as may reasonably be required to be done or taken by the Supporting Shareholder to

vote, or cause to be voted, all of such Supporting Shareholder’s Common Shares entitled to vote on the Common

Share Arrangement Resolution in favour of the Common Share Arrangement Resolution, and to vote, or cause to be


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voted, all of the Supporting Shareholder’s Common Shares entitled to vote against any proposed action by any Person

whatsoever which could prevent or delay the completion of the Arrangement and the transactions contemplated by

the Arrangement Agreement.

See “The Arrangement – Support Agreements”.

Procedure for the Arrangement to become Effective

Procedural Steps

The Arrangement is proposed to be carried out pursuant to Section 193 of the ABCA. The following procedural steps

must be taken in order for the Arrangement to become effective:

(a) the Common Shareholder Arrangement Resolution must be approved by the Common Shareholders

at the Common Shareholders’ Meeting in the manner set forth in the Interim Order;

(b) the Preferred Shareholder Arrangement Resolution must be approved by the Preferred Shareholders

at the Preferred Shareholders’ Meeting in the manner set forth in the Interim Order (provided,

however, that should such approval not be obtained, the Preferred Shares will be excluded from the

Arrangement and will remain outstanding following completion of the Arrangement and the Plan of

Arrangement will be amended prior to its filing to reflect the same);

(c) the Court must grant the Final Order approving the Arrangement;

(d) all conditions precedent to the Arrangement, as set forth in the Arrangement Agreement, including

receipt of the Required Regulatory Approvals, must be satisfied or waived by the appropriate Party;

and

(e) the Final Order, the Articles of Arrangement and related documents, in the form prescribed by the

ABCA, must be filed with the Registrar.

There is no assurance that the conditions set out in the Arrangement Agreement will be satisfied or waived on

a timely basis or at all.

Upon the conditions precedent set forth in the Arrangement Agreement being fulfilled or waived, Veresen intends to

file a copy of the Final Order and the Articles of Arrangement with the Registrar under the ABCA, together with such

other materials as may be required by the Registrar, in order to give effect to the Arrangement.

See “Procedure for the Arrangement to become Effective – Procedural Steps”.

Shareholder Approvals

Common Shareholder Approval

Pursuant to the terms of the Interim Order, the Common Shareholder Arrangement Resolution must, subject to further

order of the Court, be approved by at least 66⅔% of the votes cast by Common Shareholders present in person or

represented by proxy at the Common Shareholders’ Meeting. If the Common Shareholder Arrangement Resolution is

not approved by Common Shareholders, the Arrangement cannot be completed.


in such form of proxy, to vote such proxy in favour of the Common Shareholder Arrangement Resolution set

forth in Appendix A to this Information Circular.


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Notwithstanding the foregoing, the Common Shareholder Arrangement Resolution proposed for consideration by the

Common Shareholders authorizes the Board, without further notice to or approval of Common Shareholders, subject

to the terms of the Arrangement Agreement and the Interim Order, to modify, amend or terminate the Arrangement

Agreement or the Plan of Arrangement, to decide not to proceed with the Arrangement and to revoke the Common

Shareholder Arrangement Resolution at any time prior to the Effective Time. See Appendix A to this Information

Circular for the full text of the Common Shareholder Arrangement Resolution.

Preferred Shareholder Approval

Pursuant to the terms of the Interim Order, the Preferred Shareholder Arrangement Resolution must be approved by

at least 66⅔% of the votes cast by the Preferred Shareholders present in person or represented by proxy at the Preferred

Shareholders’ Meeting, voting as a single class. It is not a condition to completion of the Arrangement that the

Preferred Shareholder Arrangement Resolution shall have been approved and, if the Preferred Shareholder

Arrangement Resolution is not approved by Preferred Shareholders, the Preferred Shares will be excluded from the

Arrangement and will remain outstanding following completion of the Arrangement. In addition, in the circumstances

where the Preferred Shareholder Arrangement Resolution receives the requisite approval of the Preferred

Shareholders, and Dissent Rights have been validly exercised in respect of more than 5% of the outstanding Preferred

Shares, Veresen shall amend the Plan of Arrangement if requested by Pembina to exclude the Preferred Shares under

the Plan of Arrangement and matters ancillary thereto, including the amalgamation of Pembina and Veresen as

contemplated in the Plan of Arrangement.


in such form of proxy, to vote such proxy in favour of the Preferred Shareholder Arrangement Resolution set

forth in Appendix B to this Information Circular.

Notwithstanding the foregoing, the Preferred Shareholder Arrangement Resolution proposed for consideration by the

Preferred Shareholders authorizes the Board, without further notice to or approval of such Preferred Shareholders,

subject to the terms of the Arrangement Agreement and the Interim Order, to modify, amend or terminate the

Arrangement Agreement or the Plan of Arrangement, to decide not to proceed with the Arrangement and to revoke

the Preferred Shareholder Arrangement Resolution at any time prior to the Effective Time. See Appendix B to this

Information Circular for the full text of the Preferred Shareholder Arrangement Resolution.

See “Procedure for the Arrangement to become Effective – Regulatory Approvals”.

Court Approval

On June 5, 2017, Veresen obtained the Interim Order providing for the calling and holding of the Meetings and other

procedural matters. The Interim Order is attached as Appendix E to this Information Circular. The ABCA provides

that the Arrangement requires final Court approval. Subject to the terms of the Arrangement Agreement, if the

Common Shareholder Arrangement Resolution is approved at the Common Shareholders’ Meeting, Veresen will make

an application to the Court for the Final Order at the Calgary Courts Centre, 601 - 5th Street, S.W., Calgary, Alberta,

Canada, on July 12, 2017 at 10:00 a.m. (Calgary time) or as soon thereafter as counsel may be heard. The Notice of

Originating Application for the Final Order accompanies this Information Circular. At the application the Court will

be requested to consider the fairness of the Arrangement.

Any Shareholder, or other interested party desiring to support or oppose the Application with respect to the

Arrangement, may appear at the hearing in person or by counsel for that purpose, subject to filing with the Court and

serving on Veresen on or before 5:00 p.m. (Calgary time) on July 4, 2017, a notice of intention to appear setting out

their address for service and indicating whether they intend to support or oppose the Application or make submissions,

together with any evidence or materials which are to be presented to the Court. Service of such notice on Veresen is

required to be effected by service upon the solicitors for Veresen: Osler, Hoskin & Harcourt LLP, Suite 2500, 450 -

1st Street S.W., Calgary, Alberta, T2P 5H1, Attention: Colin Feasby.

See “Procedure for the Arrangement to become Effective – Court Approval”.


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Regulatory Approvals

The Arrangement Agreement provides that receipt of all Required Regulatory Approvals, including Competition Act

Approval, HSR Approval and CTA Approval, is a condition precedent to the Arrangement becoming effective.

It is also a condition to the completion of the Arrangement that the TSX and the NYSE shall have conditionally

approved the listing of the Pembina Common Shares to be issued to Common Shareholders pursuant to the

Arrangement and, if the Preferred Shareholder Arrangement Resolution receives the requisite approval of the

Preferred Shareholders at the Preferred Shareholders’ Meeting, that the TSX shall have conditionally approved the

listing of the Pembina Exchange Shares to be issued to Preferred Shareholders pursuant to the Arrangement. The TSX

has conditionally approved the listing of the Pembina Common Shares to be issued to Common Shareholders pursuant

to the Arrangement and the listing of the Pembina Exchange Shares following the Effective Date on the TSX. Listing

is subject to Pembina fulfilling all of the listing requirements of the TSX. The NYSE has conditionally approved the

listing of the Pembina Common Shares to be issued to Common Shareholders pursuant to the Arrangement. Listing

will be subject to Pembina fulfilling all of the listing requirements of the NYSE.

See “Procedure for the Arrangement to become Effective – Regulatory Approvals”.

Dissent Rights

Pursuant to the Interim Order, Dissenting Shareholders are entitled, in addition to any other right such Dissenting

Shareholder may have, to dissent and to be paid by Pembina the fair value of the Common Shares or Preferred Shares,

as the case may be, held by such Dissenting Shareholder in respect of which such Dissenting Shareholder dissents,

determined as of the close of business on the last Business Day before the day on which the Common Shareholder

Arrangement Resolution or Preferred Shareholder Arrangement Resolution, as the case may be, from which such

Dissenting Shareholder’s dissent was adopted and provided the Arrangement is completed in respect of such

Shareholders. A Dissenting Shareholder may dissent only with respect to all of the Common Shares or Preferred

Shares, respectively, held by such Dissenting Shareholder, or on behalf of any one beneficial owner and

registered in the Dissenting Shareholder’s name. Only registered Shareholders may dissent. Persons who are

beneficial owners of Veresen Shares registered in the name of a broker, dealer, bank, trust company or other

nominee who wish to dissent should be aware that they may only do so through the registered owner of such

Veresen Shares. A registered Shareholder, such as a broker or CDS who holds Veresen Shares as nominee for

beneficial holders, some of whom wish to dissent, must exercise the Dissent Right on behalf of such beneficial

owners with respect to all of the Common Shares or Preferred Shares held for such beneficial owners. In such

case, the written objection to the Common Shareholder Arrangement Resolution or Preferred Shareholder

Arrangement Resolution, as the case may be, should set forth the number of Common Shares and/or Preferred

Shares covered by it.

Unless otherwise waived, it is a condition to the completion of the Arrangement that holders of not more than

5% of the issued and outstanding Common Shares shall have validly exercised Dissent Rights in respect of the

Arrangement that have not been withdrawn as of the Effective Date. Should Dissent Rights have been validly

exercised in respect of more than 5% of the outstanding Preferred Shares and the Preferred Shareholder Arrangement

Resolution receives the requisite approval of the Preferred Shareholders, Veresen will, if requested by Pembina, amend

the Plan of Arrangement to exclude the Preferred Shares under the Plan of Arrangement and matters ancillary thereto,

including, in each case, the amalgamation of Veresen and Pembina contemplated by the Plan of Arrangement.

Notwithstanding the foregoing, registered Preferred Shareholders who have validly exercised Dissent Rights shall not

be entitled to dissent and to be paid the fair value of their Preferred Shares in the event that the Preferred Shares are

not exchanged by Pembina pursuant to the Arrangement.

See “Dissent Rights”.


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Making an Election Regarding the Consideration to be Received

How to Make an Election

Enclosed with this Information Circular is the Common Shareholder Letter of Transmittal and Election Form which,

when properly completed and returned together with the certificate(s) or DRS Advice(s) representing Common Shares

and all other documents that may be required by the Depositary, will enable each Common Shareholder to obtain the

consideration that the Common Shareholder is entitled to receive under the Arrangement. The Common Shareholder

Letter of Transmittal and Election Form must be submitted by the Election Deadline. Veresen will provide at least 10

Business Days’ notice of the Election Deadline to Common Shareholders by means of a news release disseminated

on a national newswire in Canada and the U.S. See “Procedure for the Arrangement to become Effective – Procedure

for Exchange of Veresen Share Certificates or DRS Advices”.

The Common Shareholder Letter of Transmittal and Election Form contains complete instructions on how to make

your election and exchange your Common Shares.

Each Common Shareholder’s election may be subject to the pro-rationing provisions described below.

What Happens if a Shareholder Fails to Make a Valid Election

Common Shareholders who do not deposit with the Depositary a duly completed Common Shareholder Letter of

Transmittal and Election Form together with the applicable certificate(s) or DRS Advice(s) representing Common

Shares prior to the Election Deadline, or otherwise fail to comply with the requirements of the Plan of Arrangement

and the Common Shareholder Letter of Transmittal and Election Form with respect to the election to receive the Share

Consideration or the Cash Consideration shall be deemed to have elected to receive the Share Consideration in

exchange for all of such holder’s Common Shares, subject to the terms of the Plan of Arrangement.

See “Procedure for the Arrangement to become Effective – Making an Election Regarding the Consideration to be

Received”.

Pro-Rationing Provisions

Elections for Pembina Common Shares

In the event the Total Elected Share Consideration exceeds the Maximum Share Consideration, then the aggregate

number of Pembina Common Shares to be paid to any Common Shareholder shall be determined by multiplying the

aggregate number of Pembina Common Shares that would be issued to such Common Shareholder by a fraction,

rounded to six decimal places, the numerator of which is the Maximum Share Consideration and the denominator of

which is the Total Elected Share Consideration; and such holder shall be deemed to have elected to receive the Share

Consideration for such number of its Common Shares, rounded down to the nearest whole, as is equal to the aggregate

number of Pembina Common Shares received by such holder, as adjusted pursuant to the Plan of Arrangement, divided

by the Share Consideration, and the Cash Consideration for the remainder of its Common Shares for which such holder

would otherwise have received the Share Consideration.

See “Procedure for the Arrangement to become Effective – Pro Ration Provisions – Elections for Pembina Common

Shares”.

Elections for Cash

In the event that the Total Elected Cash Consideration exceeds the Maximum Cash Consideration, then the aggregate

amount of cash to be paid to any Common Shareholder shall be determined by multiplying the aggregate amount of

cash that would be paid to such Common Shareholder by a fraction, rounded to six decimal places, the numerator of

which is the Maximum Cash Consideration and the denominator of which is the Total Elected Cash Consideration;

and such holder shall be deemed to have elected to receive the Cash Consideration for such number of its Common


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Shares, rounded down to the nearest whole, as is equal to the aggregate amount of cash received by such holder, as

adjusted in accordance with the Plan of Arrangement, divided by the Cash Consideration, and the Share Consideration

for the remainder of its Common Shares for which such holder would otherwise have received the Cash Consideration.

See “Procedure for the Arrangement to become Effective – Pro Ration Provisions – Elections for Cash”.

Fractional Shares

No fractional Pembina Common Shares will be issued pursuant to the Arrangement and, in lieu thereof, each former

Common Shareholder otherwise entitled to a fractional interest in a Pembina Common Share will receive the nearest

whole number of Pembina Common Shares (with fractions equal to exactly 0.5 or greater being rounded up and

fractions less than 0.5 being rounded down), unless such rounding causes the aggregate number of Pembina Common

Shares to be paid to the Common Shareholders pursuant to the Plan of Arrangement to be greater than the Maximum

Share Consideration, in which case all such fractional interests will be paid in cash based on the Cash Consideration

notwithstanding that such cash payments may cause the aggregate cash consideration to be paid by Pembina pursuant

to the Plan of Arrangement to exceed the Maximum Cash Consideration. In calculating such fractional interests, all

Common Shares registered in the name of or beneficially held by a Common Shareholder or his/her/its nominee shall

be aggregated.

See “Procedure for the Arrangement to become Effective – Pro Ration Provisions – Fractional Shares”.

It is highly likely that elections made by Common Shareholders will be subject to pro-rationing under the Plan

of Arrangement.

Summary of Canadian Federal Income Tax Considerations

This Information Circular contains a summary of certain Canadian federal income tax considerations generally

applicable to certain Shareholders who, under the Arrangement, dispose of one or more Veresen Shares. See the

discussion under the section entitled “Certain Canadian Federal Income Tax Considerations”.

Shareholders should consult their own tax advisors for advice with respect to the Canadian income tax consequences

to them in respect of the Arrangement.

Summary of Certain United States Federal Income Tax Considerations

This Information Circular contains a summary of certain U.S. federal income tax considerations generally applicable

to certain U.S. Holders that transfer one or more Common Shares pursuant to the Arrangement. Any comments herein

regarding such considerations are qualified in their entirety by reference to that summary. See the discussion under

the section entitled “Certain United States Federal Income Tax Considerations”. U.S. Holders are urged to consult

their tax advisors regarding the specific tax consequences of the Arrangement to them.

Other Tax Considerations

This Information Circular discusses certain Canadian and United States federal income tax considerations applicable

to certain Shareholders. Tax consequences to Shareholders who are resident in jurisdictions other than Canada or the

United States are not discussed and such Shareholders should consult their tax advisors with respect to the tax

implications of the Arrangement, including any associated filing requirements, in such jurisdictions and with respect

to the tax implications in such jurisdictions of owning Pembina Shares after the Arrangement. All Shareholders should

consult their tax advisors regarding the provincial, state, local and territorial tax consequences of the Arrangement and

of holding Pembina Shares.


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Timing

If the Meetings are held as scheduled and are not adjourned and the necessary conditions for completion of the

Arrangement are satisfied or waived, Veresen will apply for the Final Order approving the Arrangement. If the Final

Order is obtained on July 12, 2017 in form and substance satisfactory to Veresen and Pembina, the Effective Date will

occur once all other conditions set forth in the Arrangement Agreement are satisfied or waived. Veresen and Pembina

expect the Effective Date will occur in the second half of 2017. It is not possible, however, to state with certainty

when the Effective Date will occur.

The Arrangement will become effective upon the filing with the Registrar of the Articles of Arrangement and a copy

of the Final Order, together with such other materials as may be required by the Registrar.

The Effective Date could be delayed for a number of reasons, including an objection before the Court at the hearing

of the application for the Final Order or delays in receiving all Required Regulatory Approvals.

See “Timing”.

Selected Unaudited Pro Forma Financial Information for Pembina

This Information Circular contains certain unaudited pro forma financial information for Pembina after giving effect

to the Arrangement for the year ended December 31, 2016 and for the three month period ended March 31, 2017.

These tables should be read in conjunction with the unaudited pro forma consolidated financial statements of Pembina

for the year ended December 31, 2016 and the three month period ended March 31, 2017, including the notes thereto,

attached as Appendix I to this Information Circular. Reference should also be made to: (a) the Veresen Annual

Financial Statements; (b) the Veresen Interim Financial Statements; (c) the Pembina Annual Financial Statements;

and (d) the Pembina Interim Financial Statements, each of which is incorporated by reference herein. See “Pro Forma

Information of Pembina After Giving Effect to the Arrangement”.

Risk Factors

Shareholders voting in favour of the Common Shareholder Arrangement Resolution and the Preferred Shareholder

Arrangement Resolution, as the case may be, will be choosing to combine the businesses of Veresen and Pembina and

to invest in Pembina Shares, as applicable. The completion of the Arrangement and investment in Pembina Shares

involves risks.

An investment in Pembina Shares is subject to certain risks, which are generally associated with an investment in

shares of a pipeline, midstream and marketing corporation. The following is a list of certain additional risk factors

associated with the Arrangement and the investment in Pembina Shares which Shareholders should carefully

consider before approving the Common Shareholder Arrangement Resolution and Preferred Shareholder

Arrangement Resolution, as applicable:

Pembina and Veresen may fail to realize the anticipated benefits of the Arrangement;

the conditions to completion of the Arrangement, including receiving all Required Regulatory Approvals,

Court approval, TSX and NYSE approval, as applicable, for the listing of the Pembina Common Shares and

subject to the Preferred Shareholder Arrangement Resolution receiving the requisite approval, the Pembina

Exchange Shares issuable pursuant to the Arrangement, may not be satisfied or waived by the Outside Date

which may result in the Arrangement not being completed;

risks related to the integration of Veresen’s and Pembina’s existing businesses, including that Shareholders

may be exposed to additional business risks not previously applicable to such investment;

the Arrangement Agreement could be terminated by either Party under certain circumstances;


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Veresen will incur significant costs relating to the Arrangement, regardless of whether the Arrangement is

completed or not completed;

the timing of the Meetings and the Final Order and the anticipated Effective Date may be changed or delayed;

if the Arrangement is not completed, Shareholders will not realize the benefits of the Arrangement and

Veresen’s future business and operations could be adversely affected;

changes in income tax laws or actions taken by taxing authorities could have adverse implications on

Pembina, Veresen or their respective securityholders; and

future dividends on Pembina’s Common Shares may not be increased as expected, or declared at all.

The risk factors listed above are an abbreviated list of risk facts summarized elsewhere in this Information Circular,

the Veresen AIF, the Veresen Annual MD&A, the Veresen Interim MD&A, the Pembina AIF, the Pembina

Annual MD&A and the Pembina Interim MD&A, each of which are incorporated herein by reference. See

“Risk Factors”. Shareholders should carefully consider all such risk factors.


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THE ARRANGEMENT

General

Veresen entered into the Arrangement Agreement with Pembina on May 1, 2017. A copy of the Arrangement

Agreement is attached as Appendix C to this Information Circular. The Arrangement Agreement provides for the

implementation of the Plan of Arrangement (a copy of which is attached as Appendix D to this Information Circular)

pursuant to which, among other things, the following transactions will occur:

Common Shareholders (other than Dissenting Shareholders) will, for each Common Share held, have the

option to receive:


(b) $18.65 in cash,

subject to pro-rationing under the Plan of Arrangement. Assuming full pro-rationing, each Common

Shareholder would receive (i) cash in an amount equal to $4.8494 multiplied by the number of Common

Shares held by such Common Shareholder, and (ii) 0.3172 of a Pembina Common Share multiplied by the

number of Common Shares held by such Common Shareholder.

Provided that the Preferred Shareholder Arrangement Resolution receives the requisite approval by the

Preferred Shareholders at the Preferred Shareholders’ Meeting and the Preferred Shares are not otherwise

excluded from the Arrangement pursuant to the terms of the Arrangement Agreement:

(a) Veresen shall declare and pay a cash dividend on each Preferred Share in an amount equal to all



(b) each Preferred Shareholder (other than Dissenting Shareholders) shall receive, for each Preferred

Share held, the Preferred Share Consideration.

Provided that the Preferred Shareholder Arrangement Resolution has received the requisite approval of

Preferred Shareholders at the Preferred Shareholders’ Meeting (or the Preferred Shareholders have approved

a special resolution with similar effect to the Preferred Shareholder Arrangement Resolution prior to the

Effective Time such that Pembina has become the sole holder of the Preferred Shares), and the Plan of

Arrangement is not otherwise amended to exclude the Preferred Shares, Pembina and Veresen shall be

amalgamated to form one corporation under the ABCA, being Amalco. If the Preferred Shareholders do not

approve the Preferred Shareholder Arrangement Resolution, or if the Preferred Shares are otherwise excluded

from the Plan of Arrangement pursuant to the terms of the Arrangement Agreement, the Preferred Shares

will remain outstanding following completion of the Arrangement and will not be exchanged for the Pembina

Exchange Shares.

Pursuant to the Arrangement Agreement: (a) in the circumstances where the Preferred Shareholder Arrangement

Resolution does not receive the requisite approval of the Preferred Shareholders at the Preferred Shareholders’

Meeting (or any adjournment thereof) and the Preferred Shareholders do not otherwise approve a special resolution

with similar effect to the Preferred Shareholder Arrangement Resolution prior to the Effective Time such that Pembina

is the sole holder of the Preferred Shares prior to the amalgamation contemplated in the Plan of Arrangement, Veresen

shall amend the Plan of Arrangement to exclude the Preferred Shares under the Plan of Arrangement and matters

ancillary thereto; and (b) in the circumstances where the Preferred Shareholder Arrangement Resolution receives the

requisite approval of the Preferred Shareholders, and Dissent Rights have been validly exercised in respect of more

than 5% of the outstanding Preferred Shares, Veresen shall amend the Plan of Arrangement if requested by Pembina

to exclude the Preferred Shares under the Plan of Arrangement and matters ancillary thereto, including, in each case,


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the amalgamation contemplated in the Plan of Arrangement. In such circumstances, the Preferred Shares will remain

outstanding following completion of the Arrangement and will not be exchanged for the Pembina Exchange Shares.

As of June 5, 2017, there were issued and outstanding 313,652,781 Common Shares and 401,129,872 Pembina

Common Shares. Upon completion of the Arrangement, assuming the issuance of the Maximum Share Consideration,

current holders of Pembina Common Shares are expected to own approximately 80% of the combined company, and

Common Shareholders are expected to own approximately 20% of the combined company. The Plan of Arrangement

provides that any certificate formerly representing Common Shares (and, in the event the Preferred Shareholder

Arrangement Resolution receives the requisite approval at the Preferred Shareholders’ Meeting, any certificate

formerly representing Preferred Shares) not deposited together with all other documents as required by the Plan of

Arrangement and the applicable Letter of Transmittal on or before the last Business Day prior to the third anniversary

of the Effective Date, shall cease to represent a right or claim by or interest of any kind or nature against Veresen or

Pembina. On such date, all consideration and other property to which such former holder was entitled shall be deemed

to have been surrendered to Veresen or Pembina, as applicable.

As the completion of the Arrangement will be considered a “Change of Control” pursuant to the Veresen LTIP and

the Veresen DSU Plans and the provisions of the Arrangement Agreement, all outstanding Veresen RSUs, Veresen

PSUs and Veresen DSUs will vest and be settled in cash immediately prior to the Effective Time such that no Veresen

RSUs, Veresen PSUs or Veresen DSUs will remain outstanding at the Effective Time. See “Interests of Certain

Persons and Companies in the Arrangement”.

Subject to the completion of the Arrangement, Pembina has announced that it intends to increase the monthly dividend

on the Pembina Common Shares by 5.9% (from $0.17 to $0.18 per Pembina Common Share per month). Commencing

with the July 2017 dividend record date, Veresen will amend its record dates for dividends on the Common Shares to

match the record dates set by Pembina for dividends on the Pembina Common Shares.

Pembina has agreed to use commercially reasonable efforts to appoint Doug Arnell, Maureen E. Howe and Henry W.

Sykes, each a current director of Veresen, to the Pembina Board as soon as reasonably practicable following

completion of the Arrangement to serve until the next annual meeting of Pembina shareholders or until their successors

are duly appointed.

Details of the Arrangement

The following is a summary only of the Plan of Arrangement and reference should be made to the full text of the

Arrangement Agreement and the Plan of Arrangement set forth in Appendices C and D to this Information Circular,

respectively.

Pursuant to the Plan of Arrangement, commencing at the Effective Time, each of the following are deemed to occur

in the following order without any further authorization, act or formality:

Termination of Shareholder Rights Plan: Veresen’s shareholder rights plan dated May 3, 2017, as such may

be amended, amended and restated or replaced from time to time shall terminate and cease to have any further

force or effect and the rights issued pursuant thereto shall be cancelled without any payment in respect

thereof;

Dissenting Shareholders: Common Shares and, in the event the Preferred Shareholder Arrangement

Resolution receives the requisite approval of Preferred Shareholders at the Preferred Shareholders’ Meeting,

Preferred Shares held by Dissenting Shareholders who have validly exercised Dissent Rights shall be deemed

to have been transferred to Veresen (free and clear of any and all Encumbrances), and cancelled and such

Dissenting Shareholders shall cease to have any rights as Common Shareholders or Preferred Shareholders,

as applicable, other than the right to be paid the fair value of their Common Shares or Preferred Shares, as

the case may be, in accordance with the Plan of Arrangement, and the names of such holders shall be removed

from the register of Common Shareholders and Preferred Shareholders, as applicable;


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Acquisition of Common Shares by Pembina: Each issued and outstanding Common Share (other than those

held by Dissenting Shareholders) shall be transferred by the holder thereof without any further action on its

part (free and clear of any Encumbrances) to Pembina in accordance with the election or deemed election of

such holder pursuant to the Plan of Arrangement, as adjusted by the pro-rationing provisions of the Plan of

Arrangement, if applicable, in exchange for the Cash Consideration or the Share Consideration, as applicable,

and Pembina shall be deemed to be the legal and beneficial owner of such transferred Common Shares (free

and clear of Encumbrances), and upon such exchange: (a) the holders of such Common Shares shall cease to

be the holders of Common Shares and the names of such holders shall be removed from the register of

Common Shareholders; and (b) Pembina shall become the holder of the Common Shares so exchanged and

shall be added to the register of Common Shareholders as the registered holder of such shares;

Acquisition and Exchange of Preferred Shares by Pembina: Provided that the Preferred Shareholder

Arrangement Resolution has received the requisite approval of Preferred Shareholders at the Preferred

Shareholders’ Meeting and the Preferred Shares are not otherwise excluded from the Plan of Arrangement:

o Veresen shall declare and pay in cash a dividend on each Preferred Share in an amount equal to all



o each issued and outstanding Preferred Share (other than those held by Dissenting Shareholders) shall

be transferred by the holder thereof without any further action on its part (free and clear of any

Encumbrances) to Pembina in exchange for the Preferred Share Consideration and Pembina shall

be deemed to be the legal and beneficial owner of such transferred Preferred Shares (free and clear

of Encumbrances), and upon such exchange: (a) the holders of such Preferred Shares shall cease to

be the holders of Preferred Shares and the names of such holders shall be removed from the register

of Preferred Shareholders; and (b) Pembina shall become the holder of the Preferred Shares so

exchanged and shall be added to the register of Preferred Shareholders as the registered holder of

such shares;

Reduction of Stated Capital: Provided that the Preferred Shareholder Arrangement Resolution has received

the requisite approval of Preferred Shareholders at the Preferred Shareholders’ Meeting or the Preferred

Shareholders have approved a special resolution with similar effect to the Preferred Shareholder Arrangement

Resolution prior to the Effective Time such that Pembina is the sole holder of the Preferred Shares, and the

Plan of Arrangement is not otherwise amended pursuant to the terms thereof to exclude the Preferred Shares,

the aggregate stated capital of Veresen, in respect of the Common Shares and the Preferred Shares, shall be

reduced to nil; and

Amalgamation: Provided that the Preferred Shareholder Arrangement Resolution has received the requisite

approval of Preferred Shareholders at the Preferred Shareholders’ Meeting or the Preferred Shareholders

have approved a special resolution with similar effect to the Preferred Shareholder Arrangement Resolution

prior to the Effective Time such that Pembina is the sole holder of the Preferred Shares, and the Plan of

Arrangement is not otherwise amended pursuant to the terms thereof to exclude the Preferred Shares,

Pembina and Veresen shall be amalgamated to form one corporation under the ABCA, being Amalco, in

accordance with the following terms of the Plan of Arrangement:

(i) Name. The name of Amalco shall be Pembina Pipeline Corporation;

(ii) Share Provisions. The share provisions and authorized share capital of Amalco shall be the

same as the share provisions and authorized share capital of Pembina;

(iii) Directors and Officers.

(A) Initial Directors. The directors of Amalco shall be the same as the directors of

Pembina; and


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(B) Initial Officers. The officers of Amalco shall be the same as the officers of

Pembina;

(iv) Business and Powers. There shall be no restrictions on the business that Amalco may carry

on or on the powers it may exercise;

(v) Other Provisions. The other provisions forming part of the Articles of Amalco shall be the

same as the respective provision of the articles of Pembina as such existed immediately

prior to the amalgamation;

(vi) Stated Capital. The aggregate stated capital of Amalco will be an amount equal to the

aggregate of the paid-up capital for the purposes of the Tax Act of the Pembina Common

Shares and the Pembina Class A Preferred Shares outstanding immediately before the

amalgamation;

(vii) By-laws. The by-laws of Amalco shall be the by-laws of Pembina;

(viii) Registered Office. The registered office of Amalco shall be the registered office of

Pembina;

(ix) Effect of Amalgamation. The following shall be the effect of the amalgamation:

(A) all of the property of each of Pembina and Veresen shall continue to be the

property of Amalco;

(B) Amalco shall continue to be liable for the obligations of each of Pembina and

Veresen;

(C) any existing cause of action, claim or liability to prosecution of Pembina or

Veresen shall be unaffected;

(D) any civil, criminal or administrative action or proceeding pending by or against

either of Pembina or Veresen may be continued to be prosecuted by or against

Amalco; and

(E) a conviction against, or ruling, order or judgment in favour of or against, either of

Pembina or Veresen may be enforced by or against Amalco;

(x) Articles. The articles of amalgamation of Amalco filed shall be deemed to be the articles

of incorporation of Amalco, and the certificate of amalgamation of Amalco shall be

deemed to be the certificate of incorporation of Amalco;

(xi) Inconsistency with Laws. To the extent any of the provisions of the Plan of Arrangement

is deemed to be inconsistent with applicable Laws, the Plan of Arrangement shall be

automatically adjusted to remove such inconsistency; and

(xii) Cancellation of Shares. On the amalgamation each issued and outstanding Common Share

and Preferred Share shall be cancelled and each issued and outstanding Pembina Common

Share and Pembina Class A Preferred Share shall remain unaffected.

The respective obligations of Pembina and Veresen to complete the transactions contemplated by the Arrangement

are subject to a number of conditions which must be satisfied or waived in order for the Arrangement to become

effective. Upon all of the conditions being fulfilled or waived, Veresen is required to file a copy of the Final Order


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and the Articles of Arrangement and any such other documents as may be required with the Registrar in order to give

effect to the Arrangement.

Background to the Arrangement

The terms of the Arrangement are the result of arm’s length negotiations between Veresen and Pembina and their

respective advisors. The following is a summary of the events leading up to the negotiation of the Arrangement

Agreement and the key meetings, negotiations, discussions and actions by and between the Parties that preceded the

execution and public announcement of the Arrangement Agreement.

Pembina, through its President and Chief Executive Officer, Mick Dilger, first approached Don Althoff, President and

Chief Executive Officer of Veresen, in early December 2016. Mr. Althoff and Mr. Dilger subsequently met on

December 8, 2016, at which meeting Mr. Dilger raised the possibility of a business combination involving Veresen

and Pembina. The discussions were preliminary in nature and specific details of any proposed transaction, such as the

consideration to be offered by Pembina in respect of any such transaction, were not addressed. Several days following

the meeting between Mr. Althoff and Mr. Dilger, Steve Mulherin, the Chair of the Board, met with Randall Findlay,

the Chair of the Pembina Board, to discuss the possibility of a business combination involving Veresen and Pembina.

These discussions were also preliminary in nature and no details of a potential transaction were proposed or discussed.

On December 19, 2016, Mr. Althoff and Mr. Dilger discussed by telephone the possibility of a business combination.

These discussions continued to be of a preliminary nature and no details of a potential transaction were proposed or

discussed.

Following these meetings, the Board met on December 26, 2016 and received an update from Mr. Althoff and Mr.

Mulherin regarding their respective discussions with Mr. Dilger and Mr. Findlay. While Veresen regularly reviews its

overall corporate strategy and, from time to time, considers various strategic options that might accelerate the

achievement of its business plan or otherwise be in the best interests of Veresen, at the time of Pembina’s approach in

December 2016, Veresen was focused on the execution of its then existing business plan and was not pursuing any

strategic options. Accordingly, in light of Pembina’s approach, the Board determined that it was appropriate to seek

financial and legal advice in order to clearly understand Veresen’s strategic alternatives and its legal obligations.

Veresen subsequently engaged Scotia Capital as financial advisor and Osler, Hoskin & Harcourt LLP (“Osler”) as

legal counsel.

Effective January 4, 2017, Veresen entered into an engagement agreement with Scotia Capital assigning Scotia Capital

the mandate of preparing an analysis of Veresen’s business plan under different scenarios, to conduct a financial

review of Pembina, provide capital markets perspective on Veresen, Pembina and other market participants and to act

as financial advisor in the event of any potential approach by a third party proposing a transaction involving Veresen,

including Pembina.

In January and early February 2017, representatives from Veresen and Scotia Capital met to discuss Veresen’s current

business prospects, financial outlook and growth prospects. Scotia Capital prepared an analysis of Veresen’s then

existing business plan under various scenarios.

In mid-February 2017, Mr. Dilger requested a meeting with Mr. Althoff, which was held on February 22, 2017. At

this meeting, Mr. Dilger further outlined Pembina’s desire to enter into a combination with Veresen and discussed the

financial and strategic merits of a potential combination. The discussions continued to be preliminary in nature without

specific details, such as transaction consideration, being addressed. On February 28, 2017, the Board met and Mr.

Althoff updated the Board on the conversations with Mr. Dilger. At the meeting, the analysis by Scotia Capital of

Veresen’s business plan under various scenarios was also reviewed.

In mid-March 2017, Mr. Dilger requested a further meeting with Mr. Althoff, which occurred on March 26, 2017.

During this meeting, Mr. Dilger presented Mr. Althoff with a written non-binding proposal relating to a potential

business combination for consideration comprised of a combination of cash and Pembina Common Shares, subject to

certain customary conditions including satisfactory completion of confirmatory diligence review by Pembina,


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approval of the respective boards of directors and agreement between the Parties with respect to the terms of a

definitive transaction agreement. The non-binding proposal also summarized several reasons why Pembina believed

that a potential business combination between the Parties had merit. Pembina requested a response to its non-binding

proposal by no later than April 7, 2017.

On March 31, 2017, the Board met, with representatives of Scotia Capital and Osler in attendance, to consider

Pembina’s non-binding proposal and Veresen’s response thereto. At the meeting, Osler briefed the directors of

Veresen on their legal duties and responsibilities in considering Pembina’s proposal and in considering alternative

strategic courses of action. The Board also considered the process for reviewing the developments with respect to

Pembina and determined that a special committee of the Board would not be appointed to consider other proposals

from Pembina or related matters as the full Board was prepared to make itself available to make all decisions and

determinations in regard to a potential transaction with Pembina, although a working group of Messrs. Mulherin,

Sykes and Charron was identified as being available to support management in any developments between Board

meetings and that each Board meeting would include in camera sessions. The Board, having considered legal advice

from Osler and financial advice from Scotia Capital, determined that the consideration proposed in Pembina’s non-

binding proposal was not compelling enough to move forward with discussions with Pembina and approved a form

of response letter, which was sent to Pembina on March 31, 2017. In the response, Mr. Althoff indicated that, while

there appeared to be potential strategic merit of a business combination as proposed, Veresen did not believe that the

financial terms of Pembina’s non-binding proposal properly reflected the value of Veresen’s business in order to be

compelling from the perspective of Veresen’s shareholders such that the Board would be prepared to enter into further

discussions with Pembina.

Between March 31 and April 7, 2017, conversations occurred between Mr. Althoff and Mr. Dilger and between

representatives of Scotia Capital and Pembina’s financial advisor, CIBC World Markets Inc. (“CIBC”). During the

course of these conversations, Pembina indicated that the level of consideration in the non-binding proposal could be

increased pending further review of a variety of factors. To assist Pembina in forming a new non-binding proposal,

Pembina requested an information session with senior members of management of Veresen to ask a number of

questions regarding Veresen’s business and its outlook. On April 10, 2017, representatives of management of Veresen

and Pembina, along with representatives from Scotia and CIBC, met and the parties discussed non-confidential

information related to the business of Veresen.

On April 13, 2017, Mr. Althoff and Mr. Mulherin met with Mr. Dilger and Mr. Findlay to discuss the potential for

reaching the terms of a business combination. Later on April 13, 2017, Mr. Dilger sent to Mr. Althoff a revised written

non-binding proposal relating to a potential business combination for increased consideration comprised of a

combination of cash and Pembina Common Shares. A draft of the Confidentiality Agreement contemplating, among

other things, a covenant by Veresen to negotiate exclusively with Pembina for a period of time, accompanied the non-

binding proposal. Pembina requested a response to its non-binding proposal by no later than April 17, 2017.

On April 14, 2017, the Board met, with representatives of Scotia Capital and Osler in attendance, to consider

Pembina’s updated non-binding proposal. At the meeting, the Board approved the execution by Veresen of the

Confidentiality Agreement with Pembina, subject to any changes recommended by Osler, and authorized Veresen’s

management to provide various due diligence items to Pembina and undertake due diligence on the business of

Pembina. The meeting included an in camera meeting of the Board with Mr. Althoff and other members of

management not in attendance.

On April 14, 2017, the Parties entered into the Confidentiality Agreement to enable mutual due diligence on each

other’s businesses and operations. The Confidentiality Agreement also contained Veresen’s covenant to negotiate

exclusively with Pembina until 5:00 p.m. (Calgary time) on May 3, 2017.

Between April 15 and April 29, 2017, management of Veresen and Pembina and their respective financial and legal

advisors met and exchanged information on the respective businesses and operations. Negotiations of the terms of the

Arrangement Agreement also commenced the week of April 17, 2017.


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Between April 26 and April 29, 2017, discussions were held by management of the Parties, with the support of their

respective financial advisors and legal counsel, in connection with the possible financial parameters, terms and

structure of a business combination.

On April 27, 2017, the Board met, with representatives of Scotia Capital and Osler in attendance, to receive Scotia

Capital’s preliminary financial analyses on Veresen, Pembina and the combined pro forma company, as well as an

update on the negotiations of the Arrangement Agreement. Scotia Capital also provided the Board with its view on

the potential market and shareholder reaction to the combination. Further, Osler provided a comprehensive summary

of the terms of the Arrangement Agreement, regulatory approvals, timeline and other related matters. Management

and advisors provided the Board with the results of the due diligence process to date. The Board provided guidance

on several of the outstanding items for negotiation in the Arrangement Agreement. The meeting included an in camera

meeting of the Board with Mr. Althoff and other members of management not in attendance.

As a result of negotiations, on April 28, 2017, Pembina provided a further revised non-binding proposal. The Board

met on April 29, 2017, with representatives of Scotia Capital and Osler in attendance, to receive a further update on

negotiations of the Arrangement Agreement and the financial parameters of the proposed transaction. The meeting

included an in camera meeting of the Board with Mr. Althoff and other members of management not in attendance.

The Board instructed that a proposal outlining updated financial terms and certain other transaction terms be provided

to Pembina.

On the afternoon of April 29, 2017, Mr. Althoff and Mr. Mulherin met with Mr. Dilger to discuss a revised transaction

proposal. At this meeting, the parties agreed to take forward new transaction terms to their respective boards of

directors to approve a final form of agreement including a total value of $18.65 per Common Share comprised of a

combination of cash and Pembina Common Shares. Additional transaction details were also finalized. Mr. Mulherin

and Mr. Findlay met separately that same day to finalize other details of the transaction.

The Board subsequently met on April 30, 2017 to review and consider the specific transaction terms that had been

negotiated by the Parties, the anticipated benefits to Veresen and the Shareholders of entering into the proposed

transaction and the proposed Arrangement Agreement and Plan of Arrangement that resulted from the negotiations

with Pembina. Scotia Capital provided its verbal fairness opinions to the Board that, as of the date of such opinions

and subject to and based on customary assumptions, qualifications and limitations: (a) the consideration to be paid to

the Common Shareholders pursuant to the Arrangement was fair, from a financial point of view, to the Common

Shareholders; and (b) the consideration to be paid to the Preferred Shareholders pursuant to the Arrangement was fair,

from a financial point of view, to the Preferred Shareholders. The Fairness Opinions dated April 30, 2017 and

addressed to the Board are contained in Appendices G and H to this Information Circular. Osler summarized for the

Board the material terms of the proposed Arrangement Agreement and Plan of Arrangement, advised the Board as to

the status of resolving the final matters under negotiation and responded to inquiries on fiduciary duties and

responsibilities with respect to the proposed transaction. Osler also noted that the due diligence review had been

completed. The Board reviewed the negotiation process with management, discussed the proposed final terms of the

Arrangement Agreement and the verbal fairness opinions of Scotia Capital. After considering, among other things,

the review of alternative courses of action that had been considered, the terms of the Arrangement Agreement, the

fairness opinions of Scotia Capital and the impact of the proposed transaction on the various stakeholders of Veresen,

the Board unanimously determined that the Arrangement and the entry into the Arrangement Agreement was in the

best interests of Veresen, the Arrangement was fair to the Common Shareholders and the Preferred Shareholders and

that it would recommend that the Common Shareholders and Preferred Shareholders vote in favour of the Arrangement

and authorized Veresen to enter into the Arrangement Agreement. This meeting included an in camera session of the

Board at the beginning and end of the meeting with Mr. Althoff and other members of management not in attendance.

Following the meeting of the Board, the Arrangement Agreement and Support Agreements were executed and

delivered. Thereafter, a joint news release of Veresen and Pembina announcing the proposed Arrangement was

disseminated in the morning of May 1, 2017.

On May 30, 2017, the Board approved the contents and mailing of this Information Circular to Common Shareholders

and Preferred Shareholders, subject to any amendments that may be approved by Veresen’s senior management team,

and ratified the recommendations to Shareholders with respect to the Arrangement.


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On June 5, 2017, the Court granted the Interim Order which is attached as Appendix E to this Information Circular.

Reasons for the Arrangement


recommending to Shareholders that they approve the Arrangement, the Board considered and relied upon a number

of factors, including, among others, the following:
















“Attributes of the Combined Company” the combined company is expected to be better positioned than

a stand-alone Veresen to deliver on Veresen’s existing strategy;




the highest per share consideration reasonably attainable within a reasonable forecast period;



an ideal partner for a business combination with Veresen;

the Board’s judgment, after discussions with Veresen’s financial advisor and management, that there

were few, if any, potentially interested and capable alternative counterparties to Veresen that would

likely be willing and able to compete with the financial terms proposed by Pembina (including the

potential upside with the combined company), and the potential negative impacts of such discussions on

the negotiations with Pembina;

the Arrangement provides Common Shareholders with flexibility through the opportunity to receive their

consideration in the form of cash or Pembina Common Shares, subject to the Maximum Cash

Consideration or the Maximum Share Consideration, as applicable, and the potential resultant pro-

rationing. This flexibility of consideration allows the Common Shareholders, to the extent they receive

cash, to lock in the premium represented by the Arrangement, and to the extent they receive Pembina

Common Shares, to benefit from exposure to the upside potential of Pembina’s and Veresen’s combined

business and participate in a value enhancing growing company with increased size, scale and liquidity;

Scotia Capital provided the Fairness Opinions, the full text of which can be found in Appendices G and

H to this Information Circular, that, as of April 30, 2017, and, subject to certain assumptions,


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qualifications and limitations, the consideration to be paid to the Common Shareholders and Preferred

Shareholders, as applicable, pursuant to the Arrangement is fair, from a financial point of view, to

Common Shareholders and Preferred Shareholders, respectively;

while the Arrangement contains a covenant prohibiting Veresen from soliciting third-party acquisition

proposals, the Arrangement permits Veresen, prior to the time that Common Shareholders pass the

Common Shareholder Arrangement Resolution, to discuss and negotiate, under specified circumstances,

an unsolicited acquisition proposal should one be received and, if the Board determines in good faith,

after consultation with its legal and financial advisors, that the unsolicited acquisition proposal

constitutes a Superior Proposal within the meaning of the Arrangement Agreement and that the failure

to pursue such Superior Proposal would be inconsistent with the Board’s fiduciary duties under

applicable law, the Board is permitted, after taking certain steps, to terminate the Arrangement in order

to enter into a definitive agreement for that Superior Proposal, subject to payment of a termination fee

to Pembina;

Pembina’s obligation to complete the Arrangement being subject to a limited number of conditions

which the Board believes are reasonable under the circumstances, with the completion of the

Arrangement not being subject to a financing condition, due diligence condition or the approval of

Pembina’s shareholders, the fact that the conditions to completion of the Arrangement are specific and

limited in scope, the business reputation and capabilities of Pembina, and the Board’s assessment that

Pembina is willing to devote the resources necessary to complete the Arrangement in an expeditious

manner;

at least 66⅔% of the votes cast by Common Shareholders at the Common Shareholders’ Meeting are

required to approve the Common Shareholder Arrangement Resolution;

the Arrangement Agreement is a result of arm’s length negotiations with Pembina, and the Board

supervised the negotiation of the key economic and other material terms of the Arrangement Agreement;

all of the directors and certain officers were willing to enter into Support Agreements in connection with

the Arrangement;

the Arrangement is subject to a determination of the Court that the terms and conditions of the

Arrangement, and the procedures relating thereto are fair, substantively and procedurally, to the

Shareholders and the other persons affected;

the Board’s belief that the Arrangement is likely to be completed in accordance with its terms and within

a reasonable time, with closing currently expected to occur in the second half of 2017; and

registered Shareholders may, upon compliance with certain conditions and in certain circumstances,

exercise Dissent Rights.

The information and factors described above and considered by the Board in reaching its determinations and making

its approvals are not intended to be exhaustive but include material factors considered by the Board. In view of the

wide variety of factors considered in connection with its evaluation of the Arrangement and the complexity of these

matters, the Board did not find it useful to, and did not attempt to, quantify, rank or otherwise assign relative weights

to these factors. In addition, individual members of the Board may have given different weight to different factors.


Attributes of the Combined Company

Management of Veresen expects the combined company, after completion of the Arrangement, will be one of

Canada’s premier energy infrastructure companies, supporting some of North America’s most prolific resource plays


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and securing increased market access for its customers. The combined company will feature a largely integrated asset

base that is supported by long-life, economic hydrocarbon reserves and comprises crude oil, liquids and natural gas

pipelines, terminal, storage and midstream operations, gas gathering and processing facilities, as well as fractionation

facilities. Veresen’s management believes the combined company will be greater than the sum of its parts and better

positioned than a stand-alone Veresen entity to deliver on its growth strategy.


approximately $6.0 billion, optimize the integrated asset base, and compete for future investment opportunities in

order to drive meaningful growth over the long term.

























The combined company will pay a meaningful cash dividend that is expected to grow, while offering a lower payout

ratio and cash flows supported primarily with fee-for-service contracts and high-quality counterparties.











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facilities; and



The combined company is expected to have a stronger balance sheet and superior access to the capital markets,

resulting in a greater ability to grow on a per share basis and to execute a broad suite of potential projects.




a per share basis;








facility.

Fairness Opinions

In determining to approve the Arrangement Agreement, the Board considered, among other things, the verbal opinions

from Scotia Capital that, as of April 30, 2017, and, subject to the assumptions, qualifications and limitations contained

in the Fairness Opinions, the consideration to be paid to Common Shareholders and Preferred Shareholders, as

applicable, pursuant to the Arrangement is fair, from a financial point of view, to such Shareholders.

The full texts of the Common Shareholder Fairness Opinion and the Preferred Shareholder Fairness Opinion

which set forth, among other things, assumptions made, information reviewed, matters considered and

limitations on the scope of the review undertaken in rendering such Fairness Opinions, are attached as

Appendices G and H, respectively. The Fairness Opinions address only the fairness, from a financial point of

view, as of April 30, 2017, of the consideration to be received by the Shareholders pursuant to the Arrangement

and do not address any other aspect of the Arrangement or any related transaction, including any legal, tax or

regulatory aspects of the Arrangement to Veresen or the Shareholders. Scotia Capital provided the Fairness

Opinions to the Board for its exclusive use only in considering the Arrangement. The Fairness Opinions may

not be relied upon by any other Person. The Fairness Opinions do not address the relative merits of the

Arrangement as compared to other business strategies or transactions that might be available to Veresen or

Veresen’s underlying business decision to effect the Arrangement. The Fairness Opinions do not constitute a

recommendation to any Shareholder as to how such Shareholder should act or vote with respect to the

Arrangement.


Fairness Opinions is qualified in its entirety by the full text of such opinions.


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Engagement of Scotia Capital

Scotia Capital was first contacted by Veresen in December 2016 with regard to a potential strategic review of Veresen.

Scotia Capital was formally retained by Veresen on January 4, 2017 pursuant to an engagement letter (the

“Engagement Agreement”) to perform such financial advisory and investment banking services for Veresen as are

customary in transactions similar to the Arrangement including assisting Veresen in analyzing strategic alternatives

and, if requested, structuring, negotiating and effecting a possible transaction between Veresen and Pembina. Pursuant

to the Engagement Agreement, the Board requested that Scotia Capital provide opinions as to the fairness, from a

financial point of view, of the consideration to be received by the Common Shareholders and the Preferred

Shareholders pursuant to the Arrangement. The terms of the Engagement Agreement provided that Scotia Capital is

to be paid a fee for its services as financial advisor, including fees that are contingent on the completion of the

Arrangement and fees payable upon delivery of the Fairness Opinions. The fees payable for delivery of the Fairness

Opinions are not contingent on the completion of the Arrangement. In addition, Scotia Capital is to be reimbursed for

its reasonable out-of-pocket expenses and to be indemnified by Veresen in certain circumstances.

In connection with this mandate, Scotia Capital has provided the Board with the Fairness Opinions, that, as of April

30, 2017, the consideration to be paid to the Common Shareholders and the Preferred Shareholders, as applicable,

pursuant to the Arrangement is fair, from a financial point of view, to the Common Shareholders and the Preferred

Shareholders, respectively.

The Board has not instructed Scotia Capital to prepare, and Scotia Capital has not prepared, a formal valuation of

Veresen or any of its securities or assets, and the Fairness Opinions should not be construed as such. Scotia Capital

has, however, conducted such analyses as it considered necessary in the circumstances to prepare and deliver the

Fairness Opinions.

Subject to the terms of the Engagement Agreement, Scotia Capital has consented to the inclusion of the Fairness

Opinions in their entirety and a summary thereof in this Information Circular and to the filing of the Fairness Opinions,

as necessary, with the securities commissions, stock exchanges and other similar regulatory authorities in Canada.

Scotia Capital Credentials

Scotia Capital represents the global corporate and investment banking and capital markets business of Scotiabank

Group (“Scotiabank”), one of North America’s premier financial institutions. In Canada, Scotia Capital is one of the

country’s largest investment banking firms with operations in all facets of corporate and government finance, mergers

and acquisitions, equity and fixed income sales and trading and investment research. Scotia Capital has participated

in a significant number of transactions involving private and public companies and has extensive experience in

preparing fairness opinions.

The Fairness Opinions represent the opinions of Scotia Capital as a firm. The form and content of the Fairness

Opinions have been approved for release by a committee of directors and other professionals of Scotia Capital, all of

whom are experienced in merger, acquisition, divestiture, fairness opinion and valuation matters.

Relationship of Scotia Capital and Veresen

Neither Scotia Capital nor any of its affiliates is an insider, associate or affiliate (as those terms are defined in the

Securities Act (Ontario)) of Veresen, Pembina or any of their respective associates or affiliates. Subject to the

following, there are no understandings, agreements or commitments between or among Scotia Capital and Veresen,

Pembina or any of their respective associates or affiliates with respect to any future business dealings. An affiliate of

Scotiabank is currently a lender to both Veresen and Pembina and Scotia Capital and certain of its affiliates have in

the past provided, and may in the future provide, traditional banking, financial advisory or investment banking services

to Veresen or any of its affiliates and may in the future provide similar services to Pembina or its affiliates.

Scotia Capital acts as a trader and dealer, both as principal and agent, in the financial markets in Canada, the United

States and elsewhere and, as such, it and Scotiabank, may have had and may have positions in the securities of Veresen


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or its affiliates from time to time and may have executed or may execute transactions on behalf of such companies or

clients for which it receives compensation. As an investment dealer, Scotia Capital conducts research on securities

and may, in the ordinary course of business, provide research reports and investment advice to its clients on investment

matters, including with respect to Veresen or any of its affiliates or Pembina or any of its affiliates or with respect to

the Arrangement.

Scope of Review

In preparing the Fairness Opinions, Scotia Capital has reviewed, considered and relied upon, without attempting to

verify independently the completeness or accuracy thereof, among other things:

(a) the draft Arrangement Agreement dated April 29, 2017, including the Plan of Arrangement

appended thereto;

(b) a draft form of Support Agreement dated April 29, 2017 to be entered into between Veresen and

each of Veresen’s directors and members of executive management;

(c) annual reports of Veresen and Pembina for the fiscal years ended 2014 to 2016;

(d) the Notice of Annual Meeting of Shareholders and the Management Information Circular of Veresen

for the fiscal years ended 2014 to 2016;

(e) the audited financial statements and management discussion and analysis of Veresen and Pembina

for the fiscal years ended 2014 to 2016;

(f) annual information forms of Veresen and Pembina for the fiscal years ended 2014 to 2016;

(g) with respect to the Preferred Shareholder Fairness Opinion, the prospectuses for each class of

Preferred Shares issued by Veresen;

(h) the budget for each of Veresen and Pembina for the fiscal year ending 2017;

(i) financial projections for each of Veresen and Pembina for the fiscal years ending 2017 to 2021

prepared by the management of Veresen and Pembina respectively;

(j) various detailed internal Veresen management reports;

(k) discussions with senior management of Veresen and Pembina;

(l) discussions with Veresen’s legal counsel;

(m) various research publications prepared by industry and equity research analysts regarding Veresen,

Pembina and other selected entities considered relevant;

(n) public information relating to the business, operations, financial performance and stock trading

history of Veresen, Pembina and other selected public companies considered by Scotia Capital to

be relevant;

(o) public information with respect to other transactions of a comparable nature considered by Scotia

Capital to be relevant;

(p) representations contained in a certificate addressed to Scotia Capital, as of April 30, 2017, from

senior officers of Veresen as to the completeness, accuracy and fair presentation of the information

upon which the Fairness Opinions are based; and


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(q) such other corporate, industry and financial market information, investigations and analyses as

Scotia Capital considered necessary or appropriate in the circumstances.

Scotia Capital has not, to the best of its knowledge, been denied access by Veresen to any information requested by

Scotia Capital.

Approach to Fairness

For the purposes of the Common Shareholder Fairness Opinion, in considering the fairness, from a financial point of

view, of the consideration to be received by the Common Shareholders pursuant to the Arrangement, Scotia Capital

reviewed, considered and relied upon, among other things, the following: (a) a comparison of the consideration under

the Arrangement to the results of the financial analysis of Veresen on a sum-of-the-parts basis; (b) a comparison of

selected financial multiples implied by the consideration under the Arrangement to multiples paid, to the extent

publicly available, in selected precedent transactions; (c) a comparison of selected financial multiples of comparable

companies whose securities are publicly traded to the multiples implied by the consideration under the Arrangement;

(d) a comparison of the consideration under the Arrangement to the recent market trading prices of the Common

Shares; (e) a review of the form of consideration under the Arrangement and perspectives on the pro forma company

including the potential synergies associated with the Arrangement; and (f) such other factors, studies and analyses, as

Scotia Capital deemed appropriate.

For the purposes of the Preferred Shareholder Fairness Opinion, in considering the fairness, from a financial point of

view, of the consideration to be received by the Preferred Shareholders pursuant to the Arrangement, Scotia Capital

reviewed, considered and relied upon, among other things, a comparison of the financial and non-financial terms of

the consideration to be received (Pembina Exchange Shares) to the financial and non-financial terms of the Preferred

Shares. The compared terms included coupons and rate reset spreads, reset dates, redemption and conversion rights

and governance rights. Scotia Capital also examined the differences in capital structure and balance sheet, credit

ratings and forecasted revenue and earnings before interest, tax, depreciation and amortization of the two issuers,

Pembina and Veresen. Finally, Scotia Capital compared the liquidity of the existing Pembina preferred shares to that

of the Preferred Shares.

In arriving at its fairness determinations in the Fairness Opinions, Scotia Capital considered the results of all of its

analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Scotia Capital

made its determination as to fairness on the basis of its experience and professional judgment after considering the

results of all of its analyses.

Prior Valuations

Veresen has represented to Scotia Capital that, to the best of its knowledge, there have been no valuations or appraisals

of Veresen or any material property of Veresen or any of its subsidiaries or affiliates prepared within the past twenty-

four (24) months and in the possession or control or knowledge of Veresen.

Assumptions and Limitations

The Fairness Opinions are subject to the assumptions, explanations and limitations set forth below.

Scotia Capital has, subject to the exercise of its professional judgment, relied, without independent verification, upon

the completeness, accuracy and fair presentation of all of the financial and other information, data, advice, opinions

and representations obtained by it from public sources, or that was provided to Scotia Capital, by Veresen, and its

associates and affiliates and advisors (collectively, the “Information”), and has assumed that this Information did not

omit to state any material fact or any fact necessary to be stated to make that information not misleading. The Fairness

Opinions are conditional upon the completeness, accuracy and fair presentation of such Information. With respect to

Veresen’s financial projections provided to Scotia Capital by management of Veresen and used in the analysis

supporting the Fairness Opinions, Scotia Capital has assumed that they have been reasonably prepared on bases

reflecting the best currently available estimates and judgments of management of Veresen as to the matters covered


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thereby, and in rendering the Fairness Opinions Scotia Capital expresses no view as to the reasonableness of such

forecasts or budgets or the assumptions on which they are based.

Senior management of Veresen has represented to Scotia Capital in certificates delivered as at April 30, 2017, among

other things, that to the best of their knowledge (a) Veresen has no information or knowledge of any facts public or

otherwise not specifically provided to Scotia Capital relating to Veresen or any of its subsidiaries or affiliates which

would reasonably be expected to affect materially the Fairness Opinions; (b) with the exception of forecasts,

projections or estimates referred to in (d) below, the written Information provided to Scotia Capital by or on behalf of

Veresen in respect of Veresen and its subsidiaries or affiliates, in connection with the Arrangement is or, in the case

of historical information or data, was, at the date of preparation, true and accurate in all material respects, and no

additional material, data or information would be required to make the data provided to Scotia Capital by Veresen not

misleading in light of circumstances in which it was prepared; (c) to the extent that any of the Information identified

in (b) above is historical, there have been no changes in material facts or new material facts since the respective dates

thereof which have not been disclosed to Scotia Capital or updated by more current Information that has been

disclosed; and (d) any portions of the Information provided to Scotia Capital which constitute forecasts, projections

or estimates were prepared using the assumptions identified therein, which, in the reasonable opinion of Veresen, are

(or were at the time of preparation) reasonable in the circumstances.

The Fairness Opinions are rendered on the basis of the securities markets, economic, financial and general business

conditions prevailing as at April 30, 2017 and the conditions and prospects, financial and otherwise, of Veresen and

its subsidiaries and affiliates, as they were reflected in the Information. In its analyses and in preparing the Fairness

Opinions, Scotia Capital made numerous assumptions with respect to industry performance, general business and

economic conditions and other matters, which Scotia Capital believes to be reasonable and appropriate in the exercise

of its professional judgment, many of which are beyond the control of Scotia Capital or any party involved in the

Arrangement.

For the purposes of rendering the Fairness Opinions, Scotia Capital also made several assumptions, including that the

final version of the Arrangement Agreement and Support Agreements would conform in all material respects to the

drafts provided to Scotia Capital, the representations and warranties of each party contained in the Arrangement

Agreement and the Support Agreements are true and correct in all material respects, each party to the Arrangement

Agreement and the Support Agreements will perform all of the covenants and agreements required to be performed

by it under the Arrangement, Veresen will be entitled to fully enforce its rights under the Arrangement Agreement

and receive the benefits therefrom in accordance with the terms thereof, and all of the conditions required to implement

the Arrangement will be satisfied.

The Fairness Opinions have been provided for the sole use of the Board in connection with its consideration of the

Arrangement and may not be used or relied upon by any other person. The Fairness Opinions do not constitute a

recommendation to the Board or to any Shareholder as to how such Shareholder should vote or act with respect to the

Arrangement. The Fairness Opinions are given as of April 30, 2017, and Scotia Capital disclaims any undertaking or

obligation to advise any person of any change in any fact or matter affecting the Fairness Opinions which may come

or be brought to the attention of Scotia Capital after April 30, 2017. Without limiting the foregoing, in the event that

there is any material change in any fact or matter affecting the Fairness Opinions after April 30, 2017, Scotia Capital

reserves the right to change, modify or withdraw the Fairness Opinions.

The Fairness Opinions do not address the relative merits of the Arrangement as compared to other business strategies

or transactions that might be available with respect to Veresen or Veresen’s underlying business decision to effect the

Arrangement. At Veresen’s direction, Scotia Capital was not requested to solicit, and did not solicit, interest from

other parties with respect to an acquisition of, or other business combination with, Veresen or any other alternative

transaction. The Fairness Opinions address only the fairness, from a financial point of view, as of April 30, 2017, of

the consideration to be received by the Common Shareholders or the Preferred Shareholders, respectively, pursuant

to the Arrangement. Without limiting the foregoing, Scotia Capital does not express any view on, and the Fairness

Opinions do not address, any other term or aspect of the Arrangement Agreement or any term or aspect of any other

agreement or instrument contemplated by the Arrangement or entered into or amended in connection with the

Arrangement. Scotia Capital is not an expert on, and did not render advice to the Board regarding legal, tax, accounting

and regulatory matters.


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The preparation of a fairness opinion is a complex process and it is not amenable to partial analysis or summary

description. Scotia Capital believes that its analyses must be considered as a whole and that selecting portions of its

analyses or the factors considered by it, without considering all facts and analyses together, could create an incomplete

view of the process and analyses underlying the Fairness Opinions.


Fairness Opinions is qualified in its entirety by the full text of such opinions. The full texts of the Common

Shareholder Fairness Opinion and the Preferred Shareholder Fairness Opinion are attached as Appendices G

and H, respectively. The Fairness Opinions are subject to the assumptions, qualifications and limitations

contained therein.

Recommendation of the Board of Directors

At a meeting of the Board held on April 30, 2017 prior to Veresen entering into the Arrangement Agreement, the

Board considered the Arrangement on the terms and conditions as provided in the Arrangement Agreement, and the

verbal fairness opinions of Scotia Capital that the consideration to be received by the Common Shareholders and the

Preferred Shareholders pursuant to the Arrangement is fair, from a financial point of view to the Common

Shareholders and the Preferred Shareholders, respectively. After considering the terms of the proposed

arrangement, the Fairness Opinions, the advice from its financial advisor and legal counsel and such other

factors as were deemed appropriate, the members of the Board unanimously: (a) determined that the

Arrangement and the entry into the Arrangement Agreement are in the best interests of Veresen; and (b) the

Arrangement is fair to the Common Shareholders and Preferred Shareholders. The Board determined that the

Arrangement shall be presented to the Shareholders at the Meetings and unanimously recommends that the

Common Shareholders and the Preferred Shareholders vote in favour of the Common Shareholder

Arrangement Resolution and Preferred Shareholder Arrangement Resolution, respectively. In coming to its

conclusion and recommendations the Board considered, among others, the following factors:

(a) the purpose and anticipated benefits of the Arrangement as outlined elsewhere in this Information

Circular including under “Reasons for the Arrangement” and “Attributes of the Combined

Company” above;

(b) information concerning the financial condition, results of operations, business plans and prospects

of Veresen, and the resulting potential for the enhancement of the business efficiency, management

effectiveness and financial results of the combined company;

(c) the alternatives available to Veresen; and

(d) the advice and assistance of Scotia Capital in evaluating the Arrangement. See “Common

Shareholder Fairness Opinion” at Appendix G to this Information Circular and “Preferred

Shareholder Fairness Opinion” at Appendix H to this Information Circular.

The foregoing discussion of the information and factors considered and given weight by the Board is not intended to

be exhaustive. In addition, in reaching the determination to approve and recommend the Arrangement, the Board did

not assign any relative or specific weights to the foregoing factors which were considered, and individual directors

may have given differing weights to different factors.

The Board realized that there are risks associated with the Arrangement, including that some of the potential benefits

set forth above may not be realized or that there may be significant costs associated with realizing such benefits. The

Board believes that the factors in favour of the Arrangement outweigh the risks and potential disadvantages, although

there can be no assurance in this regard. See “Risk Factors”.


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The Arrangement Agreement

General

The Arrangement will be effected pursuant to the Arrangement Agreement which provides for the implementation of

the Plan of Arrangement. The Arrangement Agreement contains covenants, representations and warranties of and

from each of Veresen and Pembina and various conditions precedent, both mutual and with respect to Veresen and

Pembina.

Unless all of such conditions are satisfied or waived by the Party for whose benefit such conditions exist, to the extent

they may be capable of waiver, the Arrangement will not proceed. There is no assurance that the conditions will be

satisfied or waived on a timely basis, or at all.

The following is a summary of certain provisions of the Arrangement Agreement and is qualified in its entirety by the

full text of the Arrangement Agreement, set forth in Appendix C to this Information Circular. Shareholders are urged

to read the Arrangement Agreement in its entirety.

Representations and Warranties and Covenants Relating to the Conduct of Business of the Parties

The Arrangement Agreement contains certain customary representations and warranties of each of Veresen and

Pembina relating to, among other things, their respective organization, capitalization, operations, compliance with

laws and regulations and other matters, including their authority to enter into the Arrangement Agreement and to

consummate the Arrangement. For the complete text of the applicable provisions, see Section 3.1, Schedule C, Section

4.1 and Schedule D of the Arrangement Agreement.

In addition, pursuant to the Arrangement Agreement, each of the Parties has covenanted, among other things, until the

earlier of the completion of the Arrangement or the termination of the Arrangement Agreement, to maintain and

preserve their respective businesses and refrain from taking certain actions outside the ordinary course. For the

complete text of the applicable provisions, see Sections 5.1 and 5.2 of the Arrangement Agreement.

Mutual Conditions

The respective obligations of Pembina and Veresen to complete the Arrangement are subject to the satisfaction of the

following conditions, any of which may be waived by the mutual consent of Pembina and Veresen, without prejudice

to their right to rely on any other of such conditions:

(a) the Interim Order shall have been obtained on terms consistent with the Arrangement and in form

and substance satisfactory to each of the Parties, acting reasonably, and such order shall not have

been set aside or modified in a manner unacceptable to either of the Parties, acting reasonably, on

appeal or otherwise;

(b) the Common Shareholder Arrangement Resolution shall have been passed by the Common

Shareholders at the Common Shareholders’ Meeting in accordance with the Interim Order;

(c) the Final Order shall have been obtained on terms consistent with the Arrangement and in form and

substance satisfactory to each of the Parties, acting reasonably, and such order shall not have been

set aside or modified in a manner unacceptable to either of the Parties, acting reasonably, on appeal

or otherwise;

(d) each of the Required Regulatory Approvals shall have been made, given, obtained or occurred, as

the case may be, and any such approval shall be in full force and effect and any such occurrence

shall not have been invalidated in any manner;


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(e) all Regulatory Approvals (other than the Required Regulatory Approvals) required to be obtained,

or that the Parties mutually agree in writing to obtain in respect of the completion of the

Arrangement, and the expiry of applicable waiting periods necessary to complete the Arrangement,

shall have occurred or been obtained on terms and conditions acceptable to the Parties, each acting

reasonably, and all applicable domestic and foreign statutory and regulatory waiting periods shall

have expired or have been terminated and no unresolved material objection or opposition shall have

been filed, initiated or made, except where the failure or failures to obtain such Regulatory

Approvals, or for the applicable waiting periods to have expired or terminated, would not be

reasonably expected to have a Material Adverse Effect on either of Pembina (before or after

completion of the Arrangement) or Veresen;

(f) the conditional approval to the listing of the Pembina Common Shares issuable pursuant to the

Arrangement on the TSX, and approval, subject to official notice of issuance, of the listing of

Pembina Common Shares issuable pursuant to the Arrangement on the NYSE, and, if the Preferred

Shareholder Arrangement Resolution received the requisite approval of the Preferred Shareholders

at the Preferred Shareholders’ Meeting, the conditional approval to the listing of the Pembina

Exchange Shares issuable pursuant to the Arrangement on the TSX, shall have been obtained;

(g) no Law, regulation, policy, judgment, decision, order, agreement between the Parties and a

Governmental Entity to refrain from consummating the Arrangement, ruling or directive (whether

or not having the force of Law) shall have been enacted, promulgated, amended or applied, which

prevents, prohibits or makes the consummation of the Arrangement illegal or otherwise prohibits or

enjoins Pembina or Veresen from consummating the Arrangement, or that would be reasonably

expected to have a Material Adverse Effect on either of Pembina (before or after completion of the

Arrangement) or Veresen; and

(h) no act, action, suit, proceeding, objection, opposition, order or injunction shall have been taken,

entered or promulgated by any Governmental Entity or by any elected or appointed public official

in Canada or elsewhere, whether or not having the force of Law, which prevents, prohibits or makes

the consummation of the Arrangement illegal or otherwise prohibits or enjoins Pembina or Veresen

from consummating the Arrangement, or that would be reasonably expected to have a Material

Adverse Effect on either of Pembina (before or after completion of the Arrangement) or Veresen.

Conditions to the Obligations of Pembina

The obligation of Pembina to complete the Arrangement and take the other actions required to be taken by Pembina

on or before the Effective Date is subject to the satisfaction or waiver of the following conditions:

(a) the representations and warranties made by Veresen in the Arrangement Agreement shall be true

and correct (or, in certain cases, materially true and correct) as of the Effective Date as if made on

and as of such date (except to the extent such representations and warranties speak as of an earlier

date or except as affected by transactions contemplated or permitted by the Arrangement

Agreement), except, in certain cases only, where the failure of such representations and warranties

to be true and correct, individually or in the aggregate, would not result or would not reasonably be

expected to result in a Material Adverse Change in respect of Veresen and its Subsidiaries, taken as

a whole, and Veresen will have provided to Pembina a certificate of two senior officers of Veresen

(on behalf of Veresen and without personal liability) certifying the foregoing on the Effective Date;

(b) Veresen shall have complied in all material respects with its covenants in the Arrangement

Agreement to be complied with by it on or prior to the Effective Time; and Veresen shall have

provided to Pembina a certificate of two executive officers of Veresen (on behalf of Veresen and

without personal liability) certifying compliance with such covenants on the Effective Date;


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(c) no Material Adverse Change in respect of Veresen and its Subsidiaries, taken as a whole, shall have

occurred after the date of the Arrangement Agreement and prior to the Effective Date; and

(d) holders of less than 5% of the outstanding Common Shares shall have validly exercised Dissent

Rights in respect of the Arrangement that have not been withdrawn as of the Effective Date.

The foregoing conditions are for the exclusive benefit of Pembina and may be asserted by Pembina regardless of the

circumstances or may be waived in writing by Pembina in its sole discretion, in whole or in part, at any time and from

time to time without prejudice to any other rights which Pembina may have.

Conditions to the Obligations of Veresen

The obligation of Veresen to complete the Arrangement and to take the other actions required to be taken by Veresen

on or before the Effective Date is subject to the satisfaction or waiver of the following conditions:

(a) the representations and warranties made by Pembina in the Arrangement Agreement shall be true

and correct (or, in certain cases, materially true and correct) as of the Effective Date as if made on

and as of such date (except to the extent such representations and warranties speak as of an earlier

date or except as affected by transactions contemplated or permitted by the Arrangement

Agreement), except, in certain cases only, where the failure of such representations and warranties

to be true and complete, individually or in the aggregate, would not result or would not reasonably

be expected to result in a Material Adverse Change in respect of Pembina and its Subsidiaries, taken

as a whole, and Pembina will have provided to Veresen a certificate of two senior officers of

Pembina (on behalf of Pembina and without personal liability) certifying the foregoing on the

Effective Date;

(b) Pembina shall have complied in all material respects with its covenants in the Arrangement

Agreement to be complied with by it on or prior to the Effective Time; and Pembina shall have

provided to Veresen a certificate of two executive officers of Pembina (on behalf of Pembina and

without personal liability) certifying compliance with such covenants on the Effective Date; and

(c) no Material Adverse Change in respect of Pembina and its Subsidiaries, taken as a whole, shall have

occurred after the date of the Arrangement Agreement and prior to the Effective Date.

The foregoing conditions are for the exclusive benefit of Veresen and may be asserted by Veresen regardless of the

circumstances or may be waived by Veresen in its sole discretion, in whole or in part, at any time and from time to

time without prejudice to any other rights which Veresen may have.

Covenants of Veresen Regarding Non-Solicitation; Right to Accept a Superior Proposal

Under the Arrangement Agreement, Veresen has agreed to certain non-solicitation covenants as follows:

(a) Veresen shall immediately cease and cause to be terminated all existing solicitation, discussion or

negotiation (including through its officers, directors, employees, financial advisors, legal counsel,

accountants and other agents and representatives (collectively, the “Representatives”) on its

behalf), if any, with any parties conducted before the date of the Arrangement Agreement with

respect to any Acquisition Proposal or any inquiry, proposal or offer that constitutes, or could

reasonably be expected to lead to an Acquisition Proposal, and, in connection therewith, Veresen

shall discontinue access of any of its confidential information; Veresen shall also promptly request

the return or destruction of all information respecting Veresen provided to any third parties who

have entered into a confidentiality agreement with Veresen relating to an Acquisition Proposal in

the 12 months prior to the date of the Arrangement Agreement and will use all commercial efforts

to ensure that such requests are honoured. Veresen also undertakes to enforce all standstill, non-

disclosure, non-disturbance, non-solicitation and similar agreements or covenants that Veresen has


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entered into prior to the date of the Arrangement Agreement and that Veresen enters into after the

date of the Arrangement Agreement.

(b) Veresen shall not, directly or indirectly, do or authorize or permit any of its representatives to do

any of the following:

(i) solicit, initiate or knowingly encourage or facilitate (including by way of furnishing

information) any Acquisition Proposal or any inquiries, proposals or offers relating to any

Acquisition Proposal or that could reasonably be expected to lead to an Acquisition

Proposal;

(ii) enter into or participate in any discussions or negotiations regarding any Acquisition

Proposal or any proposal that constitutes, or could reasonably be expected to lead to an

Acquisition Proposal, or furnish to any other Person any information with respect to its

businesses, properties, operations, prospects or conditions (financial or otherwise) in

connection with any Acquisition Proposal or any proposal that constitutes, or could

reasonably be expected to lead to an Acquisition Proposal or otherwise cooperate in any

way with, or assist or participate in, facilitate or encourage, any effort or attempt of any

other Person to do or seek to do any of the foregoing;

(iii) waive, terminate, amend, modify or release any third party or otherwise forbear in the

enforcement of, or enter into or participate in any discussions, negotiations or agreements

to waive, terminate, amend, modify or release any third party from or otherwise forbear in

respect of, any rights or other benefits under confidential information and/or standstill

agreements (which, for greater certainty, does not prohibit the automatic release of a party

in accordance with the pre-existing terms of any standstill provision);

(iv) accept, approve, endorse or recommend, or publicly propose to accept, approve, endorse

or recommend any Acquisition Proposal or any inquiry, proposal or offer that could

reasonably be expected to lead to an Acquisition Proposal; or

(v) accept or enter into, or publicly propose to accept or enter into, any letter of intent,

agreement in principle, agreement, arrangement or undertaking related to any Acquisition

Proposal (other than a confidentiality and standstill agreement contemplated under the

Arrangement Agreement);

provided, however, that notwithstanding any other provision of the Arrangement Agreement, Veresen and its

Representatives may, prior to the approval of the Common Shareholder Arrangement Resolution at the Common

Shareholders’ Meeting:

(vi) enter into or participate in any discussions or negotiations with a third party that is not in

breach of any confidentiality or standstill agreement and who, without any solicitation,

initiation or deliberate encouragement, directly or indirectly, after that date of the

Arrangement Agreement, by Veresen or any of its Representatives, seeks to initiate such

discussions or negotiations and, subject to execution of a confidentiality and standstill

agreement in favour of Veresen that contains a standstill provision that Veresen determines

in good faith is no less onerous or more beneficial to such third party than that in the

Confidentiality Agreement and is otherwise on terms that Veresen determines in good faith

are no less favourable to Veresen than those found in the Confidentiality Agreement

(provided that such confidentiality and standstill agreement shall (A) allow for disclosure

thereof, along with all information provided thereunder, to Pembina as set out below, (B)

allow disclosure to Pembina of the making and terms of any Acquisition Proposal made by

the third party as contemplated in the Arrangement Agreement, and (C) not contain any

provision restricting Veresen from complying with the Arrangement Agreement) may


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furnish to such third party any information concerning Veresen and its Subsidiaries and

their businesses, properties and assets, in each case if, and only to the extent that:

(A) the third party has first made a written bona fide Acquisition Proposal, which did

not result from a breach of the Arrangement Agreement, and in respect of which

the Board determines in good faith, after consultation with its outside legal and

financial advisors, constitutes, or could reasonably be expected to lead to a

Superior Proposal; and

(B) prior to furnishing such information to or entering into or participating in any such

discussions or negotiations with such third party regarding the Acquisition

Proposal, Veresen shall (1) provide prompt notice to Pembina to the effect that it

is furnishing information to or entering into or participating in discussions or

negotiations with such third party, together with a copy of the confidentiality and

standstill agreement referenced above and, if not previously provided to Pembina,

copies of all information provided to such third party concurrently with the

provision of such information to such third party, (2) notify Pembina orally and

in writing of any inquiries, offers or proposals with respect to an actual or

contemplated Superior Proposal (which written notice shall include a summary of

the material terms of such proposal (and any amendments or supplements thereto)

and, if the proposal includes equity consideration, the identity of the Person

making it, and, if not previously provided to the other Party, copies of all

information provided to the third party), within 24 hours of the receipt thereof,

and (3) keep Pembina promptly informed of the status and reasonable details of

any such inquiry, offer or proposal and answer Pembina’s reasonable questions

with respect thereto;

(vii) comply with Part 2 – Division 3 of NI 62-104 and similar provisions in respect of U.S.

securities Laws relating to the provision of directors’ circulars and making appropriate

disclosure with respect thereto to its securityholders; and

(viii) accept, recommend, approve or enter into an agreement to implement a Superior Proposal

from a third party, but only if prior to such acceptance, recommendation, approval or

implementation, the Board concludes in good faith, after considering all proposals to adjust

the terms and conditions of the Arrangement Agreement as contemplated by the

Arrangement Agreement and after receiving the advice of outside counsel, that the failure

by the board of directors to take such action would be inconsistent with its fiduciary duties

under applicable Laws, and Veresen (A) complies with its obligations set forth in the

Arrangement Agreement, (B) terminates the Arrangement Agreement in accordance with

its terms, and (C) concurrently therewith pays the amount required by the Arrangement

Agreement to Pembina.

(c) Following determination by the Board that an Acquisition Proposal constitutes a Superior Proposal,

Veresen shall give Pembina, orally and in writing, at least five complete Business Days advance

notice of any decision by the Board to accept, recommend, approve or enter into an agreement to

implement a Superior Proposal, which notice shall confirm that the Board has determined that such

Acquisition Proposal constitutes a Superior Proposal and shall identify the third party making the

Superior Proposal and Veresen shall provide Pembina with a true and complete copy thereof and of

the agreement to implement the Superior Proposal and any amendments thereto. During such five

Business Day period, Veresen agrees not to accept, recommend, approve or enter into any agreement

to implement such Superior Proposal and not to release the party making the Superior Proposal from

any standstill provisions and shall not withdraw, redefine, modify or change its recommendation in

respect of the Arrangement as outlined in the Arrangement Agreement. In addition, during such five

Business Day period Veresen shall, and shall cause its financial and legal advisors to, negotiate in

good faith with Pembina and its financial and legal advisors to make such adjustments in the terms


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and conditions of Arrangement Agreement and the Arrangement as would enable Veresen to

proceed with the Arrangement as amended rather than the Superior Proposal. In the event Pembina

proposes to amend the Arrangement Agreement and the Arrangement on a basis such that the Board

determines that the alternative proposed transaction is no longer a Superior Proposal and so advises

the Pembina Board prior to the expiry of such five Business Day period, the Board shall not accept,

recommend, approve or enter into any agreement to implement such Acquisition Proposal and shall

not release the party making the Acquisition Proposal from any standstill provisions and shall not

withdraw, redefine, modify or change its recommendation in respect of the Arrangement. In the

event that Veresen provides the notice contemplated by the Arrangement Agreement on a date which

is less than five Business Days prior to the Meetings, Pembina shall be entitled to require Veresen

to adjourn or postpone the Meetings to a date that is not more than ten (10) Business Days after the

date of such notice.

(d) Each successive amendment to any Acquisition Proposal that results in an increase in, or

modification of, the consideration (or value of such consideration) to be received by the shareholders

of the Party subject to such Acquisition Proposal or other material terms or condition thereof, shall

constitute a new Acquisition Proposal for the purposes of the Arrangement Agreement, and the other

Party shall be afforded a new five day period from the date on which such Party received all of the

materials set forth in the Arrangement Agreement with respect to the new Superior Proposal from

the Party subject thereto.

(e) The Board shall promptly reaffirm the recommendation and determination in respect of the

Arrangement, as outlined in the Arrangement Agreement, by press release after (i) any Acquisition

Proposal which is publicly announced is determined not to be a Superior Proposal, or (ii) the Parties

have entered into an amended agreement pursuant to the Arrangement Agreement which results in

any Acquisition Proposal not being a Superior Proposal.

(f) Veresen shall ensure that its Representatives are aware of the foregoing provisions. Veresen shall

be responsible for any breach of such provisions by Veresen’s Representatives.

Non-Completion Fees Payable by Veresen

Pursuant to the Arrangement Agreement, if at any time after the execution of the Arrangement Agreement:

(a) the Board has withdrawn, modified, qualified or changed any of its recommendations or

determinations with respect to the Arrangement, as outlined in the Arrangement Agreement, in a

manner adverse to Pembina or shall have resolved to do so prior to the Effective Date, or has failed

to publicly reconfirm any such recommendation upon the reasonable request of Pembina prior to

the earlier of 72 hours following such request or 72 hours prior to the Meetings, other than in

circumstances described in paragraph (c) above under the heading “Covenants of Veresen Regarding

Non-Solicitation; Right to Accept a Superior Proposal”, in which case the obligation to reaffirm is

governed by paragraph (e) under such heading (unless Pembina is then in material breach of its

obligations thereunder and such withdrawal, change or failure relates to such breach);

(b) (i) an Acquisition Proposal is publicly announced, proposed, disclosed, offered or made in respect

of Veresen or any Person shall have publicly announced an intention to make an Acquisition

Proposal prior to the termination of the Arrangement Agreement; (ii) after such Acquisition Proposal

shall have been publicly announced, proposed, disclosed, offered or made, the Arrangement

Agreement is terminated pursuant to the termination provisions of the Arrangement Agreement, and

(iii) such Acquisition Proposal, or an amended version thereof, or any other Acquisition Proposal is

consummated, agreed to or entered into, as applicable, within 12 months of the date the first

Acquisition Proposal is publicly announced, proposed, disclosed, offered or made, provided that for

purposes of the foregoing, the term “Acquisition Proposal” shall have the meaning assigned to such

term in the Arrangement Agreement except that references to “20% or more” shall be deemed to be

references to “50% or more”;


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(c) the Board accepts, recommends, approves or enters into an agreement to implement a Superior

Proposal; or

(d) Veresen is in breach, in a material respect, of any of its covenants made in the Arrangement

Agreement, which breach individually or in the aggregate causes or would reasonably be expected

to cause a Material Adverse Change with respect to Veresen and its Subsidiaries, taken as a whole,

and the Arrangement Agreement is terminated by Pembina pursuant to its terms;

(each of the above being a “Pembina Damages Event”) then in the event of the termination of the Arrangement

Agreement pursuant to its terms, Veresen shall pay to Pembina, within two Business Days of the termination of the

Arrangement Agreement, a fee in the amount of $200 million in immediately available funds to an account designated

by Pembina, and after such event but prior to payment of such amount, Veresen shall be deemed to hold such funds

in trust for Pembina; provided that: (i) in the case of a Pembina Damages Event in connection with the acceptance by

the Board of a Superior Proposal such payment shall be made by Veresen to Pembina concurrently with the acceptance,

recommending, approving or entering into of the Superior Proposal by Veresen as provided for in the Arrangement

Agreement; and (ii) the case of a Pembina Damages Event pursuant to the acceptance of an Acquisition Proposal to

purchase 50% or more of the voting securities of Veresen or its Subsidiaries within 12 months of the date such

Acquisition Proposal was first announced, subject to the terms of the Arrangement Agreement, such payment shall be

made by Veresen to Pembina upon the consummation of the Acquisition Proposal referred to therein. Veresen shall

only be obligated to pay a maximum of $200 million pursuant to the Arrangement Agreement.

Extension and Termination Fees Payable by Pembina

If the Outside Date of October 31, 2017 is postponed by Pembina pursuant to its right to postpone the Outside Date

for up to an additional two months to December 31, 2017 if a Required Regulatory Approval has not been obtained,

Pembina shall concurrently pay to Veresen an amount equal to $23.5 million as reimbursement to Veresen for its out-

of-pocket expenses incurred in connection with the postponement, provided that if Veresen is in material breach of its

obligations or covenants under the Arrangement Agreement at the time of the postponement, such amount will not be

payable.

If the Arrangement Agreement is terminated by Veresen or Pembina as a result of the Effective Time not having

occurred on or prior to the Outside Date (as may be extended) and at the time of such termination all of the mutual

conditions and the conditions to the obligations of Pembina have been satisfied or waived by Pembina other than those

conditions that by their terms are to be satisfied at the Effective Date but each of the Required Regulatory Approvals

has not been received, Pembina shall pay to Veresen an amount equal to $100 million, less any fee previously paid by

Pembina to Veresen in connection with postponement of the Outside Date, provided that such amount will not be

payable if (a) Veresen is in material breach of its obligations under the Arrangement Agreement at the time of the

termination of the Arrangement Agreement, or (b) Pembina has complied, in all material respects, with certain of its

covenants relating to seeking and obtaining such Required Regulatory Approvals.

See “Procedure for the Arrangement to Become Effective – Regulatory Approvals” for additional information with

respect to the Required Regulatory Approvals.

Termination

Pembina and Veresen have agreed that the Arrangement Agreement may be terminated at any time prior to the

Effective Date:

(a) by mutual written consent of Pembina and Veresen;

(b) by either Pembina or Veresen if the Common Shareholder Arrangement Resolution shall have failed

to receive the requisite vote of the Common Shareholders for approval at the Common Shareholders’

Meeting (including any adjournment or postponement thereof) in accordance with the Interim

Order;


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(c) by either Pembina or Veresen if the Effective Time shall not have occurred on or prior to the Outside

Date, except that this right to terminate shall not be available to any Party whose failure to fulfill

any of its obligations has been the cause of, or resulted in, the failure of the Effective Time to occur

by such date;

(d) as provided for in the Arrangement Agreement, in the event of a breach of representation, warranty,

covenant or condition by a Party after notice of such breach has been provided and the expiration of

a fifteen-Business Day cure period as set forth in the Arrangement Agreement; provided that the

Party seeking termination is not then in breach of the Arrangement Agreement so as to cause any of

the conditions to consummate the transactions contemplated by the Arrangement Agreement, not to

be satisfied;

(e) by Pembina upon the occurrence of a Pembina Damages Event; or

(f) by Veresen’s acceptance, recommendation, approval or entry into an agreement to implement a

Superior Proposal in accordance with the Arrangement Agreement, provided that Veresen (i) has

complied with its obligations described under the heading “Covenants of Veresen Regarding Non-

Solicitation; Right to Accept a Superior Proposal” above and (ii) concurrently pays the amounts

required under the heading “Non- Completion Fees Payable by Veresen” above.

Under the provisions of the Arrangement Agreement, in the event of the termination of the Arrangement Agreement

in the circumstances set out above, the Arrangement Agreement will become void and neither Party will have any

liability or further obligation to the other Party thereunder, except with respect to: (a) certain indemnification

obligations set forth in the Arrangement Agreement; and (b) the payment of certain fees pursuant to the Arrangement

Agreement, including those outlined above under the heading “Non-Completion Fees Payable by Veresen” above and

the termination fees outlined under the heading “Extension and Termination Fees Payable by Pembina”, where

applicable. For greater certainty, unless liquidated damages are payable on account of a Party being entitled to a

payment pursuant to the Arrangement Agreement, nothing contained in the Arrangement Agreement shall relieve

either Party from liability for any breach of any provision of the Arrangement Agreement. No termination of the

Arrangement Agreement will affect the obligations of the Parties pursuant to the Confidentiality Agreement or any

other subsequent written agreement that addresses confidentiality between the Parties, except to the extent specified

therein. The Arrangement Agreement provides that, upon the occurrence of certain termination events, either of

Pembina or Veresen, as the case may be, may be required to pay to the other $25 million for the payment of certain

expenses and fees. For the complete text of the applicable provisions, see Sections 7.2 and 7.3 of the Arrangement

Agreement.

Liquidated Damages

Pembina and Veresen acknowledge that all of the payment amounts set out in the Arrangement Agreement are

payments of liquidated damages which are a genuine pre-estimate of the damages which Pembina or Veresen will

suffer or incur as a result of the event giving rise to such damages and resultant termination of the Arrangement

Agreement and are not penalties. Each Party irrevocably waives any right it may have to raise as a defence that any

such liquidated damages are excessive or punitive. For greater certainty, Pembina and Veresen agree that if the

payment of any amount pursuant to the Arrangement Agreement is made, such payment is the sole monetary remedy

of Pembina and Veresen; provided, however, that this limitation shall not apply in the event of fraud or deliberate

breach of the Arrangement Agreement by either Party.

Support Agreements

On May 1, 2017, the Supporting Shareholders, which includes all of the directors and certain officers of Veresen,

holding an aggregate of 291,182 Common Shares (representing less than 1% of the outstanding Common Shares),

entered into the Support Agreements with Pembina pursuant to which they agreed, among other things, to vote the

Common Shares beneficially owned or controlled or directed by them, directly or indirectly, at the Common

Shareholders’ Meeting, in favour of the Arrangement and all matters related thereto.


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Pursuant to the Support Agreements, each of the Supporting Shareholders agrees to do all such things and take all

such steps as may reasonably be required to be done or taken by the Supporting Shareholder to vote, or cause to be

voted, all of such Supporting Shareholder’s Common Shares entitled to vote on the Common Share Arrangement

Resolution in favour of the Common Share Arrangement Resolution, and to vote, or cause to be voted, all of the

Supporting Shareholder’s Common Shares entitled to vote against any proposed action by any Person whatsoever

which could prevent or delay the completion of the Arrangement and the transactions contemplated by the

Arrangement Agreement. In addition, each Supporting Shareholder has agreed not to solicit, initiate or encourage

inquiries, submissions, proposals or offers from any other Person relating to, or participate in any negotiations

regarding, or furnish to any other Person any information with respect to, or otherwise cooperate in any way with or

assist or participate in or facilitate or encourage any effort or attempt with respect to any Acquisition Proposal and to

otherwise comply with the terms of the Arrangement Agreement having regard to the Supporting Shareholder’s

position as a director and/or officer of Veresen. The Support Agreements may be terminated on the earliest of: (a) the

Effective Time; (b) the date on which a Support Agreement is terminated by the mutual written agreement of the

parties thereto; and (c) the date that the Arrangement Agreement is terminated in accordance with the terms thereof.

PROCEDURE FOR THE ARRANGEMENT TO BECOME EFFECTIVE

Procedural Steps

The Arrangement is proposed to be carried out pursuant to Section 193 of the ABCA. The following procedural steps

must be taken in order for the Arrangement to become effective:

(a) the Common Shareholder Arrangement Resolution must be approved by the Common Shareholders

at the Common Shareholders’ Meeting in the manner set forth in the Interim Order;

(b) the Preferred Shareholder Arrangement Resolution must be approved by the Preferred Shareholders

at the Preferred Shareholders’ Meeting in the manner set forth in the Interim Order (provided,

however, that should such approval not be obtained, the Preferred Shares will be excluded from the

Arrangement and will remain outstanding following completion of the Arrangement and the Plan of

Arrangement will be amended prior to its filing to reflect the same);

(c) the Court must grant the Final Order approving the Arrangement;

(d) all conditions precedent to the Arrangement, as set forth in the Arrangement Agreement, including

receipt of the Required Regulatory Approvals, must be satisfied or waived by the appropriate Party;

and

(e) the Final Order, the Articles of Arrangement and related documents, in the form prescribed by the

ABCA, must be filed with the Registrar.

There is no assurance that the conditions set out in the Arrangement Agreement will be satisfied or waived on

a timely basis or at all.

Upon the conditions precedent set forth in the Arrangement Agreement being fulfilled or waived, Veresen intends to

file a copy of the Final Order and the Articles of Arrangement with the Registrar under the ABCA, together with such

other materials as may be required by the Registrar, in order to give effect to the Arrangement.

Shareholder Approvals

Common Shareholder Approval

Pursuant to the terms of the Interim Order, the Common Shareholder Arrangement Resolution must, subject to further

order of the Court, be approved by at least 66⅔% of the votes cast by Common Shareholders present in person or


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represented by proxy at the Common Shareholders’ Meeting. If the Common Shareholder Arrangement Resolution is

not approved by Common Shareholders, the Arrangement cannot be completed.


in such form of proxy, to vote such proxy in favour of the Common Shareholder Arrangement Resolution set

forth in Appendix A to this Information Circular.

Notwithstanding the foregoing, the Common Shareholder Arrangement Resolution proposed for consideration by the

Common Shareholders authorizes the Board, without further notice to or approval of Common Shareholders, subject

to the terms of the Arrangement Agreement and the Interim Order, to modify, amend or terminate the Arrangement

Agreement or the Plan of Arrangement, to decide not to proceed with the Arrangement and to revoke the Common

Shareholder Arrangement Resolution at any time prior to the Effective Time. See Appendix A to this Information

Circular for the full text of the Common Shareholder Arrangement Resolution.

Preferred Shareholder Approval

Pursuant to the terms of the Interim Order, the Preferred Shareholder Arrangement Resolution must be approved by

at least 66⅔% of the votes cast by the Preferred Shareholders present in person or represented by proxy at the Preferred

Shareholders’ Meeting, voting as a single class. It is not a condition to completion of the Arrangement that the

Preferred Shareholder Arrangement Resolution shall have been approved and, if the Preferred Shareholder

Arrangement Resolution is not approved by Preferred Shareholders, the Preferred Shares will be excluded from the

Arrangement and will remain outstanding following completion of the Arrangement. In addition, in the circumstances

where the Preferred Shareholder Arrangement Resolution receives the requisite approval of the Preferred

Shareholders, and Dissent Rights have been validly exercised in respect of more than 5% of the outstanding Preferred

Shares, Veresen shall amend the Plan of Arrangement if requested by Pembina to exclude the Preferred Shares under

the Plan of Arrangement and matters ancillary thereto, including the amalgamation of Pembina and Veresen as

contemplated in the Plan of Arrangement.


in such form of proxy, to vote such proxy in favour of the Preferred Shareholder Arrangement Resolution set

forth in Appendix B to this Information Circular.

Notwithstanding the foregoing, the Preferred Shareholder Arrangement Resolution proposed for consideration by the

Preferred Shareholders authorizes the Board, without further notice to or approval of such Preferred Shareholders,

subject to the terms of the Arrangement Agreement and the Interim Order, to modify, amend or terminate the

Arrangement Agreement or the Plan of Arrangement, to decide not to proceed with the Arrangement and to revoke

the Preferred Shareholder Arrangement Resolution at any time prior to the Effective Time. See Appendix B to this

Information Circular for the full text of the Preferred Shareholder Arrangement Resolution.

Court Approval

Interim Order

On June 5, 2017, Veresen obtained the Interim Order providing for the calling and holding of the Meetings and other

procedural matters. The Interim Order is attached as Appendix E to this Information Circular.

Final Order

The ABCA provides that the Arrangement requires final Court approval. Subject to the terms of the Arrangement

Agreement, if the Common Shareholder Arrangement Resolution is approved at the Common Shareholders’ Meeting,

Veresen will make an application to the Court for the Final Order at the Calgary Courts Centre, 601 - 5th Street, S.W.,

Calgary, Alberta, Canada, on July 12, 2017 at 10:00 a.m. (Calgary time) or as soon thereafter as counsel may be heard.

The Notice of Originating Application for the Final Order accompanies this Information Circular. At the application

the Court will be requested to consider the fairness of the Arrangement.


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Any Shareholder, or other interested party desiring to support or oppose the application with respect to the

Arrangement, may appear at the hearing in person or by counsel for that purpose, subject to filing with the Court and

serving on Veresen on or before 5:00 p.m. (Calgary time) on July 4, 2017, a notice of intention to appear setting out

their address for service and indicating whether they intend to support or oppose the application or make submissions,

together with any evidence or materials which are to be presented to the Court. Service of such notice on Veresen is

required to be effected by service upon the solicitors for Veresen: Osler, Hoskin & Harcourt LLP, Suite 2500, 450 -

1st Street S.W., Calgary, Alberta, T2P 5H1, Attention: Colin Feasby.

The Pembina Common Shares issuable to Common Shareholders in exchange for their Common Shares and the

Pembina Exchange Shares issuable to Preferred Shareholders pursuant to the Arrangement have not been and will not

be registered under the 1933 Act, in reliance upon the exemption from the registration requirements of the 1933 Act

provided by Section 3(a)(10) thereof. The Court has been advised that the Final Order, if granted, will constitute the

basis for an exemption from the registration requirements of the 1933 Act, pursuant to Section 3(a)(10) thereof, with

respect to the issuance of the Pembina Common Shares issuable to Common Shareholders and Pembina Exchange

Shares issuable to Preferred Shareholders pursuant to the Arrangement.

Veresen has been advised by its counsel that the Court has broad discretion under the ABCA when making orders

with respect to the Arrangement and that the Court, in hearing the application for the Final Order, will consider, among

other things, the fairness of the Arrangement to the Shareholders and any other interested party as the Court determines

appropriate. The Court may approve the Arrangement either as proposed or as amended in any manner the Court may

direct, subject to compliance with such terms and conditions, if any, as the Court may determine appropriate. Either

Pembina or Veresen may, subject to the terms of the Arrangement Agreement, determine not to proceed with the

Arrangement in the event that any amendment ordered by the Court is not satisfactory to such Party.

Regulatory Approvals

The Arrangement Agreement provides that receipt of all Required Regulatory Approvals including, without limitation,

Competition Act Approval, HSR Approval and CTA Approval and receipt of conditional approval of the TSX and

NYSE for listing of the Pembina Common Shares issuable pursuant to the Arrangement, is a condition precedent to

the Arrangement becoming effective. See “The Arrangement – The Arrangement Agreement – Mutual Conditions”.

Competition Act Approval

The Arrangement is a “notifiable transaction” for the purposes of Part IX of the Competition Act. When a transaction

is a notifiable transaction under the Competition Act, certain prescribed information must be provided to the

Commissioner under Part IX of the Competition Act and the transaction may not be completed until the expiry, waiver

or termination of the applicable waiting period. Where a notification is made, the waiting period is 30 calendar days

after the day on which the parties to the transaction submit the prescribed information, provided that, before the expiry

of this period, the Commissioner has not notified the parties that he requires additional information that is relevant to

the Commissioner’s assessment of the transaction (a “Supplementary Information Request”). If the Commissioner

provides the Parties with a Supplementary Information Request, the Parties cannot complete their transaction until 30

calendar days after compliance with such Supplementary Information Request, provided that there is no order in effect

prohibiting completion at the relevant time. Veresen and Pembina filed a pre-merger notification under subsection

114(1) of the Competition Act on May 18, 2017.

The Commissioner may, upon application by the Parties to a proposed transaction, issue an advance ruling certificate

(“ARC”) under Section 102 of the Competition Act where he is satisfied that he would not have sufficient grounds

on which to apply to the Competition Tribunal (the “Tribunal”) for an order under Section 92 of the Competition

Act. Further, if the transaction to which the ARC relates is substantially completed within one year after the ARC is

issued, the Commissioner cannot seek an order of the Tribunal under Section 92 of the Competition Act in respect of

the transaction solely on the basis of information that is the same or substantially the same as the information on the

basis of which the ARC was issued.


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The Commissioner may decide to challenge the transaction under Section 92 of the Competition Act if he is of the

view that the transaction is likely to prevent or lessen competition substantially, and may also apply to the Tribunal

for an injunction to prevent its closing pending the Tribunal’s determination of his challenge to the transaction.

Completion of the Arrangement is subject to the condition that: (a) an ARC shall have been issued by the

Commissioner pursuant to subsection 102(1) of the Competition Act with respect to the transactions contemplated by

the Arrangement Agreement; or (b) (i) the applicable waiting period under subsection 123(1) of the Competition Act,

and any extension thereof, shall have expired or shall have been terminated under subsection 123(2) of the Competition

Act, or the obligation to submit a notification under Part IX of the Competition Act shall have been waived by the

Commissioner pursuant to paragraph 113(c) of the Competition Act; and (ii) unless such requirement is waived in

writing by Pembina in its sole discretion, the Commissioner shall have advised the Parties in writing that the

Commissioner does not, at that time, intend to make an application under Section 92 of the Competition Act and such

advice shall remain in full force and effect (a “no-action letter”).

Veresen and Pembina have jointly requested that the Commissioner issue an ARC under Section 102 of the

Competition Act or, alternatively, a no-action letter in respect of the Arrangement.

HSR Approval

Under the HSR Act, certain transactions may not be completed until each Party has filed a Notification and Report

Form with the Antitrust Division of the U.S. Department of Justice (the “DOJ”) and with the U.S. Federal Trade

Commission (the “FTC”). The HSR Act requires the parties to observe a 30 calendar-day waiting period after the

submission of their HSR Act filings before consummating their transaction, unless the waiting period is terminated

early or, alternatively, is extended if the FTC or DOJ issues a Request for Additional Information and Documentary

Material. The transactions contemplated by the Arrangement Agreement are subject to the HSR Act.

Veresen and Pembina filed the requisite Notification and Report Forms on May 18, 2017, and the FTC granted early

termination of the 30 calendar-day waiting period on May 30, 2017. The expiration or termination of the waiting

period does not bar the FTC or the DOJ from subsequently challenging the Arrangement. Private parties and state

attorneys general may also bring an action under the antitrust laws under certain circumstances.

In addition, prior to acquiring their Pembina Common Shares, Common Shareholders who as a result of the

Arrangement will hold Pembina Common Shares with a value in excess of US$80.8 million may, unless exempt, be

subject to the filing and waiting period requirements of the HSR Act. This would require each such Common

Shareholder, as well as Pembina, to file a Notification and Report Form with the FTC and the DOJ and to observe an

initial 30 calendar-day waiting period. The initial waiting period may be terminated before its expiration or extended

by a Request for Additional Information and Documentary Material. Therefore, compliance with the HSR procedures

could delay the acquisition of Pembina Common Shares by affected Common Shareholders and/or the Effective Date

of the Arrangement. Any Common Shareholder that believes that it may have a filing and waiting obligation under

the HSR Act in connection with this transaction should contact Pembina at its head office at Suite 4000, 585 – 8th

Avenue S.W., Calgary, Alberta, T2P 1G1 and consult its own legal counsel.

Canada Transportation Act Approval

Subsection 53.1(1) of the Canada Transportation Act provides that every person who is required to notify the

Commissioner under subsection 114(1) of the Competition Act of a proposed transaction that involves a transportation

undertaking shall, at the same time as the Commissioner is notified and, in any event, not later than the date by which

the person is required to notify the Commissioner, give notice of the proposed transaction to the Minister. Transactions

that are subject to notification under the Canada Transportation Act cannot be completed until the requirements noted

below have been satisfied. The transactions contemplated by the Arrangement Agreement also may be subject to

notification under subsection 53.1(1) of the Canada Transportation Act.

While the Canada Transportation Act may not apply to the transactions contemplated by the Arrangement Agreement,

as a precaution Veresen and Pembina have filed a notice under subsection 53.1(1) of the Canada Transportation Act


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with the Minister. Under the Canada Transportation Act, the Minister is required to inform the Parties within 42 days

of the receipt of the Parties’ notification whether, in the Minister’s opinion, the transactions contemplated by the

Arrangement Agreement raise issues with respect to the public interest as it relates to national transportation. At any

time during or at the end of the 42 day period, the Minister may notify the Parties that the transactions contemplated

by the Arrangement Agreement do not raise issues with respect to the public interest as it relates to national

transportation, in which case the consummation of the transactions would no longer be prohibited under the Canada

Transportation Act. Alternatively, if the Minister determines that the transactions contemplated by the Arrangement

Agreement raise issues with respect to the public interest as it relates to national transportation, the Parties cannot

complete the transactions until they are approved by the Governor in Council. If this approval is required, the Minister

may direct the Canada Transportation Agency or another person to examine the public interest issues and to report to

the Minister of Transport within 150 days (or within any longer period that the Minister allows); within this same

period, the Commissioner of Competition must report to the Minister and the Parties on any concerns regarding

potential prevention or lessening of competition that may occur as a result of the transaction. The Minister will then

make a recommendation to the Governor in Council as to whether to approve the proposed transaction. The Governor

in Council has the authority to approve the transaction either conditionally or unconditionally.

Commercially Reasonable Efforts

Under the Arrangement Agreement, the Parties agreed to use their commercially reasonable efforts to obtain the

Required Regulatory Approvals, including defending all lawsuits or other legal, regulatory or other proceedings

challenging or affecting the Arrangement, and opposing, lifting or rescinding any injunction or restraining order or

action seeking to stop, or otherwise affecting the ability of the Parties to consummate the Arrangement, except that

Pembina is not required to offer, agree or consent to sell, assign, license, hold separate, or take any other action

(individually, and collectively, a “Regulatory Action”) before or after the Effective Date, with respect to any assets

or businesses, or interests in any assets or businesses, of Pembina or Veresen, or any of their respective Subsidiaries.

However, in connection with obtaining Required Regulatory Approvals by no later than the Outside Date, Pembina is

required to take a Regulatory Action with respect to any assets or businesses, or interests in any assets or businesses,

of Pembina or Veresen, or any of their respective Subsidiaries, to the extent that (A) the aggregate forecasted earnings

before interest, taxes, depreciation and amortization from such assets, businesses or interests, as applicable, for 2017

does not exceed 10% of the forecasted earnings before interest, taxes, depreciation and amortization of Veresen for

2017, as disclosed in writing by Veresen to Pembina, and (B) any such Regulatory Action is conditional on

consummation of the Arrangement.

Stock Exchange Listings

Veresen is a reporting issuer under the securities laws of each province of Canada. The Common Shares and the

Veresen Series A Shares, Veresen Series C Shares and Veresen Series E Shares (collectively, the “Listed Preferred

Shares”) are each listed and posted for trading on the TSX under the symbols VSN, VSN.PR.A, VSN.PR.C and

VSN.PR.E, respectively.

On April 28, 2017, the last trading day on which the Common Shares traded prior to the announcement of the

Arrangement, the closing price of the Common Shares on the TSX was $15.23. On June 5, 2017, the last trading day

on which the Common Shares traded prior to the printing of this Information Circular, the closing price of the Common

Shares on the TSX was $18.64.

Pembina is a reporting issuer under the securities laws of each province of Canada. The Pembina Common Shares are

listed and posted for trading on the TSX under the symbol “PPL” and on the NYSE under the symbol “PBA”.

On April 28, 2017, the last trading day on which the Pembina Common Shares traded prior to announcement of the

Arrangement, the closing price of the Pembina Common Shares on the TSX and the NYSE was $43.50 and US$31.88,

respectively. On June 5, 2017, the closing price of the Pembina Common Shares on the TSX and NYSE was $44.08

and US$32.70, respectively.


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Following completion of the Arrangement, it is anticipated that the Common Shares will be delisted from the TSX. In

the event the Preferred Shares are exchanged for Pembina Exchange Shares, it is anticipated that the Listed Preferred

Shares will be delisted from the TSX. In the event the Preferred Shares are otherwise excluded from the Plan of

Arrangement, the Preferred Shares will remain outstanding and the Listed Preferred Shares will remain listed on the

TSX.

For information with respect to the trading history of the Pembina Common Shares, the Common Shares and the

Listed Preferred Shares, see “Information Concerning Pembina Pipeline Corporation – Price Range and Trading

Volumes” and “Information Concerning Veresen Inc. – Price Range and Trading Volumes”, in Appendix J and

Appendix K to this Information Circular, respectively.

It is a condition to the completion of the Arrangement that the TSX and the NYSE shall have conditionally approved

the listing of the Pembina Common Shares to be issued to Common Shareholders pursuant to the Arrangement and,

if the Preferred Shareholder Arrangement Resolution receives the requisite approval of the Preferred Shareholders at

the Preferred Shareholders’ Meeting, that the TSX shall have conditionally approved the listing of the Pembina

Exchange Shares to be issued to Preferred Shareholders pursuant to the Arrangement. The TSX has conditionally

approved the listing of the Pembina Common Shares to be issued to Common Shareholders pursuant to the

Arrangement and the listing of the Pembina Exchange Shares following the Effective Date on the TSX. Listing is

subject to Pembina fulfilling all of the listing requirements of the TSX. The NYSE has conditionally approved the

listing of the Pembina Common Shares to be issued to Common Shareholders pursuant to the Arrangement. Listing

will be subject to Pembina fulfilling all of the listing requirements of the NYSE.

Securities Law Matters

Canada

General

The Pembina Common Shares to be issued to Common Shareholders and in the event the Preferred Shareholder

Arrangement Resolution is approved at the Preferred Shareholders’ Meeting, the Pembina Exchange Shares to be

issued to Preferred Shareholders pursuant to the Arrangement will be issued in reliance on exemptions from the

prospectus requirements of applicable Canadian securities Laws, will generally be “freely tradable” and the resale of

such Pembina Common Shares will be exempt from the prospectus requirements (and not subject to any “restricted

period” or “hold period”) under applicable Canadian securities Laws if the following conditions are met: (a) the trade

is not a control distribution (as defined in applicable securities legislation); (b) no unusual effort is made to prepare

the market or to create a demand for the securities that are the subject of the trade; (c) no extraordinary commission

or consideration is paid to a person or company in respect of the trade; and (d) if the selling shareholder is an insider

or an officer of Pembina, the selling shareholder has no reasonable grounds to believe that Pembina is in default of

securities legislation. Shareholders are urged to consult their legal advisors to determine the applicability to

them of the resale restrictions prescribed by applicable Canadian securities Laws.

MI 61-101

Each of Veresen and Pembina is subject to the provisions of MI 61-101. MI 61-101 is intended to regulate insider

bids, issuer bids, business combinations and related party transactions to ensure equality of treatment among

securityholders, generally by requiring enhanced disclosure, minority securityholder approval, and, in certain

instances, independent valuations and approval and oversight of certain transactions by a special committee of

independent directors.

As previously described in this Information Circular, all Common Shares and Preferred Shares (if the Preferred

Shareholders approve the Preferred Shareholder Arrangement Resolution) will be exchanged for Pembina Common

Shares and Pembina Exchange Shares, respectively, under the terms of the Plan of Arrangement. Unless certain

exceptions apply, the Arrangement will be considered a “business combination” in respect of Veresen pursuant to MI

61-101 since the interest of a holder of a Common Share or Preferred Share may be terminated without the holder’s


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consent. Accordingly, unless no related party of Veresen is entitled to receive a “collateral benefit” (as defined in MI

61-101) in connection with the Arrangement, the transaction would be considered a “business combination” and

subject to minority approval requirements.

If “minority approval” is required, MI 61-101 would require that, in addition to the approval of the Common

Shareholder Arrangement Resolution by not less than 66⅔% of the votes cast by the Common Shareholders and the

approval of the Preferred Shareholder Arrangement Resolution by not less than 66⅔% of the votes cast by the

Preferred Shareholders present in person or represented by proxy at the applicable Meeting, the Arrangement would

also require the approval of a simple majority of the votes cast by Common Shareholders and Preferred Shareholders,

as applicable, excluding votes cast in respect of Common Shares or Preferred Shares held by “related parties” who

receive a “collateral benefit” (as such terms are defined in MI 61-101) as a consequence of the transaction.

However, the minority approval requirements of MI 61-101 do not apply to certain transactions in which a related

party beneficially owns, or exercises control or direction over, less than 1% of the issuer’s outstanding equity securities

or to certain transactions in which an independent committee of directors has determined, acting in good faith, that

the value of the benefits received by a related party, net of any offsetting costs to the related party, is less than 5% of

the value the related party expects to receive pursuant to the transaction, provided the independent committee’s

determination is disclosed in the disclosure document for the transaction.

As disclosed in this Information Circular, certain current officers of Veresen will receive compensation in the form of

severance payments and payments resulting from accelerated vesting of the Veresen Incentive Awards upon

completion of the Arrangement. Veresen has considered whether any of these payments or other benefits to be received

by the officers of Veresen would constitute a “collateral benefit” for purposes of MI 61-101 such that the Arrangement

would therefore constitute a “business combination” under MI 61-101. See “Interests of Certain Persons or

Companies in the Arrangement”.

Veresen has determined that none of these payments or other benefits is a “collateral benefit” for the purposes of MI

61-101 since: (i) the benefit is not conferred for the purpose, in whole or in part, of increasing the value of the

consideration paid to the related party for their Veresen Shares; (ii) the benefit is not, by its terms, conditional on the

related party supporting the Arrangement in any manner; (iii) full particulars of the benefit have been disclosed in this

Information Circular; and (iv) each of the related parties receiving the benefit exercised control or direction over, or

beneficially owned, less than 1% of the outstanding Common Shares or Preferred Shares, at the date on which the

proposed Arrangement was agreed to.

Accordingly, the Arrangement is not considered to be a “business combination” in respect of Veresen, and as a result,

no “minority approval” is required for the Common Shareholder Arrangement Resolution and the Preferred

Shareholder Arrangement Resolution. In addition, since the Arrangement does not constitute a business combination,

no formal valuation is required for the Arrangement under MI 61-101.

United States

The Pembina Common Shares issuable to Common Shareholders in exchange for their Common Shares and, in the

event the Preferred Shareholder Arrangement Resolution is approved at the Preferred Shareholders’ Meeting, the

Pembina Exchange Shares to be issued to Preferred Shareholders in exchange for their Preferred Shares pursuant to

the Arrangement, have not been and will not be registered under the 1933 Act or any state securities laws, and will be

issued in reliance upon the exemption from the registration requirements of the 1933 Act provided by Section 3(a)(10)

thereof and exemptions under applicable state securities laws. Section 3(a)(10) of the 1933 Act exempts the issuance

of any security issued in exchange for one or more bona fide outstanding securities from the general requirement of

registration where the terms and conditions of such issuance and exchange have been approved by a court of competent

jurisdiction that is expressly authorized by law to grant such approval, after a hearing upon the fairness of the terms

and conditions of such issuance and exchange at which all persons to whom it is proposed to issue the securities have

the right to appear and receive timely notice thereof. The Court is authorized to conduct a hearing at which the fairness

of the terms and conditions of the Arrangement will be considered. The Court granted the Interim Order on June 5,

2017 and, subject to the approval of the Arrangement by Common Shareholders and satisfaction of certain other


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conditions, a hearing on the Arrangement will be held on July 12, 2017 by the Court. See “Procedure for the

Arrangement to Become Effective – Court Approval”.

The Pembina Common Shares issuable to Common Shareholders and the Pembina Exchange Shares issuable to

Preferred Shareholders pursuant to the Arrangement will be, following completion of the Arrangement, freely

tradeable under the 1933 Act, except by persons who will be “affiliates” of Pembina after the Effective Date or were

affiliates of Pembina within 90 days before the Effective Date. Persons who may be deemed to be “affiliates” of an

issuer include individuals or entities that control, are controlled by, or are under common control with, the issuer,

whether through the ownership of voting securities, by contract or otherwise, and generally include executive officers

and directors of the issuer as well as principal shareholders of the issuer.

Any resale of such Pembina Common Shares or Pembina Exchange Shares by such an affiliate (or former affiliate)

may be subject to the registration requirements of the 1933 Act, absent an exemption or exclusion therefrom. Subject

to certain limitations, such affiliates (and former affiliates) may immediately resell Pembina Common Shares or the

Pembina Exchange Shares outside the United States without registration under the 1933 Act pursuant to Regulation S

under the 1933 Act. If available, such affiliates (and former affiliates) may also resell such Pembina Common Shares

or Pembina Exchange Shares pursuant to Rule 144 under the 1933 Act.

The foregoing discussion is only a general overview of certain provisions of United States federal securities laws

applicable to the resale of Pembina Common Shares or Pembina Exchange Shares received upon completion

of the Arrangement. All holders of such securities are urged to consult with counsel to ensure that the resale of

their securities complies with applicable securities legislation.

Making an Election Regarding the Consideration to be Received

How to Make an Election

Enclosed with this Information Circular is the Common Shareholder Letter of Transmittal and Election Form which,

when properly completed and returned together with the certificate(s) or DRS Advice(s) representing Common Shares

and all other documents that may be required by the Depositary, will enable each Common Shareholder to obtain the

consideration that the Common Shareholder is entitled to receive under the Arrangement. The Common Shareholder

Letter of Transmittal and Election Form must be submitted by the Election Deadline. Veresen will provide at least 10

Business Days’ notice of the Election Deadline to Common Shareholders by means of a news release disseminated

on a national newswire in Canada and the U.S. See “Procedure for Exchange of Veresen Share Certificates or DRS

Advices”.


your election and exchange your Common Shares.

Each Common Shareholder’s election may be subject to the pro-rationing provisions described below.

What Happens if a Shareholder Fails to Make a Valid Election


Transmittal and Election Form together with the applicable certificate(s) or DRS Advice(s) representing Common

Shares prior to the Election Deadline, or otherwise fail to comply with the requirements of the Plan of Arrangement

and the Common Shareholder Letter of Transmittal and Election Form with respect to the election to receive the Share

Consideration or the Cash Consideration shall be deemed to have elected to receive the Share Consideration in

exchange for all of such holder’s Common Shares, subject to the terms of the Plan of Arrangement.

Pro-rationing Provisions

The Plan of Arrangement provides that the aggregate Cash Consideration shall not exceed the Maximum Cash

Consideration and the aggregate Share Consideration shall not exceed the Maximum Share Consideration. If Common


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Shareholders elect to receive either Cash Consideration in an aggregate amount exceeding the Maximum Cash

Consideration or the Share Consideration in an aggregate number exceeding the Maximum Share Consideration, the

actual amount of cash paid and the actual number of Pembina Common Shares issued to Common Shareholders

pursuant to the Arrangement will be subject to pro-rationing as described below. It is highly likely that elections

made by Common Shareholders will be subject to pro-rationing under the Plan of Arrangement.

Elections for Pembina Common Shares

In the event that the aggregate number of Pembina Common Shares that would be paid to Common Shareholders in

accordance with the elections or deemed elections of such Common Shareholders pursuant to the Plan of Arrangement

(the “Total Elected Share Consideration”) exceeds the Maximum Share Consideration, then the aggregate number

of Pembina Common Shares to be paid to any Common Shareholder shall be determined by multiplying the aggregate

number of Pembina Common Shares that would be issued to such Common Shareholder by a fraction, rounded to six

decimal places, the numerator of which is the Maximum Share Consideration and the denominator of which is the

Total Elected Share Consideration; and such holder shall be deemed to have elected to receive the Share Consideration

for such number of its Common Shares, rounded down to the nearest whole, as is equal to the aggregate number of

Pembina Common Shares received by such holder, as adjusted pursuant to the Plan of Arrangement, divided by the

Share Consideration, and the Cash Consideration for the remainder of its Common Shares for which such holder

would otherwise have received the Share Consideration.

Elections for Cash

In the event that the aggregate amount of cash that would be paid to Common Shareholders in accordance with the

elections or deemed elections of such Common Shareholders pursuant to Plan of Arrangement (the “Total Elected

Cash Consideration”) exceeds the Maximum Cash Consideration, then the aggregate amount of cash to be paid to

any Common Shareholder shall be determined by multiplying the aggregate amount of cash that would be paid to such

Common Shareholder by a fraction, rounded to six decimal places, the numerator of which is the Maximum Cash

Consideration and the denominator of which is the Total Elected Cash Consideration; and such holder shall be deemed

to have elected to receive the Cash Consideration for such number of its Common Shares, rounded down to the nearest

whole, as is equal to the aggregate amount of cash received by such holder, as adjusted in accordance with the Plan

of Arrangement, divided by the Cash Consideration, and the Share Consideration for the remainder of its Common

Shares for which such holder would otherwise have received the Cash Consideration.

Fractional Shares

No fractional Pembina Common Shares will be issued pursuant to the Arrangement and, in lieu thereof, each former

Common Shareholder otherwise entitled to a fractional interest in a Pembina Common Share will receive the nearest

whole number of Pembina Common Shares (with fractions equal to exactly 0.5 or greater being rounded up and

fractions less than 0.5 being rounded down), unless such rounding causes the aggregate number of Pembina Common

Shares to be paid to the Common Shareholders pursuant to the Plan of Arrangement to be greater than the Maximum

Share Consideration, in which case all such fractional interests will be paid in cash based on the Cash Consideration

notwithstanding that such cash payments may cause the aggregate cash consideration to be paid by Pembina pursuant

to the Plan of Arrangement to exceed the Maximum Cash Consideration. In calculating such fractional interests, all

Common Shares registered in the name of or beneficially held by a Common Shareholder or his/her/its nominee shall

be aggregated.

Effect on Preferred Shares if Preferred Shareholder Approval is Obtained

If the requisite approval of the Preferred Shareholders is obtained at the Preferred Shareholders’ Meeting and the

Arrangement is completed, the Preferred Shares will be acquired by Pembina as part of the Arrangement in exchange

for the Preferred Share Consideration.


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Effect on Preferred Shares if Preferred Shareholder Approval is Not Obtained

If the requisite approval of the Preferred Shareholders is not obtained at the Preferred Shareholders’ Meeting (or any

adjournment thereof) and the Preferred Shareholders do not otherwise approve a special resolution with similar effect

to the Preferred Shareholder Arrangement Resolution prior to the Effective Time such that Pembina is the sole holder

of the Preferred Shares prior to the amalgamation contemplated in the Plan of Arrangement, Veresen will amend the

Plan of Arrangement to exclude the Preferred Shares under the Plan of Arrangement and matters ancillary thereto, the

Preferred Shares will not be acquired by Pembina and will remain outstanding following completion of the

Arrangement.

Procedure for Exchange of Veresen Share Certificates or DRS Advices

Common Shareholders and Preferred Shareholders (other than Dissenting Shareholders) must duly complete and

return a Common Shareholder Letter of Transmittal and Election Form or Preferred Shareholder Letter of Transmittal,

respectively, together with the certificate(s) or DRS Advice(s), as applicable, representing their Common Shares

and/or Preferred Shares, as the case may be, and all other required documents to the Depositary at one of the offices

specified in the Letters of Transmittal. In the event that the Arrangement is not completed, such certificates or DRS

Advices will be promptly returned to Shareholders who provided such certificates or DRS Advices to the Depositary.

Enclosed with this Information Circular is a Common Shareholder Letter of Transmittal and Election Form

and/or Preferred Shareholder Letter of Transmittal which, when properly completed and returned together

with the certificate(s) or DRS Advice(s) representing Common Shares and/or Preferred Shares, as the case may

be, and all other required documents, will enable each Shareholder to obtain the consideration that the

Shareholder is entitled to receive under the Arrangement.


Transmittal and Election Form together with certificate(s) or DRS Advice(s) representing the applicable Common

Shares prior to the Election Deadline, or otherwise fail to comply with the Plan of Arrangement or the Common

Shareholder Letter of Transmittal and Election Form, will be deemed to have elected to receive the Share

Consideration in respect of all of such holders’ Common Shares, subject to pro-rationing. Veresen will provide at least

ten (10) Business Days’ notice of the Election Deadline to Common Shareholders by means of a news release

disseminated on a national newswire in Canada and the U.S.


your election and exchange your Common Shares. The Preferred Shareholder Letter of Transmittal contains complete

instructions on how to exchange your Preferred Shares.

From and after the Effective Time, certificates or DRS Advices formerly representing Veresen Shares shall

represent only the right to receive the consideration to which the former Shareholders are entitled under the

Arrangement, or as to those held by Dissenting Shareholders, other than those Dissenting Shareholders deemed to

have participated in the Arrangement pursuant to the Plan of Arrangement, to receive the fair value of the Veresen

Shares represented by such certificates or DRS Advices. As soon as practicable following the later of the Effective

Date and the date of deposit by a former holder of Veresen Shares acquired by Pembina under the Arrangement of a

duly completed Common Shareholder Letter of Transmittal and Election Form or Preferred Shareholder Letter of

Transmittal, as applicable, and the certificates or DRS Advices representing such Veresen Shares and all other required

documents, the Depositary shall either: (a) forward by first class mail to such former holder at the address specified

in the Common Shareholder Letter of Transmittal and Election Form or Preferred Shareholder Letter of Transmittal;

or (b) if requested by such Shareholder in the Common Shareholder Letter of Transmittal and Election Form or

Preferred Shareholder Letter of Transmittal, as applicable, make available or cause to be made available at the

Depositary for pickup by such Shareholder, the cash and/or DRS Advices representing the number of Pembina

Common Shares or Pembina Exchange Shares issued to such Shareholder under the Arrangement.

Subject to any applicable Laws relating to unclaimed personal property, any certificate formerly representing

Common Shares or Preferred Shares that is not deposited with all other documents as required by the Plan of


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Arrangement on or before the last Business Day before the third anniversary of the Effective Date shall cease

to represent a claim or interest of any kind or nature including the right of the former holders of Common

Shares or Preferred Shares, as applicable, to receive the consideration for such Common Shares or Preferred

Shares, as applicable, pursuant to the Plan of Arrangement (and any dividends or other distributions thereon).

In such case, such Pembina Common Shares or Pembina Exchange Shares shall be returned to Pembina for

cancellation and any cash (including any dividends or other distributions in respect of Pembina Common

Shares or Pembina Exchange Shares) shall be returned to Pembina.

If any certificate which immediately prior to the Effective Time represented an interest in outstanding Veresen Shares

that were exchanged pursuant to the Plan of Arrangement has been lost, stolen or destroyed, upon the making of an

affidavit of that fact by the person claiming such certificate to have been lost, stolen or destroyed, the Depositary will

issue and deliver in exchange for such lost, stolen or destroyed certificate the consideration to which the holder is

entitled pursuant to the Arrangement, as determined in accordance with the Arrangement. The person who is entitled

to receive such consideration shall, as a condition precedent to the receipt thereof, give a bond satisfactory to Pembina

and its transfer agent in such form as is satisfactory to Pembina and such transfer agent, or otherwise indemnify

Veresen, Pembina and the transfer agent, to the reasonable satisfaction of such parties, against any claim that may be

made against any of them with respect to the certificate alleged to have been lost, stolen or destroyed.

Shareholders whose Veresen Shares are registered in the name of a broker, dealer, bank, trust company or

other nominee must contact their nominee to deposit their Veresen Shares.

The use of mail to transmit certificates representing Veresen Shares or the Letters of Transmittal is at each

registered holder’s risk. Veresen recommends that such certificates and documents be delivered by hand to the

Depositary and a receipt therefor be obtained or that registered mail be used and appropriate insurance be

obtained.

If a Common Shareholder Letter of Transmittal and Election Form or a Preferred Shareholder Letter of Transmittal is

executed by a person other than the registered holder of the Common Shares or Preferred Shares, as applicable, being

exchanged or if the certificate(s), DRS Advice(s) or cheque(s) to be issued in exchange therefor are to be issued to a

person other than the registered owner(s) or sent to an address other than the address of the registered holder(s) as

shown on the register of Common Shareholders or Preferred Shareholders, as the case may be, maintained by the

applicable registrar and transfer agent, the signature on the Common Shareholder Letter of Transmittal and Election

Form or Preferred Shareholder Letter of Transmittal, as the case may be, must be medallion guaranteed by an Eligible

Institution (as defined in the applicable Letter of Transmittal). If the Common Shareholder Letter of Transmittal and

Election Form or the Preferred Shareholder Letter of Transmittal is executed by a person other than the registered

owner(s) of the Common Shares or Preferred Shares, as the case may be, and in certain other circumstances as set

forth in the applicable Letter of Transmittal, then the certificate(s) representing the Common Shares or Preferred

Shares, as the case may be, must be endorsed or be accompanied by an appropriate transfer power of attorney duly

and properly completed by the registered owner(s). The signature(s) on the endorsement panel or the transfer power

of attorney must correspond exactly to the name(s) of the registered owner(s) as registered or as appearing on the

certificate(s) must be medallion guaranteed by an Eligible Institution.

All questions as to validity, form, eligibility (including timely receipt), and acceptance of any Common Shares or

Preferred Shares exchanged pursuant to the Arrangement will be determined by Pembina in its sole discretion.

Depositing Common Shareholders or Preferred Shareholders, as the case may be, agree that such determination shall

be final and binding. Pembina reserves the absolute right to reject any and all deposits which it determines not to be

in proper form or which may be unlawful for it to accept under the laws of any jurisdiction. Pembina reserves the

absolute right to waive any defect or irregularity in the exchange of Common Shares or Preferred Shares. There shall

be no duty or obligation on Pembina, the Depositary or any other person to give notice of any defect or irregularity in

any deposit of Common Shares or Preferred Shares and no liability shall be incurred by any of them for failure to give

such notice.

Under no circumstances will interest accrue or be paid by Pembina, Veresen or the Depositary on the Cash

Consideration per Common Share, regardless of any delay in making any payment for the Common Shares.


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Notwithstanding the provisions of this Information Circular, the Letters of Transmittal, DRS Advices representing

Pembina Common Shares, Pembina Exchange Shares and/or cheques representing the consideration to be received

pursuant to the Arrangement will not be mailed if Pembina determines that delivery thereof by mail may be delayed.

Persons entitled to DRS Advices and/or cheques which are not mailed for the following reason may take delivery

thereof at the office of the Depositary in which the deposited certificates or DRS Advices representing Common

Shares or Preferred Shares, as the case may be, were originally deposited until such time that it is determined that the

delivery by mail will no longer be delayed.

Shareholders are encouraged to deliver a validly completed and duly executed Letter of Transmittal, as applicable,

together with the relevant security certificate(s) or DRS Advice(s), as applicable, to the Depositary as soon as possible.

None of Veresen, Pembina or the Depositary are liable for failure to notify Shareholders, nor do they have any

obligation to notify Shareholders, who make a deficient deposit with the Depositary.

INTERESTS OF CERTAIN PERSONS OR COMPANIES IN THE ARRANGEMENT

Except as described below, management of Veresen is not aware of any material interest direct or indirect, by way of

beneficial ownership or otherwise of any director or executive officer of Veresen or anyone who has held office as

such since the beginning of Veresen’s last financial year or of any associate or affiliate of any of the foregoing in the

Arrangement.

Veresen Shares

As at May 31, 2017, the directors and executive officers of Veresen and their associates beneficially owned, controlled

or directed, directly or indirectly, an aggregate of 302,092 Common Shares, representing approximately 0.1% of the

outstanding Common Shares and 1,000 Preferred Shares, representing less than 0.01% of the outstanding Preferred

Shares. All of the Common Shares held by such directors and executive officers of Veresen and their associates will

be treated in the same fashion under the Arrangement as Common Shares held by any other Common Shareholder. If

the Arrangement is completed, assuming all such individuals elect to receive the Share Consideration, without any

pro-rationing, the directors and executive officers of Veresen and their associates will receive in exchange for such

Common Shares an aggregate of approximately 129,506 Pembina Common Shares. The Common Shares held by each

director and executive officer of Veresen are set out in the table below under “Summary of Interests of Directors and

Executive Officers in the Arrangement”.

As at June 5, 2017, to the knowledge of Veresen, Pembina did not beneficially own, control or direct, directly or

indirectly, any Veresen Shares. As at June 5, 2017, to the knowledge of Veresen, the directors and executive officers

of Pembina, as a group, beneficially owned, controlled or directed, directly or indirectly, an aggregate of less than 1%

of the Common Shares and 1% of the Preferred Shares.

Veresen Incentive Awards

As at May 31, 2017 the directors and executive officers of Veresen held an aggregate of 326,012 Veresen RSUs,

809,953 Veresen PSUs and 405,711 Veresen DSUs. As the completion of the Arrangement will be considered a

“Change of Control” pursuant to the Veresen LTIP and the Veresen DSU Plans, all outstanding Veresen RSUs,

Veresen PSUs and Veresen DSUs will vest and be settled in cash immediately prior to the Effective Time. The Veresen

Incentive Awards held by each individual director and executive officer are set out in the table below under “Summary

of Interests of Directors and Executive Officers in the Arrangement”.

Severance

Veresen has entered into employment agreements with each of Don Althoff, Kevan King, Darren Marine and Theresa

Jang (collectively, the “Employment Agreements”).


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Pursuant to the Employment Agreements, in the event that a “Change of Control”, as defined in the Employment

Agreements, occurs and within one year of the Change of Control occurring the executive officer’s employment

relationship with Veresen is terminated by Veresen without “Just Cause” or by the executive officer for “Good

Reason”, provided that in order to resign for Good Reason: (a) the executive officer must give notice to terminate his

or her employment within a period of 30 days from the date of the event constituting Good Reason; and (b) Veresen

shall have 30 days from the date of receipt of such notice to remedy the Good Reason relied upon by the executive

officer, and only if Veresen failed to remedy the Good Reason during the 30 day period, then the executive officer

may resign for Good Reason, then, Veresen must pay such executive officer, other than Mr. Althoff, one and one-half

times, and for Mr. Althoff, two times the aggregate of:

(a) their annual base salary;

(b) the average annual payout to the executive officer under Veresen’s short-term incentive plan for the

past three years (or such lesser period as the executive officer has received such short-term incentive

plan payouts); and

(c) 15% of their annual base salary, which amount is to cover the cost of life, disability, medical, dental,

accident benefits and the employer matching contributions to the their savings plan.

Veresen has also adopted an executive termination policy (the “Executive Termination Policy”) applicable to

executive officers of Veresen who have not entered into Employment Agreements. The Executive Termination Policy

provides for payments to such executive officers in the event that a “Change of Control”, as defined in the Executive

Termination Policy, occurs and the executive officer’s employment relationship with Veresen is terminated by

Veresen without “Just Cause” or by the executive officer for “Good Reason”, provided that in order to resign for Good

Reason: (a) the executive officer must give notice to terminate his or her employment within a period of 30 days from

the date of the event constituting Good Reason; and (b) Veresen shall have 30 days from the date of receipt of such

notice to remedy the Good Reason relied upon by the executive officer, and only if Veresen failed to remedy the Good

Reason during the 30 day period, then the executive officer may resign for Good Reason.

For purposes of the Employment Agreements and the Executive Termination Policy, “Good Reason” means the

occurrence of any event without the executive officer’s consent that would be considered constructive dismissal or

constructive discharge by a court of competent jurisdiction under the common law and “Just Cause” means (a) any

improper conduct of the executive officer which is materially detrimental to Veresen or any willful and material failure

by the executive officer to properly carry out his or her employment duties or (b) any other act or omission that would

constitute “just cause” as determined by a court of competent jurisdiction under common law.

The estimated severance which would be received by each individual executive officer pursuant to the Employment

Agreements or the Executive Termination Policy, as applicable, assuming that all such executive officers of Veresen

are terminated by Veresen without “Just Cause”, or for “Good Reason” by the executive officer, upon the completion

of the Arrangement, is set out in the table below under “Summary of Interests of Directors and Executive Officers in

the Arrangement”.

Continuing Insurance Coverage for Directors and Officers of Veresen

Pursuant to the Arrangement Agreement, Pembina has agreed that it will maintain in effect, or will cause Veresen or

its successors to maintain in effect, without any reduction in scope or coverage for six years from the Effective Time

customary policies of directors’ and officers’ liability insurance providing protection comparable to the current

protection provided by the policies maintained by Veresen and their respective Subsidiaries as are in effect

immediately prior to the Effective Time and providing coverage on a “trailing” or “run-off” basis for all present and

former directors and officers of Veresen with respect to claims arising from facts or events which occurred prior to

the Effective Time. Prior to the Effective Time, Veresen is allowed to, in the alternative, with the consent of Pembina,

not to be unreasonably withheld, purchase run-off directors’ and officers’ liability insurance for a period of up to six

years from the Effective Time, and in such event none of Pembina, Veresen or any successor of Veresen will have

any further obligation under the Arrangement Agreement.


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Pembina has also agreed, pursuant to the Arrangement Agreement, that all rights to indemnification or exculpation

that are existing in favour of present and former officers and directors of Veresen shall survive completion of the

Arrangement and shall continue in full force and effect for a period of not less than six years from the Effective Date.

Combined Company Appointments

Veresen and Pembina have agreed pursuant to the Arrangement Agreement that Pembina shall use commercially

reasonable efforts to appoint Doug Arnell, Maureen E. Howe and Henry W. Sykes to the Pembina Board as soon as

reasonably practicable following completion of the Arrangement to serve until the next annual meeting of Pembina

shareholders or until their successors are duly appointed. Don Althoff, Veresen’s President and Chief Executive

Officer, will also continue to be involved in the combined company.

Summary of Interests of Directors and Executive Officers in the Arrangement

Each of the directors and executive officers of Veresen indicated in the table below intends to vote in favour of the

Common Shareholder Arrangement Resolution.

Name and Position

Number of

Common

Shares

Owned or

Controlled(1)

Number of

Pembina

Common

Shares Issuable

Pursuant to the

Arrangement

in Exchange for

Common

Shares Owned

or Controlled(2)

Number of

Veresen

Incentive

Awards held(3)

Estimated Payment for

Outstanding Veresen

Incentive Awards

($)(4)

Estimated

Severance

Payments(5)

($)

Don Althoff

President, Chief

Executive Officer and

Director

87,136(6)

(0.03%)

37,355 19,771 Veresen

DSUs

154,305 Veresen

RSUs

296,385 Veresen

PSUs

368,531 for Veresen DSUs

2,876,245 for Veresen

RSUs


PSUs

2,993,415

Theresa Jang

Senior Vice President,

Finance and Chief

Financial Officer

47,829(6), (7)

(0.01%)

20,504 45,913 Veresen

RSUs

119,486 Veresen

PSUs

855,818 for Veresen RSUs


PSUs

1,097,187

Kevan King


General Counsel

28,883(6)

(0.01%)

12,382 7,718 Veresen

DSUs

34,096 Veresen

RSUs

72,209 Veresen

PSUs

143,864 for Veresen DSUs



PSUs

906,009

Darren Marine


Business Joint

Ventures

716

(less than

0.01%)

307 28,075 Veresen

RSUs

69,899 Veresen

PSUs



PSUs

1,080,168

Elizabeth Spomer

Executive Vice

President of Veresen

and President and

CEO of Jordan Cove

LNG LLC

14,162

(less than

0.01%)

6,071 62,994 Veresen

RSUs

251,974 Veresen

PSUs


RSUs


PSUs

US$927,398


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Name and Position

Number of

Common

Shares

Owned or

Controlled(1)

Number of

Pembina

Common

Shares Issuable

Pursuant to the

Arrangement

in Exchange for

Common

Shares Owned

or Controlled(2)

Number of

Veresen

Incentive

Awards held(3)

Estimated Payment for

Outstanding Veresen

Incentive Awards

($)(4)

Estimated

Severance

Payments(5)

($)

Doug Arnell

Director

500

(less than

0.01%)

214 12,001 Veresen

DSUs 223,699 for Veresen DSUs Nil

J. Paul Charron

Director

35,000

(0.01%)

15,005 54,367 Veresen

DSUs


DSUs

Nil

Maureen E. Howe

Director

8,500

(less than

0.01%)

3,644 63,338 Veresen

DSUs


DSUs

Nil

Rebecca A. McDonald

Director

500

(less than

0.01%)

214 41,840 Veresen

DSUs

779,898 for Veresen DSUs Nil

Stephen W.C.

Mulherin

Director

50,000

(0.02%)

21,435 92,687 Veresen

DSUs


DSUs

Nil

Henry W. Sykes

Director

18,000

(0.01%)

7,717 51,645 Veresen

DSUs


Bertrand A. Valdman

Director

7,241

(less than

0.01%)

3,104 41,840 Veresen

DSUs


Thierry Vandal

Director

3,625

(less than

0.01%)

1,554 20,804 Veresen

DSUs


Notes:

(1) Assumes 313,652,781 Common Shares are issued and outstanding based on the number of Common Shares issued and outstanding on May 31, 2017.

(2) Assuming all such individuals elect to receive the Share Consideration, without any pro-rationing.

(3) Veresen DSUs, Veresen RSUs and Veresen PSUs held by executive officers and directors, as applicable, will continue

to accrue dividend equivalent units until the Effective Time. As part of their regular annual long-term incentive award,

Veresen DSUs will also continue to be credited to the account of each non-executive director in quarterly installments

on the last Business Day of each fiscal quarter until the Effective Time or any earlier date when such individuals cease

to be a director of Veresen.

(4) Value of Veresen DSUs, Veresen RSUs and Veresen PSUs has been determined by multiplying the aggregate number of

Veresen DSUs, Veresen RSUs and Veresen PSUs by the closing trading price of Common Shares on June 5, 2017 of

$18.64. The actual value of any Veresen PSUs upon vesting will be subject to adjustment in accordance with the terms

of the Veresen LTIP. Pursuant to the Veresen LTIP and the Veresen DSU Plans and the provisions of the Arrangement

Agreement, the fair market value used to determine actual cash payments in settlement of vested Veresen RSUs, Veresen

PSUs and Veresen DSUs as a result of the Arrangement will equal the twenty (20) day volume weighted average trading

price of the Common Shares prior to the Effective Date. In the case of Veresen PSUs, the value has been determined

assuming a payout multiplier, defined as the “TR Performance Factor”, of 1.0 and excludes any adjustment for dividend

equivalent units awarded after the date hereof. The actual TR Performance Factor used to determine actual cash payments

in settlement of vested Veresen PSUs will be determined in accordance with the terms of the Veresen LTIP prior to the Effective Date.


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(5) Assumes that all executive officers of Veresen are terminated by Veresen without “Just Cause”, or for “Good Reason”

by the executive officer, upon the completion of the Arrangement, triggering payments under the Employment

Agreements or the Executive Termination Policy, as applicable, described under the heading “Interests of Directors and

Executive Officers in the Arrangement – Severance”.

(6) Number of Common Shares shown is as of May 31, 2017.

(7) Ms. Jang also holds 1,000 Preferred Shares.

DISSENT RIGHTS

The following description of the right to dissent to which registered Shareholders are entitled is not a

comprehensive statement of the procedures to be followed by a Dissenting Shareholder who seeks payment of

the fair value of such Dissenting Shareholder’s Common Shares or Preferred Shares, as applicable, and is

qualified in its entirety by reference to the full text of the Plan of Arrangement, Interim Order and the text of

Section 191 of the ABCA, which are attached to this Information Circular as Appendices D, E and F,

respectively. A Dissenting Shareholder who intends to exercise the right to dissent should carefully consider

and comply with the provisions of the ABCA, as modified by the Plan of Arrangement and by the Interim

Order. Failure to adhere to the procedures established therein may result in the loss of all rights thereunder.

Accordingly, each Dissenting Shareholder who might desire to exercise Dissent Rights should consult his or her own

legal advisor.

A Court hearing the application for the Final Order has the discretion to alter the Dissent Rights described herein

based on the evidence presented at such hearing. Subject to certain tests as described below, pursuant to the Interim

Order, Dissenting Shareholders are entitled, in addition to any other right such Dissenting Shareholder may have, to

dissent and to be paid by Veresen the fair value of the Common Shares or Preferred Shares, as the case may be, held

by such Dissenting Shareholder in respect of which such Dissenting Shareholder dissents, determined as of the close

of business on the last Business Day before the day on which the Common Shareholder Arrangement Resolution or

Preferred Shareholder Arrangement Resolution, as the case may be, from which such Dissenting Shareholder’s dissent

was adopted and provided the Arrangement is completed in respect of such Shareholders. A Dissenting Shareholder

may dissent only with respect to all of the Common Shares or Preferred Shares, as the case may be, held by

such Dissenting Shareholder, or on behalf of any one beneficial owner and registered in the Dissenting

Shareholder’s name. Only registered Shareholders may dissent. Persons who are beneficial owners of Veresen

Shares registered in the name of a broker, dealer, bank, trust company or other nominee (including CDS) who

wish to dissent, should be aware that they may only do so through the registered owner of such Veresen Shares.

A registered Shareholder, such as a broker or CDS, who holds Veresen Shares as nominee for beneficial

holders, some of whom wish to dissent, must exercise the Dissent Right on behalf of such beneficial owners with

respect to all of the Common Shares or Preferred Shares held for such beneficial owners. In such case, the

written objection to the Common Shareholder Arrangement Resolution or Preferred Shareholder

Arrangement Resolution, as the case may be, should set forth the number of Common Shares and/or Preferred

Shares covered by it.

Dissenting Shareholders must provide a written objection to the Common Shareholder Arrangement Resolution or

Preferred Shareholder Arrangement Resolution, as the case may be, so that it is received by Veresen c/o Osler, Hoskin

& Harcourt LLP, Suite 2500, TransCanada Tower, 450 – 1st Street SW, Calgary, Alberta T2P 5H1, Attention: Colin

Feasby, by 4:00 p.m. (Calgary time) on July 4, 2017 being the fifth Business Day immediately preceding the date of

the Meetings, or the Business Day immediately preceding the date of any adjournment of the Common Shareholders’

Meeting or Preferred Shareholders’ Meeting, as applicable. No Common Shareholder or Preferred Shareholder

who has voted in favour of the Common Shareholder Arrangement Resolution or Preferred Shareholder

Arrangement Resolution, respectively, shall be entitled to dissent with respect to the Arrangement.

Either Veresen (which for purposes hereof shall include any successor to Veresen) or a Dissenting Shareholder, as the

case may be, may apply to the Court, after the approval of the Common Shareholder Arrangement Resolution or the

Preferred Shareholder Arrangement Resolution, as the case may be, to fix the fair value of such Dissenting

Shareholder’s Common Shares or Preferred Shares. If such an application is made to the Court by either Veresen or a


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Dissenting Shareholder, as the case may be, Veresen must, unless the Court orders otherwise, send to each Dissenting

Shareholder, a written offer to pay such Dissenting Shareholder an amount considered by the Pembina Board to be

the fair value of the Common Shares or Preferred Shares held by such Dissenting Shareholder. The offer, unless the

Court orders otherwise, must be sent to each Dissenting Shareholder, as the case may be, at least 10 days before the

date on which the application is returnable, if Veresen is the applicant, or within 10 days after Veresen is served a

copy of the application, if a Dissenting Shareholder is the applicant. Every offer will be made on the same terms to

each Dissenting Shareholder and contain or be accompanied with a statement showing how the fair value was

determined.

A Dissenting Shareholder may make an agreement with Pembina for the purchase of such holder’s Common Shares

or Preferred Shares, as the case may be, in the amount of the offer made by Pembina, or otherwise, at any time before

the Court pronounces an order fixing the fair value of the Common Shares or Preferred Shares, as the case may be.

A Dissenting Shareholder will not be required to give security for costs in respect of an application and, except in

special circumstances, will not be required to pay the costs of the application or appraisal. On the application, the

Court will make an order fixing the fair value of the Common Shares or Preferred Shares of all Dissenting

Shareholders, as the case may be, who are parties to the application, giving judgment in that amount against Pembina

and in favour of each of those Dissenting Shareholders, and fixing the time within which Pembina must pay the amount

payable to each Dissenting Shareholder calculated from the date on which such Dissenting Shareholder ceases to have

any rights as a Common Shareholder or Preferred Shareholder, as the case may be, until the date of payment.

On the Arrangement becoming effective in respect of the Common Shares or Preferred Shares, as the case may be,

held by the Dissenting Shareholder, or upon the making of an agreement between Veresen and the Dissenting

Shareholder as to the payment to be made by Veresen to the Dissenting Shareholder, or upon the pronouncement of a

Court order, whichever first occurs, such Dissenting Shareholder will cease to have any rights as a Common

Shareholder or Preferred Shareholder, as the case may be, other than the right to be paid the fair value of such holder’s

Common Shares or Preferred Shares, as the case may be, in the amount or in the amount of the judgment, as the case

may be. Until one of these events occurs, the Dissenting Shareholder may withdraw his or her dissent or, if the

Arrangement has not yet become effective, Veresen may rescind the Common Shareholder Arrangement Resolution

or Preferred Shareholder Arrangement Resolution, as the case may be, and in either event, the dissent and appraisal

proceedings in respect of that Dissenting Shareholder will be discontinued.

Veresen shall not make a payment to a Dissenting Shareholder under Section 191 of the ABCA, as modified by the

Interim Order and the Plan of Arrangement, if there are reasonable grounds for believing that Veresen is or would

after the payment be unable to pay its liabilities as they become due, or that the realizable value of its assets of Pembina

would thereby be less than the aggregate of its liabilities. In such event, Veresen shall notify each Dissenting

Shareholder that it is unable lawfully to pay such Dissenting Shareholder for his or her Veresen Shares, in which case

the Dissenting Shareholder may, by written notice to Veresen within 30 days after receipt of such notice, withdraw

such holder’s written objection, in which case the holder shall be deemed to have participated in the Arrangement as

a Common Shareholder or Preferred Shareholder, as the case may be. If the Dissenting Shareholder does not withdraw

such holder’s written objection, such Dissenting Shareholder retains status as a claimant against Veresen to be paid as

soon as Pembina is lawfully entitled to do so or, in a liquidation, to be ranked subordinate to the rights of creditors of

Pembina but in priority to its shareholders.

All Common Shares or Preferred Shares, as the case may be, held by Dissenting Shareholders, who exercise their

Dissent Rights will, if the holders thereof do not otherwise withdraw such written objections, be deemed to be

transferred to Veresen under the Arrangement (if applicable), and cancelled in exchange for the fair value thereof or

will, if such Dissenting Shareholders ultimately are not so entitled to be paid the fair value thereof, be treated as if the

holders had participated in the Arrangement on the same basis as a non-dissenting holder of Common Shares or

Preferred Shares, as the case may be.

The above summary does not purport to provide a comprehensive statement of the procedures to be followed by a

Dissenting Shareholders who seek payment of the fair value of their Common Shares or Preferred Shares, as the case

may be. Section 191 of the ABCA, other than as amended by the Arrangement and the Interim Order, requires

adherence to the procedures established therein and failure to do so may result in the loss of all rights thereunder.


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Accordingly, Dissenting Shareholders who might desire to exercise the right to dissent and appraisal should

carefully consider and comply with the provisions of Section 191 of the ABCA, the full text of which is set out

in Appendix F to this Information Circular and consult their own legal advisor.

Unless otherwise waived, it is a condition to the completion of the Arrangement that holders of not more than

5% of the issued and outstanding Common Shares shall have validly exercised Dissent Rights in respect of the

Arrangement that have not been withdrawn as of the Effective Date. Should Dissent Rights have been validly

exercised in respect of more than 5% of the outstanding Preferred Shares and the Preferred Shareholder Arrangement

Resolution receives the requisite approval of the Preferred Shareholders, Veresen will amend the Plan of Arrangement

if requested by Pembina to exclude the Preferred Shares under the Plan of Arrangement and matters ancillary thereto,

including the amalgamation of Veresen and Pembina contemplated by the Plan of Arrangement.

Notwithstanding the foregoing, registered Preferred Shareholders who have validly exercised Dissent Rights shall not

be entitled to dissent and to be paid the fair value of their Preferred Shares in the event that the Preferred Shares are

not exchanged by Pembina pursuant to the Arrangement.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

In the opinion of Osler, the following summary describes the principal Canadian federal income tax considerations in

respect of the sale of Veresen Shares pursuant to the Arrangement and the holding of Pembina Shares received

pursuant to the Arrangement. This summary is generally applicable to a beneficial owner of Veresen Shares who, at

all relevant times, for purposes of the Tax Act, (1) deals at arm’s length with Veresen and Pembina; (2) is not affiliated

with Veresen or Pembina; and (3) holds the Veresen Shares, and will hold any Pembina Shares received under the

Arrangement, as capital property (a “Holder”). Generally, the Veresen Shares and the Pembina Shares will be capital

property to a Holder provided the Holder does not hold such shares in the course of carrying on a business of buying

and selling securities or as part of an adventure or concern in the nature of trade. This summary does not address all

issues relevant to Holders who acquired their Common Shares on the exercise of options or pursuant to other employee

equity compensation plans. Such Holders should consult their own tax advisors.

This summary is based on the current provisions of the Tax Act, and on Osler’s understanding of the current

administrative policies and assessing practices of the Canada Revenue Agency (“CRA”) published in writing prior to

the date hereof. This summary takes into account all specific proposals to amend the Tax Act publicly announced by

or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Proposed Amendments”) and assumes

that all Proposed Amendments will be enacted in the form proposed. However, no assurances can be given that the

Proposed Amendments will be enacted as proposed, or at all. This summary does not otherwise take into account or

anticipate any changes in law or administrative policy or assessing practice whether by legislative, regulation,

administrative or judicial action nor does it take into account tax legislation or considerations of any province, territory

or foreign jurisdiction, which may differ from those discussed herein.

This summary is not applicable to (i) a Holder that is a “specified financial institution”, (ii) a Holder an interest in

which is a “tax shelter investment”, (iii) a Holder that is, for purposes of certain rules (referred to as the mark-to-

market rules) applicable to securities held by financial institutions, a “financial institution”, (iv) a Holder that reports

its “Canadian tax results” in a currency other than Canadian currency, (iv) a Holder who acquired its Common Shares

on the exercise of an employment stock option that was granted while Veresen qualified as a “Canadian controlled

private corporation”, or (v) a Holder that has entered into, or will enter into, with respect to its Veresen Shares or

Pembina Shares, as the case may be, a “derivative forward agreement”, each as defined in the Tax Act. Such Holders

should consult their own tax advisors.

Additional considerations, not discussed herein, may be applicable to a Holder that is a corporation resident in Canada

and is, or becomes, controlled by a non-resident corporation for the purposes of the “foreign affiliate dumping” rules

in section 212.3 of the Tax Act. Such Holders should consult their own tax advisors.

This summary is of a general nature only and is not, and is not intended to be, legal or tax advice to any

particular shareholder. This summary is not exhaustive of all Canadian federal income tax considerations.


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Accordingly, Shareholders should consult their own tax advisors having regard to their own particular

circumstances.

Holders Resident in Canada

This portion of the summary is generally applicable to a Holder who, at all relevant times, for purposes of the Tax Act

and any applicable income tax convention, is, or is deemed to be, resident in Canada (a “Resident Holder”). Certain

Resident Holders may be entitled to make or may have already made the irrevocable election permitted by subsection

39(4) of the Tax Act, the effect of which may be to deem to be capital property any Veresen Shares and Pembina

Shares (and all other “Canadian securities”, as defined in the Tax Act) owned by such Resident Holder in the taxation

year in which the election is made and in all subsequent taxation years. Resident Holders whose Veresen Shares or

Pembina Shares might not otherwise be considered to be capital property should consult their own tax advisors

concerning this election.

Exchange of Veresen Shares under the Arrangement

Pursuant to the Arrangement, a Resident Holder may elect, subject to certain pro-rationing and rounding provisions,

to receive for each one of their Common Shares, either (a) the Cash Consideration or (b) the Share Consideration, and

for each one of their Preferred Shares, the Preferred Share Consideration. (See “Procedure for the Arrangement to

become Effective” for further details.)

Common Shares Exchanged for Veresen Cash Consideration

For each Common Share that is exchanged for Cash Consideration pursuant to a Resident Holder’s election, as

adjusted under the Arrangement, the Resident Holder will realize a capital gain (or capital loss) to the extent that the

aggregate amount of cash received for those Common Shares, net of any reasonable costs of disposition, exceeds (or

is less than) the adjusted cost base of such shares to the Resident Holder. See “Taxation of Capital Gains and Losses”

below for a general discussion of the treatment of capital gains and capital losses under the Tax Act.

Common Shares Exchanged for Share Consideration

For each Common Share that is exchanged for Share Consideration pursuant to a Resident Holder’s election, as

adjusted under the Arrangement, the Resident Holder will be deemed to have disposed of such Common Share under

a tax-deferred share-for-share exchange pursuant to section 85.1 of the Tax Act, unless the Resident Holder chooses

to recognize a capital gain (or capital loss) as described in paragraph (b) below.

(a) Where a Resident Holder does not choose to recognize a capital gain (or capital loss) on the

exchange, the Resident Holder will be deemed to have disposed of such Common Shares for

proceeds of disposition equal to the aggregate adjusted cost base of those Common Shares to the

Resident Holder, determined immediately before the exchange, and the Resident Holder will be

deemed to have acquired the Pembina Common Shares at an aggregate cost equal to such adjusted

cost base of the Common Shares. This cost will be averaged with the adjusted cost base of all other

Pembina Common Shares held by the Resident Holder as capital property for the purposes of

determining the adjusted cost base of each Pembina Common Share held by the Resident Holder as

capital property.

(b) A Resident Holder may choose to recognize a capital gain (or capital loss) in respect of the exchange

of Common Shares for Pembina Common Shares by including the capital gain (or capital loss) in

computing the Resident Holder’s income for the taxation year in which the Arrangement takes place.

In such circumstances, the Resident Holder will recognize a capital gain (or capital loss) equal to

the amount, if any, by which the fair market value of the Pembina Common Shares received, net of

any reasonable costs associated with the exchange, exceeds (or is less than) the aggregate of the

adjusted cost base of such Common Shares to the Resident Holder, determined immediately before

the exchange. For a description of the tax treatment of capital gains and capital losses, see “Taxation


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of Capital Gains and Losses” below. The cost of the Pembina Common Shares acquired on the

exchange will be equal to the fair market value thereof at the time of the exchange. This cost will

be averaged with the adjusted cost of all other Pembina Common Shares held by the Resident Holder

as capital property for the purpose of determining the adjusted cost base of each Pembina Common

Share held by the Resident Holder as capital property.

Preferred Shares Exchanged for Preferred Share Consideration

For each Preferred Share that is exchanged for Preferred Share Consideration, the Resident Holder will be deemed to

have disposed of such Preferred Share under a tax-deferred share-for-share exchange pursuant to section 85.1 of the

Tax Act, unless the Resident Holder chooses to recognize a capital gain (or capital loss) as described in paragraph (b)

below.

(a) Where a Resident Holder does not choose to recognize a capital gain (or capital loss) on the

exchange, the Resident Holder will be deemed to have disposed of such Preferred Shares for

proceeds of disposition equal to the aggregate adjusted cost base of those Preferred Shares to the

Resident Holder, determined immediately before the exchange, and the Resident Holder will be

deemed to have acquired the Pembina Exchange Shares at an aggregate cost equal to such adjusted

cost base of the Preferred Shares. This cost will be averaged with the adjusted cost base of all other

Pembina Exchange Shares of the applicable series held by the Resident Holder as capital property

for the purposes of determining the adjusted cost base of each Pembina Exchange Share of that

series held by the Resident Holder as capital property.

(b) A Resident Holder may choose to recognize a capital gain (or capital loss) in respect of the exchange

of Preferred Shares for Pembina Exchange Shares by including the capital gain (or capital loss) in

computing the Resident Holder’s income for the taxation year in which the Arrangement takes place.

In such circumstances, the Resident Holder will recognize a capital gain (or capital loss) equal to

the amount, if any, by which the fair market value of the Pembina Exchange Shares received, net of

any reasonable costs associated with the exchange, exceeds (or is less than) the aggregate of the

adjusted cost base of such Preferred Shares to the Resident Holder, determined immediately before

the exchange. For a description of the tax treatment of capital gains and capital losses, see “Taxation

of Capital Gains and Losses” below. The cost of the Pembina Exchange Shares acquired on the

exchange will be equal to the fair market value thereof at the time of the exchange. This cost will

be averaged with the adjusted cost of all other Pembina Exchange Shares of the applicable series

held by the Resident Holder as capital property for the purpose of determining the adjusted cost base

of each Pembina Exchange Share of that series held by the Resident Holder as capital property.

Dissenting Resident Holders of Veresen Shares

A Resident Holder that validly exercises Dissent Rights will be deemed under the Arrangement to have transferred

such Resident Holder’s Common Shares or Preferred Shares to Veresen, and will be entitled to be paid the fair value

of the Resident Holder’s Common Shares or Preferred Shares, as the case may be. The Resident Holder will be deemed

to have received a taxable dividend equal to the amount by which the amount received for the Common Shares or

Preferred Shares, as the case may be, (less an amount in respect of interest, if any, awarded by the Court) exceeds the

paid-up capital for purposes of the Tax Act of such shares (as determined under the Tax Act).

Where a Dissenting Shareholder is an individual, any deemed dividend will be included in computing that Resident

Holder’s income and will be subject to the gross-up and dividend tax credit rules normally applicable to dividends

received from taxable Canadian corporations. In the case of a Dissenting Shareholder that is a corporation, any deemed

dividend will be included in income and generally will be deductible in computing taxable income. However, in some

circumstances, the amount of any such deemed dividend realized by a corporation may be treated as proceeds of

disposition and not as a dividend under subsection 55(2) of the Tax Act. Resident Holders that are corporations should

consult their own tax advisors in this regard.


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“Private corporations” and “subject corporations” (as defined in the Tax Act) may be liable for an additional

refundable Part IV tax on any dividends received to the extent such dividends are deductible in computing the Resident

Holder’s taxable income for the year.

A Resident Holder will also be considered to have disposed of Common Shares or Preferred Shares, as the case may

be, for proceeds of disposition equal to the amount paid to such Resident Holder less an amount in respect of interest,

if any, awarded by the Court and the amount of any deemed dividend. Resident Holders may realize a capital gain (or

sustain a capital loss) to the extent that such proceeds exceed (or are less than) the aggregate of the adjusted cost base

of the Common Shares or Preferred Shares, as the case may be, to the dissenting Resident Holder and reasonable costs

of the disposition. The taxation of capital gains and capital losses is discussed below under the heading “Taxation of

Capital Gains and Capital Losses”.

Any interest awarded by the Court to a Dissenting Shareholder will be included in such Resident Holder’s income for

the purposes of the Tax Act.

Holding and Disposing of Pembina Shares

Dividends Received on Pembina Shares

A Resident Holder will be required to include in computing its income for a taxation year any dividends received (or

deemed to be received) on the Pembina Common Shares or Pembina Exchange Shares, as the case may be. In the case

of a Resident Holder that is an individual (other than certain trusts), such dividends will be subject to the gross-up and

dividend tax credit rules applicable to taxable dividends received from taxable Canadian corporations, including the

enhanced gross-up and dividend tax credit applicable to any dividends designated by Pembina as an eligible dividend

in accordance with the provisions of the Tax Act. A dividend received (or deemed to be received) by a Resident Holder

that is a corporation will generally be deductible in computing the corporation’s taxable income. In certain

circumstances, however, a taxable dividend received (or deemed to be received) by a Resident Holder that is a

corporation may be deemed to be proceeds of a disposition potentially giving rise to a capital gain. Resident Holders

that are corporations should consult their own tax advisors having regard to their own particular circumstances.

A Resident Holder that is a “private corporation”, as defined in the Tax Act, or any other corporation controlled,

whether because of a beneficial interest in one or more trusts or otherwise, by or for the benefit of an individual (other

than a trust) or a related group of individuals (other than trusts), will generally be liable to pay a refundable tax under

Part IV of the Tax Act on dividends received (or deemed to be received) on the Pembina Common Shares or Pembina

Exchange Shares, as the case may be, to the extent such dividends are deductible in computing the Resident Holder’s

taxable income for the taxation year.

The Pembina Exchange Shares will be “taxable preferred shares” as defined in the Tax Act. The terms of the Pembina

Exchange Shares require Pembina to make the necessary election under Part VI.1 of the Tax Act so that Resident

Holders that are corporations will not be subject to tax under Part IV.1 of the Tax Act on dividends received (or

deemed to be received) on the Pembina Exchange Shares.

Disposition of Pembina Shares

Generally, on a disposition or deemed disposition of a Pembina Common Share or Pembina Exchange Share, a

Resident Holder will realize a capital gain (or capital loss) equal to the amount, if any, by which the proceeds of

disposition, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base to the Resident

Holder of the Pembina Common Share or the Pembina Exchange Share, as the case may be, held immediately before

the disposition or deemed disposition. The adjusted cost base to the Resident Holder of a Pembina Common Share or

Pembina Exchange Share will be determined by averaging the cost of such Pembina Common Share or Pembina

Exchange Share with the adjusted cost base of all other Pembina Common Shares or Pembina Exchange Shares of the

same series, as the case may be, held by the Resident Holder as capital property at that time. See “Taxation of Capital

Gains and Losses” below for a general discussion of the treatment of capital gains and capital losses under the Tax

Act.


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Taxation of Capital Gains and Losses

Generally, a Resident Holder is required to include in computing its income for a taxation year one-half of the amount

of any capital gain (a “taxable capital gain”) realized in the year. Subject to and in accordance with the provisions of

the Tax Act, a Resident Holder is required to deduct one-half of the amount of any capital loss (an “allowable capital

loss”) realized in a taxation year from taxable capital gains realized by the Resident Holder in the year and allowable

capital losses in excess of taxable capital gains for the year may be carried back and deducted in any of the three

preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital

gains realized in such years.

The amount of any capital loss realized by a Resident Holder that is a corporation on the disposition of a Pembina

Common Share or Pembina Exchange Share may be reduced by the amount of any dividends received (or deemed to

be received) by the Resident Holder on such share to the extent and under the circumstances prescribed by the Tax

Act. Similar rules may apply where a Pembina Common Share or Pembina Exchange Share is owned by a partnership

or trust of which a corporation, trust or partnership is a member or beneficiary. Such Resident Holders should consult

their own advisors.

Additional Refundable Tax

A Resident Holder that is throughout the taxation year a “Canadian-controlled private corporation”, as defined in the

Tax Act, is liable for tax, a portion of which may be refundable, on investment income, including taxable capital gains

realized and dividends received or deemed to be received (but not dividends or deemed dividends that are deductible

in computing taxable income).

Eligibility for Investment

Provided that the Pembina Common Shares and Pembina Exchange Shares are listed on a designated stock exchange

(which currently includes the TSX) on the Effective Date, the Pembina Common Shares and Pembina Exchange

Shares received by Common Shareholders and Preferred Shareholders, as the case may be, pursuant to the

Arrangement will be qualified investments under the Tax Act for trusts governed by registered retirement savings

plans (“RRSP”), registered retirement income funds (“RRIF”), registered education savings plans (“RESP”),

deferred profit sharing plans, registered disability savings plans (“RDSP”) and tax-free savings accounts (“TFSA”).

In the case of an RRSP, an RRIF or a TFSA, provided the annuitant of the RRSP or RRIF or the holder of the TFSA,

as the case may be, deals at arm’s length with Pembina and does not have a “significant interest” (within the meaning

of the Tax Act) in Pembina, the Pembina Common Shares and Pembina Exchange Shares will generally not be a

prohibited investment under the Tax Act for such RRSP, RRIF or TFSA. In addition, the Pembina Common Shares

and Pembina Exchange Shares will generally not be a prohibited investment if such shares are “excluded property” as

defined in the Tax Act for purposes of the prohibited investment rules. Under proposals to amend the Tax Act

contained in the Federal Budget released on March 22, 2017, the prohibited investment rules will also apply to trusts

governed by RESPs and the subscribers thereof and RDSPs and the holders thereof, effective after March 22, 2017.

Holders Not Resident in Canada

This portion of the summary is generally applicable to a Holder who, at all relevant times, for purposes of the Tax

Act, is not, and is not deemed to be, resident in Canada and does not use or hold, and is not deemed to use or hold, the

Veresen Shares or Pembina Shares in a business carried on in Canada (a “Non-Resident Holder”). Special rules,

which are not discussed in this summary, may apply to certain holders that are insurers carrying on an insurance

business in Canada and elsewhere.


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Exchange of Veresen Shares under the Arrangement

Exchange of Common Shares under the Arrangement

A Non-Resident Holder will not be subject to tax under the Tax Act on any capital gain realized on a disposition of

Common Shares pursuant to the Arrangement unless, at the Effective Time, the Common Shares are “taxable Canadian

property” (as defined in the Tax Act) to the Non-Resident Holder and are not “treaty-protected property” (as defined

in the Tax Act) of the Non-Resident Holder. See discussion below under “Veresen Shares – Taxable Canadian

Property”.

A Non-Resident Holder whose Common Shares are “taxable Canadian property” and are not “treaty-protected

property” will generally have the same tax considerations as those described above under “Holders Resident in Canada

– Exchange of Veresen Shares under the Arrangement”.

Exchange of Preferred Shares under the Arrangement

A Non-Resident Holder will not be subject to tax under the Tax Act on any capital gain realized on a disposition of

Preferred Shares pursuant to the Arrangement unless, at the Effective Time, the Preferred Shares are “taxable Canadian

property” (as defined in the Tax Act) to the Non-Resident Holder and are not “treaty-protected property” (as defined

in the Tax Act) of the Non-Resident Holder. See discussion below under “Veresen Shares – Taxable Canadian

Property”.

A Non-Resident Holder whose Preferred Shares are “taxable Canadian property” and are not “treaty-protected

property” will generally have the same tax considerations as those described above under “Holders Resident in Canada

– Exchange of Veresen Shares under the Arrangement”.

Dissenting Non-Resident Holders

A Non-Resident Holder that validly exercises Dissent Rights will be deemed to have transferred such Non-Resident

Holder’s Common Shares or Preferred Shares, as the case may be, to Veresen, and will be entitled to receive an amount

equal to the fair value of the Non-Resident Holder’s Common Shares or Preferred Shares, respectively. The Non-

Resident Holder will be deemed to have received a taxable dividend equal to the amount by which the amount paid to

the Non-Resident Holder for the Common Shares or Preferred Shares, as the case may be, (less an amount in respect

of interest, if any, awarded by the Court) exceeds the paid-up capital of such shares (as determined under the Tax Act).

The amount of the dividend will be subject to Canadian withholding tax at the rate of 25% of the gross amount of the

dividend unless the rate is reduced under the provisions of an applicable income tax treaty or convention between

Canada and the Non-Resident Holder’s country of residence.

A Non-Resident Holder of Common Shares or Preferred Shares will also be considered to have disposed of the

Common Shares or Preferred Shares, as the case may be, for proceeds of disposition equal to the amount paid to such

Non-Resident Holder less an amount in respect of interest, if any, awarded by the Court and the amount of any deemed

dividend, and will be subject to tax under the Tax Act on any gain realized if such shares constitute “taxable Canadian

property” as described under the above heading “Exchange of Veresen Shares Under the Arrangement”, unless relief

is provided under an income tax treaty or convention between Canada and the Non-Resident Holder’s country of

residence.

Veresen Shares – Taxable Canadian Property

Generally, the Common Shares or Preferred Shares will not constitute “taxable Canadian property” to a Non-Resident

Holder at a particular time provided that the Common Shares or Preferred Shares, as the case may be, are listed at that

time on a designated stock exchange (which includes the TSX), unless at any particular time during the 60-month

period that ends at that time:


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(a) one or any combination of (a) the Non-Resident Holder, (b) persons with whom the Non-Resident

Holder does not deal with at arm’s length, and (c) partnerships in which the Non-Resident Holder

or a person described in (b) holds a membership interest directly or indirectly through one or more

partnerships, has owned 25% or more of the issued shares of any class or series of the capital stock

of Veresen; and

(b) more than 50% of the fair market value of the Common Shares or Preferred Shares, as the case may

be, was derived directly or indirectly from one or any combination of: (a) real or immovable

properties situated in Canada, (b) “Canadian resource properties” (as defined in the Tax Act), (c)

“timber resource properties” (as defined in the Tax Act), and (d) options in respect of, or interests

in, or for civil law rights in, property in any of the foregoing whether or not the property exists.

Notwithstanding the foregoing, in certain circumstances set out in the Tax Act, Common Shares or Preferred Shares

could be deemed to be taxable Canadian property. Non-Resident Holders whose Common Shares or Preferred Shares,

as the case may be, may constitute taxable Canadian property should consult their own tax advisors.

Even if the Common Shares or Preferred Shares are taxable Canadian property to a Non-Resident Holder, a taxable

capital gain resulting from the disposition of such shares will not be included in computing the Non-Resident Holder’s

income for the purposes of the Tax Act if the Common Shares or Preferred Shares, as the case may be, constitute

“treaty-protected property”. Common Shares or Preferred Shares owned by a Non-Resident Holder will generally be

treaty-protected property if the gain from the disposition of such shares would, because of an applicable income tax

treaty, be exempt from tax under the Tax Act.

A Non-Resident Holder who disposes of taxable Canadian property that is not treaty-protected property must file a

Canadian income tax return for the year in which the disposition occurs, regardless of whether the Non-Resident

Holder is liable for Canadian tax on any gain realized as a result.

Holding and Disposing of Pembina Shares

Dividends Received on Pembina Shares

Dividends paid or credited (or deemed to be paid or credited) on the Pembina Common Shares and the Pembina

Exchange Shares to a Non-Resident Holder will be subject to Canadian withholding tax at the rate of 25%, subject to

any reduction in the rate of withholding to which the Non-Resident Holder is entitled under any applicable income

tax convention. For example, under the Canada-U.S. Income Tax Convention (1980) (the “Convention”), where

dividends on the Pembina Common Shares and the Pembina Exchange Shares are considered to be paid to or derived

by a Non-Resident Holder that is the beneficial owner of the dividends and is a U.S. resident for the purposes of, and

is entitled to benefits in accordance with, the provisions of the Convention, the applicable rate of Canadian withholding

tax is generally reduced to 15%.

Disposition of Pembina Shares

A Non-Resident Holder will not be subject to tax under the Tax Act on any capital gain realized on a disposition or

deemed disposition of Pembina Common Shares or Pembina Exchange Shares, unless the Pembina Common Shares

or Pembina Exchange Shares, as the case may be, constitute “taxable Canadian property” to the Non-Resident Holder

and do not constitute “treaty-protected property”. For a description of “taxable Canadian property” see “Veresen

Shares – Taxable Canadian Property” above, as the same tests will apply in respect of the Pembina Common Shares

and the Pembina Exchange Shares.

Pursuant to the provisions of the Tax Act, where a Veresen Share constitutes “taxable Canadian property” to a Non-

Resident Holder, any Pembina Shares received by the Non-Resident Holder on the exchange of such Veresen Share

for Pembina Shares utilizing the rollover available under section 85.1 of the Tax Act will be deemed to constitute

“taxable Canadian property” to the Non-Resident Holder for a period of 60 months. The result is that such Non-


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Resident Holder may be subject to tax under the Tax Act on future gains realized on a disposition of those Pembina

Shares so long as the Pembina Shares constitute “taxable Canadian property” to the Non-Resident Holder.

Non-Resident Holders whose Pembina Shares may constitute taxable Canadian property should consult their own tax

advisors.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following is a general summary of certain U.S. federal income tax considerations applicable to a U.S. Holder (as

defined below) arising from the disposition of Common Shares pursuant to the Arrangement and the ownership and

disposition of Pembina Common Shares received pursuant to the Arrangement. This summary is for general

information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income

tax considerations that may apply to a U.S. Holder. In addition, this summary does not take into account the individual

facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to

such U.S. Holder (as discussed below), including specific tax consequences to a U.S. Holder under an applicable tax

treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income

tax advice with respect to any U.S. Holder. This summary does not address the U.S. federal alternative minimum, U.S.

federal estate and gift, U.S. state and local, or non-U.S. tax consequences to U.S. Holders of the receipt of Pembina

Common Shares and/or cash pursuant to the Arrangement and the ownership and disposition of such Pembina

Common Shares. Except as specifically set forth below, this summary does not discuss applicable income tax reporting

requirements. Each U.S. Holder should consult its own tax advisor regarding all U.S. federal, U.S. state and local, and

non-U.S. tax consequences of the Arrangement and the ownership and disposition of Pembina Common Shares

received pursuant to the Arrangement.

No opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the “IRS”) has been requested, or

will be obtained, regarding the U.S. federal income tax consequences of the Arrangement or the ownership and

disposition of Pembina Common Shares received pursuant to the Arrangement. This summary is not binding on the

IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in

this summary. In addition, because the authorities on which this summary is based are subject to various

interpretations, the IRS and the U.S. courts could disagree with one or more of the positions taken in this summary.

This summary does not address the U.S. federal income tax consequences to any person of the disposition of Preferred

Shares in exchange for Pembina Exchange Shares pursuant to the Arrangement, or the ownership and disposition of

such Pembina Exchange Shares. Each holder of Preferred Shares should consult its own tax advisor regarding all U.S.

federal, U.S. state and local, and non-U.S. tax consequences of the disposition of Preferred Shares pursuant to the

Arrangement and the ownership and disposition of Pembina Exchange Shares received pursuant to the Arrangement.

Further, this summary does not address the U.S. federal income tax consequences of transactions effected prior or

subsequent to, or concurrently with, the Arrangement that, in each case, are not part of the Plan of Arrangement.

Scope of This Disclosure

Authorities

This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), final and temporary U.S.

Treasury Regulations, published rulings of the IRS, published administrative positions of the IRS, the Convention,

and U.S. court decisions that are applicable and, in each case, as in effect and available, as of the date of this

Information Circular. Any of the authorities on which this summary is based could be changed in a material and

adverse manner at any time, and any such change could be applied on a prospective or retroactive basis which could

affect the U.S. federal income tax considerations described in this summary. This summary does not discuss the

potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a

retroactive or prospective basis.


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U.S. Holders

For purposes of this summary, the term “U.S. Holder” means a beneficial owner of Common Shares (or, after the

Arrangement, Pembina Common Shares) participating in the Arrangement or exercising Dissent Rights (with respect

only to Common Shares) pursuant to the Arrangement, that is for U.S. federal income tax purposes:

an individual who is a citizen or resident of the United States;

a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or

organized in or under the laws of the United States, any state thereof or the District of Columbia;

an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

a trust that (a) is subject to the primary supervision of a court within the United States and the control of one

or more U.S. persons for all substantial decisions or (b) has a valid election in effect under applicable U.S.

Treasury Regulations to be treated as a U.S. person.

U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed

This summary does not address the U.S. federal income tax consequences of the Arrangement or the ownership and

disposition of Pembina Common Shares received pursuant to the Arrangement to U.S. Holders that are subject to

special provisions under the Code, including U.S. Holders that: (a) are tax-exempt organizations, qualified retirement

plans, individual retirement accounts, or other tax-deferred accounts; (b) are financial institutions, underwriters,

insurance companies, real estate investment trusts, or regulated investment companies; (c) are broker-dealers, dealers,

or traders in securities or currencies that elect to apply a mark-to-market accounting method; (d) have a “functional

currency” other than the U.S. dollar; (e) own Common Shares (or after the Arrangement, Pembina Common Shares)

as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving

more than one position; (f) acquired Common Shares in connection with the exercise of employee stock options or

otherwise as compensation for services; (g) hold Common Shares (or after the Arrangement, Pembina Common

Shares) other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for

investment purposes); (h) own, directly, indirectly, or by attribution, 5% or more, by voting power or value, of the

outstanding Veresen Shares (or after the Arrangement, Pembina Shares); and (i) acquired Common Shares by gift or

inheritance. This summary also does not address the U.S. federal income tax considerations applicable to U.S. Holders

who are: (a) U.S. expatriates or former long-term residents of the U.S.; (b) persons that have been, are, or will be a

resident or deemed to be a resident in Canada for purposes of the Tax Act; (c) persons that use or hold, will use or

hold, or that are or will be deemed to use or hold Common Shares (or after the Arrangement, Pembina Common

Shares) in connection with carrying on a business in Canada; (d) persons whose Common Shares (or after the

Arrangement, Pembina Common Shares) constitute “taxable Canadian property” under the Tax Act; or (e) persons

that have a permanent establishment in Canada for the purposes of the Convention. U.S. Holders that are subject to

special provisions under the Code, including U.S. Holders described immediately above, should consult their own tax

advisors regarding all U.S. federal, U.S. state and local, and non-U.S. tax consequences relating to the Arrangement

and the ownership and disposition of Pembina Common Shares received pursuant to the Arrangement.

If an entity or arrangement that is classified as a partnership (including any other “pass-through” entity) for U.S.

federal income tax purposes holds Common Shares (or after the Arrangement, Pembina Common Shares), the U.S.

federal income tax consequences to such partnership and the partners (or owners) of such partnership of participating

in the Arrangement and the ownership and disposition of Pembina Common Shares received pursuant to the

Arrangement generally will depend on the activities of the partnership and the status of such partners (or owners).

This summary does not address the tax consequences to any such partnership or partner (or owner). Partners (or

owners) of entities and arrangements that are classified as partnerships for U.S. federal , U.S. state and local, and non-

U.S. tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences of the

Arrangement and the ownership and disposition of Pembina Common Shares received pursuant to the Arrangement.


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Certain U.S. Federal Income Tax Consequences of the Arrangement

Characterization of the Arrangement for U.S. Federal Income Tax Purposes

If the Preferred Shareholder Arrangement Resolution receives the requisite approval by the Preferred Shareholders at

the Preferred Shareholders’ Meeting, and, as a result, the amalgamation of Pembina and Veresen pursuant to the

Arrangement (the “Amalgamation”) occurs, Veresen and Pembina intend that, (i) the exchange of Common Shares

for Pembina Common Shares or cash, and (ii) the Amalgamation, both pursuant to the Arrangement, be treated as an

integrated transaction that qualifies as a reorganization within the meaning of Section 368(a) of the Code (a

“Reorganization”).

Since the Arrangement will be effected pursuant to applicable provisions of Canadian corporate law that are not

identical to analogous provisions of U.S. corporate law, and there are no direct authorities that consider whether the

transactions described in items (i) and (ii) in the preceding sentence will be treated as a single integrated transaction

that qualifies as a Reorganization within the meaning of Section 368(a) of the Code, there can be no assurance that

the IRS or a U.S. court would not take a contrary view of the Arrangement in such circumstances. Neither Veresen

nor Pembina has sought or obtained either a ruling from the IRS or an opinion of counsel regarding any of the tax

consequences of the Arrangement. Accordingly, there can be no assurance that the IRS will not challenge the status

of the Arrangement as a Reorganization or that the U.S. courts would uphold the status of the Arrangement as a

Reorganization in the event of an IRS challenge.

Alternatively, if the Preferred Shareholder Arrangement Resolution does not receive the requisite approval, and, as a

result, the Amalgamation does not occur, the Arrangement is expected to be treated as a taxable transaction for U.S.

federal income tax purposes.

The alternative tax consequences of the Arrangement qualifying as a Reorganization or as a taxable transaction are

discussed below. U.S. Holders should consult their own tax advisors regarding the proper tax reporting of the

Arrangement.

Tax Consequences if the Arrangement Qualifies as a Reorganization

If the Arrangement qualifies as a Reorganization, then subject to the PFIC rules discussed below, the following U.S.

federal income tax consequences should apply to U.S. Holders:

no gain or loss will be recognized by a U.S. Holder to the extent such U.S. Holder receives solely Share

Consideration in exchange for its Common Shares;

a U.S. Holder that elects to receive Cash Consideration or Share Consideration, but pursuant to pro-ration

receives a combination of Cash Consideration and Share Consideration in exchange for its Common Shares

generally will recognize gain (but not loss), in an amount equal to the lesser of (1) the amount of gain, if any,

realized (i.e., the excess of the sum of the U.S. dollar value of the Cash Consideration and the fair market

value of the Share Consideration received pursuant to the Arrangement over the U.S. Holder’s adjusted tax

basis in the Common Shares surrendered), and (2) the U.S. dollar value of the Cash Consideration received

by such holder of Common Shares.

a U.S. Holder that receives solely Cash Consideration in exchange for all of its Common Shares pursuant to

the Arrangement generally will recognize gain or loss on the difference between (1) the U.S. dollar value of

the Cash Consideration received by such holder pursuant to the Arrangement, and (2) the adjusted tax basis

of such holder in its surrendered Common Shares;

the aggregate tax basis of the Pembina Common Shares received by a U.S. Holder pursuant to the

Arrangement will equal the aggregate tax basis of the Common Shares surrendered, decreased by the U.S.

dollar value of the Cash Consideration received in the Arrangement, and increased by the amount of gain, if

any, recognized on the exchange;


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the holding period for the Pembina Common Shares received in the Arrangement will include such U.S.

Holder’s holding period for the Common Shares surrendered in exchange therefor; and

U.S. Holders generally will be required to report certain information to the IRS on their U.S. federal income

tax returns for the tax year in which the Arrangement occurs, and to retain certain records related to the

Arrangement.

Subject to the PFIC rules discussed below and the discussion in the following paragraph, any gain or loss recognized

as described above should generally be capital gain or loss, and should generally be long-term capital gain or loss if

the Common Shares exchanged pursuant to the Arrangement have been held for more than one year on the Effective

Date of the Arrangement. Preferential tax rates apply to long-term capital gains of a U.S. Holder that is an individual,

estate, or trust. There are no preferential tax rates for long-term capital gains of a U.S. Holder that is a corporation.

If, after the Arrangement, a U.S. Holder owns, or is treated as owning under the constructive ownership rules of

Section 318 of the Code, Pembina Common Shares, it is possible that such holder’s gain recognized, if any, in the

Arrangement will be treated as a dividend rather than as capital gain. The characterization of any gain recognized on

the receipt of cash pursuant to the Arrangement as a capital gain or as ordinary dividend income will depend on

whether or not the receipt of such cash has the effect of a distribution of a dividend under Sections 302 and 356(a)(2)

of the Code, as well as certain other factors. For this purpose, a U.S. Holder will be treated as if the portion of its

Common Shares exchanged for cash in the Arrangement had instead been exchanged for Pembina Common Shares

and then was redeemed for the cash it actually received. Gain recognized in the deemed redemption generally will be

treated as capital gain if the deemed redemption is (1) “substantially disproportionate” with respect to the U.S. Holder

(that is, in general, if its deemed percentage share ownership in Pembina, including the Pembina Common Shares

actually or constructively owned, as well as those the U.S. Holder is deemed to own for purposes of the deemed

redemption analysis, was reduced in the deemed redemption by more than 20%) or (2) “not essentially equivalent to

a dividend,” which requires a “meaningful reduction” in the U.S. Holder’s deemed share ownership of Pembina. In

applying the above tests, a U.S. Holder will, under the constructive ownership rules, be deemed to own not only shares

that it actually owns, but also shares that are owned by certain related persons and entities or that such U.S. Holder or

such related persons or entities have the right to acquire pursuant to an option. The IRS has ruled that a shareholder in

a publicly held corporation whose relative common stock interest is minimal and who exercises no control with respect

to corporate affairs may generally be considered to have a “meaningful reduction” if that shareholder has even a small

reduction in its percentage stock ownership under the above analysis. These rules are complex and dependent upon

the specific factual circumstances particular to each U.S. Holder. Accordingly, U.S. Holders are urged to consult with

their own tax advisors regarding the potential characterization of any Cash Consideration received pursuant to the

Arrangement as the distribution of a dividend, having regard to such holder’s particular circumstances. For further

discussion of the treatment of dividends generally, see “Distributions on Pembina Common Shares”.

The IRS could challenge a U.S. Holder’s treatment of the Arrangement as a Reorganization. If the Arrangement fails

to qualify as a Reorganization, then the Arrangement would be treated as a taxable transaction, and the consequences

to U.S. Holders discussed below under “Tax Consequences if the Arrangement is a Taxable Transaction” would apply

instead.

Tax Consequences if the Arrangement is a Taxable Transaction

If the Arrangement does not qualify as a Reorganization, then subject to the PFIC rules discussed below, the following

U.S. federal income tax consequences would apply to U.S. Holders:

gain or loss would be recognized in an amount equal to the excess of the sum of the U.S. dollar value of the

Cash Consideration and the fair market value of the Share Consideration received pursuant to the

Arrangement over the U.S. Holder’s adjusted tax basis in the Common Shares surrendered;

the aggregate tax basis of the Pembina Common Shares received in the Arrangement would be equal to the

fair market value of such shares on the date of receipt; and


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the holding period for the Pembina Common Shares received in the Arrangement would begin on the day

after such shares are received.

Subject to the PFIC rules discussed below, any gain or loss described in the first bullet point immediately above would

be capital gain or loss, which would be long-term capital gain or loss if the holding period with respect to such

Common Shares is more than one year as of the date of the Arrangement. Preferential tax rates apply to long-term

capital gains of a non-corporate U.S. Holder. There are currently no preferential tax rates for long-term capital gains

of a U.S. Holder that is a corporation. Deductions for capital losses are subject to complex limitations under the Code.

Tax Consequences of the Arrangement if Veresen Is Classified as a PFIC

A U.S. Holder of Common Shares could be subject to special, adverse tax rules in respect of the Arrangement if

Veresen was classified as a “passive foreign investment company” within the meaning of Section 1297 of the Code (a

“PFIC”) for any tax year during which such U.S. Holder has held Common Shares.

In general, a non-U.S. corporation is a PFIC for each tax year in which (i) 75% or more of its gross income is passive

income (as defined for U.S. federal income tax purposes) or (ii) 50% or more of the value of its assets either produce

passive income or are held for the production of passive income, based on the quarterly average of the fair market

value, of such assets. For purposes of the PFIC provisions, “gross income” generally includes all sales revenues less

cost of goods sold, plus income from investments and from incidental or outside operations or sources, and “passive

income” generally includes dividends, interest, certain royalties and rents, certain gains from the sale of stock and

securities, and certain gains from commodities transactions. In determining whether or not it is a PFIC, a non-U.S.

corporation will be treated as owning its proportionate share of the assets and earning its proportionate share of the

income of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value).

Veresen believes that it was not a PFIC during its taxable year ended December 2016 and, based on its current

operations and financial expectations, Veresen expects it would not be a PFIC for its current taxable year if such

taxable year were to end on the Effective Date. The determination of whether Veresen was a PFIC during any tax year

depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing

interpretations. Accordingly, there can be no assurance that the IRS will not challenge any determination made by

Veresen concerning its PFIC status or that Veresen was not, or will not be, a PFIC for any tax year. U.S. Holders

should consult their own tax advisors regarding the PFIC status of Veresen.

If Veresen has been a PFIC at any time during a U.S. Holder’s holding period for Common Shares, then under the

default PFIC rules the U.S. federal income tax consequences to a U.S. Holder of the Arrangement are expected to be

as follows:

the exchange of Common Shares for Pembina Common Shares pursuant to the Arrangement may be treated

as a taxable transaction even if the Arrangement qualifies as a Reorganization as discussed above (subject to

an exception that may be available if Pembina is also a PFIC in the taxable year that includes the

Arrangement);

any gain on the exchange of Common Shares pursuant to the Arrangement and any “excess distribution”

(defined as the excess of distributions with respect to the Common Shares in any tax year over 125% of the

average annual distributions such U.S. Holder has received from Veresen during the shorter of the three

preceding tax years, or such U.S. Holder’s holding period for the Common Shares), will be allocated ratably

over such U.S. Holder’s holding period for the Common Shares;

the amounts allocated to the current tax year in which the Arrangement occurs and to any tax year prior to

the first year in which Veresen was a PFIC will be taxed as ordinary income in the current year;

the amounts allocated to each of the other tax years in such U.S. Holder’s holding period for the Common

Shares (“prior PFIC years”) will be subject to tax as ordinary income at the highest rate of tax in effect for

the applicable class of taxpayer for that year;


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an interest charge for a deemed deferral benefit will be imposed with respect to the resulting tax attributable

to each of the prior PFIC years, which interest charge is not deductible by non-corporate U.S. Holders; and

if the Arrangement otherwise qualifies as a Reorganization as discussed above, any loss realized by the U.S.

Holder in connection with the Arrangement would generally not be recognized.

Each U.S. Holder should consult its own tax advisor regarding the status of Veresen as a PFIC, the possible

effect of the PFIC rules to such holder, as well as the availability of any election or exception that may be

available to such holder to mitigate adverse U.S. federal income tax consequences of holding shares in a PFIC.

The remainder of this discussion assumes that Veresen has not been a PFIC at any time during a U.S. Holder’s

holding period for Common Shares and is not be a PFIC during its current taxable year.

U.S. Holders Exercising Dissent Rights

A U.S. Holder that exercises Dissent Rights with respect to their Common Shares and is paid cash in exchange for all

of such U.S. Holder’s Common Shares generally will recognize gain or loss in an amount equal to the difference, if

any, between (a) the U.S. dollar value of the Canadian currency received by such U.S. Holder in exchange for such

U.S. Holder’s Common Shares (other than amounts, if any, that are or are deemed to be interest for U.S. federal

income tax purposes, which amounts will be taxed as ordinary income) and (b) the adjusted tax basis of such U.S.

Holder in such Common Shares surrendered. Subject to the PFIC rules discussed in this summary, such gain or loss

will generally be capital gain or loss, which will be long-term capital gain or loss if the holding period with respect to

such Common Shares is more than one year as of the date of the exchange. Preferential tax rates apply to long-term

capital gains of a non-corporate U.S. Holder. There are currently no preferential tax rates for long-term capital gains

of a U.S. Holder that is a corporation. Deductions for capital losses are subject to complex limitations under the Code.

U.S. Federal Income Tax Consequences of the Ownership and Disposition of Pembina Common Shares

The following discussion is subject, in its entirety, to the rules described below under “PFIC Rules Relating to the

Ownership of Pembina Common Shares”.

Distributions on Pembina Common Shares

For U.S. federal income tax purposes, a U.S. Holder that receives a distribution, including a constructive distribution,

with respect to a Pembina Common Share generally will be required to include the amount of such distribution in

gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the

extent of the current or accumulated “earnings and profits” of Pembina, as computed for U.S. federal income tax

purposes. Any portion of the distribution in excess of Pembina’s earnings and profits will first be treated as a tax-free

return of capital to the extent of the U.S. Holder’s tax basis in its Pembina Common Share and will be applied against

and reduce that basis, but not below zero, on a dollar-for-dollar basis (thereby increasing the amount of gain or

decreasing the amount of loss recognized on a subsequent disposition of the Pembina Common Share). To the extent

that the distribution exceeds the U.S. Holder’s tax basis, the excess will constitute gain from a sale or exchange of the

Pembina Common Share. Dividends received on the Pembina Common Shares by corporate U.S. Holders generally

will not be eligible for the “dividends received deduction”. Subject to applicable limitations, dividends paid by

Pembina to non-corporate U.S. Holders, including individuals, generally would be eligible for qualified dividend

treatment and the preferential tax rates applicable to long-term capital gains, provided certain holding period and other

conditions are satisfied, including that Pembina not be classified as a PFIC in the tax year of distribution or in the

preceding tax year. The dividend rules are complex, and each U.S. Holder should consult its own tax advisor regarding

the application of such rules.

Sale, Exchange or Other Disposition of the Pembina Common Shares

Upon a sale, exchange or other taxable disposition of the Pembina Common Shares acquired pursuant to the

Arrangement, a U.S. Holder will recognize a capital gain or loss for U.S. federal income tax purposes in an amount

equal to the difference between the U.S. dollar value of the cash received plus the fair market value of any property


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received, and the U.S. Holder’s adjusted tax basis in such Pembina Common Shares. Any such gain or loss generally

will be long-term capital gain or loss if the U.S. Holder’s holding period in the Pembina Common Shares exceeds one

year. Non-corporate U.S. Holders (including individuals) generally will be subject to U.S. federal income tax on long-

term capital gain at preferential rates. The deductibility of capital losses is subject to complex limitations.

PFIC Rules Relating to the Ownership of Pembina Common Shares

Special, generally unfavorable, U.S. federal income tax rules apply to U.S. Holders owning stock of a PFIC. Based

on current business plans and financial expectations, Pembina expects that it should not be a PFIC for its current tax

year and does not anticipate becoming a PFIC in the future. No opinion of legal counsel or ruling from the IRS

concerning the status of Pembina as a PFIC has been obtained or is currently planned to be requested. PFIC

classification is fundamentally factual in nature, generally cannot be determined until the close of the tax year in

question, and is determined annually. Additionally, the analysis depends, in part, on the application of complex U.S.

federal income tax rules, which are subject to differing interpretations. Consequently, there can be no assurance that

Pembina is not or will not become, a PFIC for any tax year during which a U.S. Holder holds Pembina Common

Shares.

If Pembina were to be treated as a PFIC, gain realized on the sale or other disposition of Pembina Common Shares

would in general not be treated as capital gain. Instead, unless a U.S. Holder elects to be taxed annually on a mark-to-

market basis with respect to its Pembina Common Shares, the holder would be treated as if it had realized such gain

and certain “excess distributions” ratably over its holding period for the Pembina Common Shares and would generally

be taxed at the highest tax rate in effect for each such year to which the gain was allocated, together with an interest

charge in respect of the tax attributable to certain of such years. With certain exceptions, a U.S. Holder’s Pembina

Common Shares will be treated as stock in a PFIC if Pembina were a PFIC at any time during such holder’s holding

period in its Pembina Common Shares. Dividends received from Pembina would not be eligible for the preferential

tax rates applicable to qualified dividend income if Pembina is treated as a PFIC either in the taxable year of the

distribution or the preceding taxable year, but instead would be taxable at rates applicable to ordinary income.

U.S. Holders should consult their own tax advisors regarding the potential application of the PFIC rules to the

ownership and disposition of Pembina Common Shares and the availability of certain U.S. tax elections under the

PFIC rules.

Additional Considerations

Foreign Tax Credit

Any payment (whether directly or through withholding) of non-U.S. income tax in connection with a U.S. Holder’s

ownership or disposition of Pembina Common Shares may, subject to a number of complex limitations, be claimed

as a foreign tax credit against a U.S. Holder’s U.S. federal income tax liability in respect of such holder’s foreign

source income or may be claimed as a deduction for U.S. federal income tax purposes. The limitation on foreign taxes

eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends that

are distributed with respect to Pembina Common Shares will generally be foreign source income for purposes of

computing the foreign tax credit allowable to a U.S. Holder. Gains recognized on the sale of Pembina Common Shares

by a U.S. Holder should generally be treated as U.S. source for this purpose, except as otherwise provided in an

applicable income tax treaty and if an election is properly made under the Code. Because of the complexity of those

limitations, each U.S. Holder should consult its own tax advisor with respect to the amount of foreign taxes that may

be claimed as a credit or deduction, having regard to such holder’s particular circumstances.

Foreign Currency Gains

The amount of any distribution or proceeds paid in Canadian dollars to a U.S. Holder in connection with the ownership

of Pembina Common Shares, or on the sale, exchange or other taxable disposition of Pembina Common Shares, or

any Canadian dollars received in connection with the Arrangement, will generally be included in the gross income of

a U.S. Holder as translated into U.S. dollars calculated by reference to the exchange rate prevailing on the date of


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actual or constructive receipt of such amount, regardless of whether the Canadian dollars or other non-U.S. currency

is converted into U.S. dollars at that time. If the Canadian dollars or other non-U.S. currency received is not converted

into U.S. dollars on the date of receipt, a U.S. Holder will have a basis in the Canadian dollars or other non-U.S.

currency equal to its U.S. dollar value on the date of receipt. Any U.S. Holder who receives payment in Canadian

dollars or other non-U.S. currency and engages in a subsequent conversion or other disposition of the Canadian dollars

or other non-U.S. currency may have a foreign currency exchange gain or loss that would be treated as ordinary income

or loss, and generally would be U.S. source income or loss for foreign tax credit purposes. Different rules may apply

to U.S. Holders who use the accrual method. Each U.S. Holder should consult its own tax advisor regarding the U.S.

federal income tax consequences of receiving, owning, and disposing of Canadian dollars or other non-U.S. currency.

Additional Tax on Passive Income

Certain U.S. Holders that are individuals, estates and trusts whose income exceeds certain thresholds generally will

be required to pay a 3.8% Medicare surtax on “net investment income” including, among other things, dividends and

net gain from the sale or other taxable disposition of their Common Shares pursuant to the Arrangement. U.S. Holders

should consult their own tax advisors regarding the effect, if any, of this tax on their taxable disposition of Common

Shares pursuant to the Arrangement and their ownership and disposition of Pembina Common Shares.

U.S. Information Reporting and Backup Withholding Tax

Under U.S. federal income tax law, certain categories of U.S. Holders must file information returns with respect to

their investment in, or involvement in, Veresen or Pembina. For example, U.S. return disclosure obligations (and

related penalties) are imposed on individuals who are U.S. Holders that hold certain specified foreign financial assets

in excess of certain thresholds. The definition of “specified foreign financial assets” includes not only financial

accounts maintained in non-U.S. financial institutions, but also, if held for investment and not in an account maintained

by certain financial institutions, any stock or security issued by a non-U.S. person, any financial instrument or contract

that has an issuer or counterparty other than a U.S. person and any interest in a non-U.S. entity. U.S. Holders may be

subject to these reporting requirements unless their Common Shares or Pembina Common Shares are held in an

account at certain financial institutions. Penalties for failure to file certain of these information returns are substantial.

U.S. Holders should consult with their own tax advisors regarding the requirements of filing information returns under

these rules, including the requirement to file an IRS Form 8938.

Payments made within the U.S. or by a U.S. payor or U.S. middleman, of (a) distributions on the Pembina Common

Shares, (b) proceeds arising from the sale or other taxable disposition of Pembina Common Shares, or (c) payments

received in connection with the Arrangement (including, but not limited to, U.S. Holders exercising Dissent Rights

with respect to their Common Shares) generally may be subject to information reporting. In addition, backup

withholding, currently at a rate of 28%, may apply to such payments if a U.S. Holder (a) fails to furnish such U.S.

Holder’s correct U.S. taxpayer identification number (generally on IRS Form W-9), (b) furnishes an incorrect U.S.

taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report

items subject to backup withholding, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has

furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is

subject to backup withholding. Certain exempt persons generally are excluded from these information reporting and

backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under the U.S. backup

withholding rules will be allowed as a credit against a U.S. Holder’s U.S. federal income tax liability, if any, or will

be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner. Each U.S. Holder

should consult its own tax advisor regarding the information reporting and backup withholding rules in their particular

circumstances and the availability of and procedures for obtaining an exemption from backup withholding.

The discussion of reporting requirements set forth above is not intended to constitute an exhaustive description of all

reporting requirements that may apply to a U.S. Holder. A failure to satisfy certain reporting requirements may result

in an extension of the time period during which the IRS can assess a tax, and under certain circumstances, such an

extension may apply to assessments of amounts unrelated to any unsatisfied reporting requirement. Each U.S. Holder

should consult its own tax advisor regarding applicable reporting requirements and the information reporting and

backup withholding rules.


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TIMING

If the Meetings are held as scheduled and are not adjourned and the necessary conditions for completion of the

Arrangement are satisfied or waived, Veresen will apply for the Final Order approving the Arrangement. If the Final

Order is obtained on July 12, 2017 in form and substance satisfactory to Veresen and Pembina, the Effective Date will

occur once all other conditions set forth in the Arrangement Agreement are satisfied or waived. Veresen and Pembina

expect the Effective Date will occur in the second half of 2017. It is not possible, however, to state with certainty

when the Effective Date will occur.

The Arrangement will become effective upon the filing with the Registrar of the Articles of Arrangement and a copy

of the Final Order, together with such other materials as may be required by the Registrar.

The Effective Date could be delayed for a number of reasons, including an objection before the Court at the hearing

of the application for the Final Order or delays in receiving all Required Regulatory Approvals.

PRO FORMA INFORMATION OF PEMBINA AFTER GIVING EFFECT TO THE ARRANGEMENT

General

The Arrangement will result in the acquisition of all of the Common Shares (and the acquisition of all of the Preferred

Shares, provided the Preferred Shareholder Arrangement Resolution is approved at the Preferred Shareholders’

Meeting) by Pembina and the amalgamation of Veresen and Pembina to form Amalco. Shareholders (excluding

Dissenting Shareholders) will receive the Share Consideration or the Cash Consideration, subject to pro-rationing, for

each Common Share held and the Preferred Share Consideration for each Preferred Share held, as the case may be.

Following the completion of the Arrangement, the name of the Amalco will be “Pembina Pipeline Corporation” and

Amalco will continue the operations of Pembina and Veresen on a combined basis.

The following sets forth certain information relating to Pembina and Veresen, together with pro forma information of

Pembina after giving effect to the Arrangement and certain other adjustments. Additional information concerning each

of Pembina and Veresen is set forth elsewhere in this Information Circular. See Appendix K – “Information

Concerning Pembina Pipeline Corporation” and Appendix J – “Information Concerning Veresen Inc.”.

Officers and Directors of Pembina

Officers

Upon completion of the Arrangement, Pembina will continue to be led by its current executive team of Mick Dilger,

President and Chief Executive Officer; Scott Burrows, Vice President, Finance and Chief Financial Officer; Stuart

Taylor, Senior Vice President, NGL and Natural Gas Facilities; Paul Murphy, Senior Vice President, Crude Oil

Facilities; Harry Andersen, Vice President, Legal and General Counsel; Robert Jones, Vice President, Midstream,

Crude and Condensate; Claudia D’Orazio, Vice President, Compliance and Risk; Allan Charlesworth, Vice President,

Technical Services; Robert Lock, Vice President, Midstream; Jason Wiun, Vice President, Conventional Pipelines;

Brad Smith, Vice President, Operating Services and Jaret Sprott, Vice President, Gas Services. In addition, certain

executive officers of Veresen may join the management team of Pembina following completion of the Arrangement.

Directors

The post-Arrangement Pembina Board will consist of 13 members, being all 10 of the current Pembina directors

(Randall Findlay, Anne-Marie Ainsworth, Lorne Gordon, David LeGresley, Robert Michaleski, Leslie O’Donoghue,

Jeffrey Smith, Gordon Kerr, Bruce Rubin and Mick Dilger) and three new Veresen nominee directors (Doug Arnell,

Maureen E. Howe and Henry W. Sykes). Randall Findlay will continue in his capacity as Chairman of the Pembina

Board.


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Selected Unaudited Pro Forma Financial Information

The following tables set out certain unaudited pro forma financial information for Pembina after giving effect to the

Arrangement for the year ended December 31, 2016 and the three month period ended March 31, 2017.

The following tables should be read in conjunction with the unaudited pro forma consolidated financial statements of

Pembina for the year ended December 31, 2016 and the three month period ended March 31, 2017, including the notes

thereto, attached as Appendix I to this Information Circular. Reference should also be made to: (a) the Pembina Annual

Financial Statements; (b) the Pembina Interim Financial Statements; (c) the Veresen Annual Financial Statements;

and (d) the Veresen Interim Financial Statements, each of which is incorporated by reference herein and which can be

found under Pembina’s and Veresen’s respective profiles on SEDAR at www.sedar.com.

($millions, unless otherwise noted)

As at March 31,

2017

Total assets 23,953

Total liabilities(1) 10,776

Net assets 13,177

Share capital

Preferred shares 2,019

Common shares 13,263


Three month period

March 31, 2017

Year ended

December 31, 2017

Revenue 1,497 4,318

Results from operating activities 301 646

Earnings for the period 262 487

Basic and diluted earnings per share (dollars) 0.49 0.85

Note:

(1) Includes loans and borrowings of $7,318 million.

The unaudited pro forma consolidated financial statements are presented for illustrative purposes only and are not

necessarily indicative of (i) the financial results that would have occurred had the Arrangement actually occurred at

the times contemplated by the notes to the unaudited pro forma consolidated financial statements; or (ii) the results

expected in future periods.

Pro Forma Consolidated Capitalization of Pembina

The following table sets forth Pembina’s consolidated capitalization as at March 31, 2017, both before and after giving

effect to the Arrangement. See also Appendix I – “Pro Forma Financial Statements of Pembina”.


http://www.sedar.com/

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Designation


Authorized(2)(3)

Outstanding as at

March 31, 2017

Outstanding as at

March 31, 2017

after giving effect

to the

Arrangement(12)

Common Shares(1) Unlimited 8,935 13,263

(399,988,551

common shares)

(499,479,213

common shares)

Class A Preferred Shares(3)

Series 1 250 250 250

Series 3 150 150 150

Series 5 250 250 250

Series 7 250 250 250

Series 9 225 225 225

Series 11 170 170 170

Series 13 250 250 250

Series A Exchange(4) - 200

Series C Exchange(4) - 150

Series E Exchange (4) - 200

Convertible Debentures(11)

Series F Convertible Debentures(5) 173 147 147

Notes(11)

Series C Senior Unsecured Notes(6) 200 200 200

Series D Senior Unsecured Notes(7) 267 267 267

Medium Term Notes, Series 1(8) 250 250 250









Veresen Medium Term Notes, Series 1(8) - 150




Bank Debt(11)

Revolving Credit Facility(9) 2,500 87 1,610

Operating Credit Facility(9) 30 - -

Veresen Revolving Credit Facility(10) 750 - 606 Notes:

(1) At March 31, 2017, 15,514,056 Pembina Options were outstanding and held by employees of Pembina, of which

7,319,284 were exercisable. The Pembina Options have exercise prices ranging from $19.17 to $52.01 and expire at various dates to March 2024.

(2) Pembina is authorized to issue an unlimited number of Pembina Class B Preferred Shares, which may only be issued to

a wholly-owned subsidiary of Pembina, and such shares are eliminated on consolidation. No Pembina Class B Preferred Shares are outstanding.


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(3) The terms of the Pembina Class A Preferred Shares provide that the number of Pembina Class A Preferred Shares which

may be issued and outstanding at any time shall be limited to a number equal to no more than 20% of the number of issued and outstanding Pembina Common Shares at the time of issuance of any Pembina Class A Preferred Shares.

(4) Assumes that the Preferred Shareholder Arrangement Resolution receives the requisite approval by the Preferred

Shareholders at the Preferred Shareholders’ Meeting and the Preferred Shares are not otherwise excluded from the

Arrangement pursuant to the terms of the Arrangement Agreement. The actual designation of Pembina Exchange Shares will be numerical based on the next available number in the sequence of Pembina Class A Preferred Shares.

(5) The Series F Convertible Debentures of Pembina bear interest at the rate of 5.75% per annum payable semi-annually and mature on December 31, 2018.

(6) The Series C Senior Notes of Pembina bear interest at the rate of 5.58% per annum and mature on September 30, 2021.

(7) The Series D Senior Notes of Pembina bear interest at the rate of 5.91% per annum and mature on November 18, 2019.

(8) The Medium Term Notes, Series 1 were issued by Pembina on March 29, 2011 in the aggregate principal amount of $250

million of senior unsecured medium term notes, have a fixed interest rate of 4.89% per annum that is paid semi-annually,

and will mature on March 29, 2021. The Medium Term Notes, Series 2 were issued by Pembina on October 22, 2012 in

the aggregate principal amount of $450 million of senior unsecured medium term notes, have fixed interest rate of 3.77%

per annum that is paid semi-annually, and will mature on October 24, 2022. The Medium Term Notes, Series 3 were

issued by Pembina on April 30, 2013, February 2, 2015 and June 16, 2015 in the aggregate principal amount of $200

million, $150 million and $100 million, respectively, of senior unsecured medium term notes, have a fixed interest rate

of 4.75% per annum that is paid semi-annually, and will mature on April 30, 2043. The Medium Term Notes, Series 4

were issued by Pembina on April 4, 2014 in the aggregate principal amount of $600 million senior unsecured medium

term notes, have a fixed interest rate of 4.81% per annum that is paid semi-annually, and will mature on March 25, 2044.

The Medium Term Notes, Series 5 were issued by Pembina on February 2, 2015 in the aggregate principal amount of

$450 million of senior unsecured medium term notes, have a fixed interest rate of 3.54% per annum that is paid semi-

annually, and will mature on February 3, 2025. The Medium Term Notes, Series 6 were issued by Pembina on June 16,

2015 in the aggregate principal amount of $500 million of senior unsecured medium term notes, have a fixed interest rate

of 4.24% per annum that is paid semi-annually, and will mature on June 15, 2027. The Medium Term Notes, Series 7

were issued by Pembina on August 11, 2016 in the aggregate principal amount of $500 million of senior unsecured

medium term notes, have a fixed interest rate of 3.71% per annum that is paid semi-annually, and will mature on August

11, 2026. The Medium Term Notes, Series 8 were issued by Pembina on January 20, 2017 in the aggregate principal

amount of $300 million of senior unsecured medium term notes, have a fixed interest rate of 2.99% per annum that is

paid semi-annually, and will mature on January 22, 2024. The Medium Term Notes, Series 9 were issued by Pembina on

January 20, 2017 in the aggregate principal amount of $300 million of senior unsecured medium term notes, have a fixed

interest rate of 4.74% per annum that is paid semi-annually, and will mature on January 21, 2047. The Veresen Medium

Term Notes, Series 1 were issued by Veresen on November 22, 2011 in the aggregate amount of $150 million of senior

unsecured medium term notes, have a fixed interest rate of 4.00% per annum that is paid semi-annually and are due

November 22, 2018. The Veresen Medium Term Notes, Series 3 were issued by Veresen on March 14, 2012 in the

aggregate amount of $50 million of unsecured medium term notes, have a fixed interest rate of 5.05% per annum that is

payable semi-annually and are due March 14, 2022. The Veresen Medium Term Notes, Series 4 were issued by Veresen

on June 13, 2014 in the aggregate amount of $200 million as senior unsecured medium term notes, have a fixed interest

rate of 3.06% per annum that is payable semi-annually and are due June 13, 2019. The Veresen Medium Term Notes,

Series 5 were issued by Veresen on November 10, 2016 in the aggregate amount of $350 million as senior unsecured

medium term notes, have a fixed interest rate of 3.43% per annum payable semi-annually and are due November 10,

2021.

(9) Pembina’s credit facilities as at March 31, 2017 consisted of an unsecured $2,500 million revolving credit facility due

May 2020 (the “Revolving Credit Facility”) and an unsecured operating facility of $30 million due May 2017 (the

“Operating Credit Facility”, and together with the Revolving Credit Facility, the “Pembina Facilities”). Borrowings

on the Revolving Credit Facility and the Operating Credit Facility bear interest at prime lending rates plus nil to 1.25

percent or Bankers’ Acceptances rates plus 1.00 percent to 2.25 percent. Margins on the Pembina Facilities are based on

the credit rating of Pembina’s senior unsecured debt. There are no repayments due over the term of the Pembina Facilities.

As at March 31, 2017, Pembina had $2,479 million of cash and unutilized debt available under the Pembina Facilities.

In May 2017, Pembina reduced the amount of its Operating Credit Facility to $20 million and renewed the Operating

Credit Facility to May 2018. Pembina also had an additional $30 million in letters of credit issued pursuant to a separate

credit facility as at March 31, 2017.

(10) Veresen has an existing $750 million revolving credit facility that will mature on May 31, 2020. Subsequent to March

31, 2017, net proceeds from the closing of the sale of gas-fired facilities pursuant to the Veresen Power Business Sale in

the amount of $235 million were applied against such facility. It is anticipated that all amounts outstanding under such

facility at closing of the Arrangement will be repaid using funds drawn from Pembina’s Revolving Credit Facility and


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the facility will be cancelled. Veresen also has an existing $45 million club revolving credit facility that will mature on

May 31, 2020 pursuant to which $17 million in letters of credit were issued as at March 31, 2017.

(11) All debt amounts in the table as at March 31, 2017 represent the outstanding principal balances of such debt obligations.

(12) Excludes senior debt of Veresen’s Subsidiaries.

Description of Share Capital

The authorized share capital of Pembina will not be altered by the Arrangement. The authorized capital of Pembina

consists of an unlimited number of Pembina Common Shares, a number of Pembina Class A Preferred shares, issuable

in series, not to exceed 20% of the number of issued and outstanding Pembina Common Shares at the time of issuance

of any Pembina Class A Preferred Shares, and an unlimited number of Pembina Class B Preferred Shares which are

deemed to be automatically redeemed if a holder ceases to be a wholly-owned subsidiary of Pembina.

See “Description of the Capital Structure of Pembina” in the Pembina AIF, which is incorporated by reference herein.

Following completion of the Arrangement, it is anticipated that the issued and outstanding share capital of Pembina

will include 500,629,872 Pembina Common Shares (based on the Common Shares outstanding as of June 5, 2017 and

assuming: (a) the issuance of the Maximum Share Consideration, and (b) no additional Pembina Common Shares are

issued by Pembina prior to the Effective Date), and, if Preferred Shareholders vote in favour of the Preferred

Shareholder Arrangement Resolution at the Preferred Shareholders’ Meeting, 8,000,000 Pembina Series A Exchange

Shares, 6,000,000 Pembina Series C Exchange Shares 8,000,000 Pembina Series E Exchange Shares, as well as

10,000,000 Pembina Series 1 Shares, 6,000,000 Series 3 Shares, 10,000,000 Pembina Series 5 Shares, 10,000,000

Pembina Series 7 Shares, 9,000,000 Pembina Series 9 Shares, 6,800,000 Pembina Series 11 Shares and 10,000,000

Pembina Series 13 Shares. The Pembina Series A Exchange Shares, Pembina Series C Exchange Shares and Pembina

Series E Exchange Shares will trade on the TSX under the next available symbols in Pembina’s preferred share ticker.

Principal Holders of Pembina Common Shares Following the Arrangement

To the knowledge of the respective directors and executive officers of Pembina, as at the date hereof, both before and

after giving effect to the Arrangement, no persons will beneficially own, or control or direct, directly or indirectly,

10% or more of the Pembina Common Shares.

Auditors, Registrar and Transfer Agent

Following the completion of the Arrangement, the auditors for Pembina will continue to be KPMG LLP, Chartered

Accountants located at Suite 2700, 205 – 5th Avenue SW, Calgary, Alberta, T2P 4B9.

Following the completion of the Arrangement, the transfer agent and registrar of Pembina will continue to be

Computershare Trust Company of Canada, at its principal offices in Calgary, Alberta and Toronto, Ontario. The co-

transfer agent and registrar for the Pembina Common Shares in the United States will be Computershare Investor

Services U.S. at its principal office in Golden, Colorado.

RISK FACTORS

Shareholders voting in favour of the Common Shareholder Arrangement Resolution or the Preferred Shareholder

Arrangement Resolution, as the case may be, will be choosing to combine the businesses of Veresen and Pembina and

to invest in Pembina Common Shares (provided that such Shareholder receives Share Consideration pursuant to the

Arrangement) or Pembina Exchange Shares, as applicable. The completion of the Arrangement and investment in

Pembina Shares involves risks. In addition to the risk factors present in each of Veresen’s and Pembina’s businesses,

described under the heading “Risk Factors” in the Veresen AIF and the Pembina AIF, which are incorporated by

reference herein, Shareholders should carefully consider the following risk factors in evaluating whether to approve

the Common Shareholder Arrangement Resolution or the Preferred Shareholder Arrangement Resolution, as

applicable. Readers are cautioned that such risk factors are not exhaustive. These risk factors should be considered in


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conjunction with the other information included in this Information Circular, including the documents incorporated

by reference herein and documents filed by Pembina and Veresen pursuant to applicable Laws from time to time.

Possible Failure to Realize Anticipated Benefits of the Arrangement

The Arrangement is subject to normal commercial risks that such transaction may not be completed on the terms

negotiated or at all. Pembina and Veresen are proposing to complete the Arrangement to strengthen the position of

Pembina in the pipeline industry and to create the opportunity to realize certain benefits including, among other things,

potential cost savings. Achieving the benefits of the Arrangement depends in part on successfully consolidating

functions and integrating operations, procedures and personnel in a timely and efficient manner, as well as the ability

of Pembina, after giving effect to the Arrangement, to realize the anticipated growth opportunities and synergies from

combining the acquired businesses and operations of Veresen with those of Pembina.

The integration of the Veresen assets requires the dedication of substantial management effort, time and resources

which may divert management’s focus and resources from other strategic opportunities and from operational matters

during this process. The integration process may result in the loss of key employees and the disruption of ongoing

business, customer and employee relationships that may adversely affect Pembina’s ability to achieve the anticipated

benefits of the Arrangement.

Satisfaction of Conditions Precedent

The completion of the Arrangement is subject to a number of condition precedents, certain of which are outside the

control of Veresen and Pembina, including obtaining the requisite approvals from Common Shareholders and

Required Regulatory Approvals, including Competition Act Approval. A substantial delay in obtaining satisfactory

approvals or the imposition of unfavourable terms or conditions to the Required Regulatory Approvals could delay

the Effective Date and may adversely affect the business, financial condition or results of Veresen, Pembina or the

combined company. There is no certainty, nor can Veresen and/or Pembina provide any assurance, that these

conditions will be satisfied or, if satisfied, when they will be satisfied. If for any reason the Arrangement is not

completed, or is materially delayed, the market price of the Common Shares may be adversely affected.

Entry into New Business Activities

Completion of the Arrangement will result in a combination of the current business activities currently carried on by

each of Veresen and Pembina as separate entities. The combination of these activities into the combined company

may expose Shareholders to different business risks than those to which they were exposed prior to the Arrangement.

As a result of the changing risk profile of the companies, the combined company may be subject to review of its credit

ratings, which may result in a downgrade or negative outlook being assigned to the combined company.

After the completion of the Arrangement, Pembina will face the same risks currently facing each of Veresen and

Pembina, in addition to other risks.

The Arrangement Agreement May Be Terminated

Each of Veresen and Pembina has the right to terminate the Arrangement Agreement in certain circumstances.

Accordingly, there is no certainty, nor can either of Veresen or Pembina provide any assurance, that the Arrangement

will not be terminated by either Veresen or Pembina before the completion of the Arrangement. For instance, Veresen

and Pembina have the right, in certain circumstances, to terminate the Arrangement Agreement if changes occur that

have a Material Adverse Effect on the other Party. There is no assurance that a Material Adverse Effect will not occur

before the Effective Date, in which case Veresen and Pembina could elect to terminate the Arrangement Agreement

and the Arrangement would not proceed.

In addition, certain costs related to the Arrangement, such as legal, accounting and certain financial advisor fees, must

be paid by Veresen even if the Arrangement is not completed.


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Under the Arrangement Agreement, Veresen is required to pay Pembina a non-completion fee in certain

circumstances. This non-completion fee may discourage other parties from attempting to enter into a business

transaction with Veresen, even if those parties would otherwise be willing to enter into an agreement with Veresen

with a business combination. See “The Arrangement – The Arrangement Agreement – Non-Completion Fees Payable

by Veresen”.

While the Arrangement is Pending, Veresen is Restricted from Taking Certain Actions

The Arrangement Agreement restricts Veresen from taking specified actions until the Arrangement is completed,

without the consent of Pembina. These restrictions may prevent Veresen from pursuing attractive business

opportunities that may arise prior to completion of the Arrangement.

The Exchange Ratio underlying the Share Consideration is fixed and will not be Adjusted in the Event of any

Change in either Veresen’s or Pembina’s Respective Share Prices

Upon closing of the Arrangement, each Common Shareholder who has elected to receive Share Consideration (or who

receives Share Consideration as a result of pro-rationing in accordance with the Plan of Arrangement) will receive

0.4287 Pembina Common Shares for each Common Share held by such Common Shareholder. This exchange ratio is

fixed in the Plan of Arrangement and will not be adjusted for changes in the market price of either the Common Shares

or the Pembina Common Shares. Changes in the price of the Pembina Common Shares prior to the consummation of

the Arrangement will affect the market value that Common Shareholders will be entitled to receive upon closing.

Neither Veresen nor Pembina is permitted to terminate the Arrangement Agreement or, in the case of Veresen, resolicit

the vote of the Common Shareholders, solely because of changes in the market price of either Party’s common shares.

Share price changes may result from a variety of factors (many of which are beyond Pembina’s or Veresen’s control),

including the risk factors identified in the Veresen AIF and the Pembina AIF.

Veresen Dissent Rights

Shareholders have the right to exercise certain dissent and appraisal rights and demand payment of the fair value of

their Common Shares or Preferred Shares, as the case may be, in cash in connection with the Arrangement in

accordance with the ABCA. If there are a significant number of Dissenting Shareholders, a substantial cash payment

may be required to be made to such Shareholders that could have an adverse effect on Pembina’s financial condition

and cash resources if the Arrangement is completed. It is a condition to completion of the Arrangement that holders

of less than 5% of the outstanding Common Shares have exercised Dissent Rights in respect of the Arrangement,

which condition may be waived by Pembina, in its sole discretion. If holders of more than 5% of the Preferred Shares

exercise Dissent Rights, Veresen will amend the Plan of Arrangement if requested by Pembina to exclude the Preferred

Shares under the Plan of Arrangement.

Trading Access

The Veresen Shares are currently listed on the TSX and it is anticipated the Common Shares will be delisted from the

TSX following completion of the Arrangement and in the event the Preferred Shares are exchanged for Pembina

Exchange Shares, the Listed Preferred Shares will be delisted from the TSX. Although Pembina has applied to list the

Pembina Common Shares on the TSX and NYSE and the Pembina Exchange Shares on the TSX following completion

of the Arrangement, there can be no assurance that such listing will occur in a timely manner or at all.

Income Tax Laws

There can be no assurance that the CRA, the United States Internal Revenue Service or other applicable taxing

authorities will agree with the Canadian and U.S. federal income tax consequences of the Arrangement, as applicable,

as set forth in this Information Circular. Furthermore, there can be no assurance that applicable Canadian and U.S.

income tax Laws, regulations or tax treaties will not be changed or interpreted in a manner, or that applicable taxing

authorities will not take administrative positions, that are adverse to Pembina and its securityholders following

completion of the Arrangement. Such taxation authorities may also disagree with how Pembina or its predecessors,


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including Veresen, calculate or have in the past calculated their income for income tax purposes. Any such events

could adversely affect the combined company, its share price or the dividends or other payments to be paid to

Pembina’s securityholders following completion of the Arrangement.

Future Dividends on Pembina Common Shares

There can be no assurance as to future dividend payments by Pembina on the Pembina Common Shares and the level

thereof, including the anticipated increase following completion of the Arrangement, as Pembina’s dividend policy

and the funds available for the payment of dividends from time to time will be dependent upon, among other things,

operating cash flow generated by Pembina and its subsidiaries, financial requirements for Pembina’s operations, the

execution of its growth strategy and the satisfaction of solvency tests imposed by the ABCA for the declaration and

payment of dividends.

Credit Ratings related to the Preferred Shares

There can be no assurance that the credit ratings on the Preferred Shares will be maintained if the Preferred Shareholder

Arrangement Resolution is not approved at the Preferred Shareholder Meeting (or any adjournment thereof) and the

Preferred Shareholders do not otherwise approve a special resolution with similar effect to the Preferred Shareholder

Arrangement Resolution prior to the Effective Time such that Pembina is the sole holder of the Preferred Shares prior

to the amalgamation contemplated in the Plan of Arrangement. In such circumstances, the Preferred Shares will not

be acquired and will remain outstanding following completion of the Arrangement.

INTERESTS OF EXPERTS

Certain legal matters relating to the Arrangement are to be passed upon by Osler, Hoskin & Harcourt LLP on behalf

of Veresen. As at the date hereof, the partners and associates of Osler, Hoskin & Harcourt LLP beneficially own,

directly or indirectly, less than 1% of the outstanding Common Shares and Preferred Shares.

The Veresen Annual Financial Statements have been incorporated by reference in this Information Circular.

PricewaterhouseCoopers LLP, the auditors of Veresen, has confirmed that it is independent with respect to Veresen

in accordance with the relevant rules and related interpretation prescribed by the Code of Professional Conduct of the

Chartered Professional Accountants of Alberta.

The Pembina Annual Financial Statements have been incorporated by reference in this Information Circular. KPMG

LLP are the auditors of Pembina and have confirmed that they are independent with respect to Pembina within the

meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and

any applicable legislation or regulations and also that they are independent accountants with respect to Pembina under

all relevant U.S. professional and regulatory standards.

Scotia Capital was retained by Veresen to provide the Fairness Opinions. As at the date hereof, Scotia Capital and the

“designated professionals” (as such term is defined in Form 51-102F2) of Scotia Capital owned, directly and

indirectly, in the aggregate, less than 1% of the outstanding Common Shares and Preferred Shares and less than 1%

of the outstanding Pembina Common Shares and Pembina Exchange Shares.

INFORMATION CONCERNING VERESEN INC.

See Appendix J attached to this Information Circular for detailed information concerning Veresen.

INFORMATION CONCERNING PEMBINA PIPELINE CORPORATION

See Appendix K attached to this Information Circular for detailed information concerning Pembina.


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MATTERS TO BE CONSIDERED AT THE MEETINGS

Common Shareholders’ Meeting

At the Common Shareholders’ Meeting, Common Shareholders will be asked to consider the Common Shareholder

Arrangement Resolution in the form set forth in Appendix A of this Information Circular. Common Shareholders are

urged to review this Information Circular when considering the Common Shareholder Arrangement Resolution. In

particular, see, “The Arrangement” and Appendix K – “Information Concerning Pembina Pipeline Corporation”. For

information relating to the impact of the Arrangement on Veresen and Pembina, see “Pro Forma Information of

Pembina after Giving Effect to the Arrangement” and Appendix I – “Pro Forma Consolidated Financial Statements

of Pembina Pipeline Corporation”.

The Common Shareholder Arrangement Resolution must be approved by at least 66⅔% of the votes cast by Common

Shareholders, present in person or by proxy at the Common Shareholders’ Meeting.

Unless otherwise directed, the persons named in the accompanying form of proxy for the Common

Shareholders’ Meeting intend to vote in favour of the Common Shareholder Arrangement Resolution.

It is a condition to the completion of the Arrangement that the Common Shareholder Arrangement Resolution be

approved at the Common Shareholders’ Meeting.

Preferred Shareholders’ Meeting

At the Preferred Shareholders’ Meeting, Preferred Shareholders will be asked to consider the Preferred Shareholder

Arrangement Resolution in the form set forth in Appendix B of this Information Circular. Preferred Shareholders are

urged to review this Information Circular when considering the Preferred Shareholder Arrangement Resolution. In

particular, see “The Arrangement” and Appendix K – “Information Concerning Pembina Pipeline Corporation”. For

information relating to the impact of the Arrangement on Veresen and Pembina, see “Pro Forma Information of

Pembina after Giving Effect to the Arrangement” and Appendix I – “Pro Forma Consolidated Financial Statements

of Pembina Pipeline Corporation”.

The Preferred Shareholder Arrangement Resolution must be approved by at least 66⅔% of the votes cast by Preferred

Shareholders, present in person or by proxy at the Preferred Shareholders’ Meeting, voting as a single class.

Unless otherwise directed, the persons named in the accompanying form of proxy for the Preferred

Shareholders’ Meeting intend to vote in favour of the Preferred Shareholder Arrangement Resolution.

It is not a condition to the completion of the Arrangement that the Preferred Shareholder Arrangement Resolution be

approved at the Preferred Shareholders’ Meeting. However, if the requisite approval of the Preferred Shareholders is

not obtained at the Preferred Shareholders’ Meeting (or any adjournment thereof) and the Preferred Shareholders do

not otherwise approve a special resolution with similar effect to the Preferred Shareholder Arrangement Resolution

prior to the Effective Time such that Pembina is the sole holder of the Preferred Shares prior to the amalgamation

contemplated in the Plan of Arrangement, Veresen will amend the Plan of Arrangement to exclude the Preferred

Shares under the Plan of Arrangement and matters ancillary thereto, the Preferred Shares will not be acquired by

Pembina and will remain outstanding following completion of the Arrangement.

GENERAL PROXY MATTERS

Solicitation of Proxies

This Information Circular is provided in connection with the solicitation of proxies by the management of

Veresen for use at the Meetings and the associated costs thereof will be borne by Veresen. In addition to

solicitation by mail, proxies may be solicited by personal interviews, telephone or other means of communication and

by directors, officers and employees of Veresen (who will not be specifically remunerated therefore). In addition, the


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Arrangement Agreement provides that, if requested by Pembina, acting reasonably, Veresen shall engage a proxy

solicitation agent to solicit proxies in favour of the Common Shareholder Arrangement Resolution and the Preferred

Shareholder Arrangement Resolution, in which case the costs of such agent shall be paid by Pembina.

The Meetings are being called pursuant to the Interim Order of the Court to seek the requisite approval of Common

Shareholders and Preferred Shareholders to the Arrangement in accordance with Section 193 of the ABCA. See “The

Arrangement” and “Matters to be Considered at the Veresen Meetings”.

The information set forth below generally applies to registered holders of Veresen Shares. If you are a beneficial

holder of Veresen Shares (i.e. your Veresen Shares are held through a broker, financial institution or other nominee),

please see “Information for Beneficial Holders” at the front of this Information Circular.

Appointment and Revocation of Proxies

Accompanying this Information Circular is a form of proxy for Common Shareholders and/or a form of proxy for

Preferred Shareholders. The persons named in the enclosed form(s) of proxy are directors and/or officers of Veresen.

A Shareholder has the right to appoint a person (who need not be a Shareholder) other than the persons

designated in the form of proxy provided by Veresen to represent the Shareholder at the Common

Shareholders’ Meeting or the Preferred Shareholders’ Meeting, as the case may be. To exercise this right, the

Shareholder should strike out the names of management designees in the enclosed form of proxy and insert the name

of the desired representative in the blank space provided in the form of proxy or submit another appropriate form of

proxy. In order to be effective, a proxy must be forwarded so as to reach, or be deposited with Computershare Trust

Company of Canada at: (i) by mail using the enclosed return envelope or one addressed to Computershare Trust

Company of Canada, Proxy Department, 135 West Beaver Creek, P.O. Box 300, Richmond Hill, Ontario, L4B 4R5;

(ii) by hand delivery to Computershare Trust Company of Canada, 9th Floor, 100 University Avenue, Toronto,

Ontario, M5J 2Y1; or (iii) by facsimile to (416) 263-9524 or 1-866-249-7775, no later than: (a) 10:00 a.m. (Calgary

time) on July 7, 2017 (in the case of proxies for Common Shareholders), (b) 11:00 a.m. (Calgary time) on July 7, 2017

(in the case of proxies for Preferred Shareholders) or, (c) if the Common Shareholders’ Meeting or Preferred

Shareholders’ Meeting is adjourned, forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in

Alberta) before the beginning of any adjournment of such meeting. The time limit for the deposit of proxies may be

waived or extended by the Chairman of the applicable Meeting at his discretion without notice. The proxy shall be in

writing and executed by the Shareholder or such Shareholder’s attorney authorized in writing, or if such Shareholder

is a corporation, under its corporate seal or by a duly authorized officer or attorney.

In addition to revocation in any other manner permitted by law, a Shareholder may revoke a proxy: (a) by instrument

in writing executed by the Shareholder or such Shareholder’s attorney authorized in writing or if the Shareholder is a

corporation, under its corporate seal or by an officer or attorney thereof, duly authorized, indicating the capacity under

while such officer or attorney is signing and deposited with Computershare Trust Company of Canada, the transfer

agent of Veresen, at the office designated in the Notice of Common Shareholders’ Meeting or Notice of Preferred

Shareholders’ Meeting not later than 5:00 p.m. (Calgary time), on the Business Day preceding the day of the Meetings,

(or any adjournment or postponement thereof) or with the Chair on the day of the Meetings, as applicable, (or any

adjournment or postponement thereof); (b) by a duly executed and deposited proxy as provided herein bearing a later

date or time than the date or time of the proxy being revoked; or (c) as permitted by law.

Proxy Voting

The Common Shares represented by an effective proxy will be voted in accordance with the instructions specified

therein. Where no choice is specified, the Common Shares will be voted FOR the approval of the Common

Shareholder Arrangement Resolution. In respect of any other matters other than the Common Shareholder

Arrangement Resolution to be considered at the Common Shareholders’ Meeting, where no choice is specified,

the Common Shares will be voted for in favour of each matter identified in the accompanying Notice of Meeting

to Common Shareholders. The enclosed applicable form of proxy confers discretionary authority in respect of

amendments or variations to matters identified in the Notice of Meeting to Common Shareholders and with respect to

other matters which may properly come before the Meetings or any adjournment thereof. As of the date hereof,

management of Veresen knows of no amendments, variations or other matters to come before the Common


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Shareholders’ Meeting; however, if any other matter properly comes before the Common Shareholders’ Meeting, the

accompanying applicable form of proxy will be voted on such matter in accordance with the best judgment of the

person(s) voting the proxies.

The Preferred Shares represented by an effective proxy will be voted in accordance with the instructions specified

therein. Where no choice is specified, the Preferred Shares will be voted FOR the approval of the Preferred

Shareholder Arrangement Resolution. In respect of any other matters other than the Preferred Shareholder

Arrangement Resolution to be considered at the Preferred Shareholders’ Meeting, where no choice is specified,

the Preferred Shares will be voted for in favour of each matter identified in the accompanying Notice of Meeting

to Preferred Shareholders. The enclosed applicable form of proxy confers discretionary authority in respect of

amendments or variations to matters identified in the Notice of Meeting to Preferred Shareholders and with respect to

other matters which may properly come before the Preferred Shareholders’ Meeting or any adjournment thereof. As

of the date hereof, management of Veresen knows of no amendments, variations or other matters to come before the

Preferred Shareholders’ Meeting; however, if any other matter properly comes before the Preferred Shareholders’

Meeting, the accompanying applicable form of proxy will be voted on such matter in accordance with the best

judgment of the person(s) voting the proxies.

General

Veresen is not using “notice-and-access” to send its proxy-related materials to the Shareholders, and paper copies of

such materials will be sent to all Shareholders. Veresen will be delivering proxy-related materials directly to non-

objecting Beneficial Holders with the assistance of Broadridge and intends to pay for intermediaries to deliver proxy-

related materials to objecting Beneficial Holders.

Voting Securities of Veresen and Principal Holders thereof

As at June 5, 2017, there were 313,652,781 Common Shares issued and outstanding. Each Common Share entitles the

holder thereof to one vote per share at the Common Shareholders’ Meeting.

As at June 5, 2017, there were 8,000,000 Veresen Series A Shares, 6,000,000 Veresen Series C Shares, 8,000,000

Veresen Series E Shares and no Veresen Series B Shares, Veresen Series D Shares or Veresen Series F Shares issued

and outstanding. Each Preferred Share entitles the holder thereof to one vote per share at the Preferred Shareholders’

Meeting.

The record date for determination of Common Shareholders and Preferred Shareholders entitled to receive notice of

and to vote at the Common Shareholders’ Meeting and the Preferred Shareholders’ Meeting, respectively, is the close

of business on May 23, 2017. Veresen will prepare, as of the Record Date, a list of Common Shareholders entitled to

receive the Notice of the Common Shareholders’ Meeting, showing the number of Common Shares held by each such

Common Shareholder, and a list of Preferred Shareholders entitled to receive the Notice of the Preferred Shareholders’

Meeting, showing the number of Preferred Shares held by each such Preferred Shareholder. Common Shareholders

and Preferred Shareholders whose names have been entered in the register of holders of Common Shares or the register

of holders of Preferred Shares, respectively, on the close of business on the Record Date will be entitled to receive

notice of and to vote the Common Shares or Preferred Shares shown opposite such Common Shareholder’s or

Preferred Shareholder’s name at the Common Shareholders’ Meeting or the Preferred Shareholders’ Meeting,

respectively; provided that, to the extent that a Common Shareholder or a Preferred Shareholder transfers ownership

of any Common Shares or Preferred Shares after the Record Date and the transferee of those Common Shares or

Preferred Shares, as the case may be, establishes ownership of such Common Shares or Preferred Shares and demands,

not later than ten (10) days before the Meetings, to be included in the list of Common Shareholders eligible to vote at

the Common Shareholders’ Meeting or the list of Preferred Shareholders eligible to vote at the Preferred Shareholders’

Meeting, as the case may be, such transferee will be entitled to vote such Common Shares or Preferred Shares at the

Common Shareholders’ Meeting or the Preferred Shareholders’ Meeting, respectively.


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To the knowledge of the directors and officers of Veresen, as of the date hereof, no person or company beneficially

owns, or exercises control or direction over, directly or indirectly, more than 10% of the voting rights attached to all

of the outstanding Common Shares or Preferred Shares.

Procedure and Votes Required

Pursuant to the Interim Order:

(a) each Common Share entitled to vote at the Common Shareholders’ Meeting will entitle the holder

to one vote at the Common Shareholders’ Meeting in respect of the Common Shareholder

Arrangement Resolution;

(b) each Preferred Share entitled to vote at the Preferred Shareholders’ Meeting will entitle the holder

to one vote at the Preferred Shareholders’ Meeting in respect of the Preferred Shareholder

Arrangement Resolution;

(c) the number of votes required to pass the Common Shareholder Arrangement Resolution shall be not

less than 66⅔% of the votes cast by Common Shareholders, present in person or by proxy, voting

at the Common Shareholders’ Meeting;

(d) the number of votes required to pass the Preferred Shareholder Arrangement Resolution shall be not

less than 66⅔% of the votes cast by Preferred Shareholders, present in person or by proxy, voting

as a single class at the Preferred Shareholders’ Meeting;

(e) the quorum required at the Common Shareholders’ Meeting will be two Common Shareholders

present in person, or represented by proxy, at the opening of the Common Shareholders’ Meeting,

and holding or representing at least 25% of the Common Shares entitled to be voted at the Common

Shareholders’ Meeting; and

(f) the quorum required at the Preferred Shareholders’ Meeting will be two Preferred Shareholders

present in person, or represented by proxy, at the opening of the Preferred Shareholders’ Meeting,

and holding or representing at least 25% of the Preferred Shares entitled to be voted at the Preferred


Notwithstanding the foregoing, the Common Shareholder Arrangement Resolution and the Preferred Shareholder

Arrangement Resolution each authorizes the Board, without further notice to or approval of the Common Shareholders

or Preferred Shareholders, subject to the terms of the Plan of Arrangement, the Arrangement Agreement and the

Interim Order, to amend the Plan of Arrangement or the Arrangement Agreement or to decide not to proceed with the

Arrangement at any time prior to the Arrangement becoming effective pursuant to the provisions of the ABCA. See

Appendix A to this Information Circular for the full text of the Common Shareholder Arrangement Resolution and

Appendix B to this Information Circular for the full text of the Preferred Shareholder Arrangement Resolution.

QUESTIONS AND OTHER ASSISTANCE

If you are a Shareholder and you have any questions about the information contained in this Information Circular or

require assistance in completing your form of proxy, Common Shareholder Letter of Transmittal and Election Form

or Preferred Shareholder Letter of Transmittal, please contact your financial, legal, tax or other professional advisors

or Kingsdale.


A-1

APPENDIX A

VERESEN INC.

COMMON SHAREHOLDER ARRANGEMENT RESOLUTION

“BE IT RESOLVED, AS A SPECIAL RESOLUTION, THAT:

1. The arrangement (the “Arrangement”) under section 193 of the Business Corporations Act (Alberta) (the

“ABCA”) involving Veresen Inc. (the “Company”), as more particularly described and set forth in the

management proxy circular (the “Circular”) of the Company accompanying the notice of this meeting, as

the Arrangement may be modified or amended in accordance with its terms, is hereby authorized, approved

and adopted.

2. The plan of arrangement (the “Plan of Arrangement”) involving the Company, the full text of which is set

out as Appendix D to the Circular, as the Plan of Arrangement may be modified or amended in accordance

with its terms, is hereby authorized, approved and adopted.

3. The Arrangement Agreement made as of May 1, 2017 between Pembina Pipeline Corporation and the

Company (the “Arrangement Agreement”), the actions of the directors of the Company in approving the

Arrangement Agreement and the actions of the directors and officers of the Company in executing and

delivering the Arrangement Agreement and any amendments thereto in accordance with its terms are hereby

ratified and approved.

4. Notwithstanding that this resolution has been passed (and the Plan of Arrangement adopted) by the Common

Shareholders (as defined in the Arrangement Agreement) or that the Arrangement has been approved by the

Court of Queen’s Bench of Alberta, the directors of the Company are hereby authorized and empowered,

without further notice to or approval of the Common Shareholders (i) to amend the Arrangement Agreement

or the Plan of Arrangement, to the extent permitted by the Arrangement Agreement or the Plan of

Arrangement, and (ii) subject to the terms of the Arrangement Agreement, to disregard the Common

Shareholders’ approval and not proceed with the Arrangement.

5. Any one director or officer of the Company be and is hereby authorized and directed for and on behalf of the

Company to execute, under the corporate seal of the Company or otherwise, and to deliver to the Registrar

under the ABCA for filing articles of arrangement and such other documents as are necessary or desirable to

give effect to the Arrangement and the Plan of Arrangement in accordance with the Arrangement Agreement.


Company to execute or cause to be executed, under the corporate seal of the Company or otherwise, and to

deliver or cause to be delivered, all such other documents and instruments and to perform or cause to be

performed all such other acts and things as in such person’s opinion may be necessary or desirable to give

full effect to the foregoing resolutions and the matters authorized thereby, such determination to be

conclusively evidenced by the execution and delivery of such document, agreement or instrument or the

doing of any such act or thing.”

B-1

APPENDIX B

VERESEN INC.

PREFERRED SHAREHOLDER ARRANGEMENT RESOLUTION

“BE IT RESOLVED, AS A SPECIAL RESOLUTION, THAT:

1. The arrangement (the “Arrangement”) under section 193 of the Business Corporations Act (Alberta) (the

“ABCA”) involving Veresen Inc. (the “Company”), as more particularly described and set forth in the

management proxy circular (the “Circular”) of the Company accompanying the notice of this meeting, as

the Arrangement may be modified or amended in accordance with its terms, is hereby authorized, approved

and adopted.

2. The plan of arrangement (the “Plan of Arrangement”) involving the Company, the full text of which is set

out as Appendix D to the Circular, as the Plan of Arrangement may be modified or amended in accordance

with its terms, is hereby authorized, approved and adopted.

3. The Arrangement Agreement made as of May 1, 2017 between Pembina Pipeline Corporation and the

Company (the “Arrangement Agreement”), the actions of the directors of the Company in approving the

Arrangement Agreement and the actions of the directors and officers of the Company in executing and

delivering the Arrangement Agreement and any amendments thereto in accordance with its terms are hereby

ratified and approved.

4. Notwithstanding that this resolution has been passed (and the Plan of Arrangement adopted) by the Preferred

Shareholders (as defined in the Arrangement Agreement) or that the Arrangement has been approved by the

Court of Queen’s Bench of Alberta, the directors of the Company are hereby authorized and empowered,

without further notice to or approval of the Preferred Shareholders (i) to amend the Arrangement Agreement

or the Plan of Arrangement, to the extent permitted by the Arrangement Agreement or the Plan of

Arrangement, and (ii) subject to the terms of the Arrangement Agreement, to disregard the Preferred

Shareholders’ approval and not proceed with the Arrangement.


Company to execute, under the corporate seal of the Company or otherwise, and to deliver to the Registrar

under the ABCA for filing articles of arrangement and such other documents as are necessary or desirable to

give effect to the Arrangement and the Plan of Arrangement in accordance with the Arrangement Agreement.


Company to execute or cause to be executed, under the corporate seal of the Company or otherwise, and to

deliver or cause to be delivered, all such other documents and instruments and to perform or cause to be

performed all such other acts and things as in such person’s opinion may be necessary or desirable to give

full effect to the foregoing resolutions and the matters authorized thereby, such determination to be

conclusively evidenced by the execution and delivery of such document, agreement or instrument or the

doing of any such act or thing.”

C-1

APPENDIX C

ARRANGEMENT AGREEMENT


Between


and

VERESEN INC.

May 1, 2017

C-2

Table of Contents

Page

i

ARTICLE I INTERPRETATION ................................................................................................................ 1

1.1 Definitions .......................................................................................................................... 1

1.2 Interpretation Not Affected by Headings .......................................................................... 13

1.3 Article References ............................................................................................................. 13

1.4 Number and Gender .......................................................................................................... 13

1.5 Date for Any Action ......................................................................................................... 14

1.6 Currency............................................................................................................................ 14

1.7 Schedules .......................................................................................................................... 14

1.8 Accounting Matters ........................................................................................................... 14

1.9 Knowledge ........................................................................................................................ 14

1.10 Veresen Significant Entities .............................................................................................. 14

1.11 Other Definitional and Interpretive Provisions ................................................................. 15

ARTICLE II THE ARRANGEMENT ........................................................................................................ 15

2.1 The Arrangement .............................................................................................................. 15

2.2 Veresen Approval ............................................................................................................. 16

2.3 Obligations of Pembina .................................................................................................... 16

2.4 Obligations of Veresen ..................................................................................................... 17

2.5 Interim Order .................................................................................................................... 18

2.6 Conduct of Meeting .......................................................................................................... 19

2.7 Court Proceedings ............................................................................................................. 20

2.8 Board of Directors of Pembina ......................................................................................... 20

2.9 Veresen LTI Plans and Veresen Employment Agreements .............................................. 20

2.10 Effective Date ................................................................................................................... 21

2.11 Veresen Dividend ............................................................................................................. 21

2.12 Tax Matters ....................................................................................................................... 21

2.13 Shareholder Communications ........................................................................................... 22

2.14 U.S. Securities Laws ......................................................................................................... 22

ARTICLE III REPRESENTATIONS AND WARRANTIES OF PEMBINA ........................................... 22

3.1 Representations and Warranties ........................................................................................ 22

3.2 Investigation...................................................................................................................... 22

3.3 Survival of Representations and Warranties ..................................................................... 23

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF VERESEN ........................................... 23

4.1 Representations and Warranties ........................................................................................ 23

4.2 Investigation...................................................................................................................... 23

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Table of Contents (continued)

Page

ii

4.3 Survival of Representations and Warranties ..................................................................... 23

ARTICLE V COVENANTS ....................................................................................................................... 23

5.1 Covenants of Pembina ...................................................................................................... 23

5.2 Covenants of Veresen ....................................................................................................... 25

5.3 Mutual Covenants ............................................................................................................. 30

5.4 Pre-Arrangement Reorganizations .................................................................................... 32

5.5 Financing Assistance ........................................................................................................ 33

5.6 Payment on Postponement of Outside Date ...................................................................... 34

ARTICLE VI CONDITIONS ..................................................................................................................... 34

6.1 Mutual Conditions ............................................................................................................ 34

6.2 Pembina Conditions .......................................................................................................... 36

6.3 Veresen Conditions ........................................................................................................... 36

6.4 Notice and Cure Provisions .............................................................................................. 37

6.5 Merger of Conditions ........................................................................................................ 38

ARTICLE VII ADDITIONAL AGREEMENTS........................................................................................ 38

7.1 Veresen Covenant Regarding Non-Solicitation ................................................................ 38

7.2 Agreement as to Pembina Damages ................................................................................. 41

7.3 Fees and Expenses and Other Agreements as to Damages ............................................... 42

7.4 Liquidated Damages ......................................................................................................... 43

7.5 Access to Information; Confidentiality ............................................................................. 43

7.6 Insurance and Indemnification .......................................................................................... 44

7.7 Privacy Issues ................................................................................................................... 44

ARTICLE VIII TERM, TERMINATION, AMENDMENT AND WAIVER ............................................ 46

8.1 Termination ....................................................................................................................... 46

8.2 Effect of Termination ........................................................................................................ 47

8.3 Amendment ....................................................................................................................... 47

8.4 Waiver ............................................................................................................................... 47

ARTICLE IX GENERAL PROVISIONS .................................................................................................. 47

9.1 Notices .............................................................................................................................. 47

9.2 Entire Agreement; Binding Effect .................................................................................... 49

9.3 Assignment ....................................................................................................................... 49

9.4 Time of Essence ................................................................................................................ 49

9.5 Further Assurances ........................................................................................................... 49

9.6 Specific Performance ........................................................................................................ 49

C-4

Table of Contents (continued)

Page

iii

9.7 Third Party Beneficiaries .................................................................................................. 49

9.8 Governing Law ................................................................................................................. 50

9.9 Severability ....................................................................................................................... 50

9.10 Counterparts ...................................................................................................................... 50

C-5


THIS ARRANGEMENT AGREEMENT is dated May 1, 2017 between:

PEMBINA PIPELINE CORPORATION, a corporation existing under

the laws of Alberta with its head office in the City of Calgary, in the

Province of Alberta ("Pembina")

- and -

VERESEN INC., a corporation existing under the laws of Alberta with

its head office in the City of Calgary, in the Province of Alberta

("Veresen")

WHEREAS the board of directors of each of Pembina and Veresen has determined that it would

be in the best interests of its corporation to complete a transaction involving a business combination of

Pembina and Veresen through an acquisition by Pembina of all the issued and outstanding common

shares and preferred shares of Veresen;

AND WHEREAS Pembina and Veresen wish to carry out the transactions contemplated hereby

by way of a plan of arrangement of Veresen under the provisions of the Business Corporations Act

(Alberta);

AND WHEREAS upon the effectiveness of the Arrangement, holders of common shares of

Veresen will receive, at their election, common shares of Pembina or a cash payment, and holders of

preferred shares of Veresen, if such holders approve the Arrangement, will receive preferred shares of

Pembina all on the terms set out herein;

AND WHEREAS the Parties have entered into this Agreement to provide for the matters

referred to in the foregoing recitals and for other matters related to the transactions herein provided for;

NOW THEREFORE THIS AGREEMENT WITNESSES THAT IN CONSIDERATION of

the covenants and agreements herein contained and other good and valuable consideration (the receipt and

sufficiency of which are hereby acknowledged), the Parties covenant and agree as follows:

ARTICLE I

INTERPRETATION

1.1 Definitions

In this Agreement, unless the context otherwise requires:

"ABCA" means the Business Corporations Act, R.S.A. 1985, c. B-9, as amended, including the

regulations promulgated therefore;

"Acquisition Proposal" means any inquiry or the making of any proposal to Veresen or the

Veresen Common Shareholders from any Person or group of Persons "acting jointly or in concert" (within

the meaning of NI 62-104) which constitutes, or may reasonably be expected to lead to (in either case

whether in one transaction or a series of transactions): (a) an acquisition or purchase from Veresen or the

Veresen Common Shareholders of 20% or more of the voting securities of Veresen or its Subsidiaries; (b)

any acquisition of a substantial amount of assets (or any lease, long term supply agreement or other

arrangement having the same economic effect as a purchase or sale of a substantial amount of assets) of

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Veresen and its Subsidiaries taken as a whole; (c) an amalgamation, arrangement, merger, business

combination, or consolidation involving Veresen or its Subsidiaries; (d) any take-over bid, issuer bid,

exchange offer, recapitalization, liquidation, dissolution, reorganization or similar transaction involving

Veresen or its Subsidiaries; or (e) any other transaction, the consummation of which would or could

reasonably be expected to impede, interfere with, prevent or delay the transactions contemplated by this

Agreement or the Arrangement or which would or could reasonably be expected to materially reduce the

benefits to Pembina under this Agreement or the Arrangement, provided, however, that the transactions

relating to the Veresen Power Business Sale, in all material respects on the terms and conditions as

disclosed to Pembina in writing by Veresen prior to the date hereof, shall not constitute an "Acquisition

Proposal";

"affiliate" has the meaning set forth in the Securities Act (Alberta);

"Agreement", "herein", "hereof", "hereto", "hereunder" and similar expressions mean and

refer to this Arrangement Agreement (including the schedules hereto) as supplemented, modified or

amended, and not to any particular article, section, schedule or other portion hereof;

"Arrangement" means the arrangement pursuant to Section 193 of the ABCA, all on the terms

and conditions set forth in the Plan of Arrangement, subject to any amendments or variations thereto

made in accordance with the provisions of the Plan of Arrangement or made at the direction of the Court;

"Arrangement Resolution" means a special resolution of the Veresen Common Shareholders in

respect of the Arrangement to be considered at the Veresen Shareholders' Meeting, substantially in the

form of Schedule B-1 hereto;

"Articles of Arrangement" means the articles of arrangement of Veresen in respect of the

Arrangement required under subsection 193(10) of the ABCA to be filed with the Registrar after the Final

Order has been granted, giving effect to the Arrangement;

"associate" has the meaning set forth in the Securities Act (Alberta);

"business day" means any day, other than a Saturday, a Sunday or a statutory holiday, in the

Province of Alberta;

"Canadian Securities Administrators" means the securities commission or other securities

regulatory authority of each province and territory of Canada;

"Canadian Securities Laws" means the securities legislation or ordinance and regulations

thereunder of each province and territory of Canada and the rules, instruments, policies and orders of each

Canadian Securities Administrator made thereunder;

"Certificate" means the certificate or proof of filing to be issued by the Registrar pursuant to

subsection 193(11) or 193(12) of the ABCA in respect of the Articles of Arrangement giving effect to the

Arrangement;

"Commissioner" means the Commissioner of Competition appointed under subsection 7(1) of

the Competition Act, or his designee;

"Competition Act" means the Competition Act, R.S.C. 1985, c. C-34, as amended;

"Competition Act Approval" means, in respect of the Arrangement, the occurrence of one of the

following: (i) the receipt of an advance ruling certificate under subsection 102(1) of the Competition Act

in respect of the Arrangement; or (ii) (a) the applicable waiting period under subsection 123(1) of the

Competition Act, and any extension thereof, shall have expired or shall have been terminated under

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subsection 123(2) of the Competition Act, or the obligation to submit a notification under Part IX of the

Competition Act shall have been waived by the Commissioner pursuant to paragraph 113(c) of the

Competition Act and (b) unless such requirement is waived in writing by Pembina in its sole discretion,

the Commissioner shall have advised the Parties in writing that the Commissioner does not, at that time,

intend to make an application under section 92 of the Competition Act and such advice shall remain in

full force and effect;

"Confidentiality Agreement" means the Confidentiality Agreement dated April 14, 2017

between Pembina and Veresen;

"Court" means the Court of Queen's Bench of Alberta;

"CT Act" means the Canada Transportation Act, R.S.C. 1996, C. 10, as amended;

"CTA Approval" means the occurrence of one of the following: (i) Pembina shall have received

a notice from the Minister of Transport pursuant to subsection 53.1(4) of the CT Act that the Minister of

Transport is of the opinion that the Arrangement contemplated by this Agreement does not raise issues

with respect to the public interest as it relates to national transportation, in accordance with subsection

53.1(4) of the CT Act; or (ii) the Arrangement contemplated by this Agreement shall have been approved

by the Governor in Council in accordance with subsections 53.2(7) of the CT Act, and in either case the

completion of the Arrangement contemplated by this Agreement shall not be prohibited under subsection

53.2(1) of the CT Act;

"deliberate" breach of any representation, warranty or covenant by Pembina or Veresen means

that, as applicable, an executive officer of Pembina or Veresen (a) had actual knowledge that a

representation or warranty of the Party to which he served as an executive officer was false when made,

or (b) as to a covenant herein, directed or allowed Pembina or Veresen, each as applicable, to take an

action, fail to take an action or permit an action to be taken or occur that he knew at such time constituted

a breach of a covenant herein by such Party;

"Dissent Rights" means the rights of dissent provided for in Article 4 of the Plan of

Arrangement;

"Effective Date" means the effective date of the Arrangement, being the date shown on the

Certificate;

"Effective Time" means 12:01 a.m. (Calgary time) on the Effective Date or such other time on

the Effective Date as may be agreed to in writing by Pembina and Veresen;

"Encumbrance" includes any mortgage, pledge, assignment, charge, lien, security interest,

adverse interest in property, other third party interest or encumbrance of any kind whether contingent or

absolute, and any agreement, option, right or privilege (whether by Law, contract or otherwise) capable of

becoming any of the foregoing;

"Environmental Laws" means, with respect to any Person or its business, activities, property,

assets or undertaking, all Laws, including the common law, relating to environmental or health and safety

matters in the jurisdictions applicable to such Person or its business, activities, property, assets or

undertaking, including, without limitation, legislation governing the reduction of greenhouse gas

emissions and the use, transportation, storage and release of Hazardous Substances;

"ERISA" means the United States Employee Retirement Income Security Act of 1974, as

amended, or any successor thereto;

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"ERISA Affiliate" means, with respect to Veresen or any of its Subsidiaries (other than the

Veresen Significant Entities), any other entity, trade or business that together with Veresen or any of its

Subsidiaries (other than the Veresen Significant Entities) is, was at the relevant time or would be treated

as a single employer under Section 414 of the U.S. Tax Code or Section 4001 of ERISA;

"Exchanges" means the TSX and, with respect to Pembina, also includes the NYSE;

"Final Order" means the final order of the Court approving the Arrangement pursuant to

subsection 193(9)(a) of the ABCA, as such order may be amended at any time prior to the Effective Date

or, if appealed, then unless such appeal is withdrawn or denied, as affirmed;

"Governmental Entity" means any: (a) multinational, federal, provincial, territory, state,

regional, municipal, local or other government or any governmental or public department, court, tribunal,

arbitral body, commission, board, bureau or agency; (b) subdivision, agent, commission, board or

authority of any of the foregoing; (c) quasi-governmental or private body exercising any regulatory,

expropriation or taxing authority under or for the account of any of the foregoing; or (d) the Exchanges,

as applicable;

"Hazardous Substances" means any waste or other substance that is prohibited, listed, defined,

designated or classified as dangerous, hazardous, radioactive, explosive or toxic or a pollutant or a

contaminant under or pursuant to any applicable Environmental Laws, and specifically including

hydraulic fracturing fluids, chemicals and proppants, as well as petroleum and all derivatives thereof or

synthetic substitutes therefor;

"HSR Act" means the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as

amended;

"HSR Approval" means the applicable waiting period (and any extension thereof) in respect of

the Arrangement under the HSR Act shall have expired or been earlier terminated;

"IFRS" means International Financial Reporting Standards as incorporated in the Handbook of

the Canadian Institute of Chartered Accountants, at the relevant time applied on a consistent basis;

"Interim Order" means the interim order of the Court under subsection 193(4) of the ABCA, as

the same may be amended, containing declarations and directions in respect of the notice to be given and

the conduct of the Veresen Shareholders' Meeting with respect to the Arrangement as more fully set out

herein;

"Investment Canada Act" means the Investment Canada Act, R.S.C. 1985, c. 28 (1st Supp.), as

amended;

"IRS" means the United States Internal Revenue Service;

"Laws" means all laws, by-laws, statutes, rules, regulations, principles of law, orders, ordinances,

protocols, codes, guidelines, policies, notices, directions and judgments or other requirements and the

terms and conditions of any grant of approval, permission, authority or license of any Governmental

Entity (including any of the Exchanges) or self-regulatory authority and the term "applicable" with

respect to such Laws and in a context that refers to one or more Persons, means such Laws as are

applicable to such Persons or its business, undertaking, property or securities and emanate from a Person

having jurisdiction over the Person or Persons or its or their business, undertaking, property or securities;

and "Laws" includes Environmental Laws;

"Material Adverse Change" or "Material Adverse Effect" means, with respect to any Person,

any fact or state of facts, circumstance, change, effect, occurrence or event which:

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(a) either individually is or in the aggregate are, or individually or in the aggregate would

reasonably be expected to be, material and adverse to the business, operations, results of

operations, properties, assets, liabilities, obligations (whether absolute, accrued,

conditional or otherwise) or condition (financial or otherwise) of such Person and its

Subsidiaries, taken as a whole, except to the extent of any fact or state of facts,

circumstance, change, effect, occurrence or event resulting from or arising in connection

with: (i) any matter or prospective matter which has, at or prior to the date hereof, been

publicly disclosed by such Person or has been disclosed in writing to the other Party as at

or prior to the date hereof or the failure of such Party to meet any internal or published

projections, forecasts, estimates or predictions in respect of revenues, earnings or other

financial or operating metrics before, on or after the date of this Agreement; (ii) any

change in IFRS or U.S. GAAP or changes in regulatory accounting requirements

applicable to the oil, natural gas (including liquefied natural gas) and natural gas liquids

transportation, storage, processing, terminalling and fractionation or other midstream

business (the "Relevant Business") as a whole; (iii) conditions affecting the Relevant

Business as a whole, including changes in Laws (including Tax Laws); (iv) any change in

global, national or regional political conditions (including the outbreak of war or acts of

terrorism) or in general economic, business, regulatory, or market conditions or in

national or global financial or capital markets or commodity markets; (v) any natural

disaster; (vi) any changes in the trading price or trading volumes of the Pembina Shares

or Veresen Common Shares, as applicable, or any credit rating downgrade, negative

outlook, watch or similar event relating to Pembina or Veresen, as applicable (provided,

however, that the causes underlying such changes may be considered to determine

whether such causes constitute a Material Adverse Change or Material Adverse Effect);

(vii) any actions taken (or omitted to be taken) at the written request or with the prior

written consent of the other Party hereto; (viii) the announcement of this Agreement or

any action taken by the Person or any of its Subsidiaries that is required pursuant to this

Agreement (including any steps taken pursuant to Section 5.3 to obtain any required

regulatory approvals but excluding any obligation to act in the ordinary course of

business); or (ix) the failure by Veresen to complete the Veresen Power Business Sale;

provided, however, that with respect to paragraphs (ii), (iii), (iv) and (v) such matter does

not have a materially disproportionate effect on the Person and its Subsidiaries, taken as a

whole, relative to comparable entities operating in the Relevant Business, in which case,

the relevant exclusion from this definition of "Material Adverse Change" or "Material

Adverse Effect" referred to in paragraphs (ii), (iii), (iv) and (v) above would not apply,

and references in certain sections of this Agreement to dollar amounts are not intended to

be, and shall not be deemed to be, illustrative or interpretative for purposes of

determining whether a "Material Adverse Change" or a "Material Adverse Effect" has

occurred; or

(b) either individually or in the aggregate prevents or materially delays, or individually or in

the aggregate would reasonably be expected to prevent or materially delay, the Person

from performing its material obligations under this Agreement in any material respect;

"Maximum Cash Consideration" means $1,522,500,000;

"Maximum Share Consideration" means 99,500,000 Pembina Shares;

"MI 61-101" means Multilateral Instrument 61-101 – Protection of Minority Security Holders in

Special Transactions;

"Money Laundering Laws" has the meaning ascribed thereto in paragraph (bb) of Schedule C;

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"NI 62-104" means National Instrument 62-104 – Take-Over Bids and Issuer Bids;

"NYSE" means the New York Stock Exchange;

"OFAC" has the meaning ascribed thereto in paragraph (bb) of Schedule C;

"Outside Date" means October 31, 2017, subject to the right of Pembina to postpone the Outside

Date for up to an additional two months if a Required Regulatory Approval has not been obtained, by

giving written notice to Veresen to such effect no later than 5:00 p.m. (Calgary Time) on the date that is

not less than five days prior to the original Outside Date (and any subsequent Outside Date), or such later

date as may be agreed to in writing by the Parties, provided that, notwithstanding the foregoing, Pembina

shall not be permitted to postpone the Outside Date if the failure to obtain a Required Regulatory

Approval is primarily the result of Pembina's failure to comply with its covenants herein;

"Parties" means Pembina and Veresen, and "Party" means either one of them;

"Pembina Class A Preferred Shares" means the class A preferred shares of Pembina;

"Pembina Class B Preferred Shares" means class B preferred shares of Pembina, issuable in

series;

"Pembina Convertible Debentures" means the 5.75% convertible unsecured subordinated

debentures of Pembina maturing December 31, 2018 issued by Provident Energy Ltd. on April 29, 2011

and assumed by Pembina in April 2012;

"Pembina Damages Event" has the meaning ascribed thereto in Section 7.2;

"Pembina Exchange Preferred Shares" means the Pembina Series A Exchange Shares, the

Pembina Series B Exchange Shares, the Pembina Series C Exchange Shares, the Pembina Series D

Exchange Shares, the Pembina Series E Exchange Shares and the Pembina Series F Exchange Shares, as

constituted on the Effective Date;

"Pembina Information" has the meaning ascribed thereto in Section 2.3;

"Pembina Options" means options to purchase Pembina Shares granted pursuant to Pembina's

stock option plan dated May 26, 2011, as amended;

"Pembina Preferred Shares" means, collectively, the Pembina Class A Preferred Shares and the

Pembina Class B Preferred Shares;

"Pembina Series 1 Shares" means the cumulative redeemable rate reset Class A Preferred

Shares, Series 1 in the capital of Pembina;

"Pembina Series 2 Shares" means the cumulative redeemable floating rate Class A Preferred








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"Pembina Series 11 Shares" means the cumulative redeemable minimum rate reset Class A

Preferred Shares, Series 11 in the capital of Pembina;



"Pembina Series 13 Shares" means the cumulative redeemable minimum rate reset Class A

Preferred Shares, Series 13 in the capital of Pembina;



"Pembina Series A Exchange Shares" means a series of cumulative redeemable rate reset Class

A Preferred Shares in the capital of Pembina, such shares having identical terms to the Veresen Series A

Shares except that the issuer thereof shall be Pembina and they will be convertible into Pembina Series B

Exchange Shares instead of Veresen Series B Shares;

"Pembina Series B Exchange Shares" means a series of cumulative redeemable floating rate

Class A Preferred Shares in the capital of Pembina, such shares having identical terms to the Veresen

Series B Shares except that the issuer thereof shall be Pembina and they will be convertible into Pembina

Series A Exchange Shares instead of Veresen Series A Shares;

"Pembina Series C Exchange Shares" means a series of cumulative redeemable rate reset Class

A Preferred Shares in the capital of Pembina, such shares having identical terms to the Veresen Series C

Shares except that the issuer thereof shall be Pembina and they will be convertible into Pembina Series D

Exchange Shares instead of Veresen Series D Shares;

"Pembina Series D Exchange Shares" means a series of cumulative redeemable floating rate


Series D Shares except that the issuer thereof shall be Pembina and they will be convertible into Pembina

Series C Exchange Shares instead of Veresen Series C Shares;

"Pembina Series E Exchange Shares" means a series of cumulative redeemable rate reset Class

A Preferred Shares in the capital of Pembina, such shares having identical terms to the Veresen Series E

Shares except that the issuer thereof shall be Pembina and they will be convertible into Pembina Series F

Exchange Shares instead of Veresen Series F Shares;

"Pembina Series F Exchange Shares" means a series of cumulative redeemable floating rate


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Series F Shares except that the issuer thereof shall be Pembina and they will be convertible into Pembina

Series E Exchange Shares instead of Veresen Series E Shares;

"Pembina Shareholder Rights Plan" means Pembina's shareholder rights plan dated May 13,

2016;

"Pembina Shareholders" means the holders of Pembina Shares;

"Pembina Shares" means the common shares in the capital of Pembina;

"Permitted Encumbrances" means (a) Encumbrances specifically disclosed in writing to the

other Party prior to the date hereof; (b) easements, rights of way, servitudes or other similar rights,

including, without limitation, rights of way for highways, railways, sewers, drains, gas or oil pipelines,

gas or water mains, electric light, power, telephone or cable television towers, poles, wires and similar

rights in real property or any interest therein, provided the same are registered on title and not of such

nature as to materially adversely affect the use of the property subject thereto; (c) the regulations and any

rights reserved to or vested in any municipality or governmental, statutory or public authority to levy

taxes or to control or regulate any Party's or any of its Subsidiaries' interests in any manner;

(d) undetermined or inchoate liens incurred or created in the ordinary course of business as security for a

Party's or any of its Subsidiaries' share of the costs and expenses of the development or operation of any

of its assets, which costs and expenses are not delinquent as of the Effective Time; (e) undetermined or

inchoate mechanics' liens and similar liens for which payment for services rendered or goods supplied is

not delinquent as of the Effective Time; (f) liens granted in the ordinary course of business to a

Governmental Entity respecting operations pertaining to petroleum and natural gas rights; (g) liens for

taxes, assessments and governmental charges that are not due and payable or delinquent; and (h) any

encumbrances under a Party's or any of its Subsidiaries' existing credit facilities or other borrowing

arrangements disclosed in writing to the other Party;

"Person" includes an individual, firm, trust, partnership, association, corporation, joint venture,

trustee, executor, administrator, legal representative or government (including any Governmental Entity);

"Plan of Arrangement" means the plan of arrangement substantially in the form set forth in

Schedule A hereto and any amendments or variations thereto made in accordance with Section 8.3 hereof

or Article 6 of the Plan of Arrangement or made at the direction of the Court in the Final Order with the

consent of Pembina and Veresen, each acting reasonably;

"Pre-Arrangement Reorganization" has the meaning ascribed thereto in Section 5.4;

"Pre-Emptive Right" means a right of first refusal, pre-emptive right of purchase or similar right

whereby any third party has a right to acquire or purchase all or any portion of any asset (including any

securities) owned in whole or in part by Veresen or any of its Subsidiaries;

"Preferred Shareholder Resolution" means the special resolution of the Veresen Preferred

Shareholders, voting as a class, in respect of the Arrangement to be considered at the Veresen

Shareholders' Meeting, substantially in the form attached as Schedule B-2 to the Arrangement

Agreement;

"Registrar" means the Registrar of Corporations duly appointed pursuant to section 263 of the

ABCA;

"Regulatory Action" has the meaning ascribed thereto in Section 5.3(d);

"Regulatory Approvals" means any consent, waiver, permit, permission, exemption, review,

order, decision or approval of, or any registration and filing with or withdrawal of any objection or

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successful conclusion of any litigation brought by, any Governmental Entity, or the expiry, waiver or

termination of any waiting period imposed by Law or a Governmental Entity or pursuant to a written

agreement between the Parties and a Governmental Entity to refrain from consummating the

Arrangement, in each case required or advisable under Laws in connection with the Arrangement,

including the Required Regulatory Approvals;

"Relevant Business" has the meaning set forth in the definition of "Material Adverse Change"

and "Material Adverse Effect" in this Agreement;

"Representatives" means the officers, directors, employees, financial advisors, legal counsel,

accountants and other agents and representatives of a Party;

"Required Regulatory Approvals" means the Competition Act Approval, the CTA Approval

and the HSR Approval;

"SEC" means the United States Securities and Exchange Commission;

"Securities Regulators" means collectively the Canadian Securities Administrators and the SEC;

"Subsidiary" has the meaning set forth in the Securities Act (Alberta) and, in the case of Veresen,

includes the Veresen Significant Entities;

"Superior Proposal" means a written bona fide Acquisition Proposal to acquire not less than all

of the outstanding Veresen Common Shares, or all or substantially all of the assets (on a consolidated

basis) of Veresen, which: (i) complies with Securities Laws and did not result from or involve a breach of

Section 7.1; (ii) is not subject to any financing condition and that the funds or other consideration

necessary to complete the Acquisition Proposal are or are reasonably likely to be available, as

demonstrated to the satisfaction of the board of directors of Veresen, acting in good faith, to fund

completion of the Acquisition Proposal at the time and on the basis set out therein; (iii) is not subject to

any due diligence condition; (iv) the board of directors of Veresen determines, in good faith, after

consultation with its financial advisor(s) and outside counsel, would or would be reasonably likely to, if

consummated in accordance with its terms and without assuming away the risk of non-completion, result

in a transaction more favourable, from a financial point of view, for Veresen Common Shareholders to the

transaction contemplated by this Agreement (including after considering the proposal to adjust the terms

and conditions of the Arrangement as contemplated in Section 7.1(c)); (v) the board of directors of

Veresen determines, in good faith, after consultation with its financial advisor(s) and outside counsel, is

reasonably likely to be consummated at the time and on the terms proposed, without undue delay and

taking into account all legal, financial, regulatory (including with respect to the Competition Act, CT Act

and HSR Act, to the extent applicable) and other aspects of such Acquisition Proposal and the Person or

group of Persons making such proposal; and (vi) after receiving the advice of outside counsel, that the

failure by the board of directors of Veresen to accept, recommend, approve or enter into a definitive

agreement to implement, as applicable, such Acquisition Proposal would be inconsistent with its fiduciary

duties;

"Tax" or "Taxes" means all taxes, however denominated, including any interest, penalties or

other additions that may become payable in respect thereof, imposed by any Governmental Entity, which

taxes shall include, without limiting the generality of the foregoing, all income or profits taxes (including,

but not limited to, federal, provincial and state income taxes), capital taxes, payroll and employee

withholding taxes, gasoline and fuel taxes, employment insurance, social insurance taxes (including

Canada Pension Plan payments), sales and use taxes (including goods and services, harmonized sales and

provincial or territorial sales tax), ad valorem taxes, excise taxes, franchise taxes, gross receipts taxes,

business license taxes, occupation taxes, real and personal property taxes, stamp taxes, environmental

taxes, carbon taxes, transfer taxes, workers' compensation premiums or charges, pension assessment and

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other governmental charges, and other obligations of the same or of a similar nature to any of the

foregoing, which one of the Parties or any of its Subsidiaries is required to pay, withhold or collect;

"Tax Act" means the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended, including the

regulations promulgated thereunder, as amended from time to time;

"Tax Returns" means all reports, estimates, elections, designations, forms, declarations of

estimated Tax, information statements and returns relating to, or required to be filed in connection with

any Taxes and whether in tangible or electronic form;

"Tax Sharing Agreement" has the meaning ascribed thereto in subparagraph (g)(xiv) of

Schedule D;

"Third Party Beneficiaries" has the meaning ascribed thereto in Section 9.7;

"TSX" means The Toronto Stock Exchange;

"U.S. Economic Sanctions" has the meaning ascribed thereto in paragraph (bb) of Schedule C;

"U.S. Exchange Act" means the United States Securities Exchange Act of 1934, as amended;

"U.S. GAAP" means generally accepted accounting principles in the United States, at the

relevant time applied on a consistent basis;

"U.S. Securities Act" means the United States Securities Act of 1933, as amended;

"U.S. Securities Laws" means federal and state securities legislation of the United States and all

rules, regulations and orders promulgated thereunder;

"U.S. Tax Code" means the United States Internal Revenue Code of 1986, as amended, or any

successor thereto;

"U.S. Treasury Regulations" means the Treasury regulations promulgated under the U.S. Tax

Code;

"Veresen AEGS Notes" means the $110 million aggregate principal amount of 5.565% senior

notes, Series A due May 4, 2020 of Alberta Ethane Gathering System L.P. issued pursuant to the note

purchase agreement dated May 4, 2005;

"Veresen Bank Facility" means the $750 million revolving credit facility of Veresen and the $45

million club revolving credit facility of Veresen, as amended, with a syndicate of financial institutions

maturing on May 31, 2020;

"Veresen Common Shareholders" means the holders of Veresen Common Shares;

"Veresen Common Share Consideration" means a deemed price per Veresen Common Share of

$18.65;

"Veresen Common Shares" means the common shares in the capital of Veresen;

"Veresen Debt" means total consolidated indebtedness, including long-term debt (including, for

greater certainty, the Veresen MTNs and the Veresen AEGS Notes) and bank debt, but excluding working

capital deficiency, of Veresen;

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"Veresen DSU Plans" means the Veresen Directors Deferred Share Unit Plan dated December

8, 2016 and the Veresen Senior Executive Deferred Share Unit Plan dated January 1, 2012;

"Veresen DSUs" means deferred share units awarded pursuant to the Veresen DSU Plans,

including any related dividend equivalent units;

"Veresen DRIP" means Veresen's Premium Dividend, Dividend Reinvestment Share Purchase

Plan;

"Veresen Employee Plans" has the meaning ascribed thereto in paragraph (bb) of Schedule D;

"Veresen Employee Obligations" means any obligations or liabilities of Veresen to pay any

amount to or on behalf of its directors, officers, consultants or Veresen Employees (other than for salary,

vacation pay and directors' fees in the ordinary course and in amounts consistent with historic practices

and not including payments made in respect of Veresen Incentive Awards) and, without limiting the

generality of the foregoing, Veresen Employee Obligations shall include the obligations of Veresen to

officers or other Veresen Employees for severance, or other termination payments pursuant to the

Veresen Employment Agreements and arising under applicable Laws as a result of the change of control

of Veresen;

"Veresen Employees" means the officers and other employees of Veresen or of any of its

Subsidiaries (excluding the Veresen Significant Entities);

"Veresen Employment Agreements" means the executive employment agreements between

Veresen and each of Don Althoff, Kevan King, Darren Marine, Paul Eastman, David Fitzpatrick and

Theresa Jang;

"Veresen Exchange Ratio" means 0.4287 of a Pembina Share for each Veresen Common Share;

"Veresen Fairness Opinions" has the meaning ascribed thereto in Section 2.2(b);

"Veresen Financial Statements" has the meaning ascribed thereto in paragraph (q) of

Schedule D;

"Veresen Incentive Awards" means, collectively, the Veresen RSUs, Veresen DSUs and

Veresen PSUs;

"Veresen LTI Plans" means, collectively, the Veresen LTIP and the Veresen DSU Plans,

including any award agreements related to awards granted thereunder;

"Veresen LTIP" means the amended and restated Veresen Long-Term Incentive Plan dated

January 1, 2016;

"Veresen Midstream Facility" means the $1.925 billion credit facility of Veresen Midstream

Limited Partnership pursuant to the credit agreement dated as March 31, 2015, as amended, among

Veresen Midstream Limited Partnership, Veresen Midstream US LLC and the administrative and

collateral agents and lenders party thereto from time to time;

"Veresen MTN Indenture" means the trust indenture dated as of November 22, 2011, as

amended by a First Supplemental Indenture dated March 14, 2012, a second supplemental indenture dated

June 13, 2014 and a third supplemental indenture dated November 10, 2016, between Veresen and

Computershare Trust Company of Canada, establishing and setting forth, among other things, the terms of

the Veresen MTNs;

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"Veresen MTNholders" means, collectively, the holders of the Veresen MTNs;

"Veresen MTNs" means, collectively, (i) the $150 million principal amount of 4.00% series 1

medium term notes of Veresen due November 22, 2018, (ii) the $50 million principal amount of 5.05%

series 3 medium term notes of Veresen due March 14, 2022, (iii) the $200 million principal amount of

3.06% series 4 medium term notes of Veresen due June 13, 2019, and (iv) the $350 million principal

amount of 3.43% series 5 medium term notes of Veresen due November 10, 2021;

"Veresen Power Business Sale" means the sale of Veresen's power generation business, as

announced by Veresen on February 21, 2017 including all updates, amendments and changes disclosed to

Pembina in writing by Veresen prior to the date hereof;

"Veresen Preferred Share Consideration" one Pembina Series A Exchange Share per Veresen

Series A Share, without interest, one Pembina Series B Exchange Share per Veresen Series B Share,

without interest, one Pembina Series C Exchange Share per Veresen Series C Share, without interest, one

Pembina Series D Exchange Share per Veresen Series D Share, without interest, one Pembina Series E

Exchange Share per Veresen Series E Share, without interest, and one Pembina Series F Exchange Share

per Veresen Series F Share, without interest (together, in the case of each Veresen Preferred Share, with

an amount equal to all accrued and unpaid dividends thereon up to, but excluding, the Effective Date) as

applicable;

"Veresen Preferred Shareholders" means, collectively, the holders of Veresen Series A Shares,

Veresen Series B Shares, Veresen Series C Shares, Veresen Series D Shares, Veresen Series E Shares and

Veresen Series F Shares;

"Veresen Preferred Shares" means, collectively, the Veresen Series A Shares, the Veresen

Series B Shares, the Veresen Series C Shares, the Veresen Series D Shares, the Veresen Series E Shares

and the Veresen Series F Shares, as constituted on the date hereof;

"Veresen Proxy Circular" means the notice of the Veresen Shareholders' Meeting to be sent to

Veresen Shareholders and the management proxy circular to be prepared in connection with the Veresen

Shareholders' Meeting together with any amendments thereto or supplements thereof, and any other

registration statement, information circular or proxy statement which may be prepared in connection with

the Veresen Shareholders' Meeting;

"Veresen PSUs" means performance share units awarded pursuant to the Veresen LTIP,


"Veresen RSUs" means the restricted share units awarded pursuant to the Veresen LTIP,


"Veresen Ruby Notes" means up to US$250 million aggregate principal amount of subordinated

notes of Ruby Pipeline, L.L.C. and Veresen U.S. Infrastructure Inc.;

"Veresen Series A Shares" means the cumulative redeemable preferred shares, series A of

Veresen;

"Veresen Series B Shares" means the cumulative redeemable preferred shares, series B of

Veresen;

"Veresen Series C Shares" means the cumulative redeemable preferred shares, series C of

Veresen;

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"Veresen Series D Shares" means the cumulative redeemable preferred shares, series D of

Veresen;

"Veresen Series E Shares" means the cumulative redeemable preferred shares, series E of

Veresen;

"Veresen Series F Shares" means the cumulative redeemable preferred shares, series F of

Veresen;

"Veresen Shareholder Rights Plan" means Veresen's shareholder rights plan dated May 6,

2014, as such may be amended, amended and restated or replaced from time to time;

"Veresen Shareholders" means the holders of Veresen Common Shares and Veresen Preferred

Shares;

"Veresen Shareholders' Meeting" means such meeting or meetings of the Veresen

Shareholders, including any adjournment thereof, that is or are to be convened as provided by the Interim

Order to consider, and if deemed advisable approve, the Arrangement Resolution and the Preferred

Shareholder Resolution;

"Veresen Shares" means, collectively, Veresen Common Shares and Veresen Preferred Shares;

"Veresen Significant Entities" means, collectively, Aux Sable Canada LP, Aux Sable Canada

Ltd., Alliance Canada Marketing L.P., Alliance Canada Marketing Ltd., Alliance Pipeline Limited

Partnership, Alliance Pipeline Ltd., Veresen Midstream Limited Partnership, Veresen Midstream General

Partner Inc., NRGreen Power L.P., NRGreen Power Ltd., Alliance Pipeline L.P., Alliance Pipeline Inc.,

Aux Sable Liquid Products LP, Aux Sable Liquid Products Inc., Aux Sable Midstream LLC, Ruby

Pipeline Holding Company, L.L.C. and Ruby Pipeline, LLC; and

"WARN Act" means the United States Worker Adjustment and Retraining Notification Act of

1988, and similar state, local and foreign laws related to plant closings, relocations, mass layoffs and

employment losses.

1.2 Interpretation Not Affected by Headings

The division of this Agreement into Articles, Sections, subsections, paragraphs and other portions

and the insertion of headings are for convenience of reference only and shall not affect in any way the

meaning or interpretation of this Agreement.

1.3 Article References

Unless the contrary intention appears, references in this Agreement to an Article, Section,

subsection, paragraph or Schedule by number or letter or both refer to the Article, Section, subsection,

paragraph or Schedule, respectively, bearing that designation in this Agreement.

1.4 Number and Gender

In this Agreement, unless the contrary intention appears, words importing the singular include the

plural and vice versa; and words importing gender shall include all genders.

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1.5 Date for Any Action

If the date on which any action is required to be taken hereunder by a Party is not a business day

in the place where the action is required to be taken, such action shall be required to be taken on the next

succeeding day which is a business day in such place.

1.6 Currency

Unless otherwise stated, all references in this Agreement to sums of money are expressed in

lawful money of Canada.

1.7 Schedules

The following Schedules annexed to this Agreement, being:

Schedule A Plan of Arrangement

Schedule B-1 Form of Arrangement Resolution

Schedule B-2 Form of Preferred Shareholder Resolution

Schedule C Representations and Warranties of Pembina

Schedule D Representations and Warranties of Veresen

are incorporated by reference into this Agreement and form a part hereof.

1.8 Accounting Matters

Unless otherwise stated, all accounting terms used in this Agreement shall have the meanings

attributable thereto under, and all determinations of an accounting nature required to be made shall be

made in a manner consistent with IFRS, in the case of Pembina, and U.S. GAAP, in the case of Veresen.

1.9 Knowledge

In this Agreement, references to "to the knowledge of" means the actual knowledge of the

Executive Officers of Pembina or Veresen, as the case may be, after reasonable inquiry (which, for

greater certainty, shall not require inquiries of any Person other than the Executive Officers of Veresen

and the executive officers of Subsidiaries of Veresen (other than the Veresen Significant Entities)), and

such officers shall make such inquiry as is reasonable in the circumstances. For purposes of this Section

1.9 and Section 1.10, "Executive Officers" (a) in the case of Pembina, means Pembina's President and

Chief Executive Officer, Vice President, Finance and Chief Financial Officer, Vice President, Legal and

General Counsel, Senior Vice President, Pipeline and Crude Oil Facilities and Senior Vice President,

NGL and Natural Gas Facilities, and (b) in the case of Veresen means Veresen's President and Chief

Executive Officer, Senior Vice President, Finance and Chief Financial Officer, Senior Vice

President, General Counsel, Senior Vice President, Business Joint Ventures, Executive Vice President,

President and CEO, Jordan Cove LNG, Vice President, Human Resources and Administration and Vice

President, Corporate Planning and Investor Relations.

1.10 Veresen Significant Entities

Notwithstanding any other provision of this Agreement, the representations and warranties

contained in this Agreement with respect to the Veresen Significant Entities are given by Veresen only to

the knowledge of the Executive Officers of Veresen referred to in Section 1.9, except for the

representations and warranties given respecting Veresen's direct or indirect ownership and Veresen's

rights and obligations in respect of such Veresen Significant Entities.

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Covenants of Veresen contained in this Agreement shall not extend to the Veresen Significant

Entities in which Veresen does not directly or indirectly own a controlling interest; provided however,

except as expressly stated in this Agreement, that if an issue, event or circumstance relating to any of the

Veresen Significant Entities arises, which issue would be the subject matter of any of the covenants

contained in this Agreement but for the fact that the covenants do not extend to the Veresen Significant

Entities, subject to any applicable Laws, applicable fiduciary duties or contractual obligations (other than

under this Agreement), Veresen shall use commercially reasonable efforts to comply with such covenant

and shall vote its voting interests in the relevant Veresen Significant Entity in respect of such issue, event

or circumstance consistent with complying with the relevant covenant as though such covenant did extend

to the relevant Veresen Significant Entity. Veresen shall also exercise any other proper influence in the

relevant Veresen Significant Entity in a manner consistent with complying with the relevant covenant as

though such covenant did extend to the relevant Veresen Significant Entity, subject to any applicable

Laws, applicable fiduciary duties or contractual obligations (other than under this Agreement).

1.11 Other Definitional and Interpretive Provisions

(a) References in this Agreement to the words "include", "includes" or "including" shall be

deemed to be followed by the words "without limitation" whether or not they are in fact

followed by those words or words of like import.

(b) Any capitalized terms used in any exhibit or Schedule but not otherwise defined therein,

shall have the meaning as defined in this Agreement.

(c) References to any agreement or contract are to that agreement or contract as amended,

modified or supplemented from time to time in accordance with the terms hereof and

thereof. Any reference in this Agreement to a Person includes the heirs, administrators,

executors, legal personal representatives, predecessors, successors and permitted assigns

of that Person.

(d) References to a particular statute or Law shall be to such statute or Law and the rules,

regulations and published policies made thereunder, as now in effect and as they may be

promulgated thereunder or amended from time to time.

(e) The term "made available" means that (i) copies of the subject materials were included in,

and were not removed from, the data room of the applicable Party no later than 9 a.m.

(Calgary time) on April 30, 2017; or (ii) copies of the subject materials were provided to

the other Party.

ARTICLE II

THE ARRANGEMENT

2.1 The Arrangement

Pembina and Veresen shall proceed to effect a plan of arrangement under section 193 of the

ABCA pursuant to which, on the Effective Date, on the terms and subject to the conditions contained in

the Plan of Arrangement:

(a) each Veresen Common Shareholder (other than those Veresen Common Shareholders

who have validly exercised Dissent Rights) shall receive, for each Veresen Common

Share, the Veresen Common Share Consideration which shall be payable, at its election

with:

(i) such number of Pembina Shares equal to the Veresen Exchange Ratio; or

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(ii) a cash amount equal to the Veresen Common Share Consideration;

provided that, under no circumstance shall: (A) the aggregate cash

payments paid by Pembina in connection with such elections exceed the

Maximum Cash Consideration (for greater certainty, excluding any validly

exercised Dissent Rights); or (B) the aggregate number of Pembina Shares

issued by Pembina in connection with such elections exceed the Maximum

Share Consideration. In the event the Maximum Cash Consideration or the

Maximum Share Consideration would otherwise be exceeded, the Veresen

Common Shareholders who have elected to receive a portion of their

aggregate Veresen Common Share Consideration in cash or Pembina

Shares, as applicable, will receive that amount of cash and Pembina Shares

as has been prorated in accordance with the terms of the Plan of

Arrangement; and

(b) if the Preferred Shareholder Resolution receives the requisite approval by the Veresen

Preferred Shareholders at the Veresen Shareholders' Meeting, each Veresen Preferred

Shareholder (other than those Veresen Preferred Shareholders who have validly exercised

Dissent Rights) shall receive, for each Veresen Preferred Share, the Veresen Preferred

Share Consideration, as applicable.

Pembina may acquire the Veresen Shares through a direct or indirectly wholly-owned Subsidiary,

currently existing or to be organized under the laws of any jurisdiction in Canada ("AcquisitionCo").

Pembina will cause AcquisitionCo to perform all of its obligations under the Plan of Arrangement.

2.2 Veresen Approval

Veresen represents and warrants to Pembina:

(a) that its board of directors has unanimously determined that:

(i) the Arrangement is fair to the Veresen Common Shareholders and the

Veresen Preferred Shareholders;

(ii) it will recommend that the Veresen Common Shareholders and the Veresen

Preferred Shareholders vote in favour of the Arrangement; and

(iii) the Arrangement and entry into this Agreement are in the best interests of

Veresen; and

(b) (i) that its board of directors has received verbal opinions from Scotia Capital Inc., the

financial advisor to Veresen, that the consideration to be paid to the Veresen Common

Shareholders and the Veresen Preferred Shareholders is fair, from a financial point of

view, to the Veresen Common Shareholders and the Veresen Preferred Shareholders,

respectively (the "Veresen Fairness Opinions"); and (ii) that the fees to be paid to Scotia

Capital Inc. in connection with the delivery of the Veresen Fairness Opinions are not

contingent on the completion of the Arrangement.

2.3 Obligations of Pembina

Subject to the terms and conditions of this Agreement, in order to facilitate the Arrangement,

Pembina shall take all action necessary in accordance with all applicable Laws, including Canadian

Securities Laws and U.S. Securities Laws, to do all things necessary or desirable to give effect to the

Arrangement, including using commercially reasonable efforts to make and actively prosecute

applications for all applicable required Regulatory Approvals.

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Pembina shall use its commercially reasonable efforts to obtain and furnish to Veresen the

information required on its behalf to be included in the Veresen Proxy Circular (the "Pembina

Information"). As of the date the Veresen Proxy Circular is first mailed to the Veresen Shareholders and

the date of any Veresen Shareholders' Meeting, the Pembina Information shall be complete and correct in

all material respects, shall not contain any untrue statement of a material fact or omit to state a material

fact required to be stated therein or necessary to make the statements therein, in light of the circumstances

in which they are made, not misleading (a "Misrepresentation") and shall comply in all material respects

with all applicable Laws. Pembina agrees to promptly correct any Pembina Information which shall have

become false or misleading at any time prior to the Veresen Shareholders' Meeting.

Pembina agrees to indemnify and save harmless Veresen and its officers, directors, employees,

agents, advisors and representatives from and against any and all liabilities, losses, damages, claims,

costs, reasonable expenses, interest awards, judgments and penalties suffered or incurred by any of them

in connection with or as a result of any Misrepresentation in any of the Pembina Information.

2.4 Obligations of Veresen

Subject to the terms and conditions of this Agreement, in order to facilitate the Arrangement,

Veresen shall take all action necessary in accordance with all applicable Laws, including Canadian

Securities Laws and U.S. Securities Laws, to:

(a) make and diligently prosecute an application to the Court for the Interim Order in respect

of the Arrangement;

(b) in accordance with the terms of and the procedures contained in the Interim Order, duly

call, give notice of, convene and hold the Veresen Shareholders' Meeting as promptly as

practicable, and in any event not later than July 11, 2017 and with a record date not later

than May 23, 2017, to vote upon the Arrangement Resolution and the Preferred

Shareholder Resolution and any other matters as may be properly brought before such

meeting;

(c) subject to compliance by the Veresen directors and officers with their fiduciary duties,

solicit proxies of Veresen Common Shareholders and Veresen Preferred Shareholders in

favour of the Arrangement Resolution and the Preferred Shareholder Resolution,

respectively, including, if so requested by Pembina, acting reasonably, by using a proxy

solicitation agent for such purpose;

(d) subject to obtaining the approvals as contemplated in the Interim Order and as may be

directed by the Court in the Interim Order, take all steps necessary or desirable to submit

the Arrangement to the Court and apply for the Final Order as soon as reasonably

practicable, and use all commercially reasonable efforts to do so not later than the third

business day after the date on which the Arrangement Resolution is passed at the Veresen

Shareholders' Meeting;

(e) deliver the Articles of Arrangement to the Registrar upon satisfaction or waiver of the

conditions set forth in Article VI as provided for in Section 2.10; and

(f) do all things necessary or desirable to give effect to the Arrangement, including using

commercially reasonable efforts to make and actively prosecute applications for all

applicable required Regulatory Approvals.

Veresen shall use its commercially reasonable efforts to prepare, print and mail, directly and

indirectly, the Veresen Proxy Circular and related material to the Veresen Shareholders as soon as

practicable following the date of this Agreement. Veresen shall give Pembina and its legal counsel a

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reasonable opportunity to review and comment on the drafts of the Veresen Proxy Circular and other

related documents, and shall give reasonable consideration to any comments made by Pembina and its

counsel relating to the disclosure contained therein, and agrees that all Pembina Information and

information regarding the Arrangement included in the Veresen Proxy Circular must be in content

satisfactory to Pembina, acting reasonably. As of the date the Veresen Proxy Circular is first mailed to

the Veresen Shareholders and the date of any Veresen Shareholders' Meeting, the Veresen Proxy Circular

shall be complete and correct in all material respects, shall not contain any untrue statement of a material

fact or omit to state a material fact required to be stated therein or necessary to make the statements

therein, in light of the circumstances in which they are made, not misleading and shall comply in all

material respects with all applicable Laws. Veresen agrees to promptly correct any information (other

than the Pembina Information) in the Veresen Proxy Circular which shall have become false or

misleading at any time prior to the Veresen Shareholders' Meeting. Without limiting the generality of the

foregoing, Veresen shall ensure that the Veresen Proxy Circular provides holders of Veresen Shares with

information in sufficient detail to permit them to form a reasoned judgment concerning the matters to be

placed before them at the Veresen Shareholders' Meeting, including identifying the approaches to fairness

determination taken by Scotia Capital Inc. in respect of the Veresen Fairness Opinions and presented to

the board of directors of Veresen, and contains the unanimous recommendation of the board of directors

of Veresen that the Veresen Common Shareholders and the Veresen Preferred Shareholders vote in favour

of the Arrangement Resolution and the Preferred Shareholder Resolution, respectively.

2.5 Interim Order

The application referred to in Section 2.4(a) shall request that the Interim Order provide, among

other things:

(a) for the class of Persons to whom notice is to be provided in respect of the Arrangement

and the Veresen Shareholders' Meeting and for the manner in which such notice is to be

provided;

(b) that the requisite approval for the Arrangement Resolution to be placed before the

Veresen Common Shareholders shall be 66 2/3% of the votes cast on the Arrangement

Resolution by Veresen Common Shareholders present in person or by proxy at the

Veresen Shareholders' Meeting (such that each Veresen Common Shareholder is entitled

to one vote for each Veresen Common Share held) and, if required under Canadian

Securities Laws, by a majority of the votes cast on the Arrangement Resolution by

Veresen Common Shareholders present in person or by proxy at the Veresen Meeting

after excluding the votes of those Persons whose votes are required to be excluded under

MI 61-101;

(c) that the requisite approval for the Preferred Shareholder Resolution to be placed before

the Veresen Preferred Shareholders shall be 66 2/3% of the votes cast on the Preferred

Shareholder Resolution by Veresen Preferred Shareholders present in person or by proxy

at the Veresen Shareholders' Meeting (such that each Veresen Preferred Shareholder is

entitled to one vote for each Veresen Preferred Share held) and, if required under

Canadian Securities Laws, by a majority of the votes cast on the Preferred Shareholder

Resolution by Veresen Preferred Shareholders present in person or by proxy at the

Veresen Shareholders' Meeting after excluding the votes of those Persons whose votes

are required to be excluded under MI 61-101;

(d) that, in all other respects, the terms, restrictions and conditions of the constating

documents of Veresen, including quorum requirements and all other matters, shall apply

in respect of the Veresen Shareholders' Meeting;

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(e) for the grant of the Dissent Rights as set forth in the Plan of Arrangement;

(f) that the Veresen Shareholders' Meeting may be adjourned or postponed from time to time

by Veresen in accordance with the terms of this Agreement without the need for

additional approval of the Court;

(g) that the record date for Veresen Shareholders entitled to notice of and to vote at the

Veresen Shareholders' Meeting will not change in respect of any adjournment(s) or

postponement(s) of the Veresen Shareholders' Meeting;

(h) for the notice requirements with respect to the presentation of the application to the Court

for the Final Order; and

(i) for such other matters as the Parties may agree in writing, each acting reasonably.

In the application referred to in Section 2.4(a), Veresen shall inform the Court that the Parties

intend to rely on the exemption provided by Section 3(a)(10) of the U.S. Securities Act for the issuance of

the Pembina Shares and, if applicable, the Pembina Exchange Preferred Shares, pursuant to the

Arrangement and that, in connection therewith, the Court will be required to approve the substantive and

procedural fairness of the terms and conditions of the Arrangement to each Person to whom Pembina

Shares and, if applicable, the Pembina Exchange Preferred Shares will be issued. Each Person to whom

Pembina Shares and, if applicable, the Pembina Exchange Preferred Shares will be issued on completion

of the Arrangement will be given adequate notice advising them of their right to attend and appear before

the Court at the hearing of the Court for the Final Order and providing them with adequate information to

enable such Person to exercise such right.

2.6 Conduct of Meeting

(a) Subject to the terms of this Agreement and the Interim Order, Veresen agrees to convene

and conduct the Veresen Shareholders' Meeting, in accordance with its constating

documents and applicable Laws and the Interim Order, and agrees not to propose to

adjourn or postpone the meeting without the prior consent of Pembina, acting reasonably:

(i) except as required for quorum purposes (in which case the meeting shall be

adjourned and not cancelled) or by applicable Law or by a Governmental

Entity;

(ii) except as required under Section 6.4 or Section 7.1(c); or

(iii) except for an adjournment at the request of Pembina for the purpose of

attempting to obtain the requisite approval for the Arrangement Resolution

or the Preferred Shareholder Resolution.

(b) Notwithstanding the receipt by Veresen of a Superior Proposal in accordance with

Section 7.1, unless otherwise agreed to in writing by Pembina or this Agreement is

terminated in accordance with its terms or except as required by applicable Law or by a

Governmental Entity, Veresen shall continue to take all steps reasonably necessary to

hold the Veresen Shareholders' Meeting and to cause the Arrangement Resolution and the

Preferred Shareholder Resolution to be voted on at the Veresen Shareholders' Meeting

and shall not propose to adjourn or postpone the Veresen Shareholders' Meeting other

than as contemplated by Section 2.6(a).

(c) Veresen shall advise Pembina as reasonably requested, and on a daily basis on each of the

last seven business days prior to the date of the Veresen Shareholders' Meeting, as to the

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aggregate tally of the proxies and votes received in respect of such meeting and all

matters to be considered at such meeting.

(d) Veresen shall advise Pembina of any written communication received after the date of

this Agreement from any shareholder or other Person in opposition to the Arrangement

Resolution or the Preferred Shareholder Resolution or any written notice of dissent,

purported dissent exercise or withdrawal of Dissent Rights by a Veresen Shareholder, and

written communications sent by or on behalf of Veresen to any Veresen Shareholder

exercising or purporting to exercise Dissent Rights.

(e) Veresen shall not make any payment or settlement offer, or agree to any payment or

settlement prior to the Effective Time with respect to the Dissent Rights without the prior

written consent of Pembina, acting reasonably.

2.7 Court Proceedings

Veresen will provide Pembina and its legal counsel with reasonable opportunity to review and

comment upon drafts of all material to be filed with the Court in connection with the Arrangement,

including by providing on a timely basis a description of any information required to be supplied by

Pembina for inclusion in such material, prior to the service and filing of that material, and will accept the

reasonable comments of Pembina and its legal counsel with respect to any such information required to be

supplied by Pembina and included in such material and any other matters contained therein. Veresen will

ensure that all material filed with the Court in connection with the Arrangement is consistent in all

material respects with the terms of this Agreement and the Plan of Arrangement. In addition, Veresen

will not object to legal counsel to Pembina making submissions on the application for the Interim Order

and the application for the Final Order as such counsel considers appropriate, provided such submissions

are consistent with this Agreement and the Plan of Arrangement. Veresen will also provide legal counsel

to Pembina on a timely basis with copies of any notice and evidence served on Veresen or its legal

counsel in respect of the application for the Final Order or any appeal therefrom. Subject to applicable

Laws, Veresen will not file any material with, or make any submissions to, the Court in connection with

the Arrangement or serve any such material, and will not agree to modify or amend materials so filed or

served, except as contemplated hereby or with Pembina's prior written consent, such consent not to be

unreasonably withheld or delayed; provided that nothing herein shall require Pembina to agree or consent

to any increased purchase price or other consideration or other modification or amendment to such filed

or served materials that expands or increases Pembina's obligations set forth in any such filed or served

materials or under this Agreement. Veresen shall oppose any proposal from any Person that would result

in the Final Order containing any provision that is inconsistent with this Agreement.

2.8 Board of Directors of Pembina

The Parties agree that Pembina shall use commercially reasonable efforts to appoint Doug Arnell,

Maureen E. Howe and Henry W. Sykes to the board of directors of Pembina as soon as reasonably

practicable following completion of the Arrangement to serve until the next annual meeting of Pembina

Shareholders or until their successors are duly appointed.

2.9 Veresen LTI Plans and Veresen Employment Agreements

The Parties acknowledge that the Arrangement will result in a "change of control" under the

Veresen LTI Plans and the Veresen Employment Agreements, and other than in respect of Veresen

Incentive Awards, there is no accelerated vesting or payout of any awards nor is there any change of

control, severance, separation or similar payments triggered under any executive employment or change

of control agreements applicable to any officers, employees or directors of Veresen or any of its

Subsidiaries (excluding the Veresen Significant Entities), or, to the knowledge of Veresen, of any of the

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Veresen Significant Entities, including the Veresen Employment Agreements, solely as a result of the

completion of the Arrangement. Notwithstanding any provision of the Veresen LTI Plans to the contrary,

all Veresen Incentive Awards shall be settled in cash prior to the Effective Time in the manner disclosed

in writing to Pembina by Veresen on or prior to the date hereof.

Veresen has disclosed in writing to Pembina the estimated amount of any change of control,

severance, separation or similar payments which would be payable to named executive officers of

Veresen (determined as at December 31, 2016), as a group, pursuant to the Veresen Employment

Agreements and any other Veresen Employee Obligations assuming the relevant conditions to the

payment of such amounts pursuant to such agreements or obligations are triggered at or prior to the

Effective Time (whether or not such conditions are actually met).

Veresen shall be exclusively responsible for any withholding obligations of Taxes pursuant to the

Tax Act or other applicable Laws from any amounts paid for the Veresen Employee Obligations at or

prior to the Effective Time and in connection with the exercise or settlement of any Veresen Incentive

Awards (whether pursuant to this Section 2.9 or otherwise), and Veresen shall deliver the consideration

for the foregoing net of such amounts to Veresen Employees and holders of Veresen Incentive Awards, as

applicable. Any such amounts deducted, withheld and remitted by Veresen will be treated for all

purposes under this Agreement as having been paid to the Veresen Employees and holders of Veresen

Incentive Awards, as applicable, in respect of which such deduction, withholding and remittance was

made; provided that such deducted and withheld amounts are actually remitted to the appropriate Tax

authority.

2.10 Effective Date

The Arrangement shall become effective at the Effective Time. Upon issuance of the Final Order

and subject to the satisfaction or waiver of the conditions precedent in Article VI, each of Pembina and

Veresen shall, as soon as practicable, execute and deliver such closing documents and instruments and

Veresen shall proceed to file the Articles of Arrangement, the Final Order and such other documents as

may be required to give effect to the Arrangement with the Registrar pursuant to section 193 of the

ABCA no later than the fifth business day following the satisfaction or waiver of such conditions

precedent (other than the conditions precedent that by their terms are to be satisfied as of the Effective

Date) or such other date as agreed to in writing by the Parties, whereupon the transactions comprising the

Arrangement shall occur and shall be deemed to have occurred in the order set out therein without any

further act or formality.

2.11 Veresen Dividend

Commencing with the July 2017 dividend record date, Veresen shall amend its record dates for

dividends on the Veresen Common Shares to match the record dates set by Pembina for dividends on the

Pembina Shares.

2.12 Tax Matters

Pembina and Veresen shall be entitled to deduct and withhold from any amount otherwise

payable to any Veresen Shareholder and, for greater certainty, from any amount payable to a Veresen

Shareholder who has validly exercised, and not withdrawn, Dissent Rights, as the case may be, under the

Plan of Arrangement such amounts as Pembina or Veresen, as the case may be, is required or reasonably

believes is required to deduct and withhold from such consideration in accordance with applicable Laws.

Any such amounts will be deducted, withheld and remitted from the consideration payable pursuant to the

Plan of Arrangement and shall be treated for all purposes as having been paid to the Veresen Shareholder

in respect of which such deduction and withholding was made, provided that such withheld amounts are

actually remitted to the appropriate Governmental Entity.

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Provided that the Preferred Shareholder Resolution receives the required approval of the Veresen

Preferred Shareholders, the Parties intend (i) that the Arrangement shall qualify as a reorganization within

the meaning of Section 368(a) of the U.S. Tax Code, and (ii) that this Agreement shall constitute a plan of

reorganization for such purposes.

2.13 Shareholder Communications

Veresen agrees to co-operate with Pembina and, if requested by Pembina, participate in

presentations to investors regarding the Arrangement. Veresen shall seek prior consent of Pembina, such

consent not to be unreasonably withheld, prior to the making of any presentations regarding the

Arrangement and shall promptly advise, consult and co-operate with Pembina in issuing any press

releases or otherwise making public statements with respect to this Agreement or the Arrangement and in

making any filing with any Governmental Entity or with any stock exchange, including the Exchanges,

with respect thereto. Veresen shall use all commercially reasonable efforts to enable Pembina to review

and comment on all such press releases prior to the release thereof and shall enable Pembina to review

and comment on such filings prior to the filing thereof; provided, however, that the foregoing shall be

subject to Veresen's overriding obligation to make disclosure in accordance with applicable Laws, and if

such disclosure is required and Pembina has not reviewed or commented on the disclosure, Veresen shall

use commercially reasonable efforts to give prior oral or written notice to Pembina, and if such prior

notice is not possible, to give such notice immediately following the making of such disclosure or filing.

The Parties agree to issue jointly a press release with respect to this Agreement, which shall include

reference to an increase in Pembina's monthly dividend and the appointment of certain of Veresen's

current directors to the Pembina board of directors following completion of the Arrangement as provided

in Section 2.8, as soon as practicable after its due execution. For the avoidance of doubt, the foregoing

shall not prevent Veresen from making internal announcements to employees and having discussions with

Veresen Shareholders, financial analysts or other stakeholders so long as such statements and

announcements are consistent with the press releases, public disclosures or public statements made by the

Parties.

2.14 U.S. Securities Laws

The Arrangement shall be structured and executed such that, assuming the Court considers the

fairness of the terms and conditions of the Arrangement and grants the Final Order, the issuance of the

Pembina Shares issuable to Veresen Common Shareholders and, if applicable, the issuance of Pembina

Exchange Preferred Shares to Veresen Preferred Shareholders under the Arrangement will not require

registration under the U.S. Securities Act, in reliance upon Section 3(a)(10) thereof. Each Party agrees to

act in good faith, consistent with the intent of the Parties and the intended treatment of the Arrangement

as set forth in this Section 2.14.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PEMBINA

3.1 Representations and Warranties

Pembina hereby makes to Veresen the representations and warranties set forth in Schedule C

hereto and acknowledges that Veresen is relying upon such representations and warranties in connection

with the entering into of this Agreement and the carrying out of the Arrangement.

3.2 Investigation

Any investigation by Veresen and its advisors shall not mitigate, diminish or affect the

representations and warranties of Pembina pursuant to this Agreement.

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3.3 Survival of Representations and Warranties

The representations and warranties of Pembina contained in this Agreement shall expire and be

terminated on the earlier of the Effective Date and the date on which this Agreement is terminated,

provided that such termination shall not affect any claim arising from a deliberate prior breach of any

such representations or warranties.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF VERESEN

4.1 Representations and Warranties

Veresen hereby makes to Pembina the representations and warranties set forth in Schedule D

hereto, and acknowledges that Pembina is relying upon such representations and warranties in connection

with the entering into of this Agreement and the carrying out of the Arrangement.

4.2 Investigation

Any investigation by Pembina and its advisors shall not mitigate, diminish or affect the

representations and warranties of Veresen pursuant to this Agreement.

4.3 Survival of Representations and Warranties

The representations and warranties of Veresen contained in this Agreement shall expire and be

terminated on the earlier of the Effective Date and the date on which this Agreement is terminated,

provided that such termination shall not affect any claim arising from a deliberate prior breach of any

such representations or warranties.

ARTICLE V

COVENANTS

5.1 Covenants of Pembina

Pembina covenants and agrees that during the period from the date of this Agreement until the

earlier of the Effective Date and the time that this Agreement is terminated in accordance with its terms,

unless otherwise (i) agreed to in writing by Veresen (such agreement to be subject to applicable Law and

not be unreasonably withheld, conditioned or delayed); (ii) required or expressly permitted or specifically

contemplated by this Agreement or the Arrangement; or (iii) disclosed to Veresen in writing on or prior to

the date hereof:

(a) the business of Pembina and its Subsidiaries shall be conducted only in, and Pembina and

its Subsidiaries shall not take any action except in, the ordinary course of business and

consistent with past practice, and Pembina shall use all commercially reasonable efforts

to maintain and preserve its and their business organization, assets, employees and

advantageous business relationships, provided, however, that this Section 5.1(a) shall not

restrict Pembina or any Subsidiary of Pembina from resolving to, or entering into or

performing any contract, agreement, commitment or arrangement with respect to, the

acquisition (subject to Section 5.1(c)(ii)), disposition (subject to Section 5.1(c)(i)),

building or construction of any assets or properties relating to the Relevant Business or of

the ownership interests in any Person engaged in the Relevant Business in any manner

(other than a disposition of a material Subsidiary of Pembina), including other than in the

usual and ordinary course consistent with past practices, and provided that the doing of

any such thing does not have a Material Adverse Effect on Pembina;

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(b) Pembina shall not, and shall not permit any of its Subsidiaries to, directly or indirectly: (i)

except in connection with the issuance of any Pembina Preferred Shares, amend

Pembina's constating documents or amend in any material respects the constating

documents of any of its Subsidiaries; (ii) except in relation to internal transactions solely

involving Pembina and its wholly-owned Subsidiaries or solely among such Subsidiaries,

declare, set aside or pay any dividend or other distribution or payment in cash, shares or

property in respect of its shares owned by any Person, except monthly dividends to

holders of Pembina Shares and dividends to holders of Pembina Preferred Shares in the

amounts set forth in the articles of Pembina; (iii) issue, grant, sell or pledge or agree to

issue, grant, sell or pledge any shares of Pembina or any of its Subsidiaries, or securities

convertible into or exchangeable or exercisable for, or otherwise evidencing a right to

acquire, shares of Pembina or any of its Subsidiaries, other than as required pursuant to

the terms attaching to any Pembina Preferred Shares, Pembina Shares issuable upon

conversion, redemption or maturity of the Pembina Convertible Debentures, Pembina

Shares issuable upon exercise of the Pembina Options and new grants of Pembina

Options; (iv) except as allowed pursuant to the terms attaching to any Pembina Preferred

Shares, split, consolidate, redeem, purchase or otherwise acquire any of its outstanding

shares or other securities; (v) amend the terms of any of its securities; (vi) adopt a plan of

liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation

or reorganization of Pembina or any of its Subsidiaries; (vii) reduce the capital of any

shares of Pembina or any of its Subsidiaries; or (viii) authorize, agree, resolve, commit or

propose any of the foregoing, or enter into, modify or terminate any contract, agreement,

commitment or arrangement with respect to any of the foregoing;

(c) Pembina shall not, and shall not permit any of its Subsidiaries to, directly or indirectly: (i)

sell, pledge, dispose of or encumber any assets of Pembina or any of its Subsidiaries with

a value individually or in the aggregate exceeding $1.0 billion (other than any security

interests required to be provided in connection with Pembina's credit facilities or the

assumption by Pembina of Veresen's credit facilities or in connection with any

transactions solely involving Pembina and its Subsidiaries); (ii) acquire (by merger,

amalgamation, consolidation or acquisition of shares or assets) any corporation,

partnership or other business organization or division thereof or make any investment

either by purchase of shares or securities, contributions of capital (other than to wholly

owned Subsidiaries) or purchase of any property or assets of any other individual or

entity with a value individually or in the aggregate exceeding $1.0 billion; (iii) waive,

release or relinquish, or authorize or propose to do so, any contractual right which is

material to the business of Pembina and its Subsidiaries, taken as a whole, other than in

the ordinary course of business consistent with past practice; (iv) waive, release, grant or

transfer any rights of value or modify or change any existing license, lease, contract or

other document which is material to the business of Pembina and its Subsidiaries, taken

as a whole, other than in the ordinary course of business consistent with past practice; or

(v) authorize, agree, resolve, commit or propose any of the foregoing, or enter into or

modify any contract, agreement, commitment or arrangement to do any of the foregoing;

(d) Pembina shall use its commercially reasonable efforts (taking into account insurance

market conditions and offerings and industry practices) to cause its current insurance (or

re-insurance) policies, including directors' and officers' insurance, not to be cancelled or

terminated or any of the coverage thereunder to lapse, except where such cancellation,

termination or lapse would not individually or in the aggregate be material to Pembina,

unless simultaneously with such termination, cancellation or lapse, replacement policies

underwritten by insurance or re-insurance companies of nationally recognized standing

having comparable deductibles and providing coverage equal to or greater than the

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coverage under the cancelled, terminated or lapsed policies for substantially similar

premiums are in full force and effect;

(e) other than would not be reasonably expected to result in a material increase in Taxes,

Pembina shall not, and shall not permit any of its Subsidiaries to, (i) file any amended

Tax Returns; (ii) change in any material respect any of its methods of reporting income or

deductions for accounting or income tax purposes from those employed in the preparation

of its income tax return for the taxation year ending December 31, 2015 except as may be

required by applicable Law; (iii) make or revoke any material election relating to Taxes;

(iv) settle, compromise or agree to the entry of judgment with respect to any proceeding

relating to Taxes except for any settlement, compromise or agreement that is not material

to Pembina; (v) file any Tax Return other than in accordance with past practice; (vi) enter

into any Tax Sharing Agreement; or (vii) make a request for a Tax ruling to any

Governmental Entity;

(f) Pembina shall continue to withhold from each payment to be made to any of its present or

former employees (which includes officers) and directors and to all other Persons

including, without limitation, all Persons who are non-residents of Canada for the

purposes of the Tax Act, all amounts that are required to be so withheld by any applicable

Laws and Pembina shall remit such withheld amounts to the proper Governmental Entity

within the times prescribed by such applicable Laws;

(g) Pembina will make all necessary filings and applications under applicable Laws,

including Canadian Securities Laws and U.S. Securities Laws, required to be made on the

part of Pembina in connection with the transactions contemplated herein and shall take all

reasonable action necessary to be in compliance with such applicable Laws;

(h) Pembina shall apply to list the Pembina Shares issuable or to be made issuable pursuant

to the Arrangement on the Exchanges and the Pembina Exchange Preferred Shares on the

TSX, and shall use its commercially reasonable efforts to obtain approval, subject to

customary conditions, for the listing of such Pembina Shares on the Exchanges and, if the

Preferred Shareholder Resolution receives the requisite approval of Veresen Preferred

Shareholders, of such Pembina Exchange Preferred Shares on the TSX;

(i) Pembina shall ensure that it has available funds to permit the payment of any amount that

may become payable under Section 7.3, having regard to its other liabilities and

obligations, and shall take all such actions as may be necessary to ensure that it maintains

such availability to ensure that it is able to pay such amount if and when required; and

(j) Pembina shall not agree, resolve, commit or undertake to do any of the matters prohibited

in this Section 5.1.

Nothing in this Agreement is intended to or shall result in Veresen exercising material influence

over the operations of Pembina, particularly in relation to operations in which the Parties compete or

would compete, but for this Agreement, with each other, prior to the Effective Date.

5.2 Covenants of Veresen

Veresen covenants and agrees that during the period from the date of this Agreement until the

earlier of the Effective Date and the time that this Agreement is terminated in accordance with its terms,

except pursuant to the Veresen Power Business Sale in all material respects on the terms and conditions

as disclosed to Pembina in writing by Veresen prior to the date hereof, or unless otherwise (i) agreed to in

writing by Pembina (such agreement to be subject to applicable Law and not be unreasonably withheld,

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conditioned or delayed); (ii) required or expressly permitted or specifically contemplated by this

Agreement or the Arrangement; or (iii) disclosed to Pembina in writing on or prior to the date hereof:

(a) the business of Veresen and its Subsidiaries shall be conducted only in, and Veresen and

its Subsidiaries shall not take any action except in, the ordinary course of business and

consistent with past practice (which, for greater certainty includes resolving to, or

entering into or performing any contract, agreement, commitment or arrangement with

respect to, the acquisition (subject to Section 5.2(c)(ii)), disposition (subject to Section

5.2(c)(i)), building or construction of any assets or properties relating to the Relevant

Business (subject to Section 5.2(d)) in the ordinary course of business and consistent with

past practice), Veresen shall use all commercially reasonable efforts to maintain and

preserve its and their business organization, assets, employees and advantageous business

relationships and Veresen shall undertake any actions agreed to in writing between the

Parties;

(b) Veresen shall not, and shall not permit any of its Subsidiaries to, directly or indirectly: (i)

amend Veresen's constating documents or amend in any material respects the constating

documents of any of its Subsidiaries (including, for greater certainty, any joint venture or

similar agreement in respect thereof); (ii) except in relation to internal transactions solely

involving Veresen and its wholly-owned Subsidiaries or among such Subsidiaries or, in

the case of the Veresen Significant Entities, consistent with past practice, declare, set

aside or pay any dividend or other distribution or payment in cash, shares or property in

respect of its shares owned by any Person, except regular monthly dividends to holders of

Veresen Common Shares in an amount not to exceed $0.0833 per Veresen Common

Share per month, dividends to holders of Veresen Preferred Shares in the amounts set

forth in the articles of Veresen and any dividend or other distribution or payment in cash

by any of the Veresen Significant Entities made in the ordinary course of business and

consistent with past practice; (iii) issue, grant, sell or pledge or agree to issue, grant, sell

or pledge any shares of Veresen or any of its Subsidiaries, or securities convertible into or

exchangeable or exercisable for, or otherwise evidencing a right to acquire, shares of

Veresen or any of its Subsidiaries, other than as required pursuant to the terms attaching

to any Veresen Preferred Shares and Veresen Common Shares issuable pursuant to the

terms of outstanding Veresen Incentive Awards on the terms disclosed in writing to

Pembina on or prior to the date hereof (and, for greater certainty, Veresen shall not

reinstate the Veresen DRIP following execution of this Agreement); (iv) split,

consolidate, redeem, purchase or otherwise acquire any of the outstanding shares or other

securities of Veresen or any of its Subsidiaries; (v) amend the terms of any of the

securities of Veresen or any of its Subsidiaries; (vi) adopt a plan of liquidation or

resolutions providing for the liquidation, dissolution, merger, consolidation or

reorganization of Veresen or any of its Subsidiaries; or (vii) authorize, agree, resolve,

commit or propose any of the foregoing, or enter into, modify or terminate any contract,

agreement, commitment or arrangement with respect to any of the foregoing, except as

permitted above;

(c) Veresen shall not, and shall not permit any of its Subsidiaries to, directly or indirectly: (i)

sell, pledge, dispose of or encumber any assets of Veresen or any of its Subsidiaries with

a value in the aggregate exceeding $200 million; (ii) acquire (by merger, amalgamation,

consolidation or acquisition of shares or assets) any corporation, partnership or other

business organization or division thereof or make any investment either by purchase of

shares or securities, contributions of capital (other than to wholly owned Subsidiaries) or

purchase of any property or assets of any other individual or entity with a value in the

aggregate exceeding $200 million; (iii) incur any indebtedness for borrowed money or

any other liability or obligation, except those which are not material and which arise in

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the ordinary course of business consistent with past practice, or issue any debt securities

or assume, guarantee, endorse or otherwise as an accommodation become responsible for,

the obligations of any other individual or entity, or make any loans or advances; (iv)

extend the maturity of any indebtedness for borrowed money or any other liability or

obligation, including bankers' acceptances; (v) pay, discharge or satisfy any claims,

liabilities or obligations (including any regulatory investigation) which are material to the

business of Veresen, other than the payment, discharge or satisfaction, in the ordinary

course of business consistent with past practice, of liabilities reflected or reserved against

in Veresen's most recently publicly available financial statements as of the date hereof or

incurred in the ordinary course of business consistent with past practice; (vi) waive,

release or relinquish, or authorize or propose to do so, any contractual right which is

material to the business of Veresen; (vii) waive, release, grant or transfer any rights of

value or modify, amend or change any existing license, agreement, lease, contract or

other document which is material to the business of Veresen or any of its Subsidiaries

(including, for greater certainty, any joint venture or similar agreement in respect

thereof), other than in connection with contract renewals and annual supply agreements

in the ordinary course of business consistent with past practice; (viii) enter into or

terminate any hedges, swaps or other financial instruments or like transaction; or (ix)

authorize, agree, resolve, commit or propose to do any of the foregoing, or enter into or

modify any contract, agreement, commitment or arrangement to do any of the foregoing;

(d) except for the aggregate amount and for the specified purposes set forth in Veresen's

previously approved 2017 capital budget (a true and complete copy of which has been

disclosed in writing to Pembina), and except for capital expenditures necessary to address

emergencies or other urgent matters involving actual or potential loss or damage to

property, or threats to human safety or the environment, Veresen and its Subsidiaries

shall not incur or commit to capital expenditures prior to the Effective Date with a value

in the aggregate exceeding $200 million;

(e) Veresen shall use its commercially reasonable efforts to complete each of the transactions

comprising the Veresen Power Business Sale pursuant to, and in all material respects on,

the terms and conditions, and within the time frame as disclosed to Pembina in writing by

Veresen prior to the date hereof;

(f) Veresen shall not, and shall cause each of its Subsidiaries (excluding the Veresen

Significant Entities) not to: (i) issue, award or grant any Veresen Incentive Awards or any

securities or other instruments or equity-based compensation providing similar benefits;

(ii) except as may be required pursuant to existing employment, collective bargaining,

pension, supplemental pension or termination policies or agreements (each of which are

in writing and copies of which have been provided to Pembina prior to the date hereof),

grant to any officer, director, consultant or employee an increase in compensation or

benefits in any form, make any loan to any officer, director or employee or grant or

increase the amount or value of any change of control, severance, separation, retention or

termination pay to, or enter into any employment, change of control, severance, retention

or termination agreement with any officer, director, consultant or employee of Veresen or

any of its Subsidiaries; (iii) grant any general salary increases; (iv) make any payment to

any director, officer, consultant or employee outside of their ordinary and usual

compensation for services provided; or (v) enter into or modify any employment

agreement with any officer, director or other employees of Veresen or of any of its

Subsidiaries (excluding the Veresen Significant Entities) or enter into any agreements

with any consultants that are not terminable with 30 days or less notice, provided that

Veresen and its Subsidiaries shall be permitted to enter into or modify employment

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agreements with non-officer employees which do not result in an increase to the total

employee expense of Veresen or such Subsidiary, as applicable, as of the date hereof;

(g) Veresen shall not, and the board of directors of Veresen and its committees shall not use

any discretion which may be available to them under the terms of the Veresen LTI Plans,

or any awards granted thereunder, to accelerate the vesting of any awards granted

pursuant to the Veresen LTI Plans and all payouts of awards granted pursuant to the

Veresen LTI Plans shall be determined in accordance with Section 2.9 hereof;

(h) except as is necessary to comply with applicable Law or any non-discretionary

requirements of the Veresen Employee Plans, neither Veresen nor any of its Subsidiaries

(excluding the Veresen Significant Entities) shall (i) adopt any additional benefit or

similar plans which would be considered to be a Veresen Employee Plan once created,

(ii) amend, terminate, or make any contribution to any Veresen Employee Plan, or (iii)

enter into any collective bargaining or other union agreement;

(i) Veresen shall use its commercially reasonable efforts (taking into account insurance

market conditions and offerings and industry practices) to cause its current insurance (or

re-insurance) policies, including directors' and officers' insurance, not to be cancelled or

terminated or any of the coverage thereunder to lapse, except where such cancellation,

termination or lapse would not individually or in the aggregate be material to Veresen,

unless simultaneously with such termination, cancellation or lapse, replacement policies

underwritten by insurance or re-insurance companies of nationally recognized standing

having comparable deductibles and providing coverage equal to or greater than the

coverage under the cancelled, terminated or lapsed policies for substantially similar

premiums are in full force and effect;

(j) Veresen will deliver to Pembina, as soon as they become available, true and complete

copies of any material reports or statements which relate to Veresen and its Subsidiaries

and are required to be filed by Veresen with any Governmental Entity subsequent to the

date hereof. As of their respective dates, such reports and statements (excluding any

information therein provided by Pembina, as to which Veresen makes no representation)

will not contain any untrue statement of a material fact, or omit to state a material fact,

required to be stated therein or necessary to make the statements therein, in light of the

circumstances in which they are made, not misleading and will comply in all material

respects with all applicable Laws;

(k) Veresen shall not, and shall not permit any of its Subsidiaries (excluding the Veresen

Significant Entities, but only to the extent that any of the following is not authorized,

agreed to, resolved, committed to or proposed by the board of directors of such Veresen

Significant Entity) to, (i) file any amended Tax Returns; (ii) change in any material

respect any of its methods of reporting income or deductions for accounting or income

tax purposes from those employed in the preparation of its income tax return for the

taxation year ending December 31, 2015 except as may be required by applicable Law;

(iii) make or revoke any material election relating to Taxes; (iv) settle, compromise or

agree to the entry of judgment with respect to any proceeding relating to Taxes except for

any settlement, compromise or agreement that is not material to Veresen; (v) file any Tax

Return other than in accordance with past practice; (vi) enter into any Tax Sharing

Agreement; or (vii) make a request for a Tax ruling to any Governmental Entity;

(l) Veresen shall continue to withhold from each payment to be made to any of its present or

former employees (which includes officers) and directors and to all other Persons

including, without limitation, all Persons who are non-residents of Canada for the

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purposes of the Tax Act, all amounts that are required to be so withheld by any applicable

Laws and Veresen shall remit such withheld amounts to the proper Governmental Entity

within the times prescribed by such applicable Laws;

(m) Veresen shall not knowingly take any action or knowingly permit inaction or knowingly

enter into any transaction that could reasonably be expected to have the effect of

materially reducing or eliminating the amount of the tax cost "bump" pursuant to

paragraphs 88(1)(c) and 88(1)(d) of the Tax Act in respect of the securities of any

affiliates or subsidiaries and other non-depreciable capital property owned by Veresen or

any affiliate or subsidiary on the date hereof, upon an amalgamation or winding-up of

Veresen or any of its subsidiaries (or any of their respective successors);

(n) Veresen will conduct itself so as to keep Pembina fully informed as to the material

decisions or actions required or required to be made with respect to the operation of its

business; provided that such disclosure is not otherwise prohibited by reason of a

confidentiality obligation owed to a third party or otherwise prevented by applicable Law

or is in respect to customer specific or competitively sensitive information;

(o) Veresen shall not settle or compromise any claim (i) material to its business, or (ii)

brought by any present, former or purported holder of its securities (in such Person's

capacity as such) in connection with the transactions contemplated by this Agreement or

the Arrangement prior to the Effective Date;

(p) Veresen will make all necessary filings and applications under applicable Laws,

including applicable Canadian Securities Laws and U.S. Securities Laws, required to be

made on the part of Veresen in connection with the transactions contemplated herein and

shall take all commercially reasonable action necessary to be in compliance with such

applicable Laws;

(q) Veresen shall provide Pembina with such assistance as may be reasonably required in

connection with the application for conditional approval of the listing of the Pembina

Shares issuable under the Arrangement on the Exchanges and, if applicable, the Pembina

Exchange Preferred Shares issuable under the Arrangement on the TSX;

(r) Veresen shall ensure that it has available funds to permit the payment of any amount that

may become payable under Section 7.2 or 7.3, having regard to its other liabilities and

obligations, and shall take all such actions as may be necessary to ensure that it maintains

such availability to ensure that it is able to pay such amount if and when required;

(s) Veresen shall use commercially reasonable efforts to obtain resignations and mutual

releases (in a form satisfactory to Pembina and such resigning person, each acting

reasonably) from each of the directors of Veresen and the directors of its Subsidiaries

who were nominated by Veresen to be effective at the Effective Time; and

(t) Veresen shall not agree, resolve, commit or undertake to do any of the matters prohibited

in this Section 5.2.

Nothing in this Agreement is intended to or shall result in Pembina exercising material influence

over the operations of Veresen, particularly in relation to operations in which the Parties compete or

would compete, but for this Agreement, with each other, prior to the Effective Date.

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5.3 Mutual Covenants

Each of the Parties covenants and agrees that during the period from the date of this Agreement

until the earlier of the Effective Date and the time that this Agreement is terminated in accordance with its

terms:

(a) subject to Section 5.3(d), it shall use its commercially reasonable efforts to, and shall

cause its Subsidiaries to use their commercially reasonable efforts to, satisfy (or cause the

satisfaction of) the conditions precedent to its obligations hereunder as set forth in Article

VI and to take, or cause to be taken, all other action and to do, or cause to be done, all

other things necessary, proper or advisable under all applicable Laws to complete the

Arrangement, including using its commercially reasonable efforts to promptly: (i) obtain

all necessary waivers, consents and approvals required to be obtained by it from parties to

loan agreements, leases and other contracts; (ii) obtain all necessary exemptions,

consents, approvals and authorizations as are required to be obtained by it under all

applicable Laws; (iii) defend all lawsuits or other legal, regulatory or other proceedings

against it challenging or affecting the Arrangement or this Agreement, and oppose, lift or

rescind any injunction or restraining order or other order or action seeking to stop, or

otherwise adversely affecting the ability of the Parties to consummate, the Arrangement;

(iv) fulfill all conditions and satisfy all provisions of this Agreement and the

Arrangement, including delivery of the certificates of their respective officers

contemplated by Section 6.2 and Section 6.3; and (v) carry out the terms of the Interim

Order and the Final Order applicable to it and comply with all requirements imposed by

applicable Laws on it or its Subsidiaries with respect to this Agreement or the

Arrangement;

(b) it shall cooperate with the other Party in connection with the performance by it and its

Subsidiaries of their obligations under this Section 5.3, including providing regular status

updates on its progress in obtaining any Regulatory Approval to the other Party as and

when requested by the other Party, and permitting the other Party a reasonable

opportunity to review in advance, and to provide comments on, any proposed

communications of any nature with a Governmental Entity, which comments shall be

considered and given due regard;

(c) it shall use commercially reasonable efforts to, and shall cause its Subsidiaries to use

commercially reasonable efforts to, satisfy (or cause the satisfaction of) the conditions

precedent set forth in Section 6.1(d) and Section 6.1(e) including, subject to Section

5.3(d), using commercially reasonable efforts to: (i) obtain all Regulatory Approvals, (ii)

cooperate fully with the other Party and such other Party's counsel, recognizing that

certain competitively sensitive information shall be exchanged only on an external

counsel-only basis and in accordance with the Confidentiality Agreement and any other

subsequent written agreement that addresses confidentiality between the Parties, (iii) as

promptly as possible, but in any event on or before May 26, 2017, unless otherwise

mutually agreed to in writing, make all necessary notifications or applications in respect

of Regulatory Approvals, including the notification required under subsection 114(1) of

the Competition Act (and Pembina shall also file with the Commissioner a request for an

advance ruling certificate or, in lieu thereof, a no-action letter either prior to or

simultaneously with the submission of its notification), the notification under subsection

53.1(1) and 53.1(2) of the CT Act, and the notification required under the HSR Act, and

the Parties shall supply as promptly as practicable any additional information or

documentary materials that may be required or as the parties or their counsel agree may

be advisable pursuant to the Competition Act, the CT Act, the HSR Act or any similar

Laws, (iv) certify completeness of its response to any supplementary information request

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received under subsection 114(2) of the Competition Act, and comply with any second

request issued under the HSR Act, in respect of the Arrangement as promptly as

practicable after the date of issuance of any such supplementary information request or

second request, as applicable, but in no event later than sixty days after such issuance,

unless otherwise mutually agreed to in writing, and to take all actions necessary to assert,

defend and support its certification of the completeness of its response to such

supplementary information request or second request, (v) respond promptly to all

requests for information made by a Governmental Entity in respect of obtaining a

Regulatory Approval, and (vi) prepare and file, as promptly as practicable, all

documentation to effect all necessary notices, reports and other filings and to obtain as

promptly as practicable all consents, registrations, approvals, and authorizations in

respect of the Regulatory Approvals;

(d) nothing in this Section 5.3 shall require Pembina to offer, agree or consent to sell, assign,

license, hold separate, or take any other action (individually, and collectively, a

"Regulatory Action"), before or after the Effective Date, with respect to any assets or

businesses, or interests in any assets or businesses, of Pembina or Veresen, or any of their

respective Subsidiaries, as applicable and as the case may be, including agreeing and

consenting to (i) restrictions on, or impairment of, its ability to own, manage, operate, or

otherwise exercise full ownership rights of, any assets or businesses, or interest in any

assets or businesses, or (ii) the creation of, termination or amendment of relationships,

contractual rights, obligations, licenses, ventures or other arrangements, with respect to,

before or after the Effective Date, any assets or businesses, or interests in any assets or

businesses, of either Party or any of its respective Subsidiaries; provided that,

notwithstanding the foregoing in this Section 5.3(d), in connection with obtaining

Required Regulatory Approvals by no later than the Outside Date, Section 5.3(a), Section

5.3(c) and this Section 5.3(d) shall require Pembina to take a Regulatory Action with

respect to any assets or businesses, or interests in any assets or businesses, of Pembina or

Veresen, or any of their respective Subsidiaries, as applicable and as the case may be, to

the extent that (A) the aggregate forecasted earnings before interest, taxes, depreciation

and amortization from such assets, businesses or interests, as applicable, for 2017 does

not exceed 10% of the forecasted earnings before interest, taxes, depreciation and

amortization of Veresen for 2017, as disclosed in writing by Veresen to Pembina on or

prior to the date hereof, and (B) any such Regulatory Action is conditional on

consummation of the Arrangement;

(e) except as required by Law, it shall not engage in any meetings or material

communications with any Governmental Entity in relation to the Regulatory Approvals

or the Arrangement, without counsel for the other Party being advised of same, having

been given the opportunity to participate in such meetings or communications, and in any

event shall immediately notify and provide copies to the other Party's counsel of any

communications to or from a Governmental Entity in relation to the Arrangement;

(f) it shall not deliberately take any action, refrain from taking any action or permit any

action to be taken or not taken, which is inconsistent with this Agreement or which would

reasonably be expected to significantly impede the consummation of the Arrangement, or

that will have, or would reasonably be expected to have, the effect of materially delaying,

impairing or impeding the granting of the Regulatory Approvals;

(g) except for non-substantive communications with securityholders, and subject to its

obligations under Section 2.13, it shall furnish promptly to the other Party or its counsel,

a copy of each notice, report, schedule or other document delivered, filed or received by

it in connection with: (i) the Arrangement; (ii) any filings under applicable Laws in

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connection with the transactions contemplated hereby; and (iii) any dealings with

Governmental Entities in connection with the transactions contemplated hereby; and

(h) it shall promptly notify the other Party in writing of any material change (actual,

anticipated, contemplated or, to the knowledge of such Party, threatened, financial or

otherwise) in its business, operations, results of operations, properties, assets, liabilities

(whether absolute, accrued, contingent or otherwise) or financial condition, or of any

material complaints, investigations or hearings (or communications indicating that the

same may be contemplated) by any Governmental Entity or third party relating to the

transactions contemplated hereby.

5.4 Pre-Arrangement Reorganizations

(a) Subject to Section 5.4(b), Veresen agrees that, upon request of Pembina, Veresen shall

use its commercially reasonable efforts to (i) perform such reorganizations of its

corporate structure, capital structure, business, operations and assets or such other

transactions as Pembina may request, acting reasonably (each a "Pre-Arrangement

Reorganization"), (ii) cooperate with Pembina and its advisors to determine the nature of

the Pre-Arrangement Reorganizations that might be undertaken and the manner in which

they would most effectively be undertaken, and (iii) cooperate with Pembina and its

advisors to seek to obtain consents or waivers which might be required from Veresen's

lenders under its existing credit facilities in connection with the Pre-Arrangement

Reorganizations, if any, provided that any costs, fees or expenses associated therewith

shall be at Pembina's sole expense, whether such Pre-Arrangement Reorganizations are

completed or not.

(b) Notwithstanding the foregoing, Veresen will not be obligated to participate in any Pre-

Arrangement Reorganization under Section 5.5(a) unless it has received an appropriate

indemnity from Pembina indemnifying it for all liabilities, damages, claims, judgments,

costs, expenses, and losses which it may suffer or incur as a result of such structuring and

it determines to its satisfaction, acting reasonably that such Pre-Arrangement

Reorganization:

(i) does not impair, impede, delay or prevent the satisfaction of any conditions

set forth in Article VI, or the ability of Veresen or Pembina to

consummate, and will not materially delay the consummation of, the

Arrangement;

(ii) does not require Veresen to obtain the approval of any Veresen

Shareholders;

(iii) does not reduce the consideration to be received under the Arrangement by

any of the Veresen Shareholders;

(iv) does not impose any incremental tax obligations on the Veresen

Shareholders;

(v) will not have an adverse effect on Veresen or its Subsidiaries or their

respective businesses or assets, and

(vi) is effected as close as reasonably practicable prior to the Effective Time.

(c) Pembina must provide written notice to Veresen of any proposed Pre-Arrangement

Reorganization at least ten business days prior to the Effective Date. Upon receipt of

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such notice, Veresen and Pembina shall work cooperatively and use their commercially

reasonable efforts to prepare prior to the Effective Time all documentation necessary and

do such other acts and things as are necessary to give effect to such Pre-Arrangement

Reorganization, including any amendment to this Agreement or the Plan of Arrangement

(provided that such amendments do not require Veresen to obtain approval of Veresen

Common Shareholders).

(d) Pembina waives any breach of a representation, warranty or covenant by Veresen, where

such breach is a result of an action taken by Veresen or a Subsidiary in good faith

pursuant to a request by Pembina in accordance with this Section 5.4.

5.5 Financing Assistance

(a) Veresen shall, and shall cause its Subsidiaries to, and shall use its commercially

reasonable efforts to have its and their Representatives, provide such cooperation to

Pembina as Pembina may reasonably request in connection with the arrangements by

Pembina to obtain new or amend any existing credit facilities or issue equity or debt

securities publicly or privately, subject to the terms hereof (provided that (A) to the

extent reasonably practicable, such request is made on reasonable notice, (B) such

cooperation does not unreasonably interfere with the ongoing operations of Veresen and

its Subsidiaries or unreasonably interfere with or hinder or delay the performance by

Veresen or its Subsidiaries of their obligations hereunder, (C) Veresen shall not be

required to provide, or cause any of its Subsidiaries to provide, cooperation that involves

any binding commitment by Veresen or its Subsidiaries, which commitment is not

conditional on the completion of the Arrangement and does not terminate without

liability to Veresen or its Subsidiaries upon the termination of this Agreement; and (D)

any actions taken hereunder are in compliance with Sections 5.2 and 5.3), including one

or more of the following cooperative actions as so requested:

(i) participating in meetings (including meetings with rating agencies),

drafting sessions and due diligence sessions;

(ii) furnishing Pembina and its proposed lenders or underwriters with such

financial and other pertinent information regarding Veresen as may be

reasonably requested by Pembina;

(iii) cooperating with Pembina in connection with applications to obtain such

consents, approvals or authorizations which may be reasonably necessary

or desirable in connection with such financing;

(iv) using its commercially reasonable efforts to obtain customary accountants'

consent and comfort letters and other documentation and items relating to

such securities issue as reasonably requested by Pembina and, if requested

by Pembina, to cooperate with and assist it in obtaining such

documentation and items;

(v) executing and delivering, or where applicable, obtaining, any certificates,

legal opinions or documents, as may be reasonably requested by Pembina

(including a certificate of the Chief Financial Officer of Veresen or any of

its Subsidiaries with respect to consents of accountants for use of their

reports in any materials relating to such securities issue); and

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(vi) taking all corporate actions, to be effective at the Effective Time, requested

by Pembina that are necessary or customary to permit the consummation of

such financing.

(b) Notwithstanding Section 5.5(a), neither Veresen, nor any of its Subsidiaries shall be

required by Pembina to: (i) take any action or do anything that would (A) contravene any

applicable Law, or (B) be capable of impairing or preventing the satisfaction of any

condition set forth in Article VI; (ii) commit to take any action that is not contingent on

the consummation of the transactions contemplated by this Agreement at the Effective

Time; (iii) pay any commitment, consent or other fee or incur any other liability in

connection with such financing prior to the Effective Date; or (iv) except as required to

comply with applicable Laws, disclose any information that in the reasonable judgment

of such Party would violate any obligations of such Party or any other Person with

respect to confidentiality.

(c) Pembina agrees to indemnify and save harmless Veresen and its Subsidiaries and their

respective officers, directors, employees, agents, advisors and representatives from and

against any and all liabilities, losses, damages, claims, costs, expenses, interest awards,

judgments and penalties suffered or incurred by any of them in connection with any

actions or omissions by any of them in connection with any request by Pembina made

pursuant to this Section 5.5 and for any alleged misstatement or omission in any

information provided by Veresen at the request of Pembina (other than historical factual

information to the extent prepared by Veresen and relating to Veresen and its

Subsidiaries) except that Pembina shall not be liable in any such case to the extent that

any such liabilities, losses, damages, claims, costs, expenses, interest awards, judgments

and penalties arise out of the negligence or willful misconduct of Veresen. Pembina shall

promptly upon request by Veresen and from time to time reimburse Veresen and its

Subsidiaries for all reasonable out-of-pocket costs (including legal fees) incurred by

Veresen or its Subsidiaries and their Representatives in connection with any of the

actions contemplated by this Section 5.5, including, if this Agreement is terminated by

Veresen in accordance with its terms, in connection with any unwinding or similar

transactions by Veresen or its Subsidiaries required as a result of actions taken pursuant

to this Section 5.5.

5.6 Payment on Postponement of Outside Date

If the Outside Date is postponed by Pembina pursuant to its right provided in the definition of

"Outside Date" in Section 1.1, Pembina shall concurrently pay to Veresen an amount equal to $23.5

million as reimbursement to Veresen for its out-of-pocket expenses incurred in connection with the

postponement, provided that if Veresen is in material breach of its obligations or covenants hereunder at

the time of the postponement, such amount will not be payable.

ARTICLE VI

CONDITIONS

6.1 Mutual Conditions

The respective obligations of the Parties to consummate the transactions contemplated hereby,

and in particular the Arrangement, are subject to the satisfaction, on or before the Effective Date or such

other time specified, of the following conditions, any of which may be waived by the mutual consent of

such Parties without prejudice to their right to rely on any other of such conditions:

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(a) the Interim Order shall have been obtained on terms consistent with the Arrangement and

in form and substance satisfactory to each of the Parties, acting reasonably, and such

order shall not have been set aside or modified in a manner unacceptable to either of the

Parties, acting reasonably, on appeal or otherwise;

(b) the Arrangement Resolution shall have been passed by the Veresen Common

Shareholders at the Veresen Shareholders' Meeting in accordance with the Interim Order;

(c) the Final Order shall have been obtained on terms consistent with the Arrangement and in

form and substance satisfactory to each of the Parties, acting reasonably, and such order

shall not have been set aside or modified in a manner unacceptable to either of the

Parties, acting reasonably, on appeal or otherwise;

(d) each of the Required Regulatory Approvals has been made, given, obtained or occurred,

as the case may be, and any such approval shall be in full force and effect and any such

occurrence shall not have been invalidated in any manner;

(e) all Regulatory Approvals (other than the Required Regulatory Approvals) required to be

obtained, or that the Parties mutually agree in writing to obtain in respect of the

completion of the Arrangement, and the expiry of applicable waiting periods necessary to

complete the Arrangement, shall have occurred or been obtained on terms and conditions

acceptable to the Parties, each acting reasonably, and all applicable domestic and foreign

statutory and regulatory waiting periods shall have expired or have been terminated and

no unresolved material objection or opposition shall have been filed, initiated or made,

except where the failure or failures to obtain such Regulatory Approvals, or for the

applicable waiting periods to have expired or terminated, would not be reasonably

expected to have a Material Adverse Effect on either of Pembina (before or after

completion of the Arrangement) or Veresen;

(f) the conditional approval to the listing of the Pembina Shares issuable pursuant to the

Arrangement on the TSX, and approval, subject to official notice of issuance, of the

listing of Pembina Shares issuable pursuant to the Arrangement on the NYSE, and, if the

Preferred Shareholder Resolution received the requisite approval of the Veresen Preferred

Shareholders at the Veresen Shareholders' Meeting, the conditional approval to the listing

of the Pembina Exchange Preferred Shares issuable pursuant to the Arrangement on the

TSX, shall have been obtained;

(g) no Law, regulation, policy, judgment, decision, order, agreement between the Parties and

a Governmental Entity to refrain from consummating the Arrangement, ruling or

directive (whether or not having the force of Law) shall have been enacted, promulgated,

amended or applied, which prevents, prohibits or makes the consummation of the

Arrangement illegal or otherwise prohibits or enjoins Pembina or Veresen from

consummating the Arrangement, or that would be reasonably expected to have a Material

Adverse Effect on either of Pembina (before or after completion of the Arrangement) or

Veresen; and

(h) no act, action, suit, proceeding, objection, opposition, order or injunction shall have been

taken, entered or promulgated by any Governmental Entity or by any elected or appointed

public official in Canada or elsewhere, whether or not having the force of Law, which

prevents, prohibits or makes the consummation of the Arrangement illegal or otherwise

prohibits or enjoins Pembina or Veresen from consummating the Arrangement, or that

would be reasonably expected to have a Material Adverse Effect on either of Pembina

(before or after completion of the Arrangement) or Veresen.

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6.2 Pembina Conditions

The obligation of Pembina to consummate the transactions contemplated hereby, and in particular

the Arrangement, is subject to the satisfaction, on or before the Effective Date or such other time

specified, of the following conditions:

(a) the representations and warranties made by Veresen in this Agreement shall be true and

correct as of the Effective Date as if made on and as of such date (except to the extent

such representations and warranties speak as of an earlier date or except as affected by

transactions contemplated or permitted by this Agreement), except where the failure of

such representations and warranties to be true and correct, individually or in the

aggregate, would not result or would not reasonably be expected to result in a Material

Adverse Change in respect of Veresen and its Subsidiaries, taken as a whole (and for this

purpose, any reference to "material", "Material Adverse Effect" or other concepts of

materiality in such representations and warranties shall be ignored), except that the

representations and warranties in: (i) paragraphs (a), (b), (c), (d), (g) and (h) of Schedule

D shall be true and correct in all material respects as of the Effective Date as if made on

such date; and (ii) paragraphs (k), (l), (t)(iii), (nn), (oo), (tt) and (uu) of Schedule D shall

be true and correct as of the Effective Date as if made on such date (except, it being

understood that the number of Veresen Common Shares outstanding may increase from

the number outstanding on the date of this Agreement solely as a result of the conversion

of securities of Veresen convertible into Veresen Common Shares, but only to the extent

that such convertible securities are specifically described in paragraph (k) of Schedule D,

that the number of outstanding Veresen Preferred Shares of a series may change as a

result of the conversion of Veresen Preferred Shares, and that the number of Veresen

RSUs and Veresen PSUs may change due to their vesting, expiry or termination in

accordance with their terms), and Veresen shall have provided to Pembina a certificate of

two senior officers of Veresen (on Veresen's behalf and without personal liability)

certifying the foregoing on the Effective Date;

(b) Veresen shall have complied in all material respects with its covenants herein to be

complied with by it on or prior to the Effective Time; and Veresen shall have provided to

Pembina a certificate of two executive officers of Veresen (on behalf of Veresen and

without personal liability) certifying compliance with such covenants on the Effective

Date;

(c) no Material Adverse Change in respect of Veresen and its Subsidiaries, taken as a whole,

shall have occurred after the date hereof and prior to the Effective Date; and

(d) holders of less than 5% of the outstanding Veresen Common Shares shall have validly

exercised Dissent Rights in respect of the Arrangement that have not been withdrawn as

of the Effective Date.

The conditions set forth in this Section 6.2 are for the exclusive benefit of Pembina and may be

asserted by Pembina regardless of the circumstances or may be waived in writing by Pembina in its sole

discretion, in whole or in part, at any time and from time to time without prejudice to any other rights

which Pembina may have.

6.3 Veresen Conditions

The obligation of Veresen to consummate the transactions contemplated hereby, and in particular

the Arrangement, is subject to the satisfaction, on or before the Effective Date or such other time

specified, of the following conditions:

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(a) (i) the representations and warranties made by Pembina in paragraphs (a), (b) and (c) of

Schedule C shall be true and correct in all material respects as of the Effective Date as if

made on such date; (ii) the representations and warranties made by Pembina in paragraph

(z) and (q)(iii) of Schedule C shall be true and correct as of the Effective Date as if made

on such date; (iii) the representations and warranties made by Pembina in paragraph (h)

of Schedule C shall be true and correct as at the date of this Agreement; and (iv) the

remaining representations and warranties made by Pembina in this Agreement shall be

true and correct as of the Effective Date as if made on and as of such date (except to the

extent such remaining representations and warranties speak as of an earlier date or except

as affected by transactions contemplated or permitted by this Agreement), except where

the failure of such remaining representations and warranties to be true and complete,

individually or in the aggregate, would not result or would not reasonably be expected to

result in a Material Adverse Change in respect of Pembina and its Subsidiaries, taken as a

whole (and for this purpose, any reference to "material", "Material Adverse Effect" or

other concepts of materiality in such representations and warranties shall be ignored), and

Pembina shall have provided to Veresen a certificate of two senior officers of Pembina

(on Pembina's behalf and without personal liability) certifying the foregoing on the

Effective Date;

(b) Pembina shall have complied in all material respects with its covenants herein to be

complied with by it on or prior to the Effective Time; and Pembina shall have provided to

Veresen a certificate of two executive officers of Pembina (on behalf of Pembina and

without personal liability) certifying compliance with such covenants on the Effective

Date; and

(c) no Material Adverse Change in respect of Pembina and its Subsidiaries, taken as a whole,

shall have occurred after the date hereof and prior to the Effective Date.

The conditions set forth in this Section 6.3 are for the exclusive benefit of Veresen and may be

asserted by Veresen regardless of the circumstances or may be waived by Veresen in its sole discretion, in

whole or in part, at any time and from time to time without prejudice to any other rights which Veresen

may have.

6.4 Notice and Cure Provisions

Each Party will give prompt notice to the other of the occurrence, at any time from the date

hereof until the Effective Date, of any circumstance or change in circumstances (actual, anticipated,

contemplated, or to the knowledge of such Party, threatened) which would, or would reasonably be

expected to: (a) cause any of the representations or warranties of such Party contained herein to be untrue

or inaccurate in any material respect (or, in the case of any representations or warranties that are not

subject to materiality qualifications in respect of the conditions contained in Section 6.2(a) or Section

6.3(a), as applicable, cause any of such representations or warranties of such Party to be untrue or

inaccurate in any respect); or (b) result in the failure to comply with or satisfy any covenant, condition or

agreement to be complied with or satisfied by such Party, and it shall in good faith discuss with the other

Party any circumstance or change in circumstances (actual, anticipated, contemplated, or to the

knowledge of such Party, threatened) which is of such a nature that there may be a reasonable question as

to whether notice need to be given to the other Party pursuant to this provision.

Neither Party may elect to terminate this Agreement pursuant to Section 8.1(d) or Section 8.1(e),

as applicable, unless promptly, and in any event prior to the issuance of the Certificate by the Registrar,

the Party intending to rely thereon has delivered a written notice to the other Party specifying in

reasonable detail all breaches of covenants, inaccuracies of representations and warranties or other

matters which the Party delivering such notice is asserting as the basis for the non-fulfillment of the

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applicable condition or the availability of a termination right, as the case may be. If any such notice is

delivered, provided that the receiving Party is proceeding diligently to cure any such matter capable of

cure prior to the Outside Date to the satisfaction of the Party delivering such notice, acting reasonably, no

Party may terminate this Agreement until the earlier of (i) the expiration of a period of 15 business days

from the date of receipt of such notice, and (ii) the Outside Date, if such matter has not been cured by

such date; except that, in each case and for greater certainty, (A) no cure period shall be provided for a

breach which by its nature cannot be cured, and (B) a failure to cure a breach or another matter within the

15 business day period referenced in (i) above shall, for the purposes of any condition referenced in

Section 8.1(d) and Section 8.1(e), deem such condition to be incapable of being satisfied by the Outside

Date. More than one notice may be delivered by a Party. If such notice has been delivered within 15

business days prior to the date of the Veresen Shareholders' Meeting, Veresen may elect to postpone the

meeting of its shareholders until the expiry of such period.

6.5 Merger of Conditions

Subject to applicable Law, the conditions set out in Sections 6.1, 6.2 and 6.3 shall be conclusively

deemed to have been satisfied, waived or released upon the issuance of a Certificate in respect of the

Arrangement.

ARTICLE VII

ADDITIONAL AGREEMENTS

7.1 Veresen Covenant Regarding Non-Solicitation

(a) Veresen shall immediately cease and cause to be terminated all existing solicitation,

discussion or negotiation (including through any Representatives on its behalf), if any,

with any parties conducted before the date of this Agreement with respect to any

Acquisition Proposal or any inquiry, proposal or offer that constitutes or could reasonably

be expected to lead to an Acquisition Proposal, and, in connection therewith, Veresen

shall discontinue access of any of its confidential information; Veresen shall also

promptly request the return or destruction of all information respecting Veresen provided

to any third parties who have entered into a confidentiality agreement with Veresen

relating to an Acquisition Proposal in the last 12 months and shall use all commercial

efforts to ensure that such requests are honoured. Veresen undertakes to enforce all

standstill, non-disclosure, non-disturbance, non-solicitation and similar agreements or

covenants that Veresen has entered into prior to the date of this Agreement and that

Veresen enters into after the date of this Agreement.

(b) Veresen shall not, directly or indirectly, do or authorize or permit any of its

Representatives to do, any of the following:

(i) solicit, initiate or knowingly encourage or facilitate (including by way of

furnishing information) any Acquisition Proposal or any inquiries,

proposals or offers relating to any Acquisition Proposal or that could

reasonably be expected to lead to an Acquisition Proposal;

(ii) enter into or participate in any discussions or negotiations regarding any

Acquisition Proposal or any proposal that constitutes or could reasonably

be expected to lead to an Acquisition Proposal, or furnish to any other

Person any information with respect to its businesses, properties,

operations, prospects or conditions (financial or otherwise) in connection

with any Acquisition Proposal or any proposal that constitutes or could

reasonably be expected to lead to an Acquisition Proposal or otherwise

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cooperate in any way with, or assist or participate in, facilitate or

encourage, any effort or attempt of any other Person to do or seek to do any

of the foregoing;

(iii) waive, terminate, amend, modify or release any third party or otherwise

forbear in the enforcement of, or enter into or participate in any

discussions, negotiations or agreements to waive, terminate, amend,

modify or release any third party from or otherwise forbear in respect of,

any rights or other benefits under confidential information and/or standstill

agreements (which, for greater certainty, does not prohibit the automatic

release of a party in accordance with the pre-existing terms of any standstill

provision);

(iv) accept, approve, endorse or recommend, or publicly propose to accept,

approve, endorse or recommend any Acquisition Proposal or any inquiry,

proposal or offer that could reasonably be expected to lead to an

Acquisition Proposal; or

(v) accept or enter into, or publicly propose to accept or enter into, any letter of

intent, agreement in principle, agreement, arrangement or undertaking

related to any Acquisition Proposal (other than a confidentiality and

standstill agreement contemplated under Section 7.1(b)(vi);

provided, however, that notwithstanding any other provision hereof, Veresen and its

Representatives may, prior to the approval of the Arrangement Resolution at the Veresen

Shareholders' Meeting:

(vi) enter into or participate in any discussions or negotiations with a third party

that is not in breach of any confidentiality or standstill agreement and who,

without any solicitation, initiation or deliberate encouragement, directly or

indirectly, after that date of this Agreement, by Veresen or any of its

Representatives, seeks to initiate such discussions or negotiations and,

subject to execution of a confidentiality and standstill agreement in favour

of Veresen that contains a standstill provision that Veresen determines in

good faith is no less onerous or more beneficial to such third party than that

in the Confidentiality Agreement and is otherwise on terms that Veresen

determines in good faith are no less favourable to Veresen than those found

in the Confidentiality Agreement (provided that such confidentiality and

standstill agreement shall (A) allow for disclosure thereof, along with all

information provided thereunder, to Pembina as set out below, (B) allow

disclosure to Pembina of the making and terms of any Acquisition Proposal

made by the third party as contemplated herein, and (C) not contain any

provision restricting Veresen from complying with this Section 7.1) may

furnish to such third party any information concerning Veresen and its

Subsidiaries and their businesses, properties and assets, in each case if, and

only to the extent that:

(A) the third party has first made a written bona fide Acquisition

Proposal, which did not result from a breach of this Section

7.1, and in respect of which the board of directors of Veresen

determines in good faith, after consultation with its outside

legal and financial advisors, constitutes or could reasonably be

expected to lead to a Superior Proposal; and

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(B) prior to furnishing such information to or entering into or

participating in any such discussions or negotiations with such

third party regarding the Acquisition Proposal, Veresen shall

(1) provide prompt notice to Pembina to the effect that it is

furnishing information to or entering into or participating in

discussions or negotiations with such third party, together with

a copy of the confidentiality and standstill agreement

referenced above and, if not previously provided to Pembina,

copies of all information provided to such third party

concurrently with the provision of such information to such

third party, (2) notify Pembina orally and in writing of any

inquiries, offers or proposals with respect to an actual or

contemplated Superior Proposal (which written notice shall

include a summary of the material terms of such proposal (and

any amendments or supplements thereto) and, if the proposal

includes equity consideration, the identity of the Person making

it, and, if not previously provided to the other Party, copies of

all information provided to the third party), within 24 hours of

the receipt thereof, and (3) keep Pembina promptly informed of

the status and reasonable details of any such inquiry, offer or

proposal and answer Pembina's reasonable questions with

respect thereto;

(vii) comply with Part 2 - Division 3 of NI 62-104 and similar provisions in

respect of U.S. Securities Laws relating to the provision of directors'

circulars and making appropriate disclosure with respect thereto to its

securityholders; and

(viii) accept, recommend, approve or enter into an agreement to implement a

Superior Proposal from a third party, but only if prior to such acceptance,

recommendation, approval or implementation, the board of directors of

Veresen concludes in good faith, after considering all proposals to adjust

the terms and conditions of this Agreement as contemplated by Section

7.1(c) and after receiving the advice of outside counsel, that the failure by

the board of directors to take such action would be inconsistent with its

fiduciary duties under applicable Laws, and Veresen (A) complies with its

obligations set forth in Section 7.1, (B) terminates this Agreement in

accordance with Section 8.1(g), and (C) concurrently therewith pays the

amount required by Section 7.2 to Pembina.

(c) Following determination by the board of directors of Veresen that an Acquisition

Proposal constitutes a Superior Proposal, Veresen shall give Pembina, orally and in

writing, at least five complete business days advance notice of any decision by the board

of directors of Veresen to accept, recommend, approve or enter into an agreement to

implement a Superior Proposal, which notice shall confirm that the board of directors of

Veresen has determined that such Acquisition Proposal constitutes a Superior Proposal

and shall identify the third party making the Superior Proposal and Veresen shall provide

Pembina with a true and complete copy thereof and the agreement to implement the

Superior Proposal and any amendments thereto. During such five business day period,

Veresen agrees not to accept, recommend, approve or enter into any agreement to

implement such Superior Proposal and not to release the party making the Superior

Proposal from any standstill provisions and shall not withdraw, redefine, modify or

change its recommendation in respect of the Arrangement as outlined in Section 2.2(a).

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In addition, during such five business day period Veresen shall, and shall cause its

financial and legal advisors to, negotiate in good faith with Pembina and its financial and

legal advisors to make such adjustments in the terms and conditions of this Agreement

and the Arrangement as would enable Veresen to proceed with the Arrangement as

amended rather than the Superior Proposal. In the event Pembina proposes to amend this

Agreement and the Arrangement on a basis such that the board of directors of Veresen

determines that the alternative proposed transaction is no longer a Superior Proposal and

so advises the board of directors of Pembina prior to the expiry of such five business day

period, the board of directors of Veresen shall not accept, recommend, approve or enter

into any agreement to implement such Acquisition Proposal and shall not release the

party making the Acquisition Proposal from any standstill provisions and shall not

withdraw, redefine, modify or change its recommendation in respect of the Arrangement.

In the event that Veresen provides the notice contemplated by this Section 7.1(b)(vi) on a

date which is less than five business days prior to the Veresen Shareholders' Meeting,

Pembina shall be entitled to require Veresen to adjourn or postpone the Veresen

Shareholders' Meeting to a date that is not more than ten business days after the date of

such notice.

(d) Each successive amendment to any Acquisition Proposal that results in an increase in, or

modification of, the consideration (or value of such consideration) to be received by the

shareholders of the Party subject to such Acquisition Proposal or other material terms or

condition thereof, shall constitute a new Acquisition Proposal for the purposes of Section

7.1(c), and the other Party shall be afforded a new five day period from the date on which

such Party received all of the materials set forth in Section 7.1(c) with respect to the new

Superior Proposal from the Party subject thereto.

(e) The board of directors of Veresen shall promptly reaffirm the recommendation and

determination in Section 2.2(a) by press release after (i) any Acquisition Proposal which

is publicly announced is determined not to be a Superior Proposal, or (ii) the Parties have

entered into an amended agreement pursuant to Section 7.1(c) which results in any

Acquisition Proposal not being a Superior Proposal.

(f) Veresen shall ensure that its Representatives are aware of the provisions of this

Section 7.1. Veresen shall be responsible for any breach of this Section 7.1 by Veresen's

Representatives.

7.2 Agreement as to Pembina Damages

If at any time after the execution of this Agreement:

(a) the board of directors of Veresen has withdrawn, modified, qualified or changed any of

its recommendations or determinations referred to in Section 2.2(a) in a manner adverse

to Pembina or shall have resolved to do so prior to the Effective Date, or has failed to

publicly reconfirm any such recommendation upon the reasonable request of Pembina

prior to the earlier of 72 hours following such request or 72 hours prior to the Veresen

Shareholders' Meeting other than, in each case, circumstances where Section 7.1(c) is in

effect, in which case the obligation to reaffirm is governed by Section 7.1(e)(ii) (unless

Pembina is then in material breach of its obligations hereunder and such withdrawal,

change or failure relates to such breach);

(b) (i) an Acquisition Proposal is publicly announced, proposed, disclosed, offered or made

in respect of Veresen or any Person shall have publicly announced an intention to make

an Acquisition Proposal prior to the termination of this Agreement; (ii) after such

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Acquisition Proposal shall have been publicly announced, proposed, disclosed, offered or

made, this Agreement is terminated (A) by either Party pursuant to Section 8.1(b) [No

Veresen Common Shareholder Approval] or Section 8.1(c) [Outside Date], or (B) by

Pembina pursuant to Section 8.1(d) [Failure to Satisfy Conditions] as a result of the

failure to satisfy the condition in Section 6.2(b) [Compliance by Veresen with

Covenants], and (iii) such Acquisition Proposal, or an amended version thereof, or any

other Acquisition Proposal is consummated, agreed to or entered into, as applicable,

within 12 months of the date the first Acquisition Proposal is publicly announced,

proposed, disclosed, offered or made, provided that for purposes of this Section 7.2(b) the

term "Acquisition Proposal" shall have the meaning assigned to such term in Section 1.1

except that references to "20% or more" shall be deemed to be references to "50% or

more";

(c) the board of directors of Veresen accepts, recommends, approves or enters into an

agreement to implement a Superior Proposal; or

(d) Veresen is in breach, in a material respect, of any of its covenants made in this

Agreement, which breach individually or in the aggregate causes or would reasonably be

expected to cause a Material Adverse Change with respect to Veresen and its

Subsidiaries, taken as a whole, and this Agreement is terminated by Pembina pursuant to

Section 8.1(d) [Failure to Satisfy Conditions] as a result of the failure to satisfy the

condition in Section 6.2(b) [Failure to Comply with Covenants] or Section 6.2(c) [No

Material Adverse Change];

(each of the above being a "Pembina Damages Event") then in the event of the termination of this

Agreement pursuant to Section 8.1, Veresen shall pay to Pembina, within two business days of the

termination of this Agreement, a fee in the amount of $200 million in immediately available funds to an

account designated by Pembina, and after such event but prior to payment of such amount, Veresen shall

be deemed to hold such funds in trust for Pembina; provided that: (i) in the case of a Pembina Damages

Event pursuant to Section 7.2(c) such payment shall be made by Veresen to Pembina concurrently with

the acceptance, recommending, approving or entering into of the Superior Proposal by Veresen as

provided for in Section 7.1(b)(viii)(C); and (ii) the case of a Pembina Damages Event pursuant to Section

7.2(b) such payment shall be made by Veresen to Pembina upon the consummation of the Acquisition

Proposal referred to therein. Veresen shall only be obligated to pay a maximum of $200 million pursuant

to this Section 7.2.

7.3 Fees and Expenses and Other Agreements as to Damages

(a) Subject to Section 7.3(b), each Party shall pay all fees, costs and expenses incurred by

such Party in connection with this Agreement and the Arrangement. Pembina shall pay

any filing fees and applicable Taxes payable for or in respect of any application,

notification or other filing made in respect of any regulatory process in respect of the

transactions contemplated by the Arrangement, including under the Competition Act and

the HSR Act.

(b) If this Agreement is terminated (i) by Pembina pursuant to Section 8.1(d) [Failure to

Satisfy Conditions] because of the failure of the condition in Section 6.2(a) [Accuracy of

Veresen Reps and Warranties], or (ii) by Pembina or Veresen pursuant to Section 8.1(c)

[Outside Date] and at the time of such termination there exists a state of facts or

circumstances that would cause the conditions set forth in Section 6.2(a) [Accuracy of

Veresen Reps and Warranties] not to be satisfied, notwithstanding the availability of any

cure period, Veresen shall pay to Pembina an amount equal to $25 million as

reimbursement to Pembina for its out-of-pocket expenses incurred in connection with the

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Arrangement, provided that if Pembina is in material breach of its obligations hereunder

at the time of the termination of the Agreement such amount will not be payable.

(c) If this Agreement is terminated (i) by Veresen pursuant to Section 8.1(e) [Failure to

Satisfy Conditions] because of the failure of the condition in Section 6.3(a) [Accuracy of

Pembina Reps and Warranties], or (ii) by Veresen or Pembina pursuant to Section 8.1(c)

[Outside Date] and at the time of such termination there exists a state of facts or

circumstances that would cause the conditions set forth in Section 6.3(a) [Accuracy of

Pembina Reps and Warranties] not to be satisfied, notwithstanding the availability of any

cure period, Pembina shall pay to Veresen an amount equal to $25 million as

reimbursement to Veresen for its out-of-pocket expenses incurred in connection with the

Arrangement, provided that if Veresen is in material breach of its obligations hereunder

at the time of the termination of the Agreement such amount will not be payable.

(d) If this Agreement is terminated by Veresen or Pembina pursuant to Section 8.1(c)

[Outside Date] and at the time of such termination all of the conditions set forth in

Section 6.1 and Section 6.2 have been satisfied or waived by Pembina other than those

conditions that by their terms are to be satisfied at the Effective Date and there exists a

state of facts or circumstances that would cause the conditions set forth in Section 6.1(d)

[Required Regulatory Approvals] not to be satisfied, Pembina shall pay to Veresen an

amount equal to $100 million, less any amount previously paid by Pembina to Veresen

pursuant to Section 5.6, provided that such amount will not be payable if (A) Veresen is

in material breach of its obligations hereunder at the time of the termination of the

Agreement, or (B) Pembina has complied, in all material respects, with its obligations in

Section 5.3(a) and Section 5.3(d).

(e) No fees or amounts shall be payable by Veresen under Section 7.3(b) if Veresen has paid

a fee under Section 7.2 and no fees or amounts shall be payable by Pembina under

Section 7.3(c) if Pembina has paid a fee under Section 7.3(d).

7.4 Liquidated Damages

Each Party acknowledges that all of the payment amounts set out in this Article VII are payments

of liquidated damages which are a genuine pre-estimate of the damages which Pembina or Veresen will

suffer or incur as a result of the event giving rise to such damages and resultant termination of this

Agreement and are not penalties. Each Party irrevocably waives any right it may have to raise as a

defence that any such liquidated damages are excessive or punitive. For greater certainty, the Parties

agree that if the payment of any amounts pursuant to this Article VII is made, such payment is the sole

monetary remedy of Pembina and Veresen; provided, however, that this limitation shall not apply in the

event of fraud or deliberate breach of this Agreement by a Party.

7.5 Access to Information; Confidentiality

From the date hereof until the earlier of the Effective Date and the termination of this Agreement,

Veresen shall, and shall cause its Subsidiaries and Representatives to, subject to all applicable Laws and

any confidentiality obligations owed by Veresen to a third party or in respect to customer specific or

competitively sensitive information and in accordance with the Confidentiality Agreement and any other

subsequent written agreement that addresses confidentiality between the Parties, afford to Pembina and

the Representatives of Pembina reasonable access at all reasonable times to their officers, employees,

agents, properties, books, records and contracts (but which shall not include any right of Pembina's

Representatives to attend Veresen's regular operations meetings), and shall furnish Pembina with all data

and information as Pembina may reasonably request, subject to any confidentiality obligations owed by

Veresen to a third party, in respect to customer specific or competitively sensitive information, the

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conditions contained in the Confidentiality Agreement and any other subsequent written agreement that

addresses confidentiality between the Parties, in order to permit Pembina to be in a position to

expeditiously and efficiently integrate the businesses and operations of Pembina and Veresen immediately

upon but not prior to the Effective Date.

7.6 Insurance and Indemnification

(a) Pembina agrees that it will maintain in effect, or will cause Veresen or its successors to

maintain in effect, without any reduction in scope or coverage for six years from the

Effective Time customary policies of directors' and officers' liability insurance providing

protection comparable to the current protection provided by the policies maintained by

Veresen and their respective Subsidiaries as are in effect immediately prior to the

Effective Time and providing coverage on a "trailing" or "run-off" basis for all present

and former directors and officers of Veresen with respect to claims arising from facts or

events which occurred prior to the Effective Time. Furthermore, prior to the Effective

Time, Veresen may, in the alternative, with the consent of Pembina, not to be

unreasonably withheld, purchase run-off directors' and officers' liability insurance for a

period of up to six years from the Effective Time, and in such event none of Pembina,

Veresen or any successor of Veresen will have any further obligation under this Section

7.6(a).

(b) Pembina agrees that all rights to indemnification or exculpation now existing in favour of

present and former officers and directors of Veresen shall survive completion of the

Arrangement and shall continue in full force and effect for a period of not less than six

years from the Effective Date.

7.7 Privacy Issues

(a) For the purposes of this Section 7.7, the following definitions shall apply:

(i) "applicable law" means, in relation to any Person, transaction or event, all

applicable provisions of Laws by which such Person is bound or having

application to the transaction or event in question, including applicable

privacy laws;

(ii) "applicable privacy laws" means any and all applicable laws relating to

privacy and the collection, use and disclosure of Personal Information in all

applicable jurisdictions, including the Personal Information Protection and

Electronic Documents Act (Canada) and/or any comparable provincial law

including the Personal Information Protection Act (Alberta);

(iii) "authorized authority" means, in relation to any Person, transaction or

event, any (A) federal, provincial, municipal or local governmental body

(whether administrative, legislative, executive or otherwise), both domestic

and foreign, (B) agency, authority, commission, instrumentality, regulatory

body, court, central bank or other entity exercising executive, legislative,

judicial, taxing, regulatory or administrative powers or functions of or

pertaining to government, (C) court, arbitrator, commission or body

exercising judicial, quasi-judicial, administrative or similar functions, and

(D) other body or entity created under the authority of or otherwise subject

to the jurisdiction of any of the foregoing, including any stock or other

securities exchange, in each case having jurisdiction over such Person,

transaction or event; and

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(iv) "Personal Information" means information (other than business contact

information when used or disclosed for the purpose of contacting such

individual in that individual's capacity as an employee or an official of an

organization and for no other purpose) about an identifiable individual

disclosed or transferred to Pembina by Veresen in accordance with this

Agreement and/or as a condition of the Arrangement.

(b) The Parties hereto acknowledge that they are responsible for compliance at all times with

applicable privacy laws and with respect to any individual who is a resident of the United

States, any applicable Party policy or agreement which govern the collection, use or

disclosure of Personal Information disclosed to either Party pursuant to or in connection

with this Agreement (the "Disclosed Personal Information").

(c) Prior to the completion of the Arrangement, neither Party shall use or disclose the

Disclosed Personal Information for any purposes other than those related to the

performance of this Agreement and the completion of the Arrangement. After the

completion of the transactions contemplated herein, a Party may only collect, use and

disclose the Disclosed Personal Information for the purposes for which the Disclosed

Personal Information was initially collected from or in respect of the individual to which

such Disclosed Personal Information relates or for the completion of the transactions

contemplated herein, unless (i) either Party shall have first notified such individual of

such additional purpose, and where required by applicable law and with respect to any

individual who is a resident of the United States, any applicable Party policy or

agreement, obtained the consent of such individual to such additional purpose, or (ii)

such use or disclosure is permitted or authorized by applicable law and with respect to

any individual who is a resident of the United States, any applicable Party policy or

agreement, without notice to, or consent from, such individual.

(d) Each Party acknowledges and confirms that the disclosure of the Disclosed Personal

Information is necessary for the purposes of determining if the Parties shall proceed with

the Arrangement, and that the Disclosed Personal Information relates solely to the

carrying on of the business or the completion of the Arrangement.

(e) Each Party acknowledges and confirms that it has taken and shall continue to take

reasonable steps to, in accordance with applicable law and with respect to any individual

who is resident of the United States, any applicable Party policy or agreement, prevent

accidental loss or corruption of the Disclosed Personal Information, unauthorized input or

access to the Disclosed Personal Information, or unauthorized or unlawful collection,

storage, disclosure, recording, copying, alteration, removal, deletion, use or other

processing of such Disclosed Personal Information.

(f) Subject to the following provisions, each Party shall at all times keep strictly confidential

all Disclosed Personal Information provided to it, and shall instruct those employees or

advisors responsible for processing such Disclosed Personal Information to protect the

confidentiality of such information in a manner consistent with the Parties' obligations

hereunder. Prior to the completion of the Arrangement, each Party shall take reasonable

steps to ensure that access to the Disclosed Personal Information shall be restricted to

those employees or advisors of the respective Party who have a bona fide need to access

to such information in order to complete the Arrangement.

(g) Where authorized by applicable law, each Party shall promptly notify the other Party to

this Agreement of all inquiries, complaints, requests for access, variations or withdrawals

of consent and claims of which the Party is made aware in connection with the Disclosed

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Personal Information. To the extent permitted by applicable law, the Parties shall fully

co-operate with one another, with the persons to whom the Personal Information relates,

and any authorized authority charged with enforcement of applicable privacy laws, in

responding to such inquiries, complaints, requests for access, variations or withdrawals of

consent and claims.

(h) Upon the expiry or termination of this Agreement, or otherwise upon the reasonable

request of either Party, the other Party shall forthwith cease all use of the Disclosed

Personal Information acquired by it in connection with this Agreement and will return to

the requesting Party or, at the requesting Party's request, destroy in a secure manner and

with respect to any individual who is resident of the United States, in accordance with

applicable law and any applicable Party policy or agreement, the Disclosed Personal

Information (and any copies thereof) in its possession.

ARTICLE VIII

TERM, TERMINATION, AMENDMENT AND WAIVER

8.1 Termination

This Agreement may be terminated at any time prior to the Effective Date:

(a) by mutual written consent of Pembina and Veresen;

(b) by either Pembina or Veresen if the Arrangement Resolution shall have failed to receive

the requisite vote of the Veresen Common Shareholders for approval at the Veresen

Shareholders' Meeting (including any adjournment or postponement thereof) in

accordance with the Interim Order;

(c) by either Pembina or Veresen if the Effective Time shall not have occurred on or prior to

the Outside Date, except that the right to terminate this Agreement under this

Section 8.1(c) shall not be available to any Party whose failure to fulfill any of its

obligations has been the cause of, or resulted in, the failure of the Effective Time to occur

by such date;

(d) by Pembina if any of the conditions set forth in Section 6.1 or Section 6.2 has not been

satisfied or waived by the Outside Date or such condition is incapable of being satisfied

by the Outside Date, provided that Pembina is in compliance with its obligations under

Section 6.4 (including in respect of providing any required cure period prior to such

termination), if applicable, and not then in breach of this Agreement so as to cause any of

the conditions set forth in Section 6.1 or Section 6.3 not to be satisfied;

(e) by Veresen if any of the conditions set forth in Section 6.1 or Section 6.3 has not been

satisfied or waived by the Outside Date or such condition is incapable of being satisfied

by the Outside Date, provided that Veresen is in compliance with its obligations under

Section 6.4 (including in respect of providing any required cure period prior to such

termination), if applicable, and not then in breach of this Agreement so as to cause any of

the conditions set forth in Section 6.1 or Section 6.2, as applicable, not to be satisfied;

(f) by Pembina upon the occurrence of a Pembina Damages Event as provided in

Section 7.2; or

(g) by Veresen to accept, recommend, approve or enter into an agreement to implement a

Superior Proposal in accordance with Section 7.1(b)(viii), provided that Veresen (i) has

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complied with its obligations set forth in Section 7.1; and (ii) concurrently pays the

amount required pursuant to Section 7.2.

8.2 Effect of Termination

In the event of the termination of this Agreement in the circumstances set out in Section 8.1, this

Agreement shall forthwith become void and neither Party shall have any liability or further obligation to

the other Party hereunder, except with respect to the obligations set forth in Sections 7.2, 7.3, and 7.4

where applicable. For greater certainty, unless Section 7.4 applies due to a Party being entitled to a

payment pursuant to Sections 7.2 or 7.3, nothing contained in this Section 8.2 shall relieve either Party

from liability for any breach of any provision of this Agreement. No termination of this Agreement shall

affect the obligations of the Parties pursuant to the Confidentiality Agreement or any other subsequent

written agreement that addresses confidentiality between the Parties, except to the extent specified

therein.

8.3 Amendment

This Agreement and the Plan of Arrangement may, at any time and from time to time before or

after the holding of the Veresen Shareholders' Meeting but not later than the Effective Time, be amended

by mutual written agreement of the Parties, subject to the Interim Order and Final Order and applicable

Laws.

Notwithstanding anything else contained herein: (a) in the circumstances where the Preferred

Shareholder Resolution does not receive the requisite approval of the Veresen Preferred Shareholders at

the Veresen Shareholders' Meeting (or any adjournment thereof) and the Veresen Preferred Shareholders

do not otherwise approve a special resolution with similar effect to the Preferred Shareholder Resolution

prior to the Effective Time such that Pembina is the sole holder of the Veresen Preferred Shares prior to

the amalgamation contemplated in Section 3.1(f) of the Plan of Arrangement, Veresen shall amend the

Plan of Arrangement to exclude the Veresen Preferred Shares under the Plan of Arrangement and matters

ancillary thereto; and (b) in the circumstances where the Preferred Shareholder Resolution receives the

requisite approval of the Veresen Preferred Shareholders, and Dissent Rights have been validly exercised

in respect of more than 5% of the outstanding Veresen Preferred Shares, Veresen shall amend the Plan of

Arrangement if requested by Pembina to exclude the Veresen Preferred Shares under the Plan of

Arrangement and matters ancillary thereto, including, in each case, the amalgamation contemplated in

Section 3.1(f) of the Plan of Arrangement.

8.4 Waiver

Either Party may: (a) extend the time for the performance of any of the obligations or other acts

of the other Party; (b) waive compliance with any of the other Party's agreements or the fulfillment of any

conditions to its own obligations contained herein; and (c) waive inaccuracies in any of the other Party's

representations or warranties contained herein or in any document delivered by the other Party; provided,

however, that any such extension or waiver shall be valid only if set forth in an instrument in writing

signed on behalf of such Party and such waiver shall apply only to the specific matters identified in such

instrument.

ARTICLE IX

GENERAL PROVISIONS

9.1 Notices

All notices and other communications given or made pursuant hereto shall be in writing and shall

be deemed to have been duly given or made as of the date delivered or sent if delivered personally or sent

by facsimile transmission or email, or as of the following business day if sent by prepaid overnight

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courier, to the Parties at the following addresses (or at such other addresses as shall be specified by either

Party by notice to the other given in accordance with these provisions):

(a) if to Pembina:

Pembina Pipeline Corporation

4000, 585 – 8th Avenue S.W.

Calgary, Alberta T2P 1G1

Attention: Scott Burrows, Vice President, Finance and Chief Financial Officer

Harry Andersen, Vice President, Legal and General Counsel

Telephone: 403-231-7559

403-231-7476

Facsimile: 403-691-7356

403-237-0254

Email: [email protected]

[email protected]

with a copy to:

Blake, Cassels & Graydon LLP

3500, 855-2nd Street S.W.

Calgary, Alberta T2P 4J8

Attention: Chad Schneider

Jeff Bakker

Telephone: 403-260-9660

403-260-9682

Facsimile: 403-260-9700


[email protected]

(b) if to Veresen:

Veresen Inc.

Suite 900, Livingston Place

222 – 3rd

Avenue S.W.

Calgary, Alberta T2P 0B4

Attention: Kevan King, Senior Vice President, General Counsel

Telephone: 403-213-3643

Facsimile: 403-213-3648


with a copy to:


Suite 2500, 450 - 1st Street S.W.


Attention: Noralee Bradley

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Telephone: 403-260-7002

Facsimile: 403-260-7024


9.2 Entire Agreement; Binding Effect

This Agreement: (a) together with the Confidentiality Agreement and any other subsequent

written agreement that addresses confidentiality between the Parties, constitutes the entire agreement and

supersedes all other prior agreements and understandings, both written and oral, between the Parties with

respect to the subject matter hereof; and (b) shall be binding upon and enure to the benefit of the Parties

and their respective successors and permitted assigns.

9.3 Assignment

Except as expressly permitted by the terms hereof, neither this Agreement nor any of the rights,

interests or obligations hereunder shall be assigned by either of the Parties hereto without the prior written

consent of the other Party.

9.4 Time of Essence

Time shall be of the essence in this Agreement.

9.5 Further Assurances

Each Party hereto shall, from time to time and at all times hereafter, at the request of the other

Party hereto, but without further consideration, do all such further acts, and execute and deliver all such

further documents and instruments as may be reasonably required in order to fully perform and carry out

the terms and intent hereof.

9.6 Specific Performance

Pembina and Veresen agree that irreparable harm would occur for which money damages would

not be an adequate remedy at law in the event that any of the provisions of this Agreement or the

Confidentiality Agreement or any other subsequent written agreement that addresses confidentiality

between the Parties were not performed by the other Party in accordance with their specific terms or were

otherwise breached. It is accordingly agreed that each Party shall be entitled to an injunction or

injunctions and other equitable relief to prevent breaches or threatened breaches of the provisions of this

Agreement or the Confidentiality Agreement or any other subsequent written agreement that addresses

confidentiality between the Parties or to otherwise obtain specific performance of any such provisions,

any requirement for the securing or posting of any bond in connection with the obtaining of any such

injunctive or other equitable relief hereby being waived.

9.7 Third Party Beneficiaries

The provisions of Section 7.6 are intended for the benefit of all present and former directors and

officers of Veresen and its Subsidiaries, as and to the extent applicable in accordance with their terms,

and shall be enforceable by each of such Persons and his or her heirs, executors administrators and other

legal representatives (collectively, the "Third Party Beneficiaries") and Pembina shall hold the rights

and benefits of Section 7.6 in trust for and on behalf of the Third Party Beneficiaries and Pembina hereby

accepts such trust and agrees to hold the benefit of and enforce performance of such covenants on behalf

of the Third Party Beneficiaries; and (b) are in addition to, and not in substitution for, any other rights that

the Third Party Beneficiaries may have by contract or otherwise. Except as provided in this Section 9.7,

this Agreement shall not: (i) confer any rights or remedies upon any Person other than the Parties and

their respective successors and permitted assigns; (ii) constitute or create an employment agreement with

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any employee, create any right to employment or continued employment or service, or to a particular term

or condition of employment, or (iii) other than as may be provided for in Section 2.9 and Section 5.2(g)

hereof, be construed to establish, amend, or modify any Veresen Employee Plan or any other benefit or

compensation plan, program, agreement or arrangement.

9.8 Governing Law

This Agreement shall be governed by and construed in accordance with the Laws of the Province

of Alberta and the Laws of Canada applicable therein, and the Parties hereto irrevocably attorn to the

jurisdiction of the courts of the Province of Alberta.

9.9 Severability

If any one or more of the provisions or parts thereof contained in this Agreement should be or

become invalid, illegal or unenforceable in any respect in any jurisdiction, the remaining provisions or

parts thereof contained herein shall be and shall be conclusively deemed to be, as to such jurisdiction,

severable therefrom and:

(a) the validity, legality or enforceability of such remaining provisions or parts thereof shall

not in any way be affected or impaired by the severance of the provisions or parts thereof

severed; and

(b) the invalidity, illegality or unenforceability of any provision or part thereof contained in

this Agreement in any jurisdiction shall not affect or impair such provision or part thereof

or any other provisions of this Agreement in any other jurisdiction.

Upon such determination that any term or other provision is invalid, illegal or unenforceable, the

Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the

Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby

are fulfilled to the fullest extent possible.

9.10 Counterparts

This Agreement may be executed by facsimile or other electronic signature and in counterparts,

each of which shall be deemed an original, and all of which together constitute one and the same

instrument.

[The remainder of this page is left blank intentionally]

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IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be executed as of

the date first written above by their respective officers thereunto duly authorized.


by: (signed) "Michael H. Dilger"

Name: Michael H. Dilger

Title: President and Chief Executive Officer

by: (signed) "Harold K.B. Andersen"

Name: Harold K.B. Andersen

Title: Vice President, Legal and General Counsel

VERESEN INC.

by: (signed) "Don Althoff"

Name: Don Althoff

Title: President and Chief Executive Officer

by: (signed) "Kevan King"

Name: Kevan King

Title: Senior Vice President, General Counsel

C-56

SCHEDULE A

PLAN OF ARRANGEMENT

respecting

VERESEN INC.

made pursuant to

Section 193 of the Business Corporations Act (Alberta)

C-57

PLAN OF ARRANGEMENT

PLAN OF ARRANGEMENT UNDER SECTION 193

OF THE

BUSINESS CORPORATIONS ACT (ALBERTA)

ARTICLE 1

INTERPRETATION

1.1 In this Plan of Arrangement, the following terms have the following meanings:

(a) "ABCA" means the Business Corporations Act, R.S.A. 2000, c. B-9, as amended,

including the regulations promulgated thereunder;

(b) "Amalco" means, in the event the Preferred Shareholder Resolution receives the requisite

approval of Veresen Preferred Shareholders at the Veresen Shareholders’ Meeting, or the

Veresen Preferred Shareholders have approved a special resolution with similar effect to

the Preferred Shareholder Resolution prior to the Effective Time such that Pembina is the

sole holder of the Veresen Preferred Shares prior to the amalgamation contemplated in

Section 3.1(f), and this Plan of Arrangement is not otherwise amended pursuant to

Section 6.5 hereof to exclude the Veresen Preferred Shares, the corporation resulting

from the amalgamation of Pembina and Veresen pursuant to this Plan of Arrangement;

(c) "Arrangement", "herein", "hereof", "hereto", "hereunder" and similar expressions

mean and refer to the arrangement pursuant to section 193 of the ABCA on the terms and

subject to the conditions set forth in this Plan of Arrangement as supplemented, modified

or amended in accordance with this plan, and not to any particular article, section or other

portion hereof;

(d) "Arrangement Agreement" means the agreement dated May 1, 2017, between Pembina

and Veresen with respect to the Arrangement and all amendments thereto;

(e) "Arrangement Resolution" means the special resolution of Veresen Shareholders in

respect of the Arrangement to be considered at the Veresen Shareholders’ Meeting

substantially in the form attached as Schedule "B-1" to the Arrangement Agreement;

(f) "Articles of Arrangement" means the articles of arrangement of Veresen in respect of

the Arrangement required under subsection 193(10) of the ABCA to be sent to the

Registrar for filing after the Final Order has been granted, giving effect to the

Arrangement;

(g) "Business Day" means a day other than a Saturday, Sunday or statutory holiday or other

day when banks in the City of Calgary, Alberta are not generally open for business;

(h) "Certificate" means the certificate or proof of filing to be issued by the Registrar

pursuant to subsection 193(11) or 193(12) of the ABCA in respect of the Articles of

Arrangement giving effect to the Arrangement;

(i) "Court" means the Court of Queen's Bench of Alberta;

(j) "Depositary" means Computershare Trust Company of Canada, a trust company licensed

to carry on business in the Province of Alberta at its principal office in Calgary, Alberta

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2

or such other person that may be appointed by Pembina for the purpose of receiving

deposits of certificates formerly representing Veresen Shares;

(k) "Dissenting Veresen Shareholders" means registered Veresen Shareholders and, in the

event the Preferred Shareholder Resolution receives the requisite approval of Veresen

Preferred Shareholders at the Veresen Shareholders’ Meeting, Veresen Preferred

Shareholders who validly exercise the Dissent Rights with respect to the Arrangement

Resolution or the Preferred Shareholder Resolution, as applicable, provided to them

under the Interim Order, which exercise of Dissent Rights has not been withdrawn, or is

not deemed to have been withdrawn, before the Effective Time;

(l) "Dissent Rights" means the right dissent in respect of the Arrangement described in

Article 4 hereof;

(m) "Effective Date" means the date the Arrangement is effective under the ABCA;

(n) "Effective Time" means the time at which the Articles of Arrangement are filed with the

Registrar on the Effective Date and the Arrangement becomes effective;

(o) "Election Deadline" means 5:00 p.m. (Calgary time) on the date indicated as the election

deadline in the Letter of Transmittal and Election Form, which shall be not more than

three business days before the Effective Date;

(p) "Encumbrance" includes any mortgage, pledge, assignment, charge, lien, security

interest, adverse interest in property, other third party interest or encumbrance of any

kind whether contingent or absolute, and any agreement, option, right or privilege

(whether by law, contract or otherwise) capable of becoming any of the foregoing

(q) "Final Order" means the final order of the Court approving the Arrangement pursuant to

subsection 193(9)(a) of the ABCA, as such order may be amended at any time prior to

the Effective Date or, if appealed, then unless such appeal is withdrawn or denied, as

affirmed;

(r) "Interim Order" means an interim order of the Court concerning the Arrangement under

subsection 193(4) of the ABCA, containing declarations and directions with respect to

the Arrangement and the holding of the Veresen Shareholders’ Meeting, as such order

may be affirmed, amended or modified by any court of competent jurisdiction;

(s) "Tax Act" means the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended,

including the regulations promulgated thereunder, as amended from time to time;

(t) "Total Elected Cash Consideration" has the meaning ascribed thereto in Section 3.3;

(u) "Total Elected Share Consideration" has the meaning ascribed thereto in Section 3.3;

(v) "Letter of Transmittal" means, as applicable: (i) in respect of the Veresen Shares, the

letter of transmittal and election form accompanying the Veresen Proxy Circular sent to

Veresen Shareholders and Veresen Preferred Shareholders pursuant to which holders of

Veresen Shares are required to deliver certificates representing the Veresen Shares to the

Depository and may elect to receive, on completion of the Arrangement, in exchange for

each Veresen Share, the Cash Consideration or the Share Consideration, subject to

proration set forth in Section 3.3 hereof; or (ii) in respect of the Veresen Preferred Shares,

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3

the letter of transmittal accompanying the Veresen Proxy Circular sent to Veresen

Shareholders and Veresen Preferred Shareholders pursuant to which holders of Veresen

Preferred Shares are required to deliver certificates representing the Veresen Preferred

Shares to the Depository;

(w) "Maximum Cash Consideration" means $1,522,500,000;

(x) "Maximum Share Consideration" means 99,500,000 Pembina Shares;

(y) "Pembina" means Pembina Pipeline Corporation, a corporation existing under the

ABCA;

(z) "Pembina Exchange Preferred Shares" means the Pembina Series [X] Shares, the

Pembina Series [X+1] Shares, the Pembina Series [X+2] Shares, the Pembina Series

[X+3] Shares, the Pembina Series [X+4] Shares and the Pembina Series [X+5] Shares, as

constituted on the Effective Date;

(aa) "Pembina Series [X] Shares" means the cumulative redeemable rate reset Class A

Preferred Shares, series [X] in the capital of Pembina, such shares having identical terms

to the Veresen Series A Shares except that the issuer thereof shall be the Pembina and

they will be convertible into Pembina Series [X+1] Shares instead of Veresen Series B

Shares;

(bb) "Pembina Series [X+1] Shares" means the cumulative redeemable floating rate Class A

Preferred Shares, series [X+1] in the capital of Pembina, such shares having identical

terms to the Veresen Series B Shares except that the issuer thereof shall be the Pembina

and they will be convertible into Pembina Series [X] Shares instead of Veresen Series A

Shares;

(cc) "Pembina Series [X+2] Shares" means the cumulative redeemable rate reset Class A


terms to the Veresen Series C Shares except that the issuer thereof shall be the Pembina

and they will be convertible into Pembina Series [X+3] Shares instead of Veresen Series

D Shares;

(dd) "Pembina Series [X+3] Shares" means the cumulative redeemable floating rate Class A


terms to the Veresen Series D Shares except that the issuer thereof shall be the Pembina


C Shares;

(ee) "Pembina Series [X+4] Shares" means the cumulative redeemable rate reset Class A


terms to the Veresen Series E Shares except that the issuer thereof shall be the Pembina


F Shares;

(ff) "Pembina Series [X+5] Shares" means the cumulative redeemable floating rate Class A


terms to the Veresen Series F Shares except that the issuer thereof shall be the Pembina


E Shares;

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4

(gg) "Pembina Shares" means the common shares in the capital of Pembina;

(hh) "Plan" or "Plan of Arrangement" means this plan of arrangement as amended or

supplemented from time to time in accordance with the terms hereof, and "hereby",

"hereof", "herein", "hereunder", "herewith" and similar terms refer to this plan of

arrangement and not to any particular provision of this plan of arrangement;

(ii) "Preferred Shareholder Resolution" means the special resolution of the Veresen

Preferred Shareholders, voting as a class, in respect of the Arrangement to be considered

at the Veresen Shareholders’ Meeting substantially in the form attached as Schedule B-2

to the Arrangement Agreement;

(jj) "Registrar" means the Registrar of Corporations or the Deputy Registrar of Corporations

appointed pursuant to section 263 of the ABCA;

(kk) "Veresen" means Veresen Inc., a corporation incorporated under the ABCA;

(ll) "Veresen Cash Consideration" means $18.65 per Veresen Share;

(mm) "Veresen Preferred Share Consideration" means one Pembina Series [X] Share per

Veresen Series A Share, without interest, one Pembina Series [X+1] Share per Veresen

Series B Share, without interest, one Pembina Series [X+2] Share per Veresen Series C

Share, without interest, one Pembina Series [X+3] Share per Veresen Series D Share,

without interest, one Pembina Series [X+4] Share per Veresen Series E Share, without

interest, and one Pembina Series [X+5] Share per Veresen Series F Share, without

interest (together, in the case of each Veresen Preferred Share, with an amount equal to

all accrued and unpaid dividends thereon up to, but excluding, the Effective Date) as

applicable;

(nn) "Veresen Preferred Shareholders" means, collectively, the holders of Veresen Series A

Shares, Veresen Series B Shares, Veresen Series C Shares, Veresen Series D Shares,

Veresen Series E Shares and Veresen Series F Shares;

(oo) "Veresen Proxy Circular" means the notice of the Veresen Shareholders' Meeting to be

sent to Veresen Shareholders and Veresen Preferred Shareholders and the management

proxy circular to be prepared in connection with the Veresen Shareholders' Meeting

together with any amendments thereto or supplements thereof, and any other registration

statement, information circular or proxy statement which may be prepared in connection

with the Veresen Shareholders' Meeting;

(pp) "Veresen Series A Shares" means the cumulative redeemable preferred shares, series A

of Veresen;

(qq) "Veresen Series B Shares" means the cumulative redeemable preferred shares, series B

of Veresen;

(rr) "Veresen Series C Shares" means the cumulative redeemable preferred shares, series C

of Veresen;

(ss) "Veresen Series D Shares" means the cumulative redeemable preferred shares, series D

of Veresen;

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5

(tt) "Veresen Series E Shares" means the cumulative redeemable preferred shares, series E

of Veresen;

(uu) "Veresen Series F Shares" means the cumulative redeemable preferred shares, series F

of Veresen;

(vv) "Veresen Shareholders" means the holders of Veresen Shares;

(ww) "Veresen Share Consideration" means 0.4287 of a Pembina Share;

(xx) "Veresen Shareholders' Meeting" means such meeting or meetings of the Veresen

Shareholders and the Veresen Preferred Shareholders, including any adjournment thereof,

that is to be convened as provided by the Interim Order to consider, and if deemed

advisable approve, the Arrangement;

(yy) "Veresen Shareholder Rights Plan" means Veresen's shareholder rights plan dated May

6, 2014, as such may be amended, amended and restated or replaced from time to time;

(zz) "Veresen Shares" means the common shares in the capital of Veresen; and

(aaa) "Veresen SRPs" means the rights issued pursuant to the Veresen Shareholder Rights

Plan.

1.2 The division of this Plan of Arrangement into articles, sections and subsections and the insertion

of headings are for convenience of reference only and shall not affect the construction or

interpretation of this Plan of Arrangement.

1.3 Unless reference is specifically made to some other document or instrument, all references herein

to articles, sections and subsections are to articles, sections and subsections of this Plan of

Arrangement.

1.4 Unless the context otherwise requires, words importing the singular number shall include the

plural and vice versa; words importing any gender shall include all genders; and words importing

persons shall include individuals, partnerships, associations, corporations, funds, unincorporated

organizations, governments, regulatory authorities, and other entities.

1.5 Unless otherwise specified, all references to "dollars" or "$" shall mean Canadian dollars.

1.6 In the event that the date on which any action is required to be taken hereunder by any of the

parties is not a Business Day in the place where the action is required to be taken, such action

shall be required to be taken on the next succeeding day which is a Business Day in such place.

1.7 References in this Plan of Arrangement to any statute or sections thereof shall include such

statute as amended or substituted and any regulations promulgated thereunder from time to time

in effect.

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ARTICLE 2


2.1 This Plan of Arrangement is made pursuant and subject to the provisions of and forms part of the

Arrangement Agreement.

2.2 This Plan of Arrangement, upon the filing of the Articles of Arrangement and the issue of the

Certificate, will become effective on, and be binding on and after, the Effective Time on: (i) all

registered and beneficial Veresen Shareholders and, in the event the Preferred Shareholder

Resolution receives the requisite approval of Veresen Preferred Shareholders at the Veresen

Shareholders’ Meeting, the Veresen Preferred Shareholders; (ii) Veresen; and (iii) Pembina.

2.3 The Articles of Arrangement and Certificate shall be filed and issued, respectively, with respect

to this Arrangement in its entirety. The Certificate shall be conclusive evidence that the

Arrangement has become effective and that each of the provisions of Article 3 have become

effective in the sequence set out therein. If no Certificate is required to be issued by the Registrar

pursuant to subsection 193(11) of the ABCA, the Arrangement shall become effective at the

Effective Time on the date the Articles of Arrangement are filed with the Registrar pursuant to

subsection 193(10) of the ABCA.

ARTICLE 3

ARRANGEMENT

3.1 Commencing at the Effective Time, each of the events set out below shall occur and shall be

deemed to occur in the following order without any further act or formality except as otherwise

provided herein.

Veresen Shareholder Rights Plan

(a) The Veresen Shareholder Rights Plan shall terminate and cease to have any further force

or effect and the Veresen SRP Rights shall be cancelled without any payment in respect

thereof.

Dissenting Veresen Shareholders

(b) Subject to Article 4, the Veresen Shares and, in the event the Preferred Shareholder

Resolution receives the requisite approval of Veresen Preferred Shareholders at the

Veresen Shareholders’ Meeting, the Veresen Preferred Shares held by Dissenting

Veresen Shareholders who have validly exercised Dissent Rights shall be deemed to have

been transferred to Veresen (free and clear of all any Encumbrances), and cancelled and

such Dissenting Veresen Shareholders shall cease to have any rights as Veresen

Shareholders or Veresen Preferred Shareholders, as applicable, other than the right to be

paid the fair value of their Veresen Shares or Veresen Preferred Shares, as the case may

be, in accordance with Article 4, and the names of such holders shall be removed from

the register of Veresen Shareholders and Veresen Preferred Shareholders, as applicable.

Acquisition of Veresen Shares by Pembina

(c) Each issued and outstanding Veresen Share (other than those held by Dissenting Veresen

Shareholders) shall be transferred by the holder thereof without any further action on its

part (free and clear of any Encumbrances) to Pembina in accordance with the election or

deemed election of such holder pursuant to Section 3.2, as adjusted by Section 3.3, if

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applicable, in exchange for the Veresen Cash Consideration or the Veresen Share

Consideration, and Pembina shall be deemed to be the legal and beneficial owner of such

transferred Veresen Share (free and clear of Encumbrances,), and upon such exchange:

(i) the holders of such Veresen Shares shall cease to be the holders of Veresen

Shares and the names of such holders shall be removed from the register of

Veresen Shareholders; and

(ii) Pembina shall become the holder of the Veresen Shares so exchanged and shall

be added to the register of Veresen Shareholders as the registered holder of such

shares.

Acquisition and Exchange of Veresen Preferred Shares by Pembina

(d) Provided that the Preferred Shareholder Resolution has received the requisite approval of

Veresen Preferred Shareholders at the Veresen Shareholders’ Meeting, each issued and

outstanding Veresen Preferred Share (other than those held by Dissenting Veresen

Shareholders) shall be transferred by the holder thereof without any further action on its

part (free and clear of any Encumbrances) to Pembina in exchange for the Veresen

Preferred Share Consideration, as applicable, and Pembina shall be deemed to be the

legal and beneficial owner of such transferred Veresen Preferred Share (free and clear of

Encumbrances), and upon such exchange:

(i) the holders of such Veresen Preferred Shares shall cease to be the holders of

Veresen Preferred Shares and the names of such holders shall be removed from

the register of Veresen Preferred Shareholders; and

(ii) Pembina shall become the holder of the Veresen Preferred Shares so exchanged

and shall be added to the register of Veresen Preferred Shareholders as the

registered holder of such shares.

Amalgamation

(e) Provided that the Preferred Shareholder Resolution has received the requisite approval of

Veresen Preferred Shareholders at the Veresen Shareholders’ Meeting or Pembina has

otherwise acquired all of the Veresen Preferred Shares, and this Plan of Arrangement is

not otherwise amended pursuant to Section 6.5 hereof to exclude the Veresen Preferred

Shares, the aggregate stated capital of Veresen, in respect of the Veresen Shares and the

Veresen Preferred Shares, shall be reduced to nil.

(f) Provided that the Preferred Shareholder Resolution has received the requisite approval of

Veresen Preferred Shareholders at the Veresen Shareholders’ Meeting or the Veresen

Preferred Shareholders have approved a special resolution with similar effect to the

Preferred Shareholder Resolution prior to the Effective Time such that Pembina is the

sole holder of the Veresen Preferred Shares, and this Plan of Arrangement is not

otherwise amended pursuant to Section 6.5 hereof to exclude the Veresen Preferred

Shares, Pembina and Veresen shall be amalgamated and continued as one corporation

under the ABCA to form Amalco in accordance with the following:


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(ii) Share Provisions. The share provisions and authorized share capital of Amalco

shall be the same as the share provisions and authorized share capital of

Pembina;


(A) Initial Directors. The directors of Amalco shall be the same as the

directors of Pembina; and

(B) Initial Officers. The officers of Amalco shall be the same as the officers

of Phiilip;

(iv) Business and Powers. There shall be no restrictions on the business that Amalco

may carry on or on the powers it may exercise;

(v) Other Provisions. The other provisions forming part of the Articles of Amalco

shall be the same as the respective provision of the articles of Pembina as such

existed immediately prior to the amalgamation;

(vi) Stated Capital. The aggregate stated capital of Amalco will be an amount equal

to the aggregate of the paid-up capital for the purposes of the Tax Act of the

Pembina Shares and the Class A Preferred Shares of Pembina outstanding

immediately before the amalgamation;


(viii) Registered Office. The registered office of Amalco shall be the registered office

of Pembina;


(A) all of the property of each of Pembina and Veresen shall continue to be

the property of Amalco;

(B) Amalco shall continue to be liable for the obligations of each of Pembina

and Veresen;

(C) any existing cause of action, claim or liability to prosecution of Pembina

or Veresen shall be unaffected;

(D) any civil, criminal or administrative action or proceeding pending by or

against either of Pembina or Veresen may be continued to be prosecuted

by or against Amalco; and

(E) a conviction against, or ruling, order or judgment in favour of or against,

either of Pembina or Veresen may be enforced by or against Amalco;

(x) Articles. The articles of amalgamation of Amalco filed shall be deemed to be the

articles of incorporation of Amalco, and the certificate of amalgamation of

Amalco shall be deemed to be the certificate of incorporation of Amalco;

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9

(xi) Inconsistency with Laws. To the extent any of the provisions of this Plan of

Arrangement is deemed to be inconsistent with applicable Laws, this Plan of

Arrangement shall be automatically adjusted to remove such inconsistency;

(xii) Cancellation of Shares. On the amalgamation each issued and outstanding

Veresen Share and Veresen Preferred Share shall be cancelled and each issued

and outstanding Pembina Share and Class A Preferred Share of Pembina shall

remain unaffected.

Election

3.2 With respect to the exchange of Veresen Shares effected pursuant to Section 3.1(c):

(a) each Veresen Shareholder (other than Dissenting Shareholders) may elect to receive, in

respect of each Veresen Share held, the Veresen Cash Consideration or the Veresen Share

Consideration, subject to Sections 3.3, 3.4 and 5.6;

(b) the election provided for in Section 3.2(a) shall be made by each Veresen Shareholder by

depositing with the Depositary, prior to the Election Deadline, a duly completed Letter of

Transmittal indicating such holder's election, together with any certificates representing

the holder's Veresen Shares;

(c) any Letter of Transmittal, once deposited with the Depositary, shall be irrevocable and

may not be withdrawn by a Veresen Shareholder; and

(d) any Veresen Shareholder who does not deposit with the Depositary a duly completed

Letter of Transmittal prior to the Election Deadline, or otherwise fails to comply with the

requirements of this Section 3.2 and the Letter of Transmittal, shall be deemed to have

elected to receive the Share Consideration in respect of all of such holder's Veresen

Shares, subject to Sections 3.3, 3.4 and 5.6.

3.3 Adjustments to Share and Cash Consideration

(a) Notwithstanding Section 3.2 or any contrary provision herein (other than Section 5.6), the

maximum amount of cash that may, in the aggregate, be paid to the Veresen Shareholders

pursuant to Section 3.1(c) shall be equal to the Maximum Cash Consideration. In the

event that the aggregate amount of cash that would, but for this Section 3.3(a), be paid to

Veresen Shareholders in accordance with the elections or deemed elections of such

Veresen Shareholders pursuant to Section 3.2 (the "Total Elected Cash Consideration")

exceeds the Maximum Cash Consideration, then the aggregate amount of cash to be paid

to any Veresen Shareholder shall be determined by multiplying the aggregate amount of

cash that would, but for this Section 3.3(a), be paid to such Veresen Shareholder by a

fraction, rounded to six decimal places, the numerator of which is the Maximum Cash

Consideration and the denominator of which is the Total Elected Cash Consideration; and

such holder shall be deemed to have elected to receive the Veresen Cash Consideration

for such number of its Veresen Shares, rounded down to the nearest whole, as is equal to

the aggregate amount of cash received by such holder, as adjusted in accordance with this

Section 3.3(a), divided by the Veresen Cash Consideration, and the Veresen Share

Consideration for the remainder of its Veresen Shares for which, but for this

Section 3.3(a), such holder would otherwise have received the Veresen Cash

Consideration.

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10

(b) Notwithstanding Section 3.2 or any contrary provision herein, the maximum number of

Pembina Shares that may, in the aggregate, be paid to the Veresen Shareholders pursuant

to Section 3.1(c) shall be equal to the Maximum Share Consideration. In the event that

the aggregate number of Pembina Shares that would, but for this Section 3.3(b), be paid

to Veresen Shareholders in accordance with the elections or deemed elections of such

Veresen Shareholders pursuant to Section 3.2 (the "Total Elected Share

Consideration") exceeds the Maximum Share Consideration, then the aggregate number

of Pembina Shares to be paid to any Veresen Shareholder shall be determined by

multiplying the aggregate number of Pembina Shares that would, but for this

Section 3.3(b), be issued to such Veresen Shareholder by a fraction, rounded to six

decimal places, the numerator of which is the Maximum Share Consideration and the

denominator of which is the Total Elected Share Consideration; and such holder shall be

deemed to have elected to receive the Veresen Share Consideration for such number of its

Veresen Shares, rounded down to the nearest whole, as is equal to the aggregate number

of Pembina Shares received by such holder, as adjusted pursuant to this Section 3.3(b),

divided by the Veresen Share Consideration, and the Veresen Cash Consideration for the

remainder of its Veresen Shares for which, but for this Section 3.3(b), such holder would

otherwise have received the Veresen Share Consideration.

Withholding

3.4 Veresen, Pembina and the Depositary shall be entitled to deduct and withhold from any

consideration or amount otherwise payable to any former Veresen Shareholder or Veresen

Preferred Shareholder, if applicable, such amounts as Veresen, Pembina, or the Depositary, as the

case may be, may determine is required or permitted to deduct and withhold with respect to such

payment under the Tax Act, the United States Internal Revenue Code of 1986 or any provision of

federal, provincial, territorial, state, local or foreign tax law. To the extent that amounts are so

withheld, such withheld amounts shall be treated for all purposes hereof as having been paid to

the former Veresen Shareholder or Veresen Preferred Shareholder, as the case may be, in respect

of which such deduction and withholding was made, provided that such withheld amounts are

actually remitted to the appropriate taxing authority. To the extent that the amount so required to

be deducted or withheld from any payment to a former Veresen Shareholder or Veresen Preferred

Shareholder, as the case may be, exceeds the cash consideration otherwise payable to the holder,

Veresen, Pembina and the Depositary are hereby authorized to sell or otherwise dispose of any

property or amount otherwise payable to such former Veresen Shareholder or Veresen Preferred

Shareholder pursuant to this Plan of Arrangement to the extent necessary to provide sufficient

funds to Veresen, Pembina or the Depositary, as the case may be, to enable it to comply with such

deduction or withholding requirement and Veresen, Pembina or the Depositary, as the case may

be, shall remit to such former Veresen Shareholder or Veresen Preferred Shareholder, as the case

may be, any unapplied balance of the net proceeds of such sale.

ARTICLE 4

DISSENTING VICTOR SHAREHOLDERS

4.1 Each registered holder of Veresen Shares or, subject to Section 4.7, Veresen Preferred Shares

shall have the right to dissent with respect to the Arrangement in accordance with the Interim

Order and this Article 4, provided that notwithstanding section 191(5) of the ABCA, the written

objection to the Arrangement referred to in section 191(5) of the ABCA must be sent to by

Veresen by the Dissenting Shareholder not later than 4:00 p.m. (Calgary time) on the date that is

five Business Days prior to the date of the Veresen Shareholders’ Meeting.

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4.2 A Dissenting Veresen Shareholder shall, at the Effective Time, cease to have any rights as a

holder of Veresen Shares or Veresen Preferred Shares, as the case may be, (other than as set forth

herein) and shall only be entitled to be paid by Veresen the fair value of the holder's Veresen

Shares or Veresen Preferred Shares, as the case may be. A Dissenting Veresen Shareholder who

is entitled to be paid by Veresen the fair value of the holder's Veresen Shares or Veresen

Preferred Shares, as the case may be, shall, pursuant to Section 3.1(b) hereof, be deemed to have

transferred the holder's Veresen Shares or Veresen Preferred Shares, as the case may be, (free and

clear of any Encumbrances) to Veresen for cancellation without any further act or formality

notwithstanding the provisions of section 191 of the ABCA.

4.3 A Dissenting Veresen Shareholder who for any reason is not ultimately entitled to be paid the fair

value of the holder's Veresen Shares or Veresen Preferred Shares, as the case may be, shall be

deemed to have participated in the Arrangement on the same basis as a non-dissenting holder of

Veresen Shares (who elected to exclusively receive Veresen Cash Consideration) or Veresen

Preferred Shares (provided, in the case of Veresen Preferred Shares, that the requisite approval of

Veresen Preferred Shareholders is received at the Veresen Shareholders’ Meeting)

notwithstanding the provisions of section 191 of the ABCA.

4.4 The fair value of the Veresen Shares shall be determined as of the close of business on the last

Business Day before the day on which the Arrangement Resolution is approved by the holders of

Veresen Shares. The fair value of the Veresen Preferred Shares shall be determined as of the

close of business on the last Business Day before the day on which the Preferred Shareholders

Resolution is approved by the holders of Veresen Preferred Shares.

4.5 In no event shall Veresen or Pembina be required to recognize any Dissenting Veresen

Shareholder as a Veresen Shareholder or a Veresen Preferred Shareholder, as the case may be,

after the Effective Time and the names of such holders shall be removed from the register of

Veresen Shareholders and Veresen Preferred Shareholders, as applicable, as at the Effective

Time.

4.6 For greater certainty, in addition to any other restrictions in section 191 of the ABCA: (a) any

person who has voted in favour of the Arrangement Resolution shall not be entitled to dissent

with respect to such person’s Veresen Shares for the Arrangement; and (b) any person who has

voted in favour of the Preferred Shareholder Resolution shall not be entitled to dissent with

respect to such person’s Veresen Preferred Shares for the Arrangement. In addition, a Dissenting

Veresen Shareholder may only exercise Dissent Rights in respect of all, and not less than all, of

its Veresen Shares or Veresen Preferred Shares, as the case may be.

4.7 Notwithstanding any provision to the contrary in this Plan of Arrangement, in the event that the

requisite approval of Veresen Preferred Shareholders is not received at the Veresen Shareholders’

Meeting, the right of dissent provided for in this Article 4 shall cease to apply to holders of

Veresen Preferred Shares and any written objection to the Arrangement sent by a Veresen

Preferred Shareholder shall be null and void.

ARTICLE 5

OUTSTANDING CERTIFICATES AND FRACTIONAL SHARES

5.1 Forthwith following the Effective Time, Pembina and Veresen shall, subject to Section 5.2, cause

to be paid (a) to the Veresen Shareholders the amounts payable, or cause to be issued the number

of Pembina Shares issuable, in respect of the Veresen Shares required by Section 3.1(c), as

adjusted, if applicable, pursuant to Section 3.3 and (b) in the event the Preferred Shareholder

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12

Resolution receives the requisite approval at the Veresen Shareholders’ Meeting, cause to be

issued the number of Pembina Exchange Preferred Shares issuable, in respect of the Veresen

Preferred Shares required by Section 3.1(d).

5.2 Upon surrender to the Depositary for cancellation of a certificate or certificates (as applicable)

which, immediately prior to the Effective Time, represented outstanding Veresen Shares or

outstanding Veresen Preferred Shares that were transferred pursuant to Section 3.1(c) or 3.1(d),

together with a duly completed and executed Letter of Transmittal and such additional documents

and instruments as the Depositary may reasonably require, each Veresen Shareholder and

Veresen Preferred Shareholder represented by such surrendered certificate(s) shall be entitled to

receive in exchange therefor, and the Depositary shall deliver to such holder, the consideration

which such holder has the right to receive under this Plan of Arrangement for such Veresen

Shares and Veresen Preferred Shares, as applicable, less any amounts withheld pursuant to

Section 3.4, and any certificate(s) so surrendered shall forthwith be cancelled.

5.3 Until deposited as contemplated by Section 5.2, each certificate that immediately prior to the

Effective Time represented Veresen Shares and, in the event the Preferred Shareholder

Resolution receives the requisite approval at the Veresen Shareholders’ Meeting, Veresen

Preferred Shares shall be deemed after the Effective Time to represent only the right to receive

upon such deposit the consideration and other property to which the holders of such Veresen

Shares and Veresen Preferred Shares, as applicable, are entitled under the Arrangement, or as to

those held by Dissenting Veresen Shareholders, other than those Dissenting Veresen Shareholders

deemed to have participated in the Arrangement pursuant to Section 4.3, to receive the fair value

of the Veresen Shares or Veresen Preferred Shares, as applicable, represented by such certificates.

Any such certificate formerly representing Veresen Shares and, in the event the Preferred

Shareholder Resolution receives the requisite approval at the Veresen Shareholders’ Meeting,

Veresen Preferred Shares not duly surrendered on or before the last Business Day prior to the

third anniversary of the Effective Date shall cease to represent a claim by or interest of any

former Veresen Shareholder or Veresen Preferred Shareholder, as applicable, of any kind or

nature against Veresen or Pembina. On such date, all consideration and other property to which

such former holder was entitled shall be deemed to have been surrendered to Veresen or Pembina,

as applicable.

5.4 No Veresen Shareholder or, in the event the Preferred Shareholder Resolution receives the

requisite approval at the Veresen Shareholders’ Meeting, Veresen Preferred Shareholder shall be

entitled to receive any consideration with respect to such Veresen Shares or Veresen Preferred

Shares, as applicable, other than the consideration and other property to which such holder is

entitled to receive under the Arrangement and, for greater certainty, no such holder will be

entitled to receive any interest, dividend, premium or other payment in connection therewith.

5.5 If any certificate which immediately prior to the Effective Time represented an interest in

outstanding Veresen Shares or Veresen Preferred Shares that were exchanged pursuant to

Section 3.1 has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the

person claiming such certificate to have been lost, stolen or destroyed, the Depositary will issue

and deliver in exchange for such lost, stolen or destroyed certificate the consideration and other

property to which the holder is entitled pursuant to the Arrangement as determined in accordance

with the Arrangement. The person who is entitled to receive such consideration and other

property shall, as a condition precedent to the receipt thereof, give a bond satisfactory to Pembina

and its transfer agent in such form as is satisfactory to Pembina and such transfer agent, or

otherwise indemnify Veresen, Pembina and the transfer agent, to the reasonable satisfaction of

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such parties, against any claim that may be made against any of them with respect to the

certificate alleged to have been lost, stolen or destroyed.

5.6 No certificates representing fractional Pembina Shares shall be issued under the Arrangement. In

lieu of any fractional Pembina Shares, each registered Veresen Shareholder otherwise entitled to a

fractional interest in Pembina Shares will receive the nearest whole number of Pembina Shares,

provided that in no circumstances shall the aggregate number of Pembina Shares to be paid to the

Veresen Shareholders pursuant to this Plan of Arrangement be greater than the Maximum Share

Consideration. For greater certainty, where such fractional interest is greater than or equal to 0.5,

the number of Pembina Shares to be issued will be rounded up to the nearest whole number and

where such fractional interest is less than 0.5, the number of Pembina Shares to be issued will be

rounded down to the nearest whole number, unless such rounding causes the aggregate number of

Pembina Shares to be paid to the Veresen Shareholders pursuant to this Plan of Arrangement to

be greater than the Maximum Share Consideration, in which case all such fractional interests will

be paid in cash based on the Veresen Cash Consideration notwithstanding that such cash

payments may cause the aggregate cash consideration to be paid by Pembina pursuant to this Plan

of Arrangement to exceed the Maximum Cash Consideration. In calculating such fractional

interests, all Veresen Shares registered in the name of or beneficially held by such Veresen

Shareholder or their nominee shall be aggregated.

ARTICLE 6

AMENDMENTS

6.1 Veresen and Pembina may amend, modify and/or supplement this Plan of Arrangement at any

time and from time to time prior to the Effective Time, provided that each such amendment,

modification and/or supplement must be: (i) set out in writing; (ii) approved by both parties;

(iii) filed with the Court and, if made following the Veresen Shareholders’ Meeting, approved by

the Court; and (iv) communicated to Veresen Shareholders and/or Veresen Preferred

Shareholders, if and as required by the Court.

6.2 Any amendment, modification or supplement to this Plan of Arrangement may be proposed by

Veresen or Pembina at any time prior to or at the Veresen Shareholders’ Meeting (provided that

the other party shall have consented thereto) with or without any other prior notice or

communication, and if so proposed and accepted, in the manner contemplated and to the extent

required by the Arrangement Agreement by the persons voting at the Veresen Shareholders’

Meeting (other than as may be required under the Interim Order or other order of the Court), shall

become part of this Plan of Arrangement for all purposes.

6.3 Any amendment, modification or supplement to this Plan of Arrangement that is approved or

directed by the Court following the Veresen Shareholders’ Meeting shall be effective only (i) if it

is consented to in writing by each of Veresen and Pembina (each acting reasonably), and (ii) if

required by the Court or applicable law, it is consented to by the Veresen Shareholders and/or

Veresen Preferred Shareholders.

6.4 Any amendment, modification or supplement to this Plan of Arrangement may be made following

the Effective Time effective only if it is consented to in writing by each of Pembina and Veresen,

provided that it concerns a matter which, in the reasonable opinion of each of Pembina and

Veresen, is of an administrative nature required to better give effect to the implementation of this

Plan of Arrangement and is not adverse to the financial or economic interests of any former

holder of Veresen Shares and, in the event the Preferred Shareholder Resolution receives the

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requisite approval at the Veresen Shareholders’ Meeting, any former holder of Veresen Preferred

Shares.

6.5 Notwithstanding anything else contained herein: (a) in the circumstances where the Preferred

Shareholder Resolution does not receive the requisite approval of the Veresen Preferred

Shareholders at the Veresen Shareholders' Meeting (or any adjournment thereof) and the Veresen

Preferred Shareholders do not otherwise approve a special resolution with similar effect to the

Preferred Shareholder Resolution prior to the Effective Time such that Pembina is the sole holder

of the Veresen Preferred Shares prior to the amalgamation contemplated in Section 3.1(f),

Veresen shall amend this Plan of Arrangement to exclude the Veresen Preferred Shares under this

Plan of Arrangement and matters ancillary thereto; and (b) in the circumstances where the

Preferred Shareholder Resolution receives the requisite approval of the Veresen Preferred

Shareholders, and Dissent Rights have been validly exercised in respect of more than 5% of the

outstanding Veresen Preferred Shares, Veresen shall amend this Plan of Arrangement if requested

by Pembina to exclude the Veresen Preferred Shares under this Plan of Arrangement and matters

ancillary thereto, including, in each case, the amalgamation contemplated in Section 3.1(f).

ARTICLE 7

FURTHER ASSURANCES

7.1 Notwithstanding that the transactions and events set out herein shall occur and shall be deemed to

occur in the order set out in this Plan without any further act or formality, each of the Parties to

the Arrangement Agreement shall make, do and execute, or cause to be made, done and executed,

all such further acts, deeds, agreements, transfers, assurances, instruments or documents as may

reasonably be required in order further to document or evidence any of the transactions or events

set out herein.

7.2 From and after the Effective Time (a) this Plan shall take precedence and priority over any and all

rights related to Veresen Shares and, in the event the Preferred Shareholder Resolution receives

the requisite approval at the Veresen Shareholders’ Meeting, Veresen Preferred Shares issued

prior to the Effective Time; (b) the rights and obligations of the holders of Veresen Shares and, in

the event the Preferred Shareholder Resolution receives the requisite approval at the Veresen

Shareholders’ Meeting, holders of Veresen Preferred Shares and, in each case, any respective

trustee and transfer agent therefor, shall be solely as provided for in this Plan; and (c) all actions,

causes of actions, claims or proceedings (actual or contingent, and whether or not previously

asserted) based on or in any way relating to Veresen Shares and, in the event the Preferred

Shareholder Resolution receives the requisite approval at the Veresen Shareholders’ Meeting,

Veresen Preferred Shares shall be deemed to have been settled, compromised, released and

determined without liability except as set forth herein.

C-71

SCHEDULE B-1

FORM OF ARRANGEMENT RESOLUTION

BE IT RESOLVED, AS A SPECIAL RESOLUTION, THAT:

(1) The arrangement (the "Arrangement") under section 193 of the Business Corporations

Act (Alberta) (the "ABCA") involving Veresen Inc. (the "Company"), as more particularly described

and set forth in the management proxy circular (the "Circular") of the Company accompanying the

notice of this meeting, as the Arrangement may be modified or amended in accordance with its terms, is

hereby authorized, approved and adopted.

(2) The plan of arrangement (the "Plan of Arrangement") involving the Company, the full

text of which is set out as Schedule A to the Arrangement Agreement made as of May 1, 2017 between

Pembina Pipeline Corporation and the Company (the "Arrangement Agreement"), as the Plan of

Arrangement may be modified or amended in accordance with its terms, is hereby authorized, approved

and adopted.

(3) The Arrangement Agreement, the actions of the directors of the Company in approving

the Arrangement Agreement and the actions of the directors and officers of the Company in executing and

delivering the Arrangement Agreement and any amendments thereto in accordance with its terms are

hereby ratified and approved.

(4) Notwithstanding that this resolution has been passed (and the Plan of Arrangement

adopted) by the Veresen Common Shareholders (as defined in the Arrangement Agreement) or that the

Arrangement has been approved by the Court of Queen's Bench of Alberta, the directors of the Company

are hereby authorized and empowered, without further notice to or approval of the Veresen Common

Shareholders (i) to amend the Arrangement Agreement or the Plan of Arrangement, to the extent

permitted by the Arrangement Agreement or the Plan of Arrangement, and (ii) subject to the terms of the

Arrangement Agreement, to disregard the Veresen Common Shareholders' approval and not proceed with

the Arrangement.

(5) Any one director or officer of the Company be and is hereby authorized and directed for

and on behalf of the Company to execute, under the corporate seal of the Company or otherwise, and to

deliver to the Registrar under the ABCA for filing articles of arrangement and such other documents as

are necessary or desirable to give effect to the Arrangement and the Plan of Arrangement in accordance

with the Arrangement Agreement.


and on behalf of the Company to execute or cause to be executed, under the corporate seal of the

Company or otherwise, and to deliver or cause to be delivered, all such other documents and instruments

and to perform or cause to be performed all such other acts and things as in such person's opinion may be

necessary or desirable to give full effect to the foregoing resolutions and the matters authorized thereby,

such determination to be conclusively evidenced by the execution and delivery of such document,

agreement or instrument or the doing of any such act or thing.

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SCHEDULE B-2

FORM OF PREFERRED SHAREHOLDER RESOLUTION

BE IT RESOLVED, AS A SPECIAL RESOLUTION, THAT:

(1) The arrangement (the "Arrangement") under section 193 of the Business Corporations

Act (Alberta) (the "ABCA") involving Veresen Inc. (the "Company"), as more particularly described

and set forth in the management proxy circular (the "Circular") of the Company accompanying the

notice of this meeting, as the Arrangement may be modified or amended in accordance with its terms, is

hereby authorized, approved and adopted.

(2) The plan of arrangement (the "Plan of Arrangement") involving the Company, the full

text of which is set out as Schedule A to the Arrangement Agreement made as of May 1, 2017 between

Pembina Pipeline Corporation and the Company (the "Arrangement Agreement"), as the Plan of

Arrangement may be modified or amended in accordance with its terms, is hereby authorized, approved

and adopted.

(3) The Arrangement Agreement, the actions of the directors of the Company in approving

the Arrangement Agreement and the actions of the directors and officers of the Company in executing and

delivering the Arrangement Agreement and any amendments thereto in accordance with its terms are

hereby ratified and approved.

(4) Notwithstanding that this resolution has been passed (and the Plan of Arrangement

adopted) by the Veresen Preferred Shareholders (as defined in the Arrangement Agreement) or that the

Arrangement has been approved by the Court of Queen's Bench of Alberta, the directors of the Company

are hereby authorized and empowered, without further notice to or approval of the Veresen Preferred

Shareholders (i) to amend the Arrangement Agreement or the Plan of Arrangement, to the extent

permitted by the Arrangement Agreement or the Plan of Arrangement, and (ii) subject to the terms of the

Arrangement Agreement, to disregard the Veresen Preferred Shareholders' approval and not proceed with

the Arrangement.


and on behalf of the Company to execute, under the corporate seal of the Company or otherwise, and to

deliver to the Registrar under the ABCA for filing articles of arrangement and such other documents as

are necessary or desirable to give effect to the Arrangement and the Plan of Arrangement in accordance

with the Arrangement Agreement.


and on behalf of the Company to execute or cause to be executed, under the corporate seal of the

Company or otherwise, and to deliver or cause to be delivered, all such other documents and instruments

and to perform or cause to be performed all such other acts and things as in such person's opinion may be

necessary or desirable to give full effect to the foregoing resolutions and the matters authorized thereby,

such determination to be conclusively evidenced by the execution and delivery of such document,

agreement or instrument or the doing of any such act or thing.

C-73

SCHEDULE C

REPRESENTATIONS AND WARRANTIES OF PEMBINA

(a) Organization and Qualification. Each of Pembina and its Subsidiaries is a corporation or

partnership duly incorporated or formed, as applicable, validly existing and in good standing under the

Laws of its jurisdiction of incorporation or formation and has the requisite corporate or partnership power

and authority to own its properties as now owned and to carry on its business as it is now being

conducted. Pembina is, and its Subsidiaries are, duly registered to do business and each is in good

standing in each jurisdiction in which the nature of its properties, owned or leased, or its activities makes

such registration necessary, except where the failure to be so registered or in good standing would not

materially adversely affect Pembina and its Subsidiaries taken as a whole. Copies of the constating

documents of Pembina and its material Subsidiaries, together with all amendments to date, have been

provided to Veresen and are accurate and complete as of the date hereof and have not been amended or

superseded

(b) Authority Relative this Agreement. Pembina has the requisite corporate authority to enter into this

Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and

the participation by Pembina in the Arrangement contemplated hereby have been duly authorized by

Pembina's board of directors and no other corporate proceedings on the part of Pembina are necessary to

authorize this Agreement or the Arrangement. This Agreement has been duly executed and delivered by

Pembina and constitutes a legal, valid and binding obligation of Pembina enforceable against it in

accordance with its terms, subject to the qualification that such enforceability may be limited by

bankruptcy, insolvency, reorganization or other Laws of general application relating to or affecting rights

of creditors and that equitable remedies, including specific performance, are discretionary and may not be

ordered.

(c) Subsidiaries. Pembina has no Subsidiaries, nor does it own, directly or indirectly, any interests in

any other joint ventures, corporations, partnerships or other entities (whether or not incorporated), other

than as disclosed in writing to Veresen by Pembina on or prior to the date hereof.

(d) Ownership of Subsidiaries. Except as disclosed in writing to Veresen by Pembina on or prior to

the date hereof, Pembina is the beneficial direct or indirect owner of all of the outstanding shares and

partnership interests and other ownership interests of Pembina's Subsidiaries with good title thereto free

and clear of any and all Encumbrances. There are no options, warrants or other rights, plans, agreements

or commitments of any character whatsoever requiring the issuance, sale or transfer by any of Pembina's

Subsidiaries of any securities or other ownership interests of Pembina's Subsidiaries or any securities or

other ownership interests convertible into, or exchangeable or exercisable for, or otherwise evidencing a

right to acquire, any securities of any of Pembina's Subsidiaries. All outstanding securities or other

ownership interests of Pembina's Subsidiaries have been duly authorized and validly issued, are fully paid

and non-assessable and are not subject to, nor were they issued in violation of, any Pre-Emptive Right.

(e) No Violations; Absence of Defaults and Conflicts.

(i) Neither Pembina nor any of its Subsidiaries is in violation of its constating documents or

by-laws or in default in the performance or observance of any obligation, agreement,

covenant or condition contained in any note, bond, mortgage, indenture, loan agreement,

deed of trust, agreement, lien, contract or other instrument or obligation to which

Pembina or any of its Subsidiaries is a party or to which any of them, or any of their

respective properties or assets, may be subject or by which Pembina or any of its

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Subsidiaries is bound, except for such defaults which would not materially adversely

affect Pembina and its Subsidiaries taken as a whole;

(ii) neither the execution and delivery of this Agreement by Pembina nor the consummation

of the Arrangement contemplated hereby nor compliance by Pembina with any of the

provisions hereof will: (A) violate, conflict with, or result in a breach of any provision of,

require any consent, approval or notice under, or constitute a default (or an event which,

with notice or lapse of time or both, would constitute a default) or result in a right of

termination or acceleration under, or result in the creation of any Encumbrance (other

than Permitted Encumbrances) upon any of the properties or assets of Pembina or any of

its Subsidiaries or cause any indebtedness to come due before its stated maturity or cause

any credit to cease to be available, under any of the terms, conditions or provisions of (1)

their respective charter, by-laws or other constating documents (including any applicable

partnership, shareholder or operating agreements), or (2) any note, bond, mortgage,

indenture, loan agreement, deed of trust, agreement, lien, contract or other instrument or

obligation to which Pembina or any of its Subsidiaries is a party or to which any of them,

or any of their respective properties or assets, may be subject or by which Pembina or any

of its Subsidiaries is bound; or (B) subject to compliance with the statutes and regulations

referred to below, violate any Laws, judgment, ruling, order, writ, injunction,

determination, award, decree, statute, ordinance, rule or regulation applicable to Pembina

or any of its Subsidiaries or any of their respective properties or assets; or (C) cause the

suspension or revocation of any authorization, consent, approval or license currently in

effect, except, in the case of each of clauses (A)(2), (B) or (C) above, for such violations,

conflicts, breaches, defaults, terminations, accelerations, creations of Encumbrances,

suspensions or revocations which, or any consents, approvals or notices which if not

given or received, would not materially adversely affect Pembina and its Subsidiaries

taken as a whole; and

(iii) other than in connection with or in compliance with the provisions of applicable

Canadian Securities Laws, U.S. Securities Laws, the ABCA, the Competition Act, the

HSR Act, the CT Act or other similar applicable Laws (including any Laws that regulate

competition, antitrust, foreign investment or transportation), the terms of the Interim

Order and the Final Order in respect of the Arrangement and the filing of the Articles of

Arrangement, (A) there is no legal impediment to Pembina's consummation of the

Arrangement, and (B) no filing or registration with, or authorization, consent or approval

of, any domestic or foreign public body or authority is required of Pembina in connection

with the consummation of the Arrangement, except for such filings or registration which,

if not made, or for such authorizations, consents or approvals which, if not received,

would not materially adversely affect Pembina and its Subsidiaries taken as a whole.

(f) Litigation. Except as disclosed in writing to Veresen by Pembina on or prior to the date hereof,

there are no actions, suits, proceedings, or investigations by Governmental Entities pending or, to the

knowledge of Pembina, threatened, affecting or that would reasonably be expected to materially adversely

affect Pembina or any of its Subsidiaries or affecting or that would reasonably be expected to materially

adversely affect any of their property or assets at Law or equity or before or by any court or

Governmental Entity which action, suit, proceeding or investigation involves a possibility of any

judgment against or liability of Pembina or any of its Subsidiaries which, if successful, would materially

adversely affect Pembina and its Subsidiaries taken as a whole or would significantly impede the ability

of Pembina to consummate the Arrangement. Neither Pembina nor its Subsidiaries is subject to any

outstanding order, writ, injunction or decree that has or would materially adversely affect Pembina and its

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C-3

Subsidiaries taken as a whole or would significantly impede the ability of Pembina to consummate the

Arrangement.

(g) Reporting Issuer Status. Pembina is a reporting issuer (where such concept exists) in all provinces

of Canada and is in material compliance with all applicable Canadian Securities Laws therein. The

currently issued and outstanding Pembina Shares are listed and posted for trading on the Exchanges and

the Pembina Preferred Shares are also listed and posted for trading on the TSX and Pembina is in material

compliance with the rules of the Exchanges.

(h) Capitalization. The authorized share capital of Pembina consists of (i) an unlimited number of

Pembina Shares, (ii) Pembina Class A Preferred Shares issuable in series and limited in number to not

more than 20% of the number of issued and outstanding Pembina Shares at the time of issuance of any

such Pembina Class A Preferred Shares; and (iii) an unlimited number of Pembina Class B Preferred

Shares. There are issued and outstanding no more than 405,000,000 Pembina Shares, 10,000,000 Pembina

Series 1 Shares, 6,000,000 Pembina Series 3 Shares, 10,000,000 Pembina Series 5 Shares, 10,000,000

Pembina Series 7 Shares, 9,000,000 Pembina Series 9 Shares, 6,800,000 Pembina Series 11 Shares,

10,000,000 Pembina Series 13 Shares and there are no other shares of any class or series outstanding.

There are no more than 5,500,000 Pembina Shares issuable upon the conversion of Pembina Convertible

Debentures and no more than 17,000,000 Pembina Shares issuable upon the exercise of outstanding

Pembina Options as of the date hereof. Other than (i) Pembina Series 2 Shares issuable on conversion of

the Pembina Series 1 Shares, Pembina Series 4 Shares issuable on conversion of the Pembina Series 3

Shares, Pembina Series 6 Shares issuable on conversion of the Pembina Series 5 Shares, Pembina Series 8

Shares issuable on conversion of the Pembina Series 7 Shares, Pembina Series 10 Shares issuable on

conversion of the Pembina Series 9 Shares, Pembina Series 12 Shares issuable on conversion of the

Pembina Series 11 Shares and Pembina Series 14 Shares issuable on conversion of the Pembina Series 13

Shares, (ii) as set forth above, (iii) Pembina Shares issuable pursuant to the Pembina's Premium Dividend

and Dividend Reinvestment Plan, (iv) Pembina Shares issuable upon conversion, redemption or maturity

of the Pembina Convertible Debentures, (v) Pembina Shares issuable upon exercise of the Pembina

Options, and (vi) Pembina Shares issuable pursuant to rights issued under Pembina Shareholder Rights

Plan, each on the terms as publicly disclosed on or prior to the date hereof, there are no options, warrants

or other rights, shareholder rights plans, agreements or commitments of any character whatsoever

requiring the issuance, sale or transfer by Pembina of any shares of Pembina or any securities convertible

into, or exchangeable or exercisable for, or otherwise evidencing a right to acquire, any shares of

Pembina. All outstanding Pembina Shares, Pembina Class A Preferred Shares and Pembina Convertible

Debentures have, as applicable, been duly authorized and validly issued, are fully paid and non-assessable

and are not subject to, nor were they issued in violation of, any pre-emptive rights, and all Pembina

Shares issuable upon conversion, redemption or maturity of outstanding Pembina Convertible Debentures

and upon the exercise of the Pembina Options, and all Pembina Class A Preferred Shares issuable upon

conversion of any Pembina Class A Preferred Shares, in accordance with their respective terms will be

duly authorized and validly issued as fully paid and non-assessable and will not be subject to any pre-

emptive rights.

(i) No Orders. No order, ruling or determination having the effect of suspending the sale of, or

ceasing the trading of, the Pembina Shares or any other securities of Pembina has been issued by any

regulatory authority and is continuing in effect and no proceedings for that purpose have been instituted,

are pending or, to the knowledge of Pembina, are contemplated or threatened under any applicable Laws

or by any other Governmental Entity.

(j) Books and Records. The records and minute books of Pembina and its material Subsidiaries and

their respective predecessors have been maintained substantially in accordance with all applicable Laws

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C-4

and are complete and accurate in all material respects, and have been made available in their entirety to

Veresen.

(k) Reports. As of their respective dates, (i) Pembina's audited consolidated financial statements as at

and for the fiscal year ended December 31, 2016 (the "Pembina Financial Statements") and the related

management's discussion and analysis, (ii) Pembina's Annual Information Form dated February 23, 2017,

(iii) Pembina's information circular dated March 16, 2017 for its annual meeting of shareholders to be

held on May 5, 2017, (iv) all Pembina press releases and material change reports or similar documents

filed with any Securities Regulators since December 31, 2016, and (v) all prospectuses or other offering

documents used by Pembina in the offering of its securities or filed with Securities Regulators since

December 31, 2016 are all the financial statements, forms, reports, prospectuses or other documents

required to be filed by virtue of applicable Canadian Securities Laws and U.S. Securities Laws since

December 31, 2016, did not contain any untrue statement of a material fact or omit to state a material fact

required to be stated therein or necessary to make the statements therein, in light of the circumstances in

which they were made, not misleading and complied in all material respects with applicable Canadian

Securities Laws and U.S. Securities Laws. Since December 31, 2016, Pembina has not filed any material

change reports which continue to be confidential.

(l) Financial Statements. The Pembina Financial Statements were prepared in accordance with IFRS

(except as otherwise indicated in such financial statements and the notes thereto or in the related report of

Pembina's independent auditors), and fairly present the consolidated financial position, results of

operations and cash flows of Pembina on a consolidated basis as of the dates thereof and for the periods

indicated therein and reflect appropriate and adequate reserves in respect of contingent liabilities, if any,

of Pembina on a consolidated basis. There has been no change in Pembina's accounting policies, except as

described in the notes to the Pembina Financial Statements, since December 31, 2016.

(m) Absence of Undisclosed Liabilities. Except as disclosed in writing to Veresen by Pembina on or

prior to the date hereof, Pembina has no material obligations or liabilities of any nature (matured or

unmatured, fixed or contingent), other than:

(i) those set forth or adequately provided for in the balance sheet included in the Pembina

Financial Statements;

(ii) those incurred in the ordinary course of business and not required to be set forth in the

Pembina Financial Statements;

(iii) those incurred in the ordinary course of business since the date of the Pembina Financial

Statements and consistent with past practice; and

(iv) those incurred in connection with the execution of this Agreement.

(n) Tax Returns Filed and Taxes Paid. All material Tax Returns required to be filed by or on behalf

of Pembina or any of its Subsidiaries have been duly filed on a timely basis and such Tax Returns are

true, complete and correct in all material respects. All Taxes shown to be payable on such Tax Returns or

on subsequent assessments with respect thereto have been paid in full on a timely basis, and, other than

Taxes being contested in good faith and for which adequate reserves in accordance with IFRS have been

established, no amount of Taxes are payable by Pembina or any of its Subsidiaries with respect to items

or periods covered by such Tax Returns.

(o) Tax Reserves. Pembina has paid or provided adequate accruals in the Pembina Financial

Statements for Taxes, including income taxes and related future income taxes, in accordance with IFRS.

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(p) Tax Deficiencies; Audits. Except as disclosed in writing to Veresen by Pembina on or prior to the

date hereof, no deficiencies exist or have been asserted with respect to Taxes of Pembina or any of its

Subsidiaries that would materially adversely affect Pembina and its Subsidiaries taken as a whole.

Neither Pembina nor any of its Subsidiaries is a party to any action or proceeding for assessment or

collection of Taxes, nor, to the knowledge of Pembina, has such an event been asserted or threatened

against Pembina or any of its Subsidiaries or any of their respective assets that would materially adversely

affect Pembina and its Subsidiaries taken as a whole.

(q) No Material Adverse Change. Since December 31, 2016: (i) Pembina and its Subsidiaries have

conducted their businesses only in the ordinary and normal course, (ii) no liability or obligation of any

nature (whether absolute, accrued, contingent or otherwise) material to Pembina and its Subsidiaries,

taken as a whole, has been incurred other than in the ordinary course of business, and (iii) there has not

been any Material Adverse Change in respect of Pembina and its Subsidiaries, taken as a whole.

(r) Environmental.

(i) There have not occurred any material spills, emissions or pollution on any property of

Pembina or its Subsidiaries as a result of their operations, nor has Pembina or any of its

Subsidiaries been subject to any stop orders, control orders, clean-up orders or

reclamation orders under applicable Environmental Laws. All operations of Pembina and

its Subsidiaries have been and are now being conducted in material compliance with all

applicable Environmental Laws. Neither Pembina nor any of its Subsidiaries is aware of,

or is subject to:

(A) any proceeding, application, order or directive which relates to

environmental, health or safety matters, and which may require any

material work, repairs, construction, or expenditures; or

(B) any demand or notice with respect to the breach of any Environmental

Laws applicable to Pembina or any of its Subsidiaries, including any

regulations respecting the use, storage, treatment, transportation, or

disposition of any Hazardous Substances and which may require any

material work, repairs, construction or expenditures.

(ii) Pembina has reasonably concluded that there are no costs and liabilities (including,

without limitation, any capital or operating expenditures required for clean-up, closure of

properties or compliance with Environmental Laws, or any permit, license or approval,

any related constraints on operating activities and any potential liabilities to third parties)

associated with the effect of Environmental Laws on various business, operations and

properties of Pembina and its Subsidiaries that would be material to Pembina and its

Subsidiaries, taken as a whole.

(s) Title. Pembina and its Subsidiaries have good and sufficient title to their material real property

interests, including fee simple estate of and in real property, leases, easements, rights of way, permits or

licenses from landowners or authorities permitting the use of land by Pembina and its Subsidiaries

necessary to permit the operation of their respective businesses as presently owned and conducted. To the

knowledge of Pembina, there are no material defects, failures or impairments in the title of Pembina or its

Subsidiaries to their assets, whether or not an action, suit, proceeding or inquiry is pending or threatened

or whether or not discovered by any third party.

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(t) Facilities. To the knowledge of Pembina, the material equipment, facilities, buildings, structures,

improvements and other appurtenances on or under real property owned or used by Pembina or its

Subsidiaries are in good operating condition and in a good state of maintenance and repair, each has been

constructed and is operated in accordance with good industry practice; each is adequate and suitable for

the purpose for which it is currently being used and in the ordinary course of business, and none thereof,

nor the operation or maintenance thereof, violates any restrictive covenant or any applicable Law or

encroaches any property owned by others.

(u) No Encumbrances. Neither Pembina nor any of its Subsidiaries has encumbered or alienated their

interest in any of their assets or agreed to do so and such assets are free and clear of all Encumbrances

except for Permitted Encumbrances and other Encumbrances which are not material.

(v) Licenses. Each of Pembina and its Subsidiaries has obtained and is in compliance in all material

respects with all licenses, permits, certificates, consents, orders, grants and other authorizations of or from

any Governmental Entity or other Person necessary to conduct its businesses as they are now being or are

proposed to be conducted.

(w) Compliance with Laws. Pembina and its Subsidiaries have complied with and are not in violation

of any applicable Laws in all material respects.

(x) Insurance. Policies of insurance are in force naming Pembina or its applicable Subsidiary as an

insured that adequately cover all risks as are customarily covered by participants in the industry in which

Pembina operates. All such policies shall remain in force and effect (subject to taking into account

insurance market conditions and offerings and industry practices) and shall not be cancelled or otherwise

terminated as a result of the transactions contemplated by this Agreement, other than such cancellations as

would not, individually or in the aggregate, materially adversely affect Pembina or its Subsidiaries taken

as a whole.

(y) Possession of Intellectual Property. Except for such of the following as would not reasonably be

expected to materially adversely affect Pembina or its Subsidiaries taken as a whole, Pembina and its

Subsidiaries own or possess adequate patents, patent rights, licenses, inventions, copyrights, know-how

(including trade secrets and other unpatented and/or unpatentable proprietary or confidential information,

systems or procedures), trademarks, service marks, trade names or other intellectual property necessary to

carry on the business now operated by them, and neither Pembina nor any Subsidiary has received any

written notice or claim challenging Pembina or its Subsidiaries respecting the validity of, use of or

ownership of the processes and technology, and to the knowledge of Pembina, there are no facts upon

which such a challenge could be made.

(z) Funds Available. Pembina has sufficient funds available to pay the amounts that may be payable

pursuant to Section 7.3 of this Agreement.

(aa) Investment Canada Act. Pembina is not a non-Canadian within the meaning of the Investment

Canada Act.

(bb) Corrupt Practices Legislation.

(i) To the knowledge of Pembina, neither it nor any of its Subsidiaries has, directly or

indirectly, (A) made or authorized any contribution, payment or gift of funds or property

to any official, employee or agent of any governmental agency, authority or

instrumentality of any jurisdiction or any official of any public international organization,

or (B) made any contribution to any candidate for public office, in either case, where

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either the payment or the purpose of such contribution, payment or gift was, is, or would

be prohibited under the U.S. Foreign Corrupt Practices Act of 1977, as amended, the

Corruption of Foreign Public Officials Act (Canada) or the Proceeds of Crime (Money

Laundering) and Terrorist Financing Act (Canada) or the rules and regulations

promulgated thereunder;

(ii) during the periods of the Pembina Financial Statements, the operations of Pembina and

its Subsidiaries are and have been conducted at all times in compliance with applicable

financial recordkeeping and reporting requirements and the money laundering statutes

and the rules and regulations thereunder and any related or similar rules, regulations or

guidelines, issued, administered or enforced by any governmental agency (collectively,

the "Money Laundering Laws"). To the knowledge of Pembina, no action, suit or

proceeding by or before any court or governmental agency, authority or body or any

arbitrator involving Pembina or any of its Subsidiaries with respect to the Money

Laundering Laws is pending or threatened; and

(iii) neither Pembina nor any of its Subsidiaries nor, to the knowledge of Pembina, any

director, officer, agent, employee or affiliate of Pembina or any of its Subsidiaries has

had any sanctions administered by the Office of Foreign Assets Control of the U.S.

Treasury Department ("OFAC") imposed upon such Person; and neither Pembina nor

any of its Subsidiaries is in violation of any of the economic sanctions of the United

States administered by OFAC or any Law or executive order relating thereto (the "U.S.

Economic Sanctions").

(cc) Place of Principal Offices. The principal offices of Pembina are not located within the United

States.

(dd) Internal Control Over Financial Reporting. Pembina maintains a system of internal control over

financial reporting that complies in all material respects with the requirements of applicable Laws and a

system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are

executed in accordance with management's general or specific authorizations; (ii) transactions are

recorded as necessary to permit preparation of financial statements in conformity with IFRS and to

maintain asset accountability; (iii) access to assets is permitted only in accordance with management's

general or specific authorization; and (iv) the recorded accountability for assets is compared with the

existing assets at reasonable intervals and appropriate action is taken with respect to any differences,

except where the failure to maintain such a system would not reasonably be expected to materially

adversely affect Pembina and its Subsidiaries, taken as a whole; management of Pembina has assessed the

effectiveness of the Pembina's internal control over financial reporting, as at December 31, 2016, and has

concluded that such internal control over financial reporting was effective as of such date;

(ee) Foreign Private Issuer. As of the date hereof, Pembina is a "foreign private issuer" within the

meaning of Rule 405 of Regulation C adopted by the SEC under the U.S. Securities Act.

(ff) Investment Company. To the knowledge of Pembina, neither Pembina nor any of its Subsidiaries

is registered or is required to be registered as an "investment company" within the meaning of the United

States Investment Company Act of 1940, as amended.

C-80

SCHEDULE D

REPRESENTATIONS AND WARRANTIES OF VERESEN

(a) Organization and Qualification. Each of Veresen and its Subsidiaries is a corporation or

partnership duly incorporated or formed, as applicable, validly existing and in good standing under the

Laws of its jurisdiction of incorporation or formation and has the requisite corporate or partnership power

and authority to own its properties as now owned and to carry on its business as it is now being

conducted. Veresen is, and its Subsidiaries are, duly registered to do business and each is in good

standing in each jurisdiction in which the nature of its properties, owned or leased, or its activities makes

such registration necessary, except where the failure to be so registered or in good standing would not

materially adversely affect Veresen and its Subsidiaries taken as a whole. Except as disclosed in writing

to Pembina on or prior to the date hereof, copies of the constating documents of Veresen and its material

Subsidiaries, together with all amendments to date, have been provided to Pembina and are accurate and

complete as of the date hereof and have not been amended or superseded.

(b) Authority Relative this Agreement. Veresen has the requisite corporate authority to enter into this

Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and

the participation by Veresen in the Arrangement contemplated hereby have been duly authorized by

Veresen's board of directors and, subject to such approval of Veresen Common Shareholders as is

stipulated by the Court in the Interim Order, no other corporate proceedings on the part of Veresen are

necessary to authorize this Agreement or the Arrangement. This Agreement has been duly executed and

delivered by Veresen and constitutes a legal, valid and binding obligation of Veresen enforceable against

it in accordance with its terms, subject to the qualification that such enforceability may be limited by

bankruptcy, insolvency, reorganization or other Laws of general application relating to or affecting rights

of creditors and that equitable remedies, including specific performance, are discretionary and may not be

ordered.

(c) Subsidiaries. Veresen has no Subsidiaries, nor does it own, directly or indirectly, any interests in

any other joint ventures, corporations, partnerships or other entities (whether or not incorporated), other

than as disclosed in writing to Pembina by Veresen on or prior to the date hereof. Except as disclosed in

writing to Pembina by Veresen on or prior to the date hereof, none of Veresen's Subsidiaries is currently

prohibited, directly or indirectly, from paying any dividends to Veresen or any of its Subsidiaries, from

making any other distribution on such Subsidiary's securities or other ownership interests, or from

repaying to Veresen or any of its Subsidiaries any loans or advances to such Subsidiary from Veresen or

any of its Subsidiaries.

(d) Ownership of Subsidiaries. Except as disclosed in writing to Pembina by Veresen on or prior to

the date hereof, Veresen is the beneficial direct or indirect owner of all of the outstanding shares and other

ownership interests of Veresen's Subsidiaries with good title thereto free and clear of any and all

Encumbrances (other than Permitted Encumbrances). Except as disclosed in writing to Pembina by

Veresen on or prior to the date hereof, there are no options, warrants or other rights, plans, agreements or

commitments of any character whatsoever requiring the issuance, sale or transfer by any of Veresen's

Subsidiaries of any securities or other ownership interests of Veresen's Subsidiaries or any securities or

other ownership interests convertible into, or exchangeable or exercisable for, or otherwise evidencing a

right to acquire, any securities or other ownership interests of any of Veresen's Subsidiaries. All

outstanding securities or other ownership interests of Veresen's Subsidiaries have been duly authorized

and validly issued, are fully paid and non-assessable and are not subject to, nor were they issued in

violation of, any Pre-Emptive Right.

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(e) No Violations; Absence of Defaults and Conflicts.

Except as disclosed in writing to Pembina by Veresen on or prior to the date hereof:

(i) neither Veresen nor any of its Subsidiaries is in violation of its constating documents or

by-laws or in default in the performance or observance of any obligation, agreement,

covenant or condition contained in any note, bond, mortgage, indenture, loan agreement,

deed of trust, agreement, lien, contract or other instrument or obligation to which Veresen

or any of its Subsidiaries is a party or to which any of them, or any of their respective

properties or assets, may be subject or by which Veresen or any of its Subsidiaries is

bound, except for such defaults which would not materially adversely affect Veresen and

its Subsidiaries taken as a whole;

(ii) neither the execution and delivery of this Agreement by Veresen nor the consummation

of the Arrangement contemplated hereby nor compliance by Veresen with any of the

provisions hereof will: (A) violate, conflict with, or result in a breach of any provision of,

require any consent, approval or notice under, or constitute a default (or an event which,

with notice or lapse of time or both, would constitute a default) or result in a right of

termination or acceleration under, or result in the creation of any Encumbrance (other

than Permitted Encumbrances) upon any of the properties or assets of Veresen or any of

its Subsidiaries or cause any indebtedness to come due before its stated maturity or cause

any credit to cease to be available, under any of the terms, conditions or provisions of (1)

their respective charter, by-laws or other constating documents (including any applicable

partnership, shareholder or operating agreements), or (2) any note, bond, mortgage,

indenture, loan agreement, deed of trust, agreement, lien, contract or other instrument or

obligation to which Veresen or any of its Subsidiaries is a party or to which any of them,

or any of their respective properties or assets, may be subject or by which Veresen or any

of its Subsidiaries is bound; or (B) subject to compliance with the statutes and regulations

referred to below, violate any Laws, judgment, ruling, order, writ, injunction,

determination, award, decree, statute, ordinance, rule or regulation applicable to Veresen

or any of its Subsidiaries or any of their respective properties or assets; or (C) cause the

suspension or revocation of any authorization, consent, approval or license currently in

effect, except, in the case of each of clauses (A)(2), (B) or (C) above, for such violations,

conflicts, breaches, defaults, terminations, accelerations, creations of Encumbrances,

suspensions or revocations which, or any consents, approvals or notices which if not

given or received, would not materially adversely affect Veresen and its Subsidiaries

taken as a whole; and

(iii) other than in connection with or in compliance with the provisions of applicable

Canadian Securities Laws, U.S. Securities Laws, the ABCA, the Competition Act, the

HSR Act, the CT Act or other similar applicable Laws (including any Laws that regulate

competition, antitrust, foreign investment or transportation), the terms of the Interim

Order and the Final Order in respect of the Arrangement and the filing of the Articles of

Arrangement, (A) there is no legal impediment to Veresen's consummation of the

Arrangement, and (B) no filing or registration with, or authorization, consent or approval

of, any domestic or foreign public body or authority is required of Veresen in connection

with the consummation of the Arrangement, except for such filings or registration which,

if not made, or for such authorizations, consents or approvals which, if not received,

would not materially adversely affect Veresen and its Subsidiaries taken as a whole.

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(f) Litigation. Except as disclosed in writing to Pembina by Veresen on or prior to the date hereof,

there are no actions, suits, proceedings, or investigations by Governmental Entities pending or, to the

knowledge of Veresen, threatened, affecting or that would reasonably be expected to materially adversely

affect Veresen or any of its Subsidiaries or affecting or that would reasonably be expected to materially

adversely affect any of their property or assets at Law or equity or before or by any court or

Governmental Entity which action, suit, proceeding or investigation involves a possibility of any

judgment against or liability of Veresen or any of its Subsidiaries which, if successful, would materially

adversely affect Veresen and its Subsidiaries taken as a whole or would significantly impede the ability of

Veresen to consummate the Arrangement. Neither Veresen nor its Subsidiaries is subject to any

outstanding order, writ, injunction or decree that has or would materially adversely affect Veresen and its

Subsidiaries taken as a whole or would significantly impede the ability of Veresen to consummate the

Arrangement.

(g) Tax Returns Filed and Taxes Paid.

(i) All Tax Returns required to be filed by or on behalf of Veresen or any of its Subsidiaries

have been duly filed on a timely basis and such Tax Returns are true, complete and

correct. All Taxes shown to be payable on such Tax Returns or on subsequent

assessments or reassessments with respect thereto have been paid in full on a timely basis

other than Taxes being contested in good faith and for which adequate reserves in

accordance with U.S. GAAP have been established, and no other Taxes are payable by

Veresen or any of its Subsidiaries with respect to items or periods covered by such Tax

Returns;

(ii) Veresen and its Subsidiaries have duly and timely paid all Taxes, including all

installments on account of Taxes for the current year, that are due and payable by them

whether or not assessed by the appropriate Governmental Entity;

(iii) Veresen has made available to Pembina for review originals or true and complete copies

of: (A) material portions of income tax audit reports, statements of deficiencies, closing

or other agreements or correspondence concerning assessments, reassessments or audits

pursuant to which a Governmental Entity has proposed amendments to previously filed

Tax Returns received by or on behalf of Veresen of any of its Subsidiaries relating to

Taxes; (B) any material federal, provincial, state, local or foreign income or franchise

Tax Returns for Veresen and its Subsidiaries for all Tax years beginning after January 1,

2013; and (C) all material written communications to or from any Governmental Entity

relating to the Taxes of Veresen and its Subsidiaries over such period have been made

available to Pembina;

(iv) except as disclosed in writing by Veresen to Pembina on or prior to the date hereof, (A)

neither Veresen nor any of its Subsidiaries is a party to any action or proceeding for

assessment or collection of Taxes, nor, to the knowledge of Veresen, has such an event

been asserted or threatened against Veresen and its Subsidiaries, or any of them, or any of

their respective assets; (B) no waiver or extension of any statute of limitations is in effect

with respect to Taxes or Tax Returns of Veresen or any of its Subsidiaries and no request

for any such waiver or extension is currently pending; (C) no audit by any Governmental

Entity of Veresen or any of its Subsidiaries is in process, to the knowledge of Veresen,

threatened; and (D) no written claim has been made to Veresen or any of its Subsidiaries

by any Governmental Entity in a jurisdiction where Veresen and its Subsidiaries do not

file Tax Returns that they are or may be subject to taxation by that jurisdiction;

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(v) Veresen has or will furnish Pembina with originals or copies of all material elections,

designations or similar filings relating to Taxes of Veresen and its Subsidiaries and any

agreement or other arrangement in respect of Taxes or Tax Returns of Veresen and its

Subsidiaries that has effect for any period ending after the Effective Date;

(vi) Veresen has made available to Pembina originals or true and complete copies of all

notices of assessments that have been received in respect of income, sales (including

goods and services, harmonized sales and provincial or territorial sales) and capital tax

liabilities of Veresen and its Subsidiaries for all taxation years or periods ending prior to

and including the taxation year or period ended December 31, 2016;

(vii) each of Veresen and its Subsidiaries has duly and timely withheld all material amounts in

respect of Taxes and other amounts required by Law to be withheld by it (including

Taxes and other amounts required to be withheld by it in respect of any amount paid or

credited or deemed to be paid or credited by it to or for the account or benefit of any

Person, including any employee, officer or director and any non-resident Person), and has

duly and timely remitted to the appropriate Governmental Entity such amounts required

by Law to be remitted by it. Each of Veresen and its Subsidiaries has complied in all

material respects with all Tax information reporting provisions of all applicable Laws;

(viii) each of Veresen and its Subsidiaries has duly and timely collected or self-assessed all

amounts on account of any sales or transfer taxes, including goods and services,

harmonized sales and provincial or territorial sales taxes, required by Law to be collected

by it and have duly and timely remitted to the appropriate Governmental Entity any such

amounts required by Law to be remitted by it;

(ix) none of sections 17 or 78 or 80, 80.01, 80.02, 80.03 or 80.04 of the Tax Act, or any

equivalent provision of the Tax legislation of any province or any other jurisdiction, have

applied or will apply to any of Veresen or its Subsidiaries at any time up to and including

the Effective Time;

(x) none of Veresen and its Subsidiaries has acquired property from, or transferred property

to, a non-arm's length Person, within the meaning of the Tax Act, for consideration the

value of which is less than the fair market value of the property acquired or transferred

or, in the case where such consideration included debt payable by the acquiror, for debt

with a principal amount which is less than the fair market value of the property acquired

or transferred in consideration of such debt;

(xi) there are no reserves under the Tax Act or any equivalent provincial or territorial statute

to be claimed by any of Veresen or its Subsidiaries;

(xii) there are no Tax liens or security interests on any of the assets of Veresen or any of its

Subsidiaries other than Permitted Liens;

(xiii) neither Veresen nor any of its Subsidiaries (A) has any liability for the Taxes of any other

Person, (B) has ever filed, or has ever been required to file, a consolidated, combined or

unitary Tax Return (other than Tax Returns which include only Veresen or any of its

Subsidiaries), (C) has any liability under any agreement or arrangement relating to the

sharing, allocation or indemnification of Taxes, or any similar agreement, contract or

arrangement (other than an indemnification for Taxes provided in purchase and sale

agreements that would not have a material effect on Veresen) (collectively, "Tax

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Sharing Agreements"), or (D) has any liability for the Taxes of any Person as a

transferee, successor or agent, by contract or otherwise;

(xiv) the aggregate tax attributes of Veresen and its Subsidiaries as of December 31, 2016 are

not materially lower than as disclosed in writing to Pembina by Veresen on or prior to the

date hereof and Veresen has not undertaken any transactions out of the ordinary course of

its business in the period beginning on January 1, 2017 and ending on the date hereof

which would result in a material reduction in such aggregate tax attributes;

(xv) within the past three years, neither Veresen nor any of its Subsidiaries has constituted a

"distributing corporation" or a "controlled corporation" (within the meaning of Section

355(a)(1)(A) of the U.S. Tax Code) in a distribution of shares qualifying for tax-free

treatment under Section 355 of the U.S. Tax Code;

(xvi) except as disclosed in writing by Veresen to Pembina on or prior to the date hereof,

neither Veresen nor any of its Subsidiaries has entered into a closing agreement pursuant

to Section 7121 of the U.S. Tax Code or any similar provision of state, local or foreign

law, and neither Veresen nor any of its Subsidiaries is subject to any private letter ruling

of the IRS or comparable ruling of any other Governmental Entity which may apply after

the Effective Date;

(xvii) Subsidiaries of Veresen that are U.S. persons had not entered into any contract,

agreement, plan or arrangement covering any person that gives rise to the payment of

any amount that would not be deductible pursuant to Section 162(m) of the U.S. Tax

Code;

(xviii) None of the Veresen Subsidiaries that are US persons is or has been a party to any "listed

transaction" as defined in U.S. Tax Code §6707A(c)(2) and U.S. Treasury Regulations

§1.6011-4(b)(2).

(h) Tax Reserves. Veresen has paid or provided adequate accruals in the Veresen Financial

Statements (as defined herein) for Taxes, including income taxes and related future income taxes, in

conformity with U.S. GAAP.

(i) Tax Deficiencies; Audits. No deficiencies exist or have been asserted with respect to Taxes of

Veresen or any of its Subsidiaries that would materially adversely affect Veresen and its Subsidiaries

taken as a whole. Neither Veresen nor any of its Subsidiaries is a party to any action or proceeding for

assessment or collection of Taxes, nor, to the knowledge of Veresen, has such an event been asserted or

threatened against Veresen or any of its Subsidiaries or any of their respective assets that would

materially adversely affect Veresen and its Subsidiaries taken as a whole.

(j) Reporting Issuer Status. Veresen is a reporting issuer (where such concept exists) in all provinces

of Canada and is in material compliance with all applicable Canadian Securities Laws therein. The

Veresen Common Shares and the Veresen Preferred Shares are listed and posted for trading on the TSX

and Veresen is in material compliance with the rules of the TSX.

(k) Capitalization. The authorized share capital of Veresen consists of an unlimited number of

Veresen Common Shares and a number of preferred shares of Veresen, issuable in series, to be limited to

an amount equal to not more than one-half of the number of Veresen Common Shares issued and

outstanding at the time of issuance of such Veresen Preferred Shares. There are issued and outstanding

313,652,781 Veresen Common Shares, 8,000,000 Veresen Series A Shares, 6,000,000 Veresen Series C

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Shares and 8,000,000 Veresen Series E Shares; and there are no other shares of Veresen of any class or

series outstanding. No Veresen Common Shares will be issued upon the vesting of Veresen RSUs and

Veresen PSUs outstanding as of the date hereof. Other than (i) Veresen Series B Shares issuable on

conversion of the Veresen Series A Shares, Veresen Series D Shares issuable on conversion of the

Veresen Series C Shares and Veresen Series F Shares issuable on conversion of the Veresen Series E

Shares, (ii) Veresen Common Shares issuable pursuant to the Veresen DRIP (it being understood that

Veresen shall keep suspended the Veresen DRIP following execution of this Agreement), (iii) Veresen

Common Shares issuable upon vesting of Veresen RSUs and Veresen PSUs, and (iv) pursuant to rights

issued under the Veresen Shareholder Rights Plan, each on the terms as publicly disclosed on or prior to

the date hereof, there are no options, warrants or other rights, shareholder rights plans, agreements or

commitments of any character whatsoever requiring the issuance, sale or transfer by Veresen of any

shares of Veresen or any securities convertible into, or exchangeable or exercisable for, or otherwise

evidencing a right to acquire, any shares of Veresen. All outstanding Veresen Common Shares, Veresen

Preferred Shares and Veresen MTNs have, as applicable, been duly authorized and validly issued, are

fully paid and non-assessable and are not subject to, nor were they issued in violation of, any pre-emptive

rights, and all Veresen Common Shares issuable upon the vesting of the Veresen RSUs and Veresen

PSUs, and all Veresen Preferred Shares issuable upon conversion of any Veresen Preferred Shares, in

accordance with their respective terms, will be duly authorized and validly issued as fully paid and non-

assessable and will not be subject to any pre-emptive rights.

(l) Equity Monetization Plans. Other than the Veresen Incentive Awards as disclosed in writing to

Pembina by Veresen on or prior to the date hereof and except as disclosed in writing by Veresen to

Pembina on or prior to the date hereof, there are no outstanding stock appreciation rights, phantom equity,

profit sharing plan or similar rights, agreements, arrangements or commitments payable to any director,

officer or employee of Veresen or its Subsidiaries (excluding the Veresen Significant Entities) and which

are based upon the share price, revenue, value, income or any other attribute of Veresen or its Subsidiaries

(excluding the Veresen Significant Entities) and all such Veresen Incentive Awards outstanding are

subject only to the terms and conditions of the Veresen LTI Plans (true and complete copies of which

have been provided to Pembina prior to the date hereof) and the applicable grant agreements pursuant to

which such awards were granted (a true and complete copy of the form of which has been provided to

Pembina prior to the date hereof and none of the grant agreements entered into in respect of outstanding

Veresen Incentive Awards contain any material departures from such form of agreement).

(m) No Orders. No order, ruling or determination having the effect of suspending the sale of, or

ceasing the trading of, the Veresen Common Shares, the Veresen Preferred Shares or any other securities

of Veresen has been issued by any regulatory authority and is continuing in effect and no proceedings for

that purpose have been instituted, are pending or, to the knowledge of Veresen, are contemplated or

threatened under any applicable Laws or by any other Governmental Entity.

(n) Material Agreements. Except as disclosed in writing to Pembina by Veresen prior to the date

hereof, Veresen has provided Pembina with originals or true and complete copies of all contracts,

agreements and commitments entered into by Veresen or its Subsidiaries, or by which any of them are

bound, which are material to Veresen and its Subsidiaries (taken as a whole), and all agreements material

to Veresen and its Subsidiaries taken as a whole, whether or not provided to Pembina, are valid and

subsisting and none of Veresen or its Subsidiaries, or to the knowledge of Veresen, any counterparty to

such material agreements, is in material default under any such agreements, and, to the knowledge of

Veresen, no event or circumstance exists which with the passage of time could reasonably be expected to

result in a material default by any counterparty to such agreements.

(o) Non-Competition Agreements. Except as disclosed in writing to Pembina by Veresen prior to the

date hereof, neither Veresen nor any of its Subsidiaries is a party to or bound by any non-competition

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agreement, exclusivity agreement or any other agreement, commitment, understanding or obligation

which purports to limit the manner or the localities or regions in which all or any portion of the business

of Veresen or its Subsidiaries is or is reasonably expected to be conducted, and the execution, delivery

and performance of this Agreement and the completion of the Arrangement does not and will not result in

the restriction of Veresen or any of its Subsidiaries from engaging in their business or from competing

with any Person as described above.

(p) Books and Records. The records and minute books of Veresen and its material Subsidiaries

(excluding the Veresen Significant Entities) and their respective predecessors have been maintained

substantially in accordance with all applicable Laws and are complete and accurate in all material

respects, and have been made available in their entirety to Pembina.

(q) Reports. As of their respective dates, (i) Veresen's audited consolidated financial statements as at

and for the fiscal years ended December 31, 2016 and December 31, 2015 (the "Veresen Financial

Statements") and the related management's discussion and analysis, (ii) Veresen's Annual Information

Form dated March 14, 2017, (iii) Veresen's information circular dated March 17, 2017 for its annual

meeting of shareholders to be held on May 3, 2017, (iv) all Veresen press releases and material change

reports or similar documents filed with any Securities Regulators since December 31, 2016, and (v) all

prospectuses or other offering documents used by Veresen in the offering of its securities or filed with

Securities Regulators since December 31, 2016 are all the financial statements, forms, reports,

prospectuses or other documents required to be filed by virtue of applicable Canadian Securities Laws

since December 31, 2016, did not contain any untrue statement of a material fact or omit to state a

material fact required to be stated therein or necessary to make the statements therein, in light of the

circumstances in which they were made, not misleading and complied in all material respects with

applicable Canadian Securities Laws. Since December 31, 2016, Veresen has not filed any material

change reports which continue to be confidential.

(r) Financial Statements. The Veresen Financial Statements were prepared in accordance with U.S.

GAAP (except (i) as otherwise indicated in such financial statements and the notes thereto or, in the case

of audited statements, in the related report of Veresen's independent auditors or (ii) in the case of

unaudited interim statements, to the extent they are subject to normal year-end adjustments), and fairly

present the consolidated financial position, results of operations and cash flows of Veresen on a

consolidated basis as of the dates thereof and for the periods indicated therein (subject, in the case of any

unaudited interim financial statements, to normal year-end audit adjustments) and reflect appropriate and

adequate reserves in respect of contingent liabilities, if any, of Veresen on a consolidated basis. There has

been no change in Veresen accounting policies, except as described in the notes to the Veresen Financial

Statements, since December 31, 2016.

(s) Absence of Undisclosed Liabilities. Veresen has no material obligations or liabilities of any

nature (matured or unmatured, fixed or contingent), other than:

(i) those set forth or adequately provided for in the balance sheet included in the Veresen

Financial Statements;

(ii) those incurred in the ordinary course of business and not required to be set forth in the

Veresen Financial Statements;

(iii) those incurred in the ordinary course of business since the date of the Veresen Financial

Statements and consistent with past practice; and

(iv) those incurred in connection with the execution of this Agreement.

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(t) No Material Adverse Change. Since December 31, 2016: (i) except in connection with the

Veresen Power Business Sale, Veresen and its Subsidiaries have conducted their businesses only in the

ordinary and normal course, (ii) no liability or obligation of any nature (whether absolute, accrued,

contingent or otherwise) material to Veresen and its Subsidiaries, taken as a whole, has been incurred

other than in the ordinary course of business, and (iii) there has not been any Material Adverse Change in

respect of Veresen and its Subsidiaries, taken as a whole.

(u) Environmental.

(i) There have not occurred any material spills, emissions or pollution on any property of

Veresen or its Subsidiaries as a result of their operations, nor has Veresen or any of its

Subsidiaries been subject to any stop orders, control orders, clean-up orders or

reclamation orders under applicable Environmental Laws. All operations of Veresen and

its Subsidiaries have been and are now being conducted in material compliance with all

applicable Environmental Laws. Neither Veresen nor any of its Subsidiaries is aware of,

or is subject to:

(A) any proceeding, application, order or directive which relates to

environmental, health or safety matters, and which may require any

material work, repairs, construction, or expenditures; or

(B) any demand or notice with respect to the breach of any Environmental

Laws applicable to Veresen or any of its Subsidiaries, including any

regulations respecting the use, storage, treatment, transportation, or

disposition of any Hazardous Substances and which may require any

material work, repairs, construction or expenditures.

(ii) Veresen has reasonably concluded that there are no costs and liabilities (including,

without limitation, any capital or operating expenditures required for clean-up, closure of

properties or compliance with Environmental Laws, or any permit, license or approval,

any related constraints on operating activities and any potential liabilities to third parties)

associated with the effect of Environmental Laws on various business, operations and

properties of Veresen and its Subsidiaries that would be material to Veresen and its

Subsidiaries, taken as a whole.

(v) Title. Veresen and its Subsidiaries have good and sufficient title to their material real property

interests including fee simple estate of and in real property, leases, easements, rights of way, permits or

licenses from landowners or authorities permitting the use of land by Veresen and its Subsidiaries

necessary to permit the operation of their respective businesses as presently owned and conducted. To the

knowledge of Veresen, there are no material defects, failures or impairments in the title of Veresen or its

Subsidiaries to their assets, whether or not an action, suit, proceeding or inquiry is pending or threatened

or whether or not discovered by any third party.

(w) Facilities. To the knowledge of Veresen, the material equipment, facilities, buildings, structures,

improvements and other appurtenances on or under real property owned or used by Veresen or its

Subsidiaries, are in good operating condition and in a good state of maintenance and repair, each has been

constructed and is operated in accordance with good industry practice; each is adequate and suitable for

the purpose for which it is currently being used and in the ordinary course of business, and none thereof,

nor the operation or maintenance thereof, violates any restrictive covenant or any applicable Law or

encroaches any property owned by others.

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(x) No Encumbrances. Neither Veresen nor any of its Subsidiaries has encumbered or alienated their

interest in any of their assets or agreed to do so and such assets are free and clear of all Encumbrances

except for Permitted Encumbrances and other Encumbrances which are not material.

(y) Licenses. Each of Veresen and its Subsidiaries has obtained and is in compliance in all material

respects with all licenses, permits, certificates, consents, orders, grants and other authorizations of or from

any Governmental Entity or other Person necessary to conduct its businesses as they are now being or are

proposed to be conducted.

(z) Compliance with Laws. Veresen and its Subsidiaries have complied with and are not in violation

of any applicable Laws in all material respects.

(aa) Long-Term and Derivative Transactions. Except as disclosed in the Veresen Financial Statements

or in writing to Pembina by Veresen prior to the date hereof, Veresen has no material obligations or

liabilities, direct or indirect, vested or contingent in respect of any rate swap transactions, basis swaps,

forward rate transactions, commodity swaps, commodity options, equity or equity index swaps, equity or

equity index options, bond options, interest rate options, foreign exchange transactions, cap transactions,

floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions,

currency options, production sales transactions having terms greater than 90 days or any other similar

transactions (including any option with respect to any of such transactions) or any combination of such

transactions.

(bb) Employee Benefit Plans. Veresen has provided to Pembina true, complete and correct copies of

each material health, medical, dental, welfare, supplemental unemployment benefit, bonus, profit sharing,

option, insurance, incentive, incentive compensation, deferred compensation, share purchase, share-based

compensation, disability, pension, retirement or supplemental retirement plan and each other employee or

director compensation or benefit plan, agreement or arrangement whether written or unwritten, tax-

qualified or non-qualified, funded or unfunded, for the benefit of directors or former directors of Veresen

and/or its Subsidiaries (excluding the Veresen Significant Entities) consultants or former consultants of

Veresen and/ or its Subsidiaries (excluding the Veresen Significant Entities) employees or former

employees of Veresen and/or its Subsidiaries (excluding the Veresen Significant Entities) which are

maintained by, contributed to, or in respect of which Veresen or any Subsidiary thereof (excluding the

Veresen Significant Entities) has any actual or potential liability, excluding any statutory benefit plans

which Veresen or any Subsidiary (excluding the Veresen Significant Entities) is required to participate in

or comply with (the "Veresen Employee Plans"), and:

(i) each Veresen Employee Plan has been maintained and administered in material

compliance with its terms and in accordance with applicable Laws;

(ii) all required employer contributions or premiums under any such plans have been made in

material compliance with the terms thereof;

(iii) to the knowledge of Veresen, each Veresen Employee Plan that is required or intended to

be qualified under applicable Law or registered or approved by a governmental agency or

authority has been so qualified, registered or approved by the appropriate governmental

agency or authority, and, to the knowledge of Veresen, nothing has occurred since the

date of the last qualification, registration or approval which could reasonably be expected

to materially adversely affect, or cause, the appropriate governmental agency or authority

to revoke such qualification, registration or approval;

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(iv) to the knowledge of Veresen, there are no pending or anticipated claims against or

otherwise involving any of the Veresen Employee Plans (excluding claims for benefits

incurred in the ordinary course of Veresen Employee Plan activities) and no suit, action

or other litigation (excluding claims for benefits incurred in the ordinary course of

Veresen Employee Plan activities) has been brought against or with respect to any

Veresen Employee Plan;

(v) no Veresen Employee Plan is a "registered pension plan" as that term is defined in

subsection 248(1) of the Tax Act;

(vi) Veresen has no liability for or obligation to provide any retiree or other post-employment

health or life benefits under any Veresen Employee Plan except as may be required by

Law;

(vii) except as disclosed in writing to Pembina by Veresen on or prior to the date hereof, the

execution and delivery of this Agreement or the consummation of the transactions

contemplated herein will not (either alone or in combination with any other event) (i)

result in, cause the accelerated vesting of, funding or delivery of, or increase the amount

or value of, any payment or benefit to any current or former employee, officer, or director

of Veresen or any of its Subsidiaries under any Veresen Employee Plans or (ii) in respect

of any individuals who are subject to taxation in the United States, result in any right,

benefit or the payment of any amount that, individually or in combination with any other

such payment, right, or benefit constitutes an "excess parachute payment", as defined in

Section 280G(b)(1) of the U.S. Tax Code. No Veresen Employee Plan provides for the

gross-up or reimbursement of Taxes under Section 409A or Section 4999 of the U.S. Tax

Code or any similar provision of applicable Law; and

(viii) except as disclosed in writing to Pembina by Veresen on or prior to the date hereof,

neither Veresen nor any of its ERISA Affiliates maintain, sponsor, contribute to or have

any obligation to contribute to, or have any liability in respect of (and have not, within

the last six years, maintained, sponsored, contributed to or had any obligation to

contribute to) any employee benefit plan, contract or arrangement that is subject to

ERISA.

(cc) Employment Agreements and Collective Agreements.

(i) Except as disclosed in writing to Pembina by Veresen on or prior to the date hereof,

neither Veresen nor any Subsidiary of Veresen is a party to, nor is engaged in any

negotiations with respect to, any employment agreement with any officer or employee or

any written agreement or policy providing for severance, termination or change of control

payments to any Veresen Employee; provided that, severance or termination payments

made to non-officer employees in the ordinary course of business shall not be subject to

the foregoing;

(ii) except as disclosed in writing to Pembina by Veresen on or prior to the date hereof: (A)

neither Veresen nor any Subsidiary of Veresen is a party to, nor is engaged in any

negotiations with respect to, nor is bound by, any collective bargaining or union

agreement, any actual or, to the knowledge of Veresen, threatened application for

certification or bargaining rights or letter of understanding, with respect to any current or

former employee of Veresen or any of its Subsidiaries; (B) no trade union, council of

trade unions, labor union, employee bargaining agency or affiliated bargaining agent

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holds bargaining rights with respect to any of Veresen or any of its Subsidiaries

employees by way of certification, interim certification, voluntary recognition, or

succession rights; and (C) during the last two years, no Person has petitioned and no

Person is now petitioning, for union representation of any of the employees of Veresen or

any of its Subsidiaries.

(iii) to the knowledge of Veresen, no individual who has performed services for Veresen or

any of its Subsidiaries has been improperly included or excluded from participation in

any Veresen Employee Plan;

(iv) to the knowledge of Veresen, there is no labour strike, dispute, lock-out work slowdown

or stoppage pending or involving or, to the knowledge of Veresen, threatened against

Veresen or any Subsidiary of Veresen. Except as disclosed in writing to Pembina by

Veresen on or prior to the date hereof, no trade union has applied to have Veresen or a

Subsidiary of Veresen declared a related successor, or common employer pursuant to the

Labour Relations Code (Alberta) or any similar legislation in any jurisdiction in which

Veresen or any Subsidiary of Veresen carries on business;

(v) since January 1, 2015, neither Veresen nor any of its Subsidiaries has engaged in any

unfair labour practice and no unfair labour practice complaint, grievance or arbitration

proceeding is pending or, to the knowledge of Veresen, threatened against Veresen or any

of its Subsidiaries;

(vi) all amounts due or accrued for all salary, wages, bonuses, commissions, vacation with

pay, and other employee benefits or contractor payments in respect of current or former

directors, officers, employees or consultants of Veresen or any of its Subsidiaries which

are attributable to the period before the Effective Date have been paid or are accurately

reflected in the books and records of Veresen or its Subsidiary, as applicable;

(vii) there are no material outstanding assessments, penalties, fines liens, charges, surcharges,

or other amounts due or owing by Veresen or any of its Subsidiaries pursuant to any

workers' compensation legislation and none of Veresen or any of its Subsidiaries has

been reassessed under such legislation and, to the knowledge of Veresen, no audit of any

of Veresen or any of its Subsidiaries is currently being performed pursuant to any

applicable worker's compensation legislation;

(viii) except as disclosed in writing to Pembina by Veresen on or prior to the date hereof, there

are no retirees or terminated employees of Veresen or any of its Subsidiaries (excluding

the Veresen Significant Entities) to whom Veresen or any of its Subsidiaries (excluding

the Veresen Significant Entities) has any material benefits responsibility or other

continuing or contingent material obligation;

(ix) except as disclosed in writing to Pembina by Veresen on or prior to the date hereof, no

employees or consultant of Veresen or any of its Subsidiaries (excluding the Veresen

Significant Entities) has any written agreement as to length of notice or severance

payment required to terminate his or her employment or services;

(x) no employee or consultant of Veresen or any of its Subsidiaries (excluding the Veresen

Significant Entities) in the year immediately prior to the date hereof has indicated to

Veresen that he, she or it intends to resign, retire or terminate his, her or its engagement

with Veresen as a result of the transactions contemplated by this Agreement or otherwise;

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(xi) Veresen has made available to Pembina originals or copies of all agreements, policies or

practices used by Veresen or any of its Subsidiaries (excluding the Veresen Significant

Entities) in connection with employment with Veresen or any of its Subsidiaries

(excluding the Veresen Significant Entities), including any arrangement or practice of

Veresen regarding redundancy or severance payments, whether contractual, customary or

discretionary;

(xii) to the knowledge of Veresen, no employee or consultant of Veresen or any of its

Subsidiaries is in violation of any non-competition, non-solicitation, non-disclosure or

any similar agreement with any third party; and

(xiii) Veresen and its Subsidiaries have complied in all material respects with the WARN Act.

Veresen and its Subsidiaries have not taken any action within the immediately preceding

ninety days that requires any notice pursuant to the WARN Act.

(dd) Insurance. Policies of insurance are in force naming Veresen or its applicable Subsidiary as an

insured that adequately cover all risks as are customarily covered by participants in the industry in which

Veresen operates. All such policies shall remain in force and effect (subject to taking into account

insurance market conditions and offerings and industry practices) and shall not be cancelled or otherwise

terminated as a result of the transactions contemplated by this Agreement, other than such cancellations as

would not, individually or in the aggregate, materially adversely affect Veresen or its Subsidiaries taken

as a whole.

(ee) Indebtedness To and By Officers, Directors and Others. Except as disclosed in writing to

Pembina by Veresen on or prior to the date hereof, none of Veresen or any of its Subsidiaries is indebted

to any of the directors, officers, employees or consultants of Veresen or any of its Subsidiaries or any of

their respective associates or affiliates or other parties not at arm's length to Veresen or any of its

Subsidiaries, except for amounts due as normal compensation or reimbursement of ordinary business

expenses, nor is there any indebtedness owing by any such parties to Veresen.

(ff) Customers and Suppliers. Except as disclosed in writing to Pembina by Veresen on or prior to the

date hereof:

(i) none of Veresen or any of its Subsidiaries has received notice of, and there is not, to the

knowledge of Veresen, any intention on the part of any principal customer to cease doing

business with Veresen or any of its Subsidiaries or to modify or change in any material

manner any existing arrangement with Veresen or any of its Subsidiaries for the purchase

or supply of any products or services;

(ii) the relationships of Veresen and its Subsidiaries with their principal suppliers and

customers are satisfactory, and there are no material unresolved disputes with any such

supplier or customer;

(iii) no contract with any principal supplier or customer contains terms under which the

execution or performance of this Agreement would give the supplier or customer the

right to terminate or adversely change the terms of that contract;

(iv) since December 31, 2016, there has been no termination or cancellation of, and no

modification or change in, the business relationship of Veresen or any of its Subsidiaries

with any principal customer; and

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(v) Veresen has no reason to believe that the benefits of any relationship with any of the

principal customers or suppliers of Veresen or any of its Subsidiaries will not continue

after the consummation of the transactions hereunder in substantially the same manner as

prior to the date of this Agreement.

(gg) Possession of Intellectual Property. Except for such of the following as would not reasonably be

expected to materially adversely affect Veresen or its Subsidiaries, taken as a whole, Veresen and its

Subsidiaries own or possess adequate patents, patent rights, licenses, inventions, copyrights, know-how

(including trade secrets and other unpatented and/or unpatentable proprietary or confidential information,

systems or procedures), trademarks, service marks, trade names or other intellectual property necessary to

carry on the business now operated by them, and neither Veresen nor any Subsidiary has received any

written notice or claim challenging Veresen or its Subsidiaries respecting the validity of, use of or

ownership of the processes and technology, and to the knowledge of Veresen, there are no facts upon

which such a challenge could be made.

(hh) Guarantees and Indemnification. Except for guarantees, indemnification or any like commitment

in respect of the obligations, liabilities (contingent or otherwise) or indebtedness of any of the

Subsidiaries of Veresen with respect to credit obligations of Veresen or as disclosed in writing to

Pembina by Veresen on or prior to the date hereof, none of Veresen or any of its Subsidiaries is a party to

or bound by any agreement of guarantee, indemnification (other than an indemnification of directors and

officers in accordance with the by-laws of the respective corporation or applicable Laws, and other than

standard indemnity agreements in underwriting and agency agreements and in the ordinary course

provided to service providers) or any like commitment in respect of the obligations, liabilities (contingent

or otherwise) or indebtedness of any other Person, other than guarantees of obligations of any other

Subsidiary of Veresen or industry typical indemnifications.

(ii) No Insider Rights. No director, officer, insider or other party not at arm's length to Veresen or any

of its Subsidiaries has any right, title or interest in (or the right to acquire any right, title or interest in) any

royalty interest, participation interest or any other interest whatsoever, in any assets or properties of

Veresen or any of its Subsidiaries.

(jj) Funds Available. Veresen has sufficient funds available to pay the amounts that may be payable

pursuant to Section 7.2 or Section 7.3 of this Agreement.

(kk) Corrupt Practices Legislation.

(i) To the knowledge of Veresen, neither it nor any of its Subsidiaries has, directly or

indirectly, (A) made or authorized any contribution, payment or gift of funds or property

to any official, employee or agent of any governmental agency, authority or

instrumentality of any jurisdiction or any official of any public international organization

or (B) made any contribution to any candidate for public office, in either case, where

either the payment or the purpose of such contribution, payment or gift was, is, or would

be prohibited under the U.S. Foreign Corrupt Practices Act of 1977, as amended, the

Corruption of Foreign Public Officials Act (Canada) or the Proceeds of Crime (Money

Laundering) and Terrorist Financing Act (Canada) or the rules and regulations

promulgated thereunder;

(ii) during the periods of the Veresen Financial Statements, the operations of Veresen and its

Subsidiaries are and have been conducted at all times in compliance with Money

Laundering Laws. To the knowledge of Veresen, no action, suit or proceeding by or

before any court or governmental agency, authority or body or any arbitrator involving

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Veresen or any of its Subsidiaries with respect to the Money Laundering Laws is pending

or threatened; and

(iii) neither Veresen nor any of its Subsidiaries nor, to the knowledge of Veresen, any

director, officer, agent, employee or affiliate of Veresen or any of its Subsidiaries has had

any sanctions administered by OFAC imposed upon such Person; and neither Veresen

nor any of its Subsidiaries is in violation of any U.S. Economic Sanctions.

(ll) Place of Principal Offices. The principal offices of Veresen are not located within the United

States.

(mm) Off-Balance Sheet Arrangements. Veresen does not have any off-balance sheet arrangements.

(nn) Internal Control Over Financial Reporting. Veresen maintains internal control over financial

reporting and is in compliance with all applicable Laws and required certification and disclosure

requirements with respect to internal control over financial reporting. Such internal control over financial

reporting is effective in providing sufficient assurance regarding the reliability of financial reporting and

the preparation of financial statements for external purposes in accordance with U.S. GAAP, and includes

policies and procedures that: (i) pertain to the maintenance of records that in sufficient detail accurately

and fairly reflect the transactions and dispositions of the assets of Veresen; (ii) provide sufficient

assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with U.S. GAAP, and that receipts and expenditures of Veresen are being made only in

accordance with authorizations of management and directors of Veresen; and (iii) provide sufficient

assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the

assets of Veresen that could have a material effect on its financial statements. To the knowledge of

Veresen, there are no significant deficiencies in the design or operation of, or material weaknesses in, the

internal controls over financial reporting of Veresen that are reasonably likely to materially and adversely

affect the ability of Veresen to record, process, summarize and report financial information; and, to the

knowledge of Veresen, there is no fraud, whether or not material, that involves management or other

employees who have a significant role in the internal control over financial reporting of Veresen. There

have been no controls deficiencies comments made by Veresen's auditors to Veresen.

(oo) Financial Advisors. Except for Scotia Capital Inc., no financial advisor, broker, finder or

investment banker is entitled to any brokerage, finder's or other fee or commission, or to the

reimbursement of any of its expenses, in connection with the Arrangement. The fees payable to Scotia

Capital Inc. for the delivery of the Veresen Fairness Opinions in respect of the Arrangement are not

contingent on the completion of the Arrangement. Veresen has provided to Pembina a correct and

complete copy of all agreements relating to the arrangements between it and its financial advisors as are

in existence at the date hereof (whether in connection with the Arrangement other otherwise) and agrees

not to enter into any new agreements with financial advisors or amend the terms of any such existing

agreements relating to the payment of fees and expenses or indemnification without the prior written

approval of Pembina, such approval not to be unreasonably withheld.

(pp) Confidentiality Agreements. All agreements that have not by their terms expired that have been

entered into by Veresen with Persons other than Pembina regarding the confidentiality of information

provided to such Persons or reviewed by such Persons with respect to any transaction in the nature

described in the definition of Acquisition Proposal are in industry typical form and Veresen has not

waived any standstill or other provisions of any of such agreements.

(qq) Disclosure. The data and information in respect of Veresen and its Subsidiaries and their

respective assets, liabilities, businesses, affairs and operations provided by or on behalf of Veresen to or

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on behalf of Pembina was and is accurate and correct in all material respects as at the respective dates

thereof and does not omit any data or information necessary to make any data or information provided not

materially misleading as at the respective dates thereof.

(rr) Terms of Material Agreements. None of the (i) decision by Veresen to enter into the negotiations

that gave rise to the transaction contemplated hereby and pursuant to the Plan of Arrangement, (ii)

execution and delivery of this Agreement or, (iii) the consummation of the transactions contemplated

hereby or pursuant to the Plan of Arrangement, will or has caused:

(i) any material breach of any material agreement (which, for certainty, includes the Veresen

MTN Indenture and the agreements governing the Veresen Bank Facility, the Veresen

Midstream Facility, the Veresen AEGS Notes, the Veresen Ruby Notes and the Veresen

Power Business Debt (as defined herein)) to which Veresen or any of its Subsidiaries is

or are party or by which any of them are bound;

(ii) the triggering of any Pre-Emptive Right under any material agreement to which Veresen

or any of its Subsidiaries or affiliates is or are party or by which any of them are bound;

(iii) the triggering of any change of control provision under any material agreement to which

Veresen or any of its Subsidiaries or affiliates is or are party or by which any of them are

bound;

(iv) the termination of or shortening of:

(A) the term of any material agreement to which Veresen or any of its

Subsidiaries or affiliates is or are party or by which any of them are bound;

or

(B) any term contained within any such agreement granting any manner of

contractual right to Veresen or its Subsidiaries or affiliates;

(v) any requirement to replace, post or otherwise provide any form of credit assurance under

or pursuant to any material agreement to which Veresen or any of its Subsidiaries or

affiliates is or are party or by which any of them are bound; or

(vi) the loss of any right of Veresen or its Subsidiaries or affiliates (whether presently vested

or vesting or arising in future) to acquire any interest in any property, facility or

undertaking (including an incremental interest in any property, facility or undertaking in

which Veresen or any of its Subsidiaries or affiliates currently has or have an interest).

(ss) No Area of Mutual Interest, Exclusion or Non-Compete Provision. Except as disclosed in writing

to Pembina by Veresen on or prior to the date hereof, none of Veresen or its Subsidiaries or affiliates are

party to or bound by any agreement containing any area of mutual interest or area of exclusion provisions

or provisions precluding, preventing or otherwise constraining Veresen or its Subsidiaries or affiliates

from conducting business operations (whether directly or indirectly) within any particular geographical

area, any particular industry or in competition with any third party.

(tt) Veresen Power Business Sale. No event has occurred, or state of facts or circumstances arisen,

which will prevent, or give a counterparty thereto the right to terminate, in whole or in part, the agreed

upon transactions comprising the Veresen Power Business Sale from being completed pursuant to, and in

all material respects on, the terms and conditions as disclosed to Pembina in writing by Veresen prior to

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the date hereof, and Veresen has no reason to believe that such transactions will not be completed in

accordance, in all material respects, with such terms and conditions except as disclosed to Pembina in

writing by Veresen prior to the date hereof. The amount of cash taxes payable by Veresen and arising

from the Veresen Power Business Sale will not be greater than the amount disclosed to Pembina in

writing by Veresen prior to the date hereof. As of the date of this Agreement, the amount of debt

associated with Veresen's interest in the assets subject to the Veresen Power Business Sale does not

exceed $150 million (the "Veresen Power Business Debt"), all of which will, upon completion of the

Veresen Power Business Sale, be transferred to the purchasers thereunder and will cease to be a liability

of Veresen or its applicable Subsidiaries. For greater certainty, the Veresen Power Business Debt does

not include the amount of debt associated with Veresen's interest in the transactions that were completed

prior to the date hereof.

(uu) Credit Facilities and Other Long-Term Debt. Except as disclosed in writing to Pembina by

Veresen on or prior to the date hereof, other than the Veresen Bank Facility, the Veresen Midstream

Facility, the Veresen AEGS Notes, the Veresen MTNs and the Veresen Ruby Notes and other than the

Veresen Power Business Debt, neither Veresen nor any of its Subsidiaries has any long term indebtedness

or bank indebtedness. As of the date of this Agreement, the Veresen Debt does not exceed $1,204.2

million and, as at March 31, 2017: (i) the amounts drawn under the Veresen Midstream Facility did not

exceed $868.9 million for the expansion facility, $40.0 million for the revolving facility and US$713.8

million for the term B loan, and (ii) no amounts were drawn in respect of the Veresen Ruby Notes.

Veresen is not in material default under the Veresen Bank Facility or the Veresen MTN Indenture, and the

applicable Subsidiaries of Veresen are not in default under the Veresen AEGS Notes, the Veresen Ruby

Notes or the Veresen Midstream Facility which default would be material to Veresen and its Subsidiaries,

taken as a whole, nor has any event occurred, or state of facts or circumstances arisen, that would cause

such a default to occur in the future and, to the best of Veresen's knowledge, its banker is not

contemplating any reduction under the Veresen Bank Facility or the Veresen Midstream Facility

borrowing base, prior to giving effect to the Arrangement.

(vv) Foreign Private Issuer. As of the date hereof, Veresen is a "foreign private issuer" within the

meaning of Rule 405 of Regulation C adopted by the SEC under the U.S. Securities Act.

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APPENDIX D

PLAN OF ARRANGEMENT

PLAN OF ARRANGEMENT

PLAN OF ARRANGEMENT UNDER SECTION 193

OF THE

BUSINESS CORPORATIONS ACT (ALBERTA)

ARTICLE 1

INTERPRETATION

1.1 In this Plan of Arrangement, the following terms have the following meanings:

(a) "ABCA" means the Business Corporations Act, R.S.A. 2000, c. B-9, as amended, including the

regulations promulgated thereunder;

(b) "Amalco" means, in the event the Preferred Shareholder Resolution receives the requisite

approval of Veresen Preferred Shareholders at the Veresen Shareholders’ Meeting, or the Veresen

Preferred Shareholders have approved a special resolution with similar effect to the Preferred

Shareholder Resolution prior to the Effective Time such that Pembina is the sole holder of the

Veresen Preferred Shares prior to the amalgamation contemplated in Section 3.1(f), and this Plan

of Arrangement is not otherwise amended pursuant to Section 6.5 hereof to exclude the Veresen

Preferred Shares, the corporation resulting from the amalgamation of Pembina and Veresen

pursuant to this Plan of Arrangement;

(c) "Arrangement", "herein", "hereof", "hereto", "hereunder" and similar expressions mean and

refer to the arrangement pursuant to section 193 of the ABCA on the terms and subject to the

conditions set forth in this Plan of Arrangement as supplemented, modified or amended in

accordance with this plan, and not to any particular article, section or other portion hereof;

(d) "Arrangement Agreement" means the agreement dated May 1, 2017, between Pembina and

Veresen with respect to the Arrangement and all amendments thereto;

(e) "Arrangement Resolution" means the special resolution of Veresen Shareholders in respect of

the Arrangement to be considered at the Veresen Shareholders’ Meeting substantially in the form

attached as Schedule "B-1" to the Arrangement Agreement;

(f) "Articles of Arrangement" means the articles of arrangement of Veresen in respect of the

Arrangement required under subsection 193(10) of the ABCA to be sent to the Registrar for filing

after the Final Order has been granted, giving effect to the Arrangement;

(g) "Business Day" means a day other than a Saturday, Sunday or statutory holiday or other day when

banks in the City of Calgary, Alberta are not generally open for business;

(h) "Certificate" means the certificate or proof of filing to be issued by the Registrar pursuant to

subsection 193(11) or 193(12) of the ABCA in respect of the Articles of Arrangement giving

effect to the Arrangement;

(i) "Court" means the Court of Queen's Bench of Alberta;

(j) "Depositary" means Computershare Trust Company of Canada, a trust company licensed to carry

on business in the Province of Alberta at its principal office in Calgary, Alberta or such other

person that may be appointed by Pembina for the purpose of receiving deposits of certificates

formerly representing Veresen Shares;

(k) "Dissenting Veresen Shareholders" means registered Veresen Shareholders and, in the event the

Preferred Shareholder Resolution receives the requisite approval of Veresen Preferred

Shareholders at the Veresen Shareholders’ Meeting, Veresen Preferred Shareholders who validly

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exercise the Dissent Rights with respect to the Arrangement Resolution or the Preferred

Shareholder Resolution, as applicable, provided to them under the Interim Order, which exercise

of Dissent Rights has not been withdrawn, or is not deemed to have been withdrawn, before the

Effective Time;

(l) "Dissent Rights" means the right dissent in respect of the Arrangement described in Article 4

hereof;

(m) "Effective Date" means the date the Arrangement is effective under the ABCA;

(n) "Effective Time" means the time at which the Articles of Arrangement are filed with the Registrar

on the Effective Date and the Arrangement becomes effective;

(o) "Election Deadline" means 5:00 p.m. (Calgary time) on the date announced by Veresen by means

of a news release disseminated on a national newswire in Canada and the U.S. as the deadline for

Veresen Shareholders to make an election to receive the Cash Consideration or the Share

Consideration in respect of their Veresen Shares, which announcement shall be made at least ten

(10) Business Days in advance of the Election Deadline;

(p) "Encumbrance" includes any mortgage, pledge, assignment, charge, lien, security interest,

adverse interest in property, other third party interest or encumbrance of any kind whether

contingent or absolute, and any agreement, option, right or privilege (whether by law, contract or

otherwise) capable of becoming any of the foregoing

(q) "Final Order" means the final order of the Court approving the Arrangement pursuant to

subsection 193(9)(a) of the ABCA, as such order may be amended at any time prior to the

Effective Date or, if appealed, then unless such appeal is withdrawn or denied, as affirmed;

(r) "Interim Order" means an interim order of the Court concerning the Arrangement under

subsection 193(4) of the ABCA, containing declarations and directions with respect to the

Arrangement and the holding of the Veresen Shareholders’ Meeting, as such order may be

affirmed, amended or modified by any court of competent jurisdiction;

(s) "Tax Act" means the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended, including the

regulations promulgated thereunder, as amended from time to time;

(t) "Total Elected Cash Consideration" has the meaning ascribed thereto in Section 3.3;

(u) "Total Elected Share Consideration" has the meaning ascribed thereto in Section 3.3;

(v) "Letter of Transmittal" means, as applicable: (i) in respect of the Veresen Shares, the letter of

transmittal and election form accompanying the Veresen Proxy Circular sent to Veresen

Shareholders and Veresen Preferred Shareholders pursuant to which holders of Veresen Shares are

required to deliver certificates representing the Veresen Shares to the Depository and may elect to

receive, on completion of the Arrangement, in exchange for each Veresen Share, the Cash

Consideration or the Share Consideration, subject to proration set forth in Section 3.3 hereof; or

(ii) in respect of the Veresen Preferred Shares, the letter of transmittal accompanying the Veresen

Proxy Circular sent to Veresen Shareholders and Veresen Preferred Shareholders pursuant to

which holders of Veresen Preferred Shares are required to deliver certificates representing the

Veresen Preferred Shares to the Depository;

(w) "Maximum Cash Consideration" means $1,522,500,000;

(x) "Maximum Share Consideration" means 99,500,000 Pembina Shares;

(y) "Pembina" means Pembina Pipeline Corporation, a corporation existing under the ABCA;

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(z) "Pembina Exchange Preferred Shares" means the Pembina Series [X] Shares, the Pembina

Series [X+1] Shares, the Pembina Series [X+2] Shares, the Pembina Series [X+3] Shares, the

Pembina Series [X+4] Shares and the Pembina Series [X+5] Shares, as constituted on the

Effective Date;

(aa) "Pembina Series [X] Shares" means the cumulative redeemable rate reset Class A Preferred

Shares, series [X] in the capital of Pembina, such shares having identical terms to the Veresen

Series A Shares except that the issuer thereof shall be the Pembina and they will be convertible

into Pembina Series [X+1] Shares instead of Veresen Series B Shares;

(bb) "Pembina Series [X+1] Shares" means the cumulative redeemable floating rate Class A Preferred

Shares, series [X+1] in the capital of Pembina, such shares having identical terms to the Veresen

Series B Shares except that the issuer thereof shall be the Pembina and they will be convertible

into Pembina Series [X] Shares instead of Veresen Series A Shares;

(cc) "Pembina Series [X+2] Shares" means the cumulative redeemable rate reset Class A Preferred


Series C Shares except that the issuer thereof shall be the Pembina and they will be convertible

into Pembina Series [X+3] Shares instead of Veresen Series D Shares;

(dd) "Pembina Series [X+3] Shares" means the cumulative redeemable floating rate Class A Preferred


Series D Shares except that the issuer thereof shall be the Pembina and they will be convertible

into Pembina Series [X+2] Shares instead of Veresen Series C Shares;

(ee) "Pembina Series [X+4] Shares" means the cumulative redeemable rate reset Class A Preferred


Series E Shares except that the issuer thereof shall be the Pembina and they will be convertible

into Pembina Series [X+5] Shares instead of Veresen Series F Shares;

(ff) "Pembina Series [X+5] Shares" means the cumulative redeemable floating rate Class A Preferred


Series F Shares except that the issuer thereof shall be the Pembina and they will be convertible

into Pembina Series [X+4] Shares instead of Veresen Series E Shares;

(gg) "Pembina Shares" means the common shares in the capital of Pembina;

(hh) "Plan" or "Plan of Arrangement" means this plan of arrangement as amended or supplemented

from time to time in accordance with the terms hereof, and "hereby", "hereof", "herein",

"hereunder", "herewith" and similar terms refer to this plan of arrangement and not to any

particular provision of this plan of arrangement;

(ii) "Preferred Shareholder Resolution" means the special resolution of the Veresen Preferred

Shareholders, voting as a class, in respect of the Arrangement to be considered at the Veresen

Shareholders’ Meeting substantially in the form attached as Schedule B-2 to the Arrangement

Agreement;

(jj) "Registrar" means the Registrar of Corporations or the Deputy Registrar of Corporations

appointed pursuant to section 263 of the ABCA;

(kk) "Veresen" means Veresen Inc., a corporation incorporated under the ABCA;

(ll) "Veresen Cash Consideration" means $18.65 per Veresen Share;

(mm) "Veresen Preferred Share Consideration" means one Pembina Series [X] Share per Veresen

Series A Share, without interest, one Pembina Series [X+1] Share per Veresen Series B Share,

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without interest, one Pembina Series [X+2] Share per Veresen Series C Share, without interest,

one Pembina Series [X+3] Share per Veresen Series D Share, without interest, one Pembina Series

[X+4] Share per Veresen Series E Share, without interest, and one Pembina Series [X+5] Share

per Veresen Series F Share, without interest, as applicable;

(nn) "Veresen Preferred Shareholders" means, collectively, the holders of Veresen Series A Shares,

Veresen Series B Shares, Veresen Series C Shares, Veresen Series D Shares, Veresen Series E

Shares and Veresen Series F Shares;

(oo) "Veresen Proxy Circular" means the notice of the Veresen Shareholders' Meeting to be sent to

Veresen Shareholders and Veresen Preferred Shareholders and the management proxy circular to

be prepared in connection with the Veresen Shareholders' Meeting together with any amendments

thereto or supplements thereof, and any other registration statement, information circular or proxy

statement which may be prepared in connection with the Veresen Shareholders' Meeting;

(pp) "Veresen Series A Shares" means the cumulative redeemable preferred shares, series A of

Veresen;

(qq) "Veresen Series B Shares" means the cumulative redeemable preferred shares, series B of

Veresen;

(rr) "Veresen Series C Shares" means the cumulative redeemable preferred shares, series C of

Veresen;

(ss) "Veresen Series D Shares" means the cumulative redeemable preferred shares, series D of

Veresen;

(tt) "Veresen Series E Shares" means the cumulative redeemable preferred shares, series E of

Veresen;

(uu) "Veresen Series F Shares" means the cumulative redeemable preferred shares, series F of

Veresen;

(vv) "Veresen Shareholders" means the holders of Veresen Shares;

(ww) "Veresen Share Consideration" means 0.4287 of a Pembina Share;

(xx) "Veresen Shareholders' Meeting" means such meeting or meetings of the Veresen Shareholders

and the Veresen Preferred Shareholders, including any adjournment thereof, that is to be convened

as provided by the Interim Order to consider, and if deemed advisable approve, the Arrangement;

(yy) "Veresen Shareholder Rights Plan" means Veresen's shareholder rights plan dated May 6, 2014,

as such may be amended, amended and restated or replaced from time to time;

(zz) "Veresen Shares" means the common shares in the capital of Veresen; and

(aaa) "Veresen SRPs" means the rights issued pursuant to the Veresen Shareholder Rights Plan.

1.2 The division of this Plan of Arrangement into articles, sections and subsections and the insertion of

headings are for convenience of reference only and shall not affect the construction or interpretation of this

Plan of Arrangement.

1.3 Unless reference is specifically made to some other document or instrument, all references herein to

articles, sections and subsections are to articles, sections and subsections of this Plan of Arrangement.

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1.4 Unless the context otherwise requires, words importing the singular number shall include the plural and

vice versa; words importing any gender shall include all genders; and words importing persons shall

include individuals, partnerships, associations, corporations, funds, unincorporated organizations,

governments, regulatory authorities, and other entities.

1.5 Unless otherwise specified, all references to "dollars" or "$" shall mean Canadian dollars.

1.6 In the event that the date on which any action is required to be taken hereunder by any of the parties is not a

Business Day in the place where the action is required to be taken, such action shall be required to be taken

on the next succeeding day which is a Business Day in such place.

1.7 References in this Plan of Arrangement to any statute or sections thereof shall include such statute as

amended or substituted and any regulations promulgated thereunder from time to time in effect.

ARTICLE 2


2.1 This Plan of Arrangement is made pursuant and subject to the provisions of and forms part of the

Arrangement Agreement.

2.2 This Plan of Arrangement, upon the filing of the Articles of Arrangement and the issue of the Certificate,

will become effective on, and be binding on and after, the Effective Time on: (i) all registered and

beneficial Veresen Shareholders and, in the event the Preferred Shareholder Resolution receives the

requisite approval of Veresen Preferred Shareholders at the Veresen Shareholders’ Meeting, the Veresen

Preferred Shareholders; (ii) Veresen; and (iii) Pembina.

2.3 The Articles of Arrangement and Certificate shall be filed and issued, respectively, with respect to this

Arrangement in its entirety. The Certificate shall be conclusive evidence that the Arrangement has become

effective and that each of the provisions of Article 3 have become effective in the sequence set out therein.

If no Certificate is required to be issued by the Registrar pursuant to subsection 193(11) of the ABCA, the

Arrangement shall become effective at the Effective Time on the date the Articles of Arrangement are filed

with the Registrar pursuant to subsection 193(10) of the ABCA.

ARTICLE 3

ARRANGEMENT

3.1 Commencing at the Effective Time, each of the events set out below shall occur and shall be deemed to

occur in the following order without any further act or formality except as otherwise provided herein.

Veresen Shareholder Rights Plan

(a) The Veresen Shareholder Rights Plan shall terminate and cease to have any further force or effect

and the Veresen SRP Rights shall be cancelled without any payment in respect thereof.

Dissenting Veresen Shareholders

(b) Subject to Article 4, the Veresen Shares and, in the event the Preferred Shareholder Resolution

receives the requisite approval of Veresen Preferred Shareholders at the Veresen Shareholders’

Meeting, the Veresen Preferred Shares held by Dissenting Veresen Shareholders who have validly

exercised Dissent Rights shall be deemed to have been transferred to Veresen (free and clear of all

any Encumbrances), and cancelled and such Dissenting Veresen Shareholders shall cease to have

any rights as Veresen Shareholders or Veresen Preferred Shareholders, as applicable, other than

the right to be paid the fair value of their Veresen Shares or Veresen Preferred Shares, as the case

may be, in accordance with Article 4, and the names of such holders shall be removed from the

register of Veresen Shareholders and Veresen Preferred Shareholders, as applicable.

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Acquisition of Veresen Shares by Pembina

(c) Each issued and outstanding Veresen Share (other than those held by Dissenting Veresen

Shareholders) shall be transferred by the holder thereof without any further action on its part (free

and clear of any Encumbrances) to Pembina in accordance with the election or deemed election of

such holder pursuant to Section 3.2, as adjusted by Section 3.3, if applicable, in exchange for the

Veresen Cash Consideration or the Veresen Share Consideration, and Pembina shall be deemed to

be the legal and beneficial owner of such transferred Veresen Share (free and clear of

Encumbrances,), and upon such exchange:

(i) the holders of such Veresen Shares shall cease to be the holders of Veresen Shares and

the names of such holders shall be removed from the register of Veresen Shareholders;

and

(ii) Pembina shall become the holder of the Veresen Shares so exchanged and shall be added

to the register of Veresen Shareholders as the registered holder of such shares.

Acquisition and Exchange of Veresen Preferred Shares by Pembina

(d) Provided that the Preferred Shareholder Resolution has received the requisite approval of Veresen

Preferred Shareholders at the Veresen Shareholders’ Meeting:

(i) Veresen shall declare and pay in cash a dividend on each Veresen Preferred Share in an

amount equal to all accrued and unpaid dividends thereon, and for which a record date for

the payment of such dividends has not occurred prior to the Effective Date, up to, but

excluding, the Effective Date; and

(ii) each issued and outstanding Veresen Preferred Share (other than those held by Dissenting

Veresen Shareholders) shall be transferred by the holder thereof without any further

action on its part (free and clear of any Encumbrances) to Pembina in exchange for the

Veresen Preferred Share Consideration, as applicable, and Pembina shall be deemed to be

the legal and beneficial owner of such transferred Veresen Preferred Share (free and clear

of Encumbrances), and upon such exchange:

(A) the holders of such Veresen Preferred Shares shall cease to be the holders of

Veresen Preferred Shares and the names of such holders shall be removed from

the register of Veresen Preferred Shareholders; and

(B) Pembina shall become the holder of the Veresen Preferred Shares so exchanged

and shall be added to the register of Veresen Preferred Shareholders as the

registered holder of such shares.

Amalgamation

(e) Provided that the Preferred Shareholder Resolution has received the requisite approval of Veresen

Preferred Shareholders at the Veresen Shareholders’ Meeting or the Veresen Preferred

Shareholders have approved a special resolution with similar effect to the Preferred Shareholder

Resolution prior to the Effective Time such that Pembina is the sole holder of the Veresen

Preferred Shares, and this Plan of Arrangement is not otherwise amended pursuant to Section 6.5

hereof to exclude the Veresen Preferred Shares, the aggregate stated capital of Veresen, in respect

of the Veresen Shares and the Veresen Preferred Shares, shall be reduced to nil.

(f) Provided that the Preferred Shareholder Resolution has received the requisite approval of Veresen

Preferred Shareholders at the Veresen Shareholders’ Meeting or the Veresen Preferred

Shareholders have approved a special resolution with similar effect to the Preferred Shareholder

Resolution prior to the Effective Time such that Pembina is the sole holder of the Veresen

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Preferred Shares, and this Plan of Arrangement is not otherwise amended pursuant to Section 6.5

hereof to exclude the Veresen Preferred Shares, Pembina and Veresen shall be amalgamated and

continued as one corporation under the ABCA to form Amalco in accordance with the following:


(ii) Share Provisions. The share provisions and authorized share capital of Amalco shall be

the same as the share provisions and authorized share capital of Pembina;


(A) Initial Directors. The directors of Amalco shall be the same as the directors of

Pembina; and

(B) Initial Officers. The officers of Amalco shall be the same as the officers of

Pembina;

(iv) Business and Powers. There shall be no restrictions on the business that Amalco may

carry on or on the powers it may exercise;

(v) Other Provisions. The other provisions forming part of the Articles of Amalco shall be

the same as the respective provision of the articles of Pembina as such existed

immediately prior to the amalgamation;

(vi) Stated Capital. The aggregate stated capital of Amalco will be an amount equal to the

aggregate of the paid-up capital for the purposes of the Tax Act of the Pembina Shares

and the Class A Preferred Shares of Pembina outstanding immediately before the

amalgamation;


(viii) Registered Office. The registered office of Amalco shall be the registered office of

Pembina;


(A) all of the property of each of Pembina and Veresen shall continue to be the

property of Amalco;

(B) Amalco shall continue to be liable for the obligations of each of Pembina and

Veresen;

(C) any existing cause of action, claim or liability to prosecution of Pembina or

Veresen shall be unaffected;

(D) any civil, criminal or administrative action or proceeding pending by or against

either of Pembina or Veresen may be continued to be prosecuted by or against

Amalco; and

(E) a conviction against, or ruling, order or judgment in favour of or against, either

of Pembina or Veresen may be enforced by or against Amalco;

(x) Articles. The articles of amalgamation of Amalco filed shall be deemed to be the articles

of incorporation of Amalco, and the certificate of amalgamation of Amalco shall be

deemed to be the certificate of incorporation of Amalco;

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(xi) Inconsistency with Laws. To the extent any of the provisions of this Plan of

Arrangement is deemed to be inconsistent with applicable Laws, this Plan of

Arrangement shall be automatically adjusted to remove such inconsistency;

(xii) Cancellation of Shares. On the amalgamation each issued and outstanding Veresen

Share and Veresen Preferred Share shall be cancelled and each issued and outstanding

Pembina Share and Class A Preferred Share of Pembina shall remain unaffected.

Election

3.2 With respect to the exchange of Veresen Shares effected pursuant to Section 3.1(c):

(a) each Veresen Shareholder (other than Dissenting Shareholders) may elect to receive, in respect of

each Veresen Share held, the Veresen Cash Consideration or the Veresen Share Consideration,

subject to Sections 3.3, 3.4 and 5.6;

(b) the election provided for in Section 3.2(a) shall be made by each Veresen Shareholder by

depositing with the Depositary, prior to the Election Deadline, a duly completed Letter of

Transmittal indicating such holder's election, together with any certificates representing the

holder's Veresen Shares;

(c) any Letter of Transmittal, once deposited with the Depositary, shall be irrevocable and may not be

withdrawn by a Veresen Shareholder; and

(d) any Veresen Shareholder who does not deposit with the Depositary a duly completed Letter of

Transmittal prior to the Election Deadline, or otherwise fails to comply with the requirements of

this Section 3.2 and the Letter of Transmittal, shall be deemed to have elected to receive the Share

Consideration in respect of all of such holder's Veresen Shares, subject to Sections 3.3, 3.4

and 5.6.

3.3 Adjustments to Share and Cash Consideration

(a) Notwithstanding Section 3.2 or any contrary provision herein (other than Section 5.6), the

maximum amount of cash that may, in the aggregate, be paid to the Veresen Shareholders

pursuant to Section 3.1(c) shall be equal to the Maximum Cash Consideration. In the event that

the aggregate amount of cash that would, but for this Section 3.3(a), be paid to Veresen

Shareholders in accordance with the elections or deemed elections of such Veresen Shareholders

pursuant to Section 3.2 (the "Total Elected Cash Consideration") exceeds the Maximum Cash

Consideration, then the aggregate amount of cash to be paid to any Veresen Shareholder shall be

determined by multiplying the aggregate amount of cash that would, but for this Section 3.3(a), be

paid to such Veresen Shareholder by a fraction, rounded to six decimal places, the numerator of

which is the Maximum Cash Consideration and the denominator of which is the Total Elected

Cash Consideration; and such holder shall be deemed to have elected to receive the Veresen Cash

Consideration for such number of its Veresen Shares, rounded down to the nearest whole, as is

equal to the aggregate amount of cash received by such holder, as adjusted in accordance with this

Section 3.3(a), divided by the Veresen Cash Consideration, and the Veresen Share Consideration

for the remainder of its Veresen Shares for which, but for this Section 3.3(a), such holder would

otherwise have received the Veresen Cash Consideration.

(b) Notwithstanding Section 3.2 or any contrary provision herein, the maximum number of Pembina

Shares that may, in the aggregate, be paid to the Veresen Shareholders pursuant to Section 3.1(c)

shall be equal to the Maximum Share Consideration. In the event that the aggregate number of

Pembina Shares that would, but for this Section 3.3(b), be paid to Veresen Shareholders in

accordance with the elections or deemed elections of such Veresen Shareholders pursuant to

Section 3.2 (the "Total Elected Share Consideration") exceeds the Maximum Share

Consideration, then the aggregate number of Pembina Shares to be paid to any Veresen

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Shareholder shall be determined by multiplying the aggregate number of Pembina Shares that

would, but for this Section 3.3(b), be issued to such Veresen Shareholder by a fraction, rounded to

six decimal places, the numerator of which is the Maximum Share Consideration and the

denominator of which is the Total Elected Share Consideration; and such holder shall be deemed

to have elected to receive the Veresen Share Consideration for such number of its Veresen Shares,

rounded down to the nearest whole, as is equal to the aggregate number of Pembina Shares

received by such holder, as adjusted pursuant to this Section 3.3(b), divided by the Veresen Share

Consideration, and the Veresen Cash Consideration for the remainder of its Veresen Shares for

which, but for this Section 3.3(b), such holder would otherwise have received the Veresen Share

Consideration.

Withholding

3.4 Veresen, Pembina and the Depositary shall be entitled to deduct and withhold from any consideration or

amount otherwise payable to any former Veresen Shareholder or Veresen Preferred Shareholder, if

applicable, such amounts as Veresen, Pembina, or the Depositary, as the case may be, may determine is

required or permitted to deduct and withhold with respect to such payment under the Tax Act, the United

States Internal Revenue Code of 1986 or any provision of federal, provincial, territorial, state, local or

foreign tax law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all

purposes hereof as having been paid to the former Veresen Shareholder or Veresen Preferred Shareholder,

as the case may be, in respect of which such deduction and withholding was made, provided that such

withheld amounts are actually remitted to the appropriate taxing authority. To the extent that the amount so

required to be deducted or withheld from any payment to a former Veresen Shareholder or Veresen

Preferred Shareholder, as the case may be, exceeds the cash consideration otherwise payable to the holder,

Veresen, Pembina and the Depositary are hereby authorized to sell or otherwise dispose of any property or

amount otherwise payable to such former Veresen Shareholder or Veresen Preferred Shareholder pursuant

to this Plan of Arrangement to the extent necessary to provide sufficient funds to Veresen, Pembina or the

Depositary, as the case may be, to enable it to comply with such deduction or withholding requirement and

Veresen, Pembina or the Depositary, as the case may be, shall remit to such former Veresen Shareholder or

Veresen Preferred Shareholder, as the case may be, any unapplied balance of the net proceeds of such sale.

ARTICLE 4

DISSENTING VERESEN SHAREHOLDERS

4.1 Each registered holder of Veresen Shares or, subject to Section 4.7, Veresen Preferred Shares shall have the

right to dissent with respect to the Arrangement in accordance with the Interim Order and this Article 4,

provided that notwithstanding section 191(5) of the ABCA, the written objection to the Arrangement

referred to in section 191(5) of the ABCA must be received by Veresen from the Dissenting Shareholder

not later than 4:00 p.m. (Calgary time) on the date that is five Business Days prior to the date of the

Veresen Shareholders’ Meeting.

4.2 A Dissenting Veresen Shareholder shall, at the Effective Time, cease to have any rights as a holder of

Veresen Shares or Veresen Preferred Shares, as the case may be, (other than as set forth herein) and shall

only be entitled to be paid by Veresen the fair value of the holder's Veresen Shares or Veresen Preferred

Shares, as the case may be. A Dissenting Veresen Shareholder who is entitled to be paid by Veresen the

fair value of the holder's Veresen Shares or Veresen Preferred Shares, as the case may be, shall, pursuant to

Section 3.1(b) hereof, be deemed to have transferred the holder's Veresen Shares or Veresen Preferred

Shares, as the case may be, (free and clear of any Encumbrances) to Veresen for cancellation without any

further act or formality notwithstanding the provisions of section 191 of the ABCA.

4.3 A Dissenting Veresen Shareholder who for any reason is not ultimately entitled to be paid the fair value of

the holder's Veresen Shares or Veresen Preferred Shares, as the case may be, shall be deemed to have

participated in the Arrangement on the same basis as a non-dissenting holder of Veresen Shares (who

elected to exclusively receive Veresen Cash Consideration) or Veresen Preferred Shares (provided, in the

case of Veresen Preferred Shares, that the requisite approval of Veresen Preferred Shareholders is received

at the Veresen Shareholders’ Meeting) notwithstanding the provisions of section 191 of the ABCA.

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4.4 The fair value of the Veresen Shares shall be determined as of the close of business on the last Business

Day before the day on which the Arrangement Resolution is approved by the holders of Veresen Shares.

The fair value of the Veresen Preferred Shares shall be determined as of the close of business on the last

Business Day before the day on which the Preferred Shareholders Resolution is approved by the holders of

Veresen Preferred Shares.

4.5 In no event shall Veresen or Pembina be required to recognize any Dissenting Veresen Shareholder as a

Veresen Shareholder or a Veresen Preferred Shareholder, as the case may be, after the Effective Time and

the names of such holders shall be removed from the register of Veresen Shareholders and Veresen

Preferred Shareholders, as applicable, as at the Effective Time.

4.6 For greater certainty, in addition to any other restrictions in section 191 of the ABCA: (a) any person who

has voted in favour of the Arrangement Resolution shall not be entitled to dissent with respect to such

person’s Veresen Shares for the Arrangement; and (b) any person who has voted in favour of the Preferred

Shareholder Resolution shall not be entitled to dissent with respect to such person’s Veresen Preferred

Shares for the Arrangement. In addition, a Dissenting Veresen Shareholder may only exercise Dissent

Rights in respect of all, and not less than all, of its Veresen Shares or Veresen Preferred Shares, as the case

may be.

4.7 Notwithstanding any provision to the contrary in this Plan of Arrangement, in the event that the requisite

approval of Veresen Preferred Shareholders is not received at the Veresen Shareholders’ Meeting, the right

of dissent provided for in this Article 4 shall cease to apply to holders of Veresen Preferred Shares and any

written objection to the Arrangement sent by a Veresen Preferred Shareholder shall be null and void.

ARTICLE 5

OUTSTANDING CERTIFICATES AND FRACTIONAL SHARES

5.1 Forthwith following the Effective Time, Pembina and Veresen shall, subject to Section 5.2, cause to be

paid (a) to the Veresen Shareholders the amounts payable, or cause to be issued the number of Pembina

Shares issuable, in respect of the Veresen Shares required by Section 3.1(c), as adjusted, if applicable,

pursuant to Section 3.3 and (b) in the event the Preferred Shareholder Resolution receives the requisite

approval at the Veresen Shareholders’ Meeting, cause to be issued the number of Pembina Exchange

Preferred Shares issuable, in respect of the Veresen Preferred Shares required by Section 3.1(d).

5.2 Upon surrender to the Depositary for cancellation of a certificate or certificates (as applicable) which,

immediately prior to the Effective Time, represented outstanding Veresen Shares or outstanding Veresen

Preferred Shares that were transferred pursuant to Section 3.1(c) or 3.1(d), together with a duly completed

and executed Letter of Transmittal and such additional documents and instruments as the Depositary may

reasonably require, each Veresen Shareholder and Veresen Preferred Shareholder represented by such

surrendered certificate(s) shall be entitled to receive in exchange therefor, and the Depositary shall deliver

to such holder, the consideration which such holder has the right to receive under this Plan of Arrangement

for such Veresen Shares and Veresen Preferred Shares, as applicable, less any amounts withheld pursuant

to Section 3.4, and any certificate(s) so surrendered shall forthwith be cancelled.

5.3 Until deposited as contemplated by Section 5.2, each certificate that immediately prior to the Effective

Time represented Veresen Shares and, in the event the Preferred Shareholder Resolution receives the

requisite approval at the Veresen Shareholders’ Meeting, Veresen Preferred Shares shall be deemed after

the Effective Time to represent only the right to receive upon such deposit the consideration and other

property to which the holders of such Veresen Shares and Veresen Preferred Shares, as applicable, are

entitled under the Arrangement, or as to those held by Dissenting Veresen Shareholders, other than those

Dissenting Veresen Shareholders deemed to have participated in the Arrangement pursuant to Section 4.3,

to receive the fair value of the Veresen Shares or Veresen Preferred Shares, as applicable, represented by

such certificates. Any such certificate formerly representing Veresen Shares and, in the event the Preferred

Shareholder Resolution receives the requisite approval at the Veresen Shareholders’ Meeting, Veresen

Preferred Shares not duly surrendered on or before the last Business Day prior to the third anniversary of

the Effective Date shall cease to represent a claim by or interest of any former Veresen Shareholder or

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Veresen Preferred Shareholder, as applicable, of any kind or nature against Veresen or Pembina. On such

date, all consideration and other property to which such former holder was entitled shall be deemed to have

been surrendered to Veresen or Pembina, as applicable.

5.4 No Veresen Shareholder or, in the event the Preferred Shareholder Resolution receives the requisite

approval at the Veresen Shareholders’ Meeting, Veresen Preferred Shareholder shall be entitled to receive

any consideration with respect to such Veresen Shares or Veresen Preferred Shares, as applicable, other

than the consideration and other property to which such holder is entitled to receive under the Arrangement

and, for greater certainty, no such holder will be entitled to receive any interest, dividend, premium or other

payment in connection therewith.

5.5 If any certificate which immediately prior to the Effective Time represented an interest in outstanding

Veresen Shares or Veresen Preferred Shares that were exchanged pursuant to Section 3.1 has been lost,

stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such certificate to

have been lost, stolen or destroyed, the Depositary will issue and deliver in exchange for such lost, stolen or

destroyed certificate the consideration and other property to which the holder is entitled pursuant to the

Arrangement as determined in accordance with the Arrangement. The person who is entitled to receive

such consideration and other property shall, as a condition precedent to the receipt thereof, give a bond

satisfactory to Pembina and its transfer agent in such form as is satisfactory to Pembina and such transfer

agent, or otherwise indemnify Veresen, Pembina and the transfer agent, to the reasonable satisfaction of

such parties, against any claim that may be made against any of them with respect to the certificate alleged

to have been lost, stolen or destroyed.

5.6 No certificates representing fractional Pembina Shares shall be issued under the Arrangement. In lieu of

any fractional Pembina Shares, each registered Veresen Shareholder otherwise entitled to a fractional

interest in Pembina Shares will receive the nearest whole number of Pembina Shares, provided that in no

circumstances shall the aggregate number of Pembina Shares to be paid to the Veresen Shareholders

pursuant to this Plan of Arrangement be greater than the Maximum Share Consideration. For greater

certainty, where such fractional interest is greater than or equal to 0.5, the number of Pembina Shares to be

issued will be rounded up to the nearest whole number and where such fractional interest is less than 0.5,

the number of Pembina Shares to be issued will be rounded down to the nearest whole number, unless such

rounding causes the aggregate number of Pembina Shares to be paid to the Veresen Shareholders pursuant

to this Plan of Arrangement to be greater than the Maximum Share Consideration, in which case all such

fractional interests will be paid in cash based on the Veresen Cash Consideration notwithstanding that such

cash payments may cause the aggregate cash consideration to be paid by Pembina pursuant to this Plan of

Arrangement to exceed the Maximum Cash Consideration. In calculating such fractional interests, all

Veresen Shares registered in the name of or beneficially held by such Veresen Shareholder or their

nominee shall be aggregated.

ARTICLE 6

AMENDMENTS

6.1 Veresen and Pembina may amend, modify and/or supplement this Plan of Arrangement at any time and

from time to time prior to the Effective Time, provided that each such amendment, modification and/or

supplement must be: (i) set out in writing; (ii) approved by both parties; (iii) filed with the Court and, if

made following the Veresen Shareholders’ Meeting, approved by the Court; and (iv) communicated to

Veresen Shareholders and/or Veresen Preferred Shareholders, if and as required by the Court.

6.2 Any amendment, modification or supplement to this Plan of Arrangement may be proposed by Veresen or

Pembina at any time prior to or at the Veresen Shareholders’ Meeting (provided that the other party shall

have consented thereto) with or without any other prior notice or communication, and if so proposed and

accepted, in the manner contemplated and to the extent required by the Arrangement Agreement by the

persons voting at the Veresen Shareholders’ Meeting (other than as may be required under the Interim

Order or other order of the Court), shall become part of this Plan of Arrangement for all purposes.

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12

6.3 Any amendment, modification or supplement to this Plan of Arrangement that is approved or directed by

the Court following the Veresen Shareholders’ Meeting shall be effective only (i) if it is consented to in

writing by each of Veresen and Pembina (each acting reasonably), and (ii) if required by the Court or

applicable law, it is consented to by the Veresen Shareholders and/or Veresen Preferred Shareholders.

6.4 Any amendment, modification or supplement to this Plan of Arrangement may be made following the

Effective Time effective only if it is consented to in writing by each of Pembina and Veresen, provided that

it concerns a matter which, in the reasonable opinion of each of Pembina and Veresen, is of an

administrative nature required to better give effect to the implementation of this Plan of Arrangement and is

not adverse to the financial or economic interests of any former holder of Veresen Shares and, in the event

the Preferred Shareholder Resolution receives the requisite approval at the Veresen Shareholders’ Meeting,

any former holder of Veresen Preferred Shares.

6.5 Notwithstanding anything else contained herein: (a) in the circumstances where the Preferred Shareholder

Resolution does not receive the requisite approval of the Veresen Preferred Shareholders at the Veresen

Shareholders' Meeting (or any adjournment thereof) and the Veresen Preferred Shareholders do not

otherwise approve a special resolution with similar effect to the Preferred Shareholder Resolution prior to

the Effective Time such that Pembina is the sole holder of the Veresen Preferred Shares prior to the

amalgamation contemplated in Section 3.1(f), Veresen shall amend this Plan of Arrangement to exclude the

Veresen Preferred Shares under this Plan of Arrangement and matters ancillary thereto; and (b) in the

circumstances where the Preferred Shareholder Resolution receives the requisite approval of the Veresen

Preferred Shareholders, and Dissent Rights have been validly exercised in respect of more than 5% of the

outstanding Veresen Preferred Shares, Veresen shall amend this Plan of Arrangement if requested by

Pembina to exclude the Veresen Preferred Shares under this Plan of Arrangement and matters ancillary

thereto, including, in each case, the amalgamation contemplated in Section 3.1(f).

ARTICLE 7

FURTHER ASSURANCES

7.1 Notwithstanding that the transactions and events set out herein shall occur and shall be deemed to occur in

the order set out in this Plan without any further act or formality, each of the Parties to the Arrangement

Agreement shall make, do and execute, or cause to be made, done and executed, all such further acts,

deeds, agreements, transfers, assurances, instruments or documents as may reasonably be required in order

further to document or evidence any of the transactions or events set out herein.

7.2 From and after the Effective Time (a) this Plan shall take precedence and priority over any and all rights

related to Veresen Shares and, in the event the Preferred Shareholder Resolution receives the requisite

approval at the Veresen Shareholders’ Meeting, Veresen Preferred Shares issued prior to the Effective

Time; (b) the rights and obligations of the holders of Veresen Shares and, in the event the Preferred

Shareholder Resolution receives the requisite approval at the Veresen Shareholders’ Meeting, holders of

Veresen Preferred Shares and, in each case, any respective trustee and transfer agent therefor, shall be

solely as provided for in this Plan; and (c) all actions, causes of actions, claims or proceedings (actual or

contingent, and whether or not previously asserted) based on or in any way relating to Veresen Shares and,

in the event the Preferred Shareholder Resolution receives the requisite approval at the Veresen

Shareholders’ Meeting, Veresen Preferred Shares shall be deemed to have been settled, compromised,

released and determined without liability except as set forth herein.

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E-1

APPENDIX E

INTERIM ORDER

Clerk’s stamp

Filed on June 5,

2017

Court File Number 1701 – 07563

Court COURT OF QUEEN’S BENCH OF ALBERTA

Judicial Centre CALGARY

Applicant VERESEN INC.

Respondent NOT APPLICABLE

Matter IN THE MATTER OF SECTION 193 OF THE BUSINESS

CORPORATIONS ACT, RSA 2000, c B-9, AS AMENDED

AND IN THE MATTER OF A PROPOSED ARRANGEMENT

INVOLVING VERESEN INC., PEMBINA PIPELINE CORPORTION,

AND THE SHAREHOLDERS OF VERESEN INC.

Document INTERIM ORDER

Address for Service

and Contact

Information of

Party Filing this

Document


2500 TransCanada Tower

450 – 1st Street SW

Calgary, AB T2P 5H1

Attention: Tristram J. Mallett Telephone: (403) 260-7041

Facsimile: (403) 260-7024


UPON the Originating Application (the “Originating Application”) of Veresen Inc. (the

“Applicant”);

AND UPON reading the Originating Application, the affidavit of Don Althoff, sworn

June 1, 2017 (the “Affidavit”) and the documents referred to therein;

DATE ON WHICH ORDER WAS PRONOUNCED: June 5, 2017

NAME OF JUDGE WHO MADE THIS ORDER: Madam Justice G. A. Campbell

LOCATION OF HEARING: Calgary Courts Centre, 601 – 5th

Street SW, Calgary

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31298920.1

AND UPON HEARING counsel for the Applicant;

FOR THE PURPOSES OF THIS ORDER:

(a) the capitalized terms not defined in this Order (the “Order”) shall have the

meanings attributed to them in the draft information circular of the Applicant

which is attached as Exhibit “A” to the Affidavit; and

(b) all references to “Arrangement” used herein mean the arrangement as set forth in

the plan of arrangement attached as Appendix D of the management information

circular of the Applicant ( the “Information Circular”), and the arrangement

agreement (“Arrangement Agreement”) attached as Appendix C to the


IT IS HEREBY ORDERED THAT:

General

1. The Applicant shall seek approval of the Arrangement as described in the Information

Circular by holders (“Common Shareholders”) of common shares (“Common Shares”)

in the capital of the Applicant and holders (“Preferred Shareholders” and together with

Common Shareholders, “Shareholders”) of cumulative redeemable preferred shares,

series A, C, and E (collectively, the “Preferred Shares”) in the capital of the Applicant

in the manner set forth below.

The Meetings

2. The Applicant shall call and conduct a special meeting (the “Common Shareholders’

Meeting”) of the Common Shareholders and a special meeting (the “Preferred

Shareholders’ Meeting” and together with the Common Shareholders’ Meeting, the

“Meetings” and each a “Meeting”) of the Preferred Shareholders on or about July 11,

2017.

The Common Shareholders’ Meeting

3. At the Common Shareholders’ Meeting, the Common Shareholders will consider and

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31298920.1

vote on a resolution to approve the Arrangement in substantially the form attached as

Appendix A to the Information Circular (the “Common Shareholder Arrangement

Resolution”) and such other business as may properly be brought before the Common

Shareholders’ Meeting or any adjournment or postponement thereof, all as more

particularly described in the Information Circular.

4. A quorum at the Common Shareholders’ Meeting shall be two Common Shareholders

present in person, or represented by proxy, at the opening of the Common Shareholders’

Meeting, and holding or representing at least 25% of the Common Shares entitled to be

voted at the Common Shareholders’ Meeting.

5. If within 30 minutes from the time appointed for the Common Shareholders’ Meeting, a

quorum is not present, the Common Shareholders’ Meeting shall stand adjourned to a

date not less than two (2) and not more than 30 days later, as may be determined by the

Chair of the Common Shareholders’ Meeting. No notice of the adjourned meeting shall

be required and, if at such adjourned meeting a quorum is not present, the Common

Shareholders present at the adjourned meeting in person or represented by proxy shall

constitute a quorum for all purposes.

6. Each Common Share entitled to be voted at the Common Shareholders’ Meeting will

entitle the holder to one vote at the Common Shareholders’ Meeting in respect of the

Common Shareholder Arrangement Resolution and any other matters to be considered at

the Common Shareholders’ Meeting.

7. The record date for Common Shareholders entitled to receive notice of and vote at the

Common Shareholders’ Meeting is May 23, 2017 (the “Record Date”). Only Common

Shareholders whose names have been entered on the registers of holders of Common

Shares as at the close of business on the Record Date will be entitled to receive notice of

and to vote at the Common Shareholders’ Meeting provided that, to the extent that a

Common Shareholder transfers the ownership of any Common Shares after the Record

Date and the transferee of those Common Shares establishes ownership of such Common

Shares and demands, not later than ten (10) days before the Common Shareholders’

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31298920.1

Meeting, to be included in the list of Common Shareholders eligible to vote at the

Common Shareholders’ Meeting, such transferee will be entitled to vote those Common

Shares at the Common Shareholders’ Meeting.

Preferred Shareholders’ Meeting

8. At the Preferred Shareholders’ Meeting, the Preferred Shareholders will consider and

vote, as a single class, on a resolution to approve the Arrangement substantially in the

form attached as Appendix B to the Information Circular (the “Preferred Shareholder

Arrangement Resolution”) and such other business as may properly be brought before

the Preferred Shareholders’ Meeting or any adjournment or postponement thereof, all as

more particularly described in the Information Circular.

9. A quorum at the Preferred Shareholders’ Meeting shall be two Preferred Shareholders

present in person, or represented by proxy, at the opening of the Preferred Shareholders’

Meeting, and holding or representing at least 25% of the Preferred Shares entitled to be

voted, as a single class, at the Preferred Shareholders’ Meeting.

10. If within 30 minutes from the time appointed for the Preferred Shareholders’ Meeting, a

quorum is not present, the Preferred Shareholders’ Meeting shall stand adjourned to a

date not less than two (2) and not more than 30 days later, as may be determined by the

Chair of the Preferred Shareholders’ Meeting. No notice of the adjourned meeting shall

be required and, if at such adjourned meeting a quorum is not present, the Preferred

Shareholders present at the adjourned meeting in person or represented by proxy shall

constitute a quorum for all purposes.

11. Each Preferred Share entitled to be voted at the Preferred Shareholders’ Meeting will

entitle the holder to one vote at the Preferred Shareholders’ Meeting in respect of the

Preferred Shareholder Arrangement Resolution and any other matters to be considered at

the Preferred Shareholders’ Meeting.

12. The record date for Preferred Shareholders entitled to receive notice of and vote at the

Preferred Shareholders’ Meeting is May 23, 2017. Only Preferred Shareholders whose

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31298920.1

names have been entered on the registers of holders of Preferred Shares as at the close of

business on the Record Date will be entitled to receive notice of and to vote at the

Preferred Shareholders’ Meeting provided that, to the extent that a Preferred Shareholder

transfers the ownership of any Preferred Shares after the Record Date and the transferee

of those Preferred Shares establishes ownership of such Preferred Shares and demands,

not later than ten (10) days before the Preferred Shareholders’ Meeting, to be included in

the list of Preferred Shareholders eligible to vote at the Preferred Shareholders’ Meeting,

such transferee will be entitled to vote those Preferred Shares at the Preferred


Conduct of the Meetings

13. The Meetings shall be called, held and conducted in accordance with the applicable

provisions of the ABCA, the articles and by-laws of the Applicant in effect at the relevant

time, the Information Circular, the rulings and directions of the Chair of the Meetings,

this Order and any further Order of this Court. To the extent that there is any

inconsistency or discrepancy between this Order and the ABCA or the articles or by-laws

of the Applicant, the terms of this Order shall govern.

14. The only persons entitled to attend the Common Shareholders’ Meeting shall be Common

Shareholders or their authorized proxy holders, the Applicant’s directors and officers and

its auditors, the scrutineer (and its representatives for that purpose), the Applicant’s legal

counsel and financial advisors, representatives and legal counsel of other parties to the

Arrangement, and such other persons who may be permitted to attend by the Chair of the


15. The only persons entitled to attend the Preferred Shareholders’ Meeting shall be Preferred

Shareholders or their authorized proxy holders, the Applicant’s directors and officers and

its auditors, the scrutineer (and its representatives for that purpose), the Applicant’s legal

counsel and financial advisors, representatives and legal counsel of other parties to the

Arrangement, and such other persons who may be permitted to attend by the Chair of the

Preferred Shareholders’ Meeting.

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31298920.1

16. The number of votes required to pass the Common Shareholder Arrangement Resolution

shall be not less than 66⅔% of the votes cast by Common Shareholders present in person

or represented by proxy at the Common Shareholders’ Meeting.

17. The number of votes required to pass the Preferred Shareholder Arrangement Resolution

shall be not less than 66⅔% of the votes cast by Preferred Shareholders present in person

or represented by proxy at the Preferred Shareholders’ Meeting, voting as a single class.

18. To be valid, proxies must be deposited with Computershare Trust Company of Canada in

the manner described in the Information Circular.

19. The accidental omission to give notice of the Meetings or the non-receipt of the notice

shall not invalidate any resolution passed or proceedings taken at the Meetings.

20. The Applicant is authorized to adjourn or postpone each of the Meetings on one or more

occasions (whether or not a quorum is present, if applicable) and for such period or

periods of time as the Applicant deems advisable, without the necessity of first convening

the Meetings, or either of them, or first obtaining any vote of the Common Shareholders

or the Preferred Shareholders in respect of the adjournment or postponement. Notice of

such adjournment or postponement may be given by such method as the Applicant

determines is appropriate in the circumstances. If one or both of the Meetings are

adjourned or postponed in accordance with this Order (including paragraphs 5 and 10

hereof), the references to such Meeting or Meetings in this Order shall be deemed to be

the Meeting or Meetings as adjourned or postposed, as the context allows.

Amendments to the Arrangement

21. The Applicant and the acquirer, Pembina Pipeline Corporation (“Pembina”), are

authorized to make such amendments, revisions or supplements to the Arrangement as

they may together determine necessary or desirable, provided that such amendments,

revisions or supplements are made in accordance with and in the manner contemplated by

the Arrangement and the Arrangement Agreement. The Arrangement so amended,

revised or supplemented shall be deemed to be the Arrangement submitted to the

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31298920.1

Meetings and the subject of the Common Shareholder Arrangement Resolution and the

Preferred Shareholder Arrangement Resolution, without need to return to this Court to

amend this Order.

Amendments to Meeting Materials

22. The Applicant is authorized to make such amendments, revisions or supplements

(“Additional Information”) to the Information Circular, form of proxy for use by

Common Shareholders at the Common Shareholders’ Meeting (“Common Shareholder

Proxy”), form of proxy for use by Preferred Shareholders at the Preferred Shareholders’

Meeting (“Preferred Shareholder Proxy”), notice of the Common Shareholders’

Meeting (“Notice of the Common Shareholders’ Meeting”), notice of the Preferred

Shareholders’ Meeting (“Notice of the Preferred Shareholders’ Meeting”), form of

letter of transmittal and election form for Common Shareholders (“Common

Shareholder Letter of Transmittal and Election Form”), form of letter of transmittal

for Preferred Shareholders (“Preferred Shareholder Letter of Transmittal”) and notice

of Originating Application (“Notice of Originating Application”) as it may determine.

The Applicant may disclose such Additional Information, including material changes, by

the method and in the time most reasonably practicable in the circumstances as

determined by the Applicant. Without limiting the generality of the foregoing, if any

material change or material fact arises between the date of this Order and the date(s) of

the Meetings, which change or fact, if known prior to mailing of the Information

Circular, would have been required to be disclosed in the Information Circular, then:

(a) the Applicant shall advise Shareholders of the material change or material fact by

disseminating a news release (a “News Release”) in accordance with applicable

securities laws and the policies of the Toronto Stock Exchange; and

(b) provided that the News Release describes the applicable material change or

material fact in reasonable detail, the Applicant shall not be required to deliver an

amendment to the Information Circular to the Shareholders or otherwise give

notice to the Shareholders of the material change or material fact other than

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31298920.1

dissemination and filing of the News Release as aforesaid.

23. The Applicant is authorized to fix or amend a deadline (the “Election Deadline”) for

Common Shareholders to deposit with the depositary for the Arrangement a duly

completed Common Shareholder Letter of Transmittal and Election Form by

disseminating a news release (an “Election Deadline News Release”) on a national

newswire in Canada and the U.S. announcing the date of the Election Deadline at least 10

business days prior to the date of the Election Deadline. The Applicant shall not be

required to deliver any notice to the Common Shareholders of the Election Deadline

other than the dissemination and filing of the Election Deadline News Release as

aforesaid.

Dissent Rights

24. Registered Common Shareholders and registered Preferred Shareholders are, subject to

the provisions of this Order and the Arrangement, accorded the right to dissent under

section 191 of the ABCA with respect to the Common Shareholder Arrangement

Resolution and the Preferred Shareholder Arrangement Resolution, respectively, and the

right to be paid the fair value of their Shares by Pembina in respect of which such right to

dissent was validly exercised.

25. In order for a registered Shareholder (a “Dissenting Shareholder”) to exercise such right

to dissent under section 191 of the ABCA:

(a) the Dissenting Shareholder’s written objection to the Common Shareholder

Arrangement Resolution or the Preferred Shareholder Arrangement Resolution, as

applicable, must be received by the Applicant’s counsel, Osler, Hoskin &

Harcourt LLP, no later than 4:00 p.m. (Calgary time) on July 4, 2017 or the fifth

business day immediately preceding the date that any adjournment or

postponement of the Common Shareholders’ Meeting or the Preferred

Shareholders’ Meeting is reconvened or held, as the case may be;

(b) a vote against the Common Shareholder Arrangement Resolution, whether in

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31298920.1

person or by proxy, shall not constitute a written objection to the Common

Shareholder Arrangement Resolution as required under clause 25(a) herein and a

vote against the Preferred Shareholder Arrangement Resolution, whether in

person or by proxy, shall not constitute a written objection to the Preferred

Shareholder Arrangement Resolution as required under clause 25(a) herein;

(c) a Dissenting Shareholder shall not have voted his or her Common Shares or

Preferred Shares, as applicable, at the Common Shareholders’ Meeting or the

Preferred Shareholders’ Meeting, as applicable, either by proxy or in person, in

favour of the Common Shareholder Arrangement Resolution or the Preferred

Shareholder Arrangement Resolution, as applicable;

(d) a Dissenting Shareholder may dissent only with respect to all of the Common

Shares or Preferred Shares, as applicable, held by such Dissenting Shareholder, or

on behalf of any one beneficial owner and registered in the Dissenting

Shareholder’s name and, except in respect of a dissent of all of the Common

Shares or Preferred Shares held in respect of a beneficial owner, a Dissenting

Shareholder shall not exercise the right of dissent in respect of only a portion of

the Dissenting Shareholder’s Common Shares or Preferred Shares; and

(e) the exercise of such right to dissent must otherwise comply with the requirements

of section 191 of the ABCA, as modified and supplemented by this Order and the

Arrangement.

26. The fair value of the consideration to which a Dissenting Shareholder is entitled pursuant

to the Arrangement shall be determined as of the close of business on the last business

day before the day on which the Common Shareholder Arrangement Resolution or

Preferred Shareholder Arrangement Resolution, as the case may be, was adopted and

provided that the Arrangement is completed in respect of the applicable Shareholders.

27. Dissenting Shareholders who validly exercise their right to dissent, as set out in

paragraphs 24 and 25 above, and who:

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31298920.1

(i) are determined to be entitled to be paid the fair value of their Common Shares or

Preferred Shares, shall be deemed to have transferred such Shares as of the

effective time of the Arrangement (the “Effective Time”), without any further act

or formality and free and clear of all liens, claims and encumbrances to Pembina

in exchange for the fair value of the Common Shares or Preferred Shares, as the

case may be; or

(ii) are, for any reason (including, for clarity, any withdrawal by any Dissenting

Shareholder of their dissent) determined not to be entitled to be paid the fair value

for their Common Shares or Preferred Shares shall be deemed to have participated

in the Arrangement on the same basis as a non-dissenting Shareholder and such

Common Shares or Preferred Shares will be deemed to be exchanged for the

consideration under the Arrangement;

but in no event shall the Applicant, Pembina or any other person be required to recognize

such Shareholders as holders of Common Shares or Preferred Shares after the Effective

Time, and the names of such Shareholders shall be removed from the register of

Common Shares or Preferred Shares, as the case may be.

28. Subject to further order of this Court, the rights available to Shareholders under the

ABCA and the Arrangement to dissent from the Common Shareholder Arrangement

Resolution or the Preferred Shareholder Arrangement Resolution, as the case may be,

shall constitute full and sufficient dissent rights for the Shareholders with respect to the

Common Shareholder Arrangement Resolution or the Preferred Shareholder

Arrangement Resolution.

29. Notice to the Common Shareholders and the Preferred Shareholders of their rights to

dissent with respect to the Common Shareholder Arrangement Resolution or the

Preferred Shareholder Arrangement Resolution, respectively, and to receive, subject to

the provisions of the ABCA, this Order and the Arrangement, the fair value of the

consideration to which a Dissenting Shareholder is entitled pursuant to the Arrangement

shall be sufficiently given by including information with respect to these rights as set

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31298920.1

forth in the Information Circular which is to be sent to Shareholders in accordance with

paragraph 31 of this Order.

30. Notwithstanding paragraphs 24 through 27 of this Order, registered Preferred

Shareholders who have validly exercised rights of dissent shall not be entitled to dissent

and to be paid the fair value of their Preferred Shares if the Preferred Shares are not

exchanged, for any reason, by Pembina pursuant to the Arrangement.

Notice

31. The Information Circular, substantially in the form attached as Exhibit “A” to the

Affidavit, with such amendments thereto as counsel to the Applicant may determine

necessary or desirable (provided such amendments are not inconsistent with the terms of

this Order), and including the Notice of the Common Shareholders’ Meeting (in the case

of Common Shareholders only), the Notice of the Preferred Shareholders’ Meeting (in

the case of Preferred Shareholders only), the Common Shareholder Proxy (in the case of

Common Shareholders only), the Preferred Shareholder Proxy (in the case of Preferred

Shareholders only), the Notice of Originating Application and this Order, together with

any other communications or documents determined by the Applicant to be necessary or

advisable including the Common Shareholder Letter of Transmittal and Election Form (in

the case of Common Shareholders only) and the Preferred Shareholder Letter of

Transmittal (in the case of Preferred Shareholders only) (collectively, the “Meeting

Materials”), shall be sent to those Shareholders whose names have been entered in the

registers of holders of Common Shares or Preferred Shares, as the case may be, on the

close of business on the Record Date, the directors of the Applicant, and the auditors of

the Applicant, by one or more of the following methods:

(a) in the case of registered Shareholders, by pre-paid first class or ordinary mail, by

courier or by delivery in person, addressed to each such holder at his, her or its

address, as shown on the books and records of the Applicant as of the Record

Date not later than 21 days prior to the Common Shareholders’ Meeting or the

Preferred Shareholders’ Meeting, as applicable;

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31298920.1

(b) in the case of beneficial Shareholders, by providing sufficient copies of the

applicable Meeting Materials to intermediaries, in accordance with National

Instrument 54 -101 – Communication With Beneficial Owners of Securities of a

Reporting Issuer; and

(c) in the case of the directors and auditors of the Applicant, by email, pre-paid first

class or ordinary mail, by courier or by delivery in person, addressed to the

individual directors or firm of auditors, as applicable, not later than 21 days prior

to the date of the Common Shareholders’ Meeting or the Preferred Shareholders’

Meeting, as applicable.

32. Delivery of the Meeting Materials in the manner directed by this Order shall be deemed

to be good and sufficient service upon the Shareholders, the directors and auditors of the

Applicant of:

(a) the Originating Application;

(b) this Order;

(c) the Notice of the Common Shareholders’ Meeting or the Notice of the Preferred

Shareholders’ Meeting, as applicable; and

(d) the Notice of Originating Application.

Final Application

33. Subject to further order of this Court, and provided that the Shareholders have approved

the Arrangement in the manner directed by this Court and the directors of the Applicant

have not revoked their approval, the Applicant may proceed with an application for a

final Order of the Court approving the Arrangement (the “Final Order”) on July 12,

2017 at 10:00 a.m. (Calgary time) or so soon thereafter as counsel may be heard. Subject

to the Final Order and to the issuance of the proof of filing of the articles of arrangement,

the Applicant, all Shareholders and all other persons affected will be bound by the

Arrangement in accordance with its terms.

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31298920.1

34. Any Shareholder or other interested party (each an “Interested Party”) desiring to

appear and make submissions at the application for the Final Order is required to file with

this Court and serve upon the Applicant, by service on the Applicant’s counsel so that it

is received before 5:00 pm (Calgary time) on July 4, 2017, a notice of intention to appear

(“Notice of Intention to Appear”) including the Interested Party’s address for service

(or alternatively, a facsimile number for service by facsimile or an email address for

service by electronic mail), indicating whether such Interested Party intends to support or

oppose the application or make submissions at the application, together with a summary

of the position such Interested Party intends to advocate before the Court, and any

evidence or materials which are to be presented to the Court. Service of this Notice of

Intention to Appear to the Applicant’s counsel shall be effected by delivery to the address

set forth below:


Suite 2500, TransCanada Tower

450 – 1st Street SW


Attention: Colin Feasby

35. If the application for the Final Order is adjourned, only those parties appearing before

this Court for the Final Order, and those Interested Parties serving a Notice of Intention to

Appear in accordance with paragraph 34 of this Order, shall have notice of the adjourned

date.

Leave to Vary Interim Order

36. The Applicant is entitled at any time to seek leave to vary this Order upon such terms and

the giving of such notice as this Court may direct.

(signed) “Madam Justice G.A. Campbell”

Justice of the Court of Queen’s

Bench of Alberta

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APPENDIX F

SECTION 191 OF THE ABCA

191(1) Subject to sections 192 and 242, a holder of shares of any class of a corporation may dissent if the corporation

resolves to

(a) amend its articles under section 173 or 174 to add, change or remove any provisions restricting or

constraining the issue or transfer of shares of that class,

(b) amend its articles under section 173 to add, change or remove any restrictions on the business or

businesses that the corporation may carry on,

(b.1) amend its articles under section 173 to add or remove an express statement establishing the unlimited

liability of shareholders as set out in section 15.2(1),

(c) amalgamate with another corporation, otherwise than under section 184 or 187,

(d) be continued under the laws of another jurisdiction under section 189, or

(e) sell, lease or exchange all or substantially all its property under section 190.

(2) A holder of shares of any class or series of shares entitled to vote under section 176, other than section

176(1)(a), may dissent if the corporation resolves to amend its articles in a manner described in that section.

(3) In addition to any other right the shareholder may have, but subject to subsection (20), a shareholder entitled

to dissent under this section and who complies with this section is entitled to be paid by the corporation the

fair value of the shares held by the shareholder in respect of which the shareholder dissents, determined as of

the close of business on the last business day before the day on which the resolution from which the

shareholder dissents was adopted.

(4) A dissenting shareholder may only claim under this section with respect to all the shares of a class held by

the shareholder or on behalf of any one beneficial owner and registered in the name of the dissenting

shareholder.

(5) A dissenting shareholder shall send to the corporation a written objection to a resolution referred to in

subsection (1) or (2)

(a) at or before any meeting of shareholders at which the resolution is to be voted on, or

(b) if the corporation did not send notice to the shareholder of the purpose of the meeting or of the

shareholder’s right to dissent, within a reasonable time after the shareholder learns that the resolution

was adopted and of the shareholder’s right to dissent.

(6) An application may be made to the Court by originating notice after the adoption of a resolution referred to

in subsection (1) or (2),

(a) by the corporation, or

(b) by a shareholder if the shareholder has sent an objection to the corporation under subsection (5),

to fix the fair value in accordance with subsection (3) of the shares of a shareholder who dissents under this

section, or to fix the time at which a shareholder of an unlimited liability corporation who dissents under this

section ceases to become liable for any new liability, act or default of the unlimited liability corporation.

(7) If an application is made under subsection (6), the corporation shall, unless the Court otherwise orders, send

to each dissenting shareholder a written offer to pay the shareholder an amount considered by the directors

to be the fair value of the shares.

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(8) Unless the Court otherwise orders, an offer referred to in subsection (7) shall be sent to each dissenting

shareholder

(a) at least 10 days before the date on which the application is returnable, if the corporation is the

applicant, or

(b) within 10 days after the corporation is served with a copy of the application, if a shareholder is the

applicant.

(9) Every offer made under subsection (7) shall

(a) be made on the same terms, and

(b) contain or be accompanied with a statement showing how the fair value was determined.

(10) A dissenting shareholder may make an agreement with the corporation for the purchase of the shareholder’s

shares by the corporation, in the amount of the corporation’s offer under subsection (7) or otherwise, at any

time before the Court pronounces an order fixing the fair value of the shares.

(11) A dissenting shareholder

(a) is not required to give security for costs in respect of an application under subsection (6), and

(b) except in special circumstances must not be required to pay the costs of the application or appraisal.

(12) In connection with an application under subsection (6), the Court may give directions for

(a) joining as parties all dissenting shareholders whose shares have not been purchased by the

corporation and for the representation of dissenting shareholders who, in the opinion of the Court,

are in need of representation,

(b) the trial of issues and interlocutory matters, including pleadings and questioning under Part 5 of the

Alberta Rules of Court,

(c) the payment to the shareholder of all or part of the sum offered by the corporation for the shares,

(d) the deposit of the share certificates with the Court or with the corporation or its transfer agent,

(e) the appointment and payment of independent appraisers, and the procedures to be followed by them,

(f) the service of documents, and

(g) the burden of proof on the parties.

(13) On an application under subsection (6), the Court shall make an order

(a) fixing the fair value of the shares in accordance with subsection (3) of all dissenting shareholders

who are parties to the application,

(b) giving judgment in that amount against the corporation and in favour of each of those dissenting

shareholders,

(c) fixing the time within which the corporation must pay that amount to a shareholder, and

(d) fixing the time at which a dissenting shareholder of an unlimited liability corporation ceases to

become liable for any new liability, act or default of the unlimited liability corporation.

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(14) On

(a) the action approved by the resolution from which the shareholder dissents becoming effective,

(b) the making of an agreement under subsection (10) between the corporation and the dissenting

shareholder as to the payment to be made by the corporation for the shareholder’s shares, whether

by the acceptance of the corporation’s offer under subsection (7) or otherwise, or

(c) the pronouncement of an order under subsection (13),

whichever first occurs, the shareholder ceases to have any rights as a shareholder other than the right to be

paid the fair value of the shareholder’s shares in the amount agreed to between the corporation and the

shareholder or in the amount of the judgement, as the case may be.

(15) Subsection (14)(a) does not apply to a shareholder referred to in subsection (5)(b).

(16) Until one of the events mentioned in subsection (14) occurs,

(a) the shareholder may withdraw the shareholder’s dissent, or

(b) the corporation may rescind the resolution,

and in either event proceedings under this section shall be discontinued.

(17) The Court may in its discretion allow a reasonable rate of interest on the amount payable to each dissenting

shareholder, from the date on which the shareholder ceases to have any rights as a shareholder by reason of

subsection (14) until the date of payment.

(18) If subsection (20) applies, the corporation shall, within 10 days after

(a) the pronouncement of an order under subsection (13), or

(b) the making of an agreement between the shareholder and the corporation as to the payment to be

made for the shareholder’s shares,

notify each dissenting shareholder that it is unable lawfully to pay dissenting shareholders for their shares.

(19) Notwithstanding that a judgment has been given in favour of a dissenting shareholder under subsection

(13)(b), if subsection (20) applies, the dissenting shareholder, by written notice delivered to the corporation

within 30 days after receiving the notice under subsection (18), may withdraw the shareholder’s notice of

objection, in which case the corporation is deemed to consent to the withdrawal and the shareholder is

reinstated to the shareholder’s full rights as a shareholder, failing which the shareholder retains a status as a

claimant against the corporation, to be paid as soon as the corporation is lawfully able to do so or, in a

liquidation, to be ranked subordinate to the rights of creditors of the corporation but in priority to its

shareholders.

(20) A corporation shall not make a payment to a dissenting shareholder under this section if there are reasonable

grounds for believing that

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

(b) the realizable value of the corporation’s assets would by reason of the payment be less than the

aggregate of its liabilities.

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APPENDIX G

COMMON SHAREHOLDER FAIRNESS OPINION

April 30, 2017

The Board of Directors Veresen Inc. Suite 900, Livingston Place, South Tower 222 – 3rd Avenue S.W. Calgary, Alberta T2P 0B4

To the Members of the Board:

Scotia Capital Inc. (“Scotia Capital”, “we” or “us”) understands that Veresen Inc. (“Veresen” or the “Company”) and Pembina Pipeline Corporation (“Pembina” or the “Acquirer”) propose to enter into an agreement (the “Arrangement Agreement”) whereby, among other things, Pembina will acquire all of the outstanding common shares in the capital of the Company (the “Common Shares”) by way of a court-approved plan of arrangement (the “Plan of Arrangement”) under the Business Corporations Act (Alberta) (the “Transaction”).

Pursuant to the terms of the Arrangement Agreement and the Plan of Arrangement, holders of the Common Shares will receive, for each Common Share held (i) 0.4287 of a common share of Pembina (a “Pembina Common Share”) or (ii) $18.65 in cash, subject to pro-ration based on maximum share consideration of 99,500,000 Pembina Common Shares and maximum cash consideration of $1,522,500,000 (the “Consideration”). We further understand that pursuant to the Arrangement Agreement, in the event that the Plan of Arrangement receives the requisite approval of the holders of Preferred Shares (as defined below), all of the outstanding cumulative redeemable preferred shares, series A, B, C, D, E, and F, in the capital of Veresen (collectively, the “Preferred Shares”) will be exchanged for preferred shares in the capital of Pembina having terms identical to the terms of the Preferred Shares except that the issuer will be Pembina and such shares will be convertible into shares of Pembina. The terms of the Arrangement Agreement relating to the Transaction are to be more fully described in a management information circular which will be mailed to the shareholders of the Company (the “Disclosure Document”).

Background and Engagement of Scotia Capital

Scotia Capital was first contacted by the Company in December 2016 with regard to a potential strategic review of the Company. Scotia Capital was formally retained by the Company on January 4, 2017 pursuant to an engagement letter (the “Engagement Agreement”) to perform such financial advisory and investment banking services for the Company as are customary in transactions of this type including assisting the Company in analyzing strategic alternatives and, if requested, structuring, negotiating and effecting a Transaction (as defined in the Engagement Agreement). Pursuant to the Engagement Agreement, the Board of Directors of the Company has requested that Scotia Capital provide an opinion (the “Opinion”) as to the fairness, from a financial point of view, of the Consideration to be received by the holders of the Common Shares (the “Common Shareholders”) pursuant to the Transaction. The terms of the Engagement Agreement provide that Scotia Capital is to be paid a fee for its services as financial advisor, including fees that are contingent on the completion of the Transaction and fees payable upon delivery of the Opinion. The fees payable for delivery of the Opinion are not contingent on the completion of the Transaction. In addition, Scotia Capital is to be reimbursed for its reasonable out-of-pocket expenses and to be indemnified by the Company in certain circumstances.

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The Board of Directors has not instructed Scotia Capital to prepare, and Scotia Capital has not prepared, a formal valuation of the Company or any of its securities or assets, and the Opinion should not be construed as such. Scotia Capital has, however, conducted such analyses as it considered necessary in the circumstances to prepare and deliver the Opinion.

Subject to the terms of the Engagement Agreement, Scotia Capital consents to the inclusion of the Opinion in its entirety and a summary thereof in the Disclosure Document and to the filing of the Opinion, as necessary, with the securities commissions, stock exchanges and other similar regulatory authorities in Canada.

Overview of Veresen Inc.

Veresen owns and operates energy infrastructure assets across North America. Veresen is engaged in two principal businesses: a pipeline transportation business comprised of interests in the Alliance Pipeline, the Ruby Pipeline and the Alberta Ethane Gathering System and a midstream business which includes a partnership interest in Veresen Midstream Limited Partnership, which owns assets in western Canada, and an ownership interest in Aux Sable, which owns a world-class natural gas liquids (NGL) extraction facility near Chicago, and other natural gas and NGL processing energy infrastructure; Veresen is also developing Jordan Cove LNG, a 7.8 million tonne per annum natural gas liquefaction facility proposed to be constructed in Coos Bay, Oregon, and the associated Pacific Connector Gas Pipeline.

Credentials of Scotia Capital

Scotia Capital represents the global corporate and investment banking and capital markets business of Scotiabank Group (“Scotiabank”), one of North America’s premier financial institutions. In Canada, Scotia Capital is one of the country’s largest investment banking firms with operations in all facets of corporate and government finance, mergers and acquisitions, equity and fixed income sales and trading and investment research. Scotia Capital has participated in a significant number of transactions involving private and public companies and has extensive experience in preparing fairness opinions.

The Opinion expressed herein represents the opinion of Scotia Capital as a firm. The form and content of the Opinion have been approved for release by a committee of directors and other professionals of Scotia Capital, all of whom are experienced in merger, acquisition, divestiture, fairness opinion and valuation matters.

Relationships of Scotia Capital

Neither Scotia Capital nor any of its affiliates, is an insider, associate or affiliate (as those terms are defined in the Securities Act (Ontario)) of the Company, Acquirer or any of their respective associates or affiliates. Subject to the following, there are no understandings, agreements or commitments between or among Scotia Capital and the Company, Acquirer or any of their respective associates or affiliates with respect to any future business dealings. An affiliate of Scotiabank is currently a lender to both the Company and the Acquirer and Scotia Capital and certain of its affiliates have in the past provided, and may in the future provide, traditional banking, financial advisory or investment banking services to the Company or any of its affiliates and may in the future provide similar services to the Acquirer or its affiliates.

Scotia Capital acts as a trader and dealer, both as principal and agent, in the financial markets in Canada, the United States and elsewhere and, as such, it and Scotiabank, may have had and may have positions in the securities of the Company, or its affiliates from time to time and may have executed or may execute transactions on behalf of such companies or clients for which it receives compensation. As an investment dealer, Scotia Capital conducts research on securities and may, in the ordinary course of business, provide research reports and investment advice to its clients on investment matters, including with respect to the Company or any of its affiliates or the Acquirer or any of its affiliates or with respect to the Transaction.

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Scope of Review

In preparing the Opinion, Scotia Capital has reviewed, considered and relied upon, without attempting to verify independently the completeness or accuracy thereof, among other things:

(a) a draft Arrangement Agreement dated April 29, 2017, including the Plan of Arrangement appendedthereto (the “Arrangement Agreement”);

(b) a draft form of lock-up agreement (the “Support Agreement”) dated April 29, 2017 to be entered intobetween the Acquirer and each of Veresen’s directors and members of executive management;

(c) annual reports of the Company and Pembina for the fiscal years ended 2014 to 2016;

(d) the Notice of Annual Meeting of Shareholders and the Management Information Circular of theCompany for the fiscal years ended 2014 to 2016;

(e) audited financial statements and management discussion and analysis of the Company andPembina for the fiscal years ended 2014 to 2016;

(f) annual information forms of the Company and Pembina for the fiscal years ended 2014 to 2016;

(g) the budget for each of the Company and Pembina for the fiscal year ending 2017;

(h) financial projections for each of the Company and Pembina for the fiscal years ending 2017 to 2021prepared by the management of the Company and Pembina respectively;

(i) various detailed internal Company management reports;

(j) discussions with senior management of the Company and Pembina;

(k) discussions with the Company’s legal counsel;

(l) various research publications prepared by industry and equity research analysts regarding theCompany, Pembina and other selected entities considered relevant;

(m) public information relating to the business, operations, financial performance and stock tradinghistory of the Company, Pembina and other selected public companies considered by us to berelevant;

(n) public information with respect to other transactions of a comparable nature considered by us to berelevant;

(o) representations contained in a certificate addressed to Scotia Capital, as of the date hereof, fromsenior officers of the Company as to the completeness, accuracy and fair presentation of theinformation upon which the Opinion is based; and

(p) such other corporate, industry and financial market information, investigations and analyses asScotia Capital considered necessary or appropriate in the circumstances.

Scotia Capital has not, to the best of its knowledge, been denied access by the Company to anyinformation requested by Scotia Capital.

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Prior Valuations

The Company has represented to Scotia Capital that, to the best of its knowledge, there have been no valuations or appraisals of the Company or any material property of the Company or any of its subsidiaries or affiliates, made in the preceding twenty-four (24) months and in the possession or control or knowledge of the Company.


The Opinion is subject to the assumptions, explanations and limitations set forth below.

Scotia Capital has, subject to the exercise of its professional judgment, relied, without independent verification, upon the completeness, accuracy and fair presentation of all of the financial and other information, data, advice, opinions and representations obtained by it from public sources, or that was provided to us, by the Company, and its associates and affiliates and advisors (collectively, the “Information”), and we have assumed that this Information did not omit to state any material fact or any fact necessary to be stated to make that information not misleading. The Opinion is conditional upon the completeness, accuracy and fair presentation of such Information. With respect to the Company’s financial projections provided to Scotia Capital by management of the Company and used in the analysis supporting the Opinion, we have assumed that they have been reasonably prepared on bases reflecting the best currently available estimates and judgments of management of the Company as to the matters covered thereby, and in rendering the Opinion we express no view as to the reasonableness of such forecasts or budgets or the assumptions on which they are based.

Senior management of the Company has represented to Scotia Capital in certificates delivered as at the date hereof, among other things, that to the best of their knowledge (a) the Company has no information or knowledge of any facts public or otherwise not specifically provided to Scotia Capital relating to the Company or any of its subsidiaries or affiliates which would reasonably be expected to affect materially the Opinion; (b) with the exception of forecasts, projections or estimates referred to in (d) below, the written Information provided to Scotia Capital by or on behalf of the Company in respect of the Company and its subsidiaries or affiliates, in connection with the Transaction is or, in the case of historical information or data, was, at the date of preparation, true and accurate in all material respects, and no additional material, data or information would be required to make the data provided to Scotia Capital by the Company not misleading in light of circumstances in which it was prepared; (c) to the extent that any of the Information identified in (b) above is historical, there have been no changes in material facts or new material facts since the respective dates thereof which have not been disclosed to Scotia Capital or updated by more current Information that has been disclosed; and (d) any portions of the Information provided to Scotia Capital which constitute forecasts, projections or estimates were prepared using the assumptions identified therein, which, in the reasonable opinion of the Company, are (or were at the time of preparation) reasonable in the circumstances.

The Opinion is rendered on the basis of the securities markets, economic, financial and general business conditions prevailing as at the date hereof and the conditions and prospects, financial and otherwise, of the Company and its subsidiaries and affiliates, as they were reflected in the Information. In its analyses and in preparing the Opinion, Scotia Capital made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, which Scotia Capital believes to be reasonable and appropriate in the exercise of its professional judgment, many of which are beyond the control of Scotia Capital or any party involved in the Transaction.

For the purposes of rendering the Opinion, Scotia Capital has also made several assumptions, including that the final version of the Arrangement Agreement and Support Arrangement will conform in all material respects to the drafts provided to Scotia Capital, the representations and warranties of each party contained in the Arrangement Agreement and the Support Agreement are true and correct in all material respects, each party to the Arrangement Agreement and the Support Agreement will perform all of the covenants and agreements required to be performed by it under the Transaction, the Company will be

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entitled to fully enforce its rights under the Arrangement Agreement and receive the benefits therefrom in accordance with the terms thereof, and all of the conditions required to implement the Transaction will be satisfied.

The Opinion has been provided for the sole use of the Board of Directors of the Company in connection with its consideration of the Transaction and may not be used or relied upon by any other person. Our opinion does not constitute a recommendation to the Board of Directors or to any shareholder of the Company as to how such shareholder should vote or act with respect to the Transaction. The Opinion is given as of the date hereof, and Scotia Capital disclaims any undertaking or obligation to advise any person of any change in any fact or matter affecting the Opinion which may come or be brought to the attention of Scotia Capital after the date hereof. Without limiting the foregoing, in the event that there is any material change in any fact or matter affecting the Opinion after the date hereof, Scotia Capital reserves the right to change, modify or withdraw the Opinion.

Our Opinion does not address the relative merits of the Transaction as compared to other business strategies or transactions that might be available with respect to the Company or the Company’s underlying business decision to effect the Transaction. At your direction, we were not requested to solicit, and did not solicit, interest from other parties with respect to an acquisition of, or other business combination with, the Company or any other alternative transaction. This Opinion addresses only the fairness, from a financial point of view, as of the date hereof, of the Consideration to be received by the Common Shareholders pursuant to the Transaction. Without limiting the foregoing, we do not express any view on, and our Opinion does not address, any other term or aspect of the Arrangement Agreement or any term or aspect of any other agreement or instrument contemplated by the Transaction or entered into or amended in connection with the Transaction. Scotia Capital is not an expert on, and did not render advice to the Board of Directors regarding legal, tax, accounting and regulatory matters.

The preparation of a fairness opinion is a complex process and it is not amenable to partial analysis or summary description. Scotia Capital believes that its analyses must be considered as a whole and that selecting portions of its analyses or the factors considered by it, without considering all facts and analyses together, could create an incomplete view of the process and analyses underlying the Opinion.


In considering the fairness, from a financial point of view, of the Consideration to be received by the Common Shareholders pursuant to the Transaction , Scotia Capital reviewed, considered and relied upon, among other things, the following: (i) a comparison of the Consideration under the Transaction to the results of the financial analysis of Veresen on a sum-of-the-parts basis; (ii) a comparison of selected financial multiples implied by the Consideration under the Transaction to multiples paid, to the extent publicly available, in selected precedent transactions; (iii) a comparison of selected financial multiples of comparable companies whose securities are publicly traded to the multiples implied by the Consideration under the Transaction; (iv) a comparison of the Consideration under the Transaction to the recent market trading prices of the Veresen Common Shares; (v) a review of the form of Consideration under the Transaction and perspectives on the pro forma company including the potential synergies associated with the Transaction; and (vi) such other factors, studies and analyses, as we deemed appropriate. In arriving at its fairness determination, Scotia Capital considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Scotia Capital made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses.

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Conclusion

Based upon and subject to the foregoing and such other matters as we considered relevant, Scotia Capital is of the opinion that, as of the date hereof, the Consideration to be received by the Common Shareholders pursuant to the Transaction is fair, from a financial point of view, to such Common Shareholders.

Yours very truly,

SCOTIA CAPITAL INC.

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APPENDIX H

PREFERRED SHAREHOLDER FAIRNESS OPINION

April 30, 2017

The Board of Directors Veresen Inc. Suite 900, Livingston Place, South Tower 222 – 3rd Avenue S.W. Calgary, Alberta T2P 0B4

To the Members of the Board:

Scotia Capital Inc. (“Scotia Capital”, “we” or “us”) understands that Veresen Inc. (“Veresen” or the “Company”) and Pembina Pipeline Corporation (“Pembina” or the “Acquirer”) propose to enter into an agreement (the “Arrangement Agreement”) whereby, among other things, subject to receipt of the requisite approval of the holders of Preferred Shares (as defined below), all of the outstanding cumulative redeemable preferred shares, series A, cumulative redeemable preferred shares, series B, cumulative redeemable preferred shares, series C, cumulative redeemable preferred shares, series D, cumulative redeemable preferred shares, series E, cumulative redeemable preferred shares, series F in the capital of the Company (collectively, the "Preferred Shares") will be exchanged for newly issued preferred shares in the capital of Pembina (the “Consideration”) with identical terms to the Preferred Shares except that the issuer will be Pembina and such shares will be convertible into shares of Pembina (the “Preferred Shares Transaction”). Pursuant to the Arrangement Agreement, Pembina will also acquire all of the outstanding common shares in the capital of Veresen (the “Common Shares”) for consideration of (i) 0.4287 of a common share of Pembina (a “Pembina Common Share”) or (ii) $18.65 in cash, for each Common Share subject to pro-ration based on maximum share consideration of 99,500,000 Pembina Common Shares and maximum cash consideration of $1,522,500,000 (the “Common Shares Transaction”). The Preferred Shares Transaction and the Common Shares Transaction (collectively, the “Transaction”) are to be effected by way of a court-approved plan of arrangement (the “Plan of Arrangement”) under the Business Corporations Act (Alberta). The terms of the Arrangement Agreement relating to the Transaction are to be more fully described in a management information circular which will be mailed to the shareholders of the Company (the “Disclosure Document”).

Background and Engagement of Scotia Capital

Scotia Capital was first contacted by the Company in December 2016 with regard to a potential strategic review of the Company. Scotia Capital was formally retained by the Company on January 4, 2017 pursuant to an engagement letter (the “Engagement Agreement”) to perform such financial advisory and investment banking services for the Company as are customary in transactions of this type including assisting the Company in analyzing strategic alternatives and, if requested, structuring, negotiating and effecting a Transaction (as defined in the Engagement Agreement). Pursuant to the Engagement Agreement, the Board of Directors of the Company has requested that Scotia Capital provide an opinion (the “Opinion”) as to the fairness, from a financial point of view, of the Consideration to be received by the holders of the Preferred Shares (the “Preferred Shareholders”) pursuant to the Preferred Shares Transaction. The terms of the Engagement Agreement provide that Scotia Capital is to be paid a fee for its services as financial advisor, including fees that are contingent on the completion of the Transaction and fees payable upon delivery of the Opinion. The fees payable for delivery of the Opinion are not contingent on the completion of the Transaction. In addition, Scotia Capital is to be reimbursed for its reasonable out-of-pocket expenses and to be indemnified by the Company in certain circumstances.

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The Board of Directors has not instructed Scotia Capital to prepare, and Scotia Capital has not prepared, a formal valuation of the Company or any of its securities or assets, and the Opinion should not be construed as such. Scotia Capital has, however, conducted such analyses as it considered necessary in the circumstances to prepare and deliver the Opinion.

Subject to the terms of the Engagement Agreement, Scotia Capital consents to the inclusion of the Opinion in its entirety and a summary thereof in the Disclosure Document and to the filing of the Opinion, as necessary, with the securities commissions, stock exchanges and other similar regulatory authorities in Canada.

Overview of Veresen Inc.

Veresen owns and operates energy infrastructure assets across North America. Veresen is engaged in two principal businesses: a pipeline transportation business comprised of interests in the Alliance Pipeline, the Ruby Pipeline and the Alberta Ethane Gathering System and a midstream business which includes a partnership interest in Veresen Midstream Limited Partnership, which owns assets in western Canada, and an ownership interest in Aux Sable, which owns a world-class natural gas liquids (NGL) extraction facility near Chicago, and other natural gas and NGL processing energy infrastructure; Veresen is also developing Jordan Cove LNG, a 7.8 million tonne per annum natural gas liquefaction facility proposed to be constructed in Coos Bay, Oregon, and the associated Pacific Connector Gas Pipeline.

Credentials of Scotia Capital

Scotia Capital represents the global corporate and investment banking and capital markets business of Scotiabank Group (“Scotiabank”), one of North America’s premier financial institutions. In Canada, Scotia Capital is one of the country’s largest investment banking firms with operations in all facets of corporate and government finance, mergers and acquisitions, equity and fixed income sales and trading and investment research. Scotia Capital has participated in a significant number of transactions involving private and public companies and has extensive experience in preparing fairness opinions.

The Opinion expressed herein represents the opinion of Scotia Capital as a firm. The form and content of the Opinion have been approved for release by a committee of directors and other professionals of Scotia Capital, all of whom are experienced in merger, acquisition, divestiture, fairness opinion and valuation matters.

Relationships of Scotia Capital

Neither Scotia Capital nor any of its affiliates, is an insider, associate or affiliate (as those terms are defined in the Securities Act (Ontario)) of the Company, Acquirer or any of their respective associates or affiliates. Subject to the following, there are no understandings, agreements or commitments between or among Scotia Capital and the Company, Acquirer or any of their respective associates or affiliates with respect to any future business dealings. An affiliate of Scotiabank is currently a lender to both the Company and the Acquirer and Scotia Capital and certain of its affiliates have in the past provided, and may in the future provide, traditional banking, financial advisory or investment banking services to the Company or any of its affiliates and may in the future provide similar services to the Acquirer or its affiliates.

Scotia Capital acts as a trader and dealer, both as principal and agent, in the financial markets in Canada, the United States and elsewhere and, as such, it and Scotiabank, may have had and may have positions in the securities of the Company, or its affiliates from time to time and may have executed or may execute transactions on behalf of such companies or clients for which it receives compensation. As an investment dealer, Scotia Capital conducts research on securities and may, in the ordinary course of business, provide research reports and investment advice to its clients on investment matters, including with respect to the Company or any of its affiliates or the Acquirer or any of its affiliates or with respect to the Transaction.

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Scope of Review

In preparing the Opinion, Scotia Capital has reviewed, considered and relied upon, without attempting to verify independently the completeness or accuracy thereof, among other things:

(a) a draft Arrangement Agreement dated April 29, 2017, including the Plan of Arrangement appendedthereto (the “Arrangement Agreement”);

(b) a draft form of lock-up agreement (the “Support Agreement”) dated April 29, 2017 to be entered intobetween the Acquirer and each of Veresen’s directors and members of executive management;

(c) annual reports of the Company and Pembina for the fiscal years ended 2014 to 2016;

(d) the Notice of Annual Meeting of Shareholders and the Management Information Circular of theCompany for the fiscal years ended 2014 to 2016;

(e) audited financial statements and management discussion and analysis of the Company andPembina for the fiscal years ended 2014 to 2016;

(f) annual information forms of the Company and Pembina for the fiscal years ended 2014 to 2016;

(g) the prospectuses for each class of Preferred Shares issued by the Company;

(h) the budget for each of the Company and Pembina for the fiscal year ending 2017;

(i) financial projections for each of the Company and Pembina for the fiscal years ending 2017 to 2021prepared by the management of the Company and Pembina respectively;

(j) various detailed internal Company management reports;

(k) discussions with senior management of the Company and Pembina;

(l) discussions with the Company’s legal counsel;

(m) various research publications prepared by industry and equity research analysts regarding theCompany, Pembina and other selected entities considered relevant;

(n) public information relating to the business, operations, financial performance and stock tradinghistory of the Company, Pembina and other selected public companies considered by us to berelevant;

(o) public information with respect to other transactions of a comparable nature considered by us to berelevant;

(p) representations contained in a certificate addressed to Scotia Capital, as of the date hereof, fromsenior officers of the Company as to the completeness, accuracy and fair presentation of theinformation upon which the Opinion is based; and

(q) such other corporate, industry and financial market information, investigations and analyses asScotia Capital considered necessary or appropriate in the circumstances.

Scotia Capital has not, to the best of its knowledge, been denied access by the Company to anyinformation requested by Scotia Capital.

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Prior Valuations

The Company has represented to Scotia Capital that, to the best of its knowledge, there have been no valuations or appraisals of the Company or any material property of the Company or any of its subsidiaries or affiliates, made in the preceding twenty-four (24) months and in the possession or control or knowledge of the Company.


The Opinion is subject to the assumptions, explanations and limitations set forth below.

Scotia Capital has, subject to the exercise of its professional judgment, relied, without independent verification, upon the completeness, accuracy and fair presentation of all of the financial and other information, data, advice, opinions and representations obtained by it from public sources, or that was provided to us, by the Company, and its associates and affiliates and advisors (collectively, the “Information”), and we have assumed that this Information did not omit to state any material fact or any fact necessary to be stated to make that information not misleading. The Opinion is conditional upon the completeness, accuracy and fair presentation of such Information. With respect to the Company’s financial projections provided to Scotia Capital by management of the Company and used in the analysis supporting the Opinion, we have assumed that they have been reasonably prepared on bases reflecting the best currently available estimates and judgments of management of the Company as to the matters covered thereby, and in rendering the Opinion we express no view as to the reasonableness of such forecasts or budgets or the assumptions on which they are based.

Senior management of the Company has represented to Scotia Capital in certificates delivered as at the date hereof, among other things, that to the best of their knowledge (a) the Company has no information or knowledge of any facts public or otherwise not specifically provided to Scotia Capital relating to the Company or any of its subsidiaries or affiliates which would reasonably be expected to affect materially the Opinion; (b) with the exception of forecasts, projections or estimates referred to in (d), below, the written Information provided to Scotia Capital by or on behalf of the Company in respect of the Company and its subsidiaries or affiliates, in connection with the Transaction is or, in the case of historical information or data, was, at the date of preparation, true and accurate in all material respects, and no additional material, data or information would be required to make the data provided to Scotia Capital by the Company not misleading in light of circumstances in which it was prepared; (c) to the extent that any of the Information identified in (b), above, is historical, there have been no changes in material facts or new material facts since the respective dates thereof which have not been disclosed to Scotia Capital or updated by more current Information that has been disclosed; and (d) any portions of the Information provided to Scotia Capital which constitute forecasts, projections or estimates were prepared using the assumptions identified therein, which, in the reasonable opinion of the Company, are (or were at the time of preparation) reasonable in the circumstances.

The Opinion is rendered on the basis of the securities markets, economic, financial and general business conditions prevailing as at the date hereof and the conditions and prospects, financial and otherwise, of the Company and its subsidiaries and affiliates, as they were reflected in the Information. In its analyses and in preparing the Opinion, Scotia Capital made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, which Scotia Capital believes to be reasonable and appropriate in the exercise of its professional judgment, many of which are beyond the control of Scotia Capital or any party involved in the Preferred Shares Transaction.

For the purposes of rendering the Opinion, Scotia Capital has also made several assumptions, including that the final version of the Arrangement Agreement and Support Arrangement will conform in all material respects to the drafts provided to Scotia Capital, the representations and warranties of each party contained in the Arrangement Agreement and the Support Agreement are true and correct in all material respects, each party to the Arrangement Agreement and the Support Agreement will perform all of the covenants and agreements required to be performed by it under the Transaction, the Company will be

H-5

entitled to fully enforce its rights under the Arrangement Agreement and receive the benefits therefrom in accordance with the terms thereof, and all of the conditions required to implement the Transaction will be satisfied.

The Opinion has been provided for the sole use of the Board of Directors of the Company in connection with its consideration of the Preferred Shares Transaction and may not be used or relied upon by any other person. Our opinion does not constitute a recommendation to the Board of Directors or to any shareholder of the Company as to how such shareholder should vote or act with respect to the Preferred Shares Transaction. The Opinion is given as of the date hereof, and Scotia Capital disclaims any undertaking or obligation to advise any person of any change in any fact or matter affecting the Opinion which may come or be brought to the attention of Scotia Capital after the date hereof. Without limiting the foregoing, in the event that there is any material change in any fact or matter affecting the Opinion after the date hereof, Scotia Capital reserves the right to change, modify or withdraw the Opinion.

Our Opinion does not address the relative merits of the Preferred Shares Transaction as compared to other business strategies or transactions that might be available with respect to the Company or the Company’s underlying business decision to effect the Preferred Shares Transaction. At your direction, we were not requested to solicit, and did not solicit, interest from other parties with respect to an acquisition of, or other business combination with, the Company or any other alternative transaction. This Opinion addresses only the fairness, from a financial point of view, as of the date hereof, of the Consideration to be received by the Preferred Shareholders pursuant to the Preferred Shares Transaction. Without limiting the foregoing, we do not express any view on, and our Opinion does not address, any other term or aspect of the Arrangement Agreement or any term or aspect of any other agreement or instrument contemplated by the Preferred Shares Transaction or entered into or amended in connection with the Preferred Shares Transaction. Scotia Capital is not an expert on, and did not render advice to the Board of Directors regarding legal, tax, accounting and regulatory matters.

The preparation of a fairness opinion is a complex process and it is not amenable to partial analysis or summary description. Scotia Capital believes that its analyses must be considered as a whole and that selecting portions of its analyses or the factors considered by it, without considering all facts and analyses together, could create an incomplete view of the process and analyses underlying the Opinion.


In considering the fairness, from a financial point of view, of the Consideration to be received by the Preferred Shareholders pursuant to the Preferred Shares Transaction, Scotia Capital reviewed, considered and relied upon, among other things, a comparison of the financial and non-financial terms of the Consideration to the financial and non-financial terms of the Preferred Shares. The compared terms included coupons and rate reset spreads, reset dates, redemption and conversion rights, and governance rights. Scotia Capital also examined the differences in capital structure and balance sheet, credit ratings, and forecasted revenue and EBITDA of the two issuers, Pembina and Veresen. Finally, Scotia Capital compared the liquidity of the existing Pembina preferred shares to that of the Preferred Shares. In arriving at its fairness determination, Scotia Capital considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Scotia Capital made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses.

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Conclusion

Based upon and subject to the foregoing and such other matters as we considered relevant, Scotia Capital is of the opinion that, as of the date hereof, the Consideration to be received by the Preferred Shareholders pursuant to the Preferred Shares Transaction is fair, from a financial point of view, to such Preferred Shareholders.

Yours very truly,

SCOTIA CAPITAL INC.

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I-1

APPENDIX I

PEMBINA UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

In connection with a proposed plan of arrangement (the "Arrangement") under the Business Corporations

Act (Alberta) (the "ABCA") involving, among others, Veresen Inc. ("Veresen"), the holders ("Veresen Common

Shareholders") of common shares in the capital of Veresen (the "Veresen Common Shares"), and the holders

("Veresen Preferred Shareholders" and together with the Common Shareholders, the "Veresen Shareholders") of

the cumulative redeemable preferred shares, series A, B, C, D, E and F, of Veresen (collectively, "Veresen Preferred

Shares") and Pembina Pipeline Corporation ("Pembina"), the following unaudited pro forma condensed combined

financial information, referred to herein as the pro forma financial information, presents the effect of the Arrangement

on the combined historical financial statements of Veresen and Pembina.

Veresen and Pembina entered into an arrangement agreement dated May 1, 2017 (the "Arrangement

Agreement"). Pursuant to the Arrangement Agreement and the accompanying Arrangement, Pembina will acquire all

of the issued and outstanding Veresen Common Shares. Pursuant to the Arrangement, Veresen Common Shareholders

will receive (i) 0.4287 common shares in the capital of Pembina (each one share, a "Pembina Common Share") or

(ii) $18.65 in cash, for each Veresen Common Share held, subject to pro-rationing based on maximum share consideration of 99,500,000 Pembina Common Shares and maximum cash consideration of $1,522,500,000. Immediately following completion of the Arrangement, assuming full pro-rationing and the issuance of the maximum number of Pembina Common Shares and maximum cash consideration, former Veresen Common Shareholders are anticipated to own approximately 20% of the combined entity and current holders of Pembina Common Shares are anticipated to own approximately 80% of the combined entity. The Arrangement is currently anticipated to be completed in the second half of 2017, subject to the satisfaction of customary closing conditions, including receipt of the Required Regulatory Approvals (as defined below), approval by the Court of Queen's Bench of Alberta and approval by the Veresen Common Shareholders of a resolution approving the Arrangement (the "Common Shareholder Resolution") by at least 662/3% of the votes cast by Veresen Common Shareholders, present in person or represented by proxy at a special meeting of the Common Shareholders to be held on July 11, 2017 (the "Common Shareholder Meeting"). The pro forma information has been prepared using the assumption that full pro-rationing will occur and the maximum number of Pembina Common Shares will be issued and the maximum amount of cash consideration paid pursuant to the Arrangement.

In addition, Veresen will be seeking approval of the Veresen Preferred Shareholders to effect the exchange

of the Veresen Preferred Shares for preferred shares of Pembina with the same terms and conditions as the outstanding

Veresen Preferred Shares. For such exchange to occur at closing of the Arrangement, a resolution of the Veresen

Preferred Shareholders approving the Arrangement (the "Preferred Shareholder Resolution") must be approved by

at least 662/3% of the votes cast by Veresen Preferred Shareholders, voting as one class, present in person or represented

by proxy at a special meeting of Veresen Preferred Shareholders to be held on July 11, 2017 (the "Preferred

Shareholder Meeting"). Closing of the Arrangement is not conditional on the approval of the Veresen Preferred

Shareholder Resolution; however the exchange of Veresen Preferred Shares has been assumed in the pro forma

information. Completion of the Arrangement is subject to approval of the Toronto Stock Exchange ("TSX") and the

New York Stock Exchange, as applicable, for the listing of the Pembina Common Shares and (subject to the Preferred

Shareholder Resolution receiving the requisite approvals) the preferred shares of Pembina issuable pursuant to the

Arrangement, approval under the Competition Act and the Canada Transportation Act and will be subject to the

expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of

1976, as amended (the "Required Regulatory Approvals").

The pro forma financial information described below gives pro forma effect to the Arrangement in

accordance with Section 8.4(7) of National Instrument 51-102 - Continuous Disclosure Obligations of the Canadian

Securities Administrators ("NI 51-102") by applying pro forma adjustments to Veresen's and Pembina's historical

consolidated financial statements, which are incorporated by reference into the management information circular of

Veresen in relation to the Common Shareholder Meeting and the Preferred Shareholder Meeting, dated June 5, 2017

(the "Circular"). The pro forma financial information has been derived from the respective historical consolidated

financial statements of Veresen and Pembina, along with certain adjustments and assumptions made to give effect to

I-2

the Arrangement. Adjustments in accordance with NI 51-102 include only adjustments to conform Veresen's financial

statement amounts to Pembina's accounting policies and adjustments for those pro forma events that are (a) directly

attributable to the Arrangement for which there are firm commitments and (b) for which the complete financial effects

are objectively determinable. No adjustments have been made to eliminate non-recurring effects of the Arrangement

that are not expected to continue in future periods, to eliminate discontinued operations or to adjust the related assets

or liabilities associated with assets held for sale. The pro forma adjustments are based upon available information and

certain assumptions that management of Veresen and Pembina each believe are reasonable under the circumstances.

The Arrangement is more particularly described and set forth in the Circular accompanying the pro forma

financial information.

The pro forma financial information presents the combined effect on the historical statements and provides

the following resulting information:

Historical Information of

Veresen and Pembina

Historical Dates and Giving

Effect Resulting Information

Consolidated statements of

financial position

As at March 31, 2017 Unaudited pro forma condensed combined statement of

financial position, referred to as the pro forma statement of

financial position


earnings

For the year ended December 31,

2016; and for the three months

ended March 31, 2017

Unaudited pro forma condensed combined statements of

earnings, referred to as the pro forma statements of earnings.

Fair value adjustments to net assets acquired at March 31,

2017 have been applied to an assumed acquisition date of

January 1, 2016 for purposes of the pro forma statements of

earnings

The pro forma financial information is presented for illustrative purposes only and does not include, among

other things, estimated cost synergies, adjustments related to restructuring or integration activities, further acquisitions

or disposals not yet known or probable, or impacts of Arrangement-related change in control provisions that are

currently not factually supportable and/or probable of occurring. Therefore, the pro forma condensed combined

financial information is presented for informational purposes only and is not necessarily indicative of what Pembina's

actual financial condition or results of operations would have been had the Arrangement been completed on the date

indicated, nor does it purport to project Pembina's future financial position or results of operations for any future

period or as of any future date. Accordingly, the combined business, assets, results of operations and financial

condition may differ significantly from those indicated.

The Arrangement shall constitute a "change in control" for purposes of the applicable Veresen long term

incentive and executive employment plans and, as a result, units outstanding under these plans will vest and, together

with payments due under the executive employment agreements, be settled in cash immediately prior to the effective

time of the Arrangement. The pro forma financial information recognizes these payments.

I-3

All pro forma adjustments and their underlying assumptions are described more fully in the notes to this pro

forma financial information. The pro forma financial information should be read in conjunction with the following:

(a) The accompanying notes to the unaudited pro forma condensed combined financial information;

(b) The audited consolidated financial statements of Veresen as at and for the year ended December 31,

2016 and the related notes;

(c) The unaudited interim consolidated financial statements of Veresen as at and for the three months

ended March 31, 2017 and the related notes (collectively with item (b), "Veresen's historical

financial statements");

(d) The audited consolidated financial statements of Pembina as at and for the year ended December

31, 2016 and the related notes; and,

(e) The unaudited interim condensed consolidated financial statements of Pembina as at and for the

three months ended March, 2017 and the related notes (collectively with item (d), "Pembina's

historical financial statements").

I-4


Unaudited Pro Forma Condensed Combined Statement of Financial Position

As at March 31, 2017

Historical Pro Forma Note 4 Combined

Pembina Veresen(1) Adjustments Reference(s) Pro Forma

(in millions of Cdn dollars)

Assets

Current Assets

Cash and cash equivalents 36 163 (41) b(iv) 158

Trade receivable and other 463 29 492

Distributions receivable 65 65

Derivative financial instruments 6 6

Inventory 123 123

Assets held for sale 779 779

Total current assets 628 1,036 (41) 1,623

Non-current assets

Property, plant and equipment 12,002 315 12 b(iii) 12,329

Intangible assets and goodwill 2,826 45 3,617 b(i) 6,488

Investments in jointly-controlled businesses 131 1,535 1,804 b(ii) 3,470

Investments held at cost 1,804 (1,804) b(ii)

Deferred tax assets 27 27

Other receivables 11 5 16

Total Assets 15,625 4,740 3,588 23,953

Liabilities

Current liabilities

Trade payables and accrued liabilities 774 51 79 b(iv) 904

Taxes payable 4 10 14

Dividends payable 64 26 90

Loans and borrowings 6 4 10


Liabilities associated with assets held for sale 173 173

Total current liabilities 858 264 79 1,201

Non-current liabilities

Loans and borrowings 4,333 1,425 1,560 b(i) 7,318

Convertible debentures 144 144


Employee benefits 39 39

Deferred revenue 88 88

Decommissioning provision 504 12 b(iii) 516

Deferred tax liabilities 1,175 223 (32) b(v) 1,366

Other liabilities 47 47

Total Liabilities 7,198 1,959 1,619 10,776

Equity

Common share capital 8,935 3,482 846 b(i) 13,263

Preferred share capital 1,509 536 (26) b(i) 2,019

Deficit (2,005) (1,527) 1,439 b(i), b(iv),b(vi) (2,093)

Additional paid in capital 28 (28) b(i)

Accumulated other comprehensive income (12) 262 (262) b(i) (12)

Total Equity 8,427 2,781 1,969 13,177

Total Liabilities and Equity 15,625 4,740 3,588 23,953 (1) The financial information in this column has been derived from Veresen's historical financial statements as at March 31, 2017 with certain reclassifications as

described in further detail in Note 6.

See the accompanying notes to this Unaudited Pro Forma Condensed Combined Financial Information, which are an integral part of this pro forma financial

information.

I-5


Unaudited Pro Forma Condensed Combined Statement of Earnings

For the year ended December 31, 2016


Pembina(1) Veresen(1) Adjustments Reference(s)

Pro

Forma


Revenue 4,265 53 4,318

Cost of sales 3,193 29 3,222

Loss on commodity related financial

derivative instruments (71) (71)

Gross Profit 1,001 24 1,025

General and administrative 195 52 247

Other income (1) (1)

Project development 133 133

Results from operating activities 807 (161) 646

Asset impairment loss 103 (103) c(iii)

Net finance costs 153 37 27 c(i), c(ii) 217

Earnings (loss) before equity income

and income tax 654 (301) (76) 429

Equity income 1 149 71 c(ii), c(iv), c(v), c(vi) 221

Dividend income 121 (121) c(iv)

Earnings (loss) before income tax 655 (31) 26 650

Current tax expense (recovery) 50 11 (10) c(vii) 51

Deferred tax expense (recovery) 139 (51) 21 c(vii) 109

Income tax expense 189 (40) 11 160

Earnings for the year 466 9 15 490

Discontinued operations income (loss) (3) (3)

Earnings for the year 466 6 15 487 (1) The financial information in this column has been derived from Pembina and Veresen's historical financial statements for the year ended December 31, 2016 with

certain reclassifications as described in further detail in Note 6.


information.

I-6


Unaudited Pro Forma Condensed Combined Statement of Earnings

For the three months ended March 31, 2017


Pembina Veresen(1) Adjustments Reference(s) Pro Forma


Revenue 1,485 12 1,497

Cost of sales 1,117 6 1,123

Gain on commodity related financial

derivative instruments 13 13

Gross Profit 381 6 387


Other income (3) (3)

Project development 16 16

Results from operating activities 324 (23) 301

Net finance costs 30 12 8 c(i), c(ii) 50

Earnings (loss) before equity income

and income tax 294 (35) (8) 251

Equity income 59 30 c(ii), c(iv), c(v), c(vi) 89

Dividend income 30 (30) c(iv)

Earnings before income tax 294 54 (8) 340

Current tax expense (recovery) 12 3 (2) c(vii) 13

Deferred tax expense 67 10 c(vii) 77

Income tax expense 79 13 (2) 90

Earnings for the period 215 41 (6) 250

Discontinued operations income 12 12

Earnings for the period 215 53 (6) 262 (1) The financial information in this column has been derived from Veresen's historical financial statements for the three months ended March 31, 2017 with certain

reclassifications as described in further detail in Note 6.


information.

I-7

PEMBINA

NOTES TO UNAUDITED PROFORMA CONDENSED COMBINED FINANCIAL INFORMATION

(millions of Cdn dollars, except as otherwise noted)

Note 1 Description of the Arrangement

Veresen and Pembina entered into the Arrangement Agreement on May 1, 2017. Pursuant to the Arrangement

Agreement and the accompanying Arrangement, Pembina will acquire all of the issued and outstanding Veresen

Common Shares. Pursuant to the Arrangement, Veresen Shareholders will receive (i) 0.4287 Pembina Common

Shares or (ii) $18.65 in cash, for each Veresen Share held, subject to pro-rationing based on maximum share

consideration of 99,500,000 Pembina common shares and maximum cash consideration of $1,522,500,000.

Immediately following completion of the Arrangement, assuming full pro-rationing and the issuance of the maximum

number of Pembina Common Shares and maximum cash consideration, former Veresen Common Shareholders are

anticipated to own approximately 20% of the combined entity and current holders of Pembina Common Shares are

anticipated to own approximately 80% of the combined entity. The Arrangement is currently anticipated to be

completed in the second half of 2017, subject to the satisfaction of customary closing conditions, including receipt of

the Required Regulatory Approvals, approval by the Court of Queen's Bench of Alberta and approval by the Veresen

Common Shareholders of the Common Shareholder Resolution by at least 662/3% of the votes cast by Veresen

Common Shareholders, present in person or represented by proxy at the Common Shareholder Meeting. The pro forma

information has been prepared using the assumption that full pro-rationing will occur and the maximum number of

Pembina Common Shares will be issued and the maximum amount of cash consideration paid pursuant to the

Arrangement.

In addition, Veresen will be seeking approval of the Veresen Preferred Shareholders to effect the exchange

of the Veresen Preferred Shares for the Pembina Exchange Shares. For such exchange to occur at closing of the

Arrangement, the Preferred Shareholder Resolution must be approved by at least 662/3% of the votes cast by Veresen

Preferred Shareholders, voting as one class, present in person or represented by proxy at the Preferred Shareholder

Meeting. Closing of the Arrangement is not conditional on the approval of the Veresen Preferred Shareholder

Resolution; however the exchange of Veresen Preferred Shares has been assumed in the pro forma information.

The pro forma financial information described below gives pro forma effect to the Arrangement in

accordance with Section 8.4(7) of NI 51-102 by applying pro forma adjustments to Veresen's and Pembina's historical

consolidated financial statements, which are incorporated by reference into the management information circular in

relation to the Common Shareholder Meeting and the Preferred Shareholder Meeting, dated June 5, 2017. The pro

forma financial information has been derived from the respective historical consolidated financial statements of

Veresen and Pembina, along with certain adjustments and assumptions made to give effect to the Arrangement.

Adjustments in accordance with NI 51-102 include only adjustments to conform Veresen's financial statement

amounts to Pembina's accounting policies and adjustments for those pro forma events that are (a) directly attributable

to the Arrangement for which there are firm commitments and (b) for which the complete financial effects are

objectively determinable. No adjustments have been made to eliminate non-recurring effects of the Arrangement that

are not expected to continue in future periods, or to eliminate discontinued operations or adjust the related assets or

liabilities associated with assets held for sale. The pro forma adjustments are based upon available information and

certain assumptions that management of Veresen and Pembina each believe are reasonable under the circumstances.

The Arrangement is more particularly described and set forth in the Circular accompanying the pro forma

financial information.

I-8

Note 2 Basis of Presentation

The pro forma financial information gives pro forma effect to the Arrangement in accordance with Section

8.4(7) of NI 51-102 by applying pro forma adjustments to Veresen's and Pembina's historical consolidated financial

statements, which are incorporated by reference into the Circular. The pro forma financial information has been

derived from the respective historical consolidated financial statements of Veresen and Pembina, along with certain

adjustments and assumptions made to give effect to the Arrangement. Adjustments in accordance with NI 51-102

include only adjustments to conform Veresen's financial statement amounts to Pembina's accounting policies and

adjustments for those pro forma events that are (a) directly attributable to the Arrangement for which there are firm

commitments and (b) for which the complete financial effects are objectively determinable. No adjustments have been

made to eliminate non-recurring effects of the Arrangement that are not expected to continue in the statement of

earnings in future periods, to eliminate discontinued operations and the related assets or liabilities associated with

assets held for sale or to recognize adjustments to either parties' interests in their recognized assets or liabilities due to

the outcome of the finalization of their processes to closing. The pro forma adjustments are based upon available

information and certain assumptions that management of Veresen and Pembina each believes are reasonable under

the circumstances.

The pro forma financial information combines and provides the following:

Historical Information of

Veresen and Pembina

Historical Dates and Giving

Effect Resulting Information


financial position

As of March 31, 2017 Unaudited pro forma condensed combined statement of

financial position, referred to as the pro forma statement of

financial position


earnings

For the year ended December 31,

2016; and for the three months

ended March 31, 2017

Unaudited pro forma condensed combined statements of

earnings, referred to as the pro forma statements of earnings.

Fair value adjustments to net assets acquired at March 31,

2017 have been applied to an assumed acquisition date of

January 1, 2016 for purposes of the pro forma statements of

earnings

The pro forma financial information is presented for illustrative purposes only and does not include, among

other things, estimated cost synergies, adjustments related to restructuring or integration activities, former acquisitions

or disposals, or impacts of Arrangement-related change in control provisions that are currently not factually

supportable and/or probable of occurring. Therefore, the pro forma condensed combined financial information is

presented for informational purpose only and is not necessarily indicative of what Pembina's actual financial condition

or results of operations would have been had the Arrangement been completed on the date indicated, nor does it

purport to project Pembina's future financial position or results of operations for any future period or as of any future

date. Accordingly, the combined business, assets, results of operations and financial condition may differ significantly

from those indicated.

The pro forma financial information should be read in conjunction with Veresen's historical financial

statements and Pembina's historical financial statements. Veresen's historical financial statements have been adjusted

to reclassify line items to conform to Pembina's presentation. Additional reclassifications may be necessary on

completion of the Arrangement.

The Arrangement has been accounted for in the pro forma financial information using the acquisition method

under International Financial Reporting Standard 3 - Business Combinations ("IFRS 3") of the International

Accounting Standards Board ("IASB"). Pembina is the acquiring entity for accounting purposes.

At the date of preparation of this pro forma financial information, certain pro forma adjustments have been

made as identified herein. See Note 4 for further details.

The Arrangement consideration in the pro forma financial information is based on the closing price of

Pembina shares on the TSX on April 28, 2017 the last trading day on which Pembina Shares traded prior to Veresen

and Pembina announcing the Arrangement. However, the actual purchase price will be based on the closing price of

Pembina shares on the TSX on the date of closing of the Arrangement. Accordingly, the purchase price and the value

of identifiable assets acquired, liabilities assumed and goodwill ultimately recorded at the date of closing of the

I-9

Arrangement could differ materially.

Note 3 Significant Accounting Policies

The accounting policies used in the preparation of the pro forma financial information are those set out in

Pembina's audited consolidated financial statements as at and for the year ended December 31, 2016, which were

prepared in accordance with International Financial Reporting Standards as issued by the IASB ("IFRS"). Veresen's

audited consolidated financial statements as at and for the year ended December 31, 2016 were prepared in accordance

with United States Generally Accepted Accounting Principles ("US GAAP"). The pro forma financial information

has been prepared based on the historical financial statements of Veresen and Pembina. For the purposes of this pro

forma financial information, Veresen and Pembina completed a review of potential adjustments needed to conform

Veresen's historical financial statements to Pembina's and concluded that there were adjustments required to conform

Veresen's financial statements from US GAAP to IFRS ("IFRS adjustments"). Upon completion of the Arrangement,

Pembina will perform a further review and comparison of the accounting policies of Veresen and Pembina. From that

review, Pembina may identify differences between the accounting policies of the two companies that, when

conformed, could have a material impact on the financial statements of Pembina.

Certain reclassifications were made to align the presentation of Veresen's historical financial statements with

Pembina's current presentation, as set out in Note 6. The reclassifications have no impact on the historical statements

of income of Veresen and accordingly no impact on the pro forma statements of earnings of Pembina.

Note 4 Pro Forma Adjustments

(a) Pro Forma Purchase Price and Purchase Price Allocation

At the date of preparation of this pro forma financial information, certain pro forma adjustments have been

made as identified herein; however, the fair values of Veresen's identifiable assets and liabilities to be assumed and

the full impact of applying acquisition accounting have not been fully determined. After reflecting the pro forma

adjustments made herein, the excess of the purchase consideration over the adjusted book values of Veresen's net

assets has been presented as goodwill. It is expected that following closing of the Arrangement and once detailed

valuations and related calculations are completed, a material portion of the amount allocated to goodwill will be

attributable to property, plant and equipment, investments in jointly-controlled businesses, intangible assets, other

assets and liabilities and related deferred income tax balances. Some property, plant and equipment and intangible

assets are expected to be finite-lived and accordingly subject to amortization. The actual amount assigned to the fair

values of the identifiable assets and liabilities acquired will result in changes to earnings in periods subsequent to the

Arrangement, and those changes could be material.

Details of the Arrangement are as follows:

Maximum Pembina shares to be issued in the Arrangement (millions of shares) 99.5

Pembina closing share price as at April 28, 2017 (dollars) 43.5

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Arrangement consideration, pro forma net assets acquired and goodwill:

($millions)

Pembina share consideration 4,328

Pembina cash consideration 1,523

Pembina preferred shares issued to replace Veresen preferred shares 510

Total pro forma Arrangement consideration 6,361

Veresen net assets as at March 31, 2017, per Veresen's historical financial statements 2,781

Fair value adjustments

Increase long-term debt to fair value as at March 31, 2017 37

Fair value of Veresen net assets acquired 2,744

Calculated pro forma Arrangement goodwill 3,617

6,361

(b) Pro Forma Statement of Financial Position

The pro forma statement of financial position as at March 31, 2017 has been adjusted to give effect to the

consummation of the Arrangement and exchange of Veresen preferred shares to Pembina preferred shares with the

same terms and conditions, as if it had occurred on March 31, 2017. The following pro forma adjustments and IFRS

adjustments were made:

(i) Certain liabilities have been adjusted to fair values as described in Note 4(a). The pro forma excess

of the estimated Arrangement consideration over the fair value of Veresen's assets and liabilities

has been recorded as goodwill.

(ii) Veresen’s Investments held at cost of $1,804 million as of March 31, 2017 related to the Ruby

Pipeline preferred interest have been recorded as Investments in jointly-controlled businesses.

(iii) Asset retirement obligations ("ARO") under IFRS have been estimated for Veresen's property,

plant and equipment resulting in an increase of $12 million to both decommissioning provision

and property, plant and equipment. An ARO adjustment of $257 million relating to property, plant

and equipment owned by entities accounted for as Investments in jointly controlled businesses has

resulted in an increase and corresponding decrease to Investments in jointly controlled businesses.

(iv) Change in control payments of $79 million related to compensation were accrued in Trade payables

and accrued liabilities based on estimates by Pembina management. Cash was adjusted for

estimated transaction costs of $41 million.

(v) Adjustment to deferred income tax liabilities consists of the income tax effects related to change

in control payments related to executive compensation ($21 million) and transaction costs expected

to be incurred by Veresen and Pembina ($11 million).

(vi) In addition to (i), adjustment to deficit consists of the after income tax effects for compensation

and transaction expenses ($88 million).

(c) Pro Forma Statements of Earnings

The pro forma statements of earnings for the year ended December 31, 2016 and the three months ended

March 31, 2017 have been adjusted to give effect to the consummation of the Arrangement as if it had occurred on

January 1, 2016. The following pro forma adjustments were made:

(i) The interest expense on cash drawn on Pembina's line of credit for payments to Veresen

shareholders and change in control payments has been recorded. Net finance costs have been

increased by $36 million for the year ended December 31, 2016 and $9 million for the three months

ending March 31, 2017.

(ii) The excess of the fair values of Veresen's long-term debt over their carrying values were amortized

using the effective interest method over the remaining terms of the long-term debt. Decreased

finance costs of $9 million and $1 million were recorded for the year ended December 31, 2016

and for the three months ended March 31, 2017, respectively.

The excess of the fair values of the long-term debt held by Veresen's jointly controlled businesses

I-11

over the carrying values was amortized using the effective interest method over the remaining

terms of the long-term debt. Decreased finance costs of $12 million and $3 million were recorded

for the year ended December 31, 2016 and for the three months ended March 31, 2017, respectively

as adjustments to equity income.

(iii) The Ruby pipeline impairment of $103 million for the year ended December 31, 2016 has been

reversed as the fair value of the asset at March 31, 2017 has been pushed back to January 1, 2016

for purposes of the pro forma statements.

(iv) The Ruby pipeline has been accounted for as an equity investment for the purposes of the pro

forma statements. The Ruby equity interest consists of 50% voting unit ownership in the Ruby

pipeline with preferential rights to dividends and distributions. Equity income of $70 million and

$30 million has been recognized for the year ended December 31, 2016 and for the three months

ended March 31, 2017, net of depreciation expense incurred of $70 million and $18 million and

other expenses in those respective periods. The preferential dividend income of $121 million and

$30 million for the year ended December 31, 2016 and three months ended March 31, 2017,

respectively has been derecognized.

(v) Equity income has been adjusted for accretion expense relating to ARO adjustments of $5 million

and $1 million recorded for the year ended December 31, 2016 and for the three months ended

March 31, 2017, respectively.

(vi) Equity income has been adjusted for depreciation of property, plant and equipment of $6 million

and $2 million recognized for the year ended December 31, 2016 and for the three months ended

March 31, 2017, respectively.

(vii) Enacted or substantively enacted Canadian tax rate of 27% and US rate of 40% was used to

determine the income tax effect of the above pro forma adjustments. The enacted or substantively

enacted tax rate could be different than the tax rates assumed for the purpose of preparing this pro

forma financial information.

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Note 5 Earnings per Share Information

Pro forma net earnings per share

Year Ended

December 31, 2016

Three Months Ended

March 31, 2017

Basic and diluted net earnings per share (1)

Net earnings attributable to shareholders (millions) $414 $243

Weighted average shares (millions) 487 497

Net earnings per share (dollars) $.85 $.49 (1) Net earnings per share calculations are based on dollar amounts rounded to the nearest million and share amounts rounded to the nearest ten thousand.

Note 6 Reclassification

The following reclassifications were made to Pembina's historical financial statements:

(a) Pembina's Consolidated Statement of Financial Position: Equity accounted investment has been recast

on the balance sheet as Investments in jointly-controlled businesses.

(b) Pembina's Statements of Earnings: Share of profit from equity accounted investees has been recast as

equity income.

The following reclassifications were made to align the presentation of Veresen's historical financial

statements with Pembina's current presentation. The reclassifications have no impact on the historical net earnings

of Veresen.

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PEMBINA PIPELINE CORPORATION PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS RECLASSIFICATIONS

For the year ended December 31, 2016

UNAUDITED

Veresen

Reclassification

Amounts

Amount after

Reclassification Reference


2016 2016

Revenue 53 53 1

Equity income 149 (149) 2

Dividend income 121 (121) 3

Operating revenues 53 (53) 1

Operations and maintenance 24 (24) 4

Cost of sales 24 29 4

5 8

General and administrative 38 (38) 5

Impairment loss 103 (103) 6

Project development 133 (133) 7

Depreciation and amortization 19 (19) 8

Interest and other finance 39 (39) 9

Foreign exchange and other 2 (2) 10

Gross profit (loss) (31) 55 24


14 8

Project development 133 133 7

Results from operating activities (31) (130) (161)

Impairment loss 103 103 6

Finance costs 39 37 9

(2) 10

Earnings (loss) before equity income, dividend

income and income tax

(31) (270) (301)

Equity income 149 149 2

Dividend income 121 121 3

Earnings (loss) before income tax (31) (31)

Current taxes 11 11

Deferred taxes (recovery) (51) (51)

Income taxes (40) (40)

Earnings for the year ended before discontinued

operations

9 9

Discontinued operations loss (3) (3)

Earnings for the year 6 6

1 Operating revenues of $53 million to revenue 2 Equity income $149 from gross profit to earnings before income tax

3 Dividend income $121 million from gross profit to earnings before income tax

4 Operation and maintenance $24 million to cost of sales 5 General and administrative $38 million from gross profit to results from operating activities

6 Impairment loss $103 million from gross profit to earnings before finance costs and income tax

7 Project development $133 million from gross profit to results from operating activities 8 Depreciation and amortization of $19 million to general and administrative ($14 million) and cost of sales ($5 million)

9 Interest and other finance $39 million to finance costs 10 Foreign exchange and other income of $2 million to finance costs

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PEMBINA PIPELINE CORPORATION PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS RECLASSIFICATIONS

For the three month period ended March 31, 2017

UNAUDITED

Veresen

Reclassification

Amounts

Amount after


(in millions of Cdn dollars) 2017 2017

Revenue 12 12 1

Equity income 59 (59) 2

Dividend income 30 (30) 3

Operating revenues 12 (12) 1

Operations and maintenance 5 (5) 4

Cost of sales 5 6 4

1 7

General and administrative 9 (9) 5

Impairment loss

Project development 16 (16) 6

Depreciation and amortization 5 (5) 7

Interest and other finance 12 (12) 8

Gross profit 54 (48) 6


9 5

Project development 16 16 6

Results from operating activities 54 (77) (23)

Finance costs 12 12 8

Earnings before equity income, dividend income

and income tax

54 (89) (35)

Equity income 59 59 2

Dividend income 30 30 3

Earnings before income tax 54 54

Current taxes 3 3

Deferred taxes 10 10

Income taxes 13 13

Earnings for the period ended before discontinued

operations

41 41

Discontinued operations income 12 12

Earnings for the period 53 53

1 Operating revenues of $12 million to revenue

2 Equity income $59 from gross profit to earnings before income tax

3 Dividend income $30 million from gross profit to earnings before income tax 4 Operation and maintenance $5 million to cost of sales

5 General and administrative $9 million from gross profit to results from operating activities

6 Project development $16 million from gross profit to results from operating activities 7 Depreciation and amortization of $5 million to general and administrative ($4 million) and cost of sales ($1 million)

8 Interest and other finance $12 million to finance costs

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PEMBINA PIPELINE CORPORATION PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION RECLASSIFICATIONS

As at March 31, 2017

UNAUDITED

Veresen

Reclassification

Amounts

Amount after


(in millions of Cdn dollars) 31-Mar 31-Mar

2017 2017

ASSETS

Current Assets

Cash and cash equivalents 163 163

Accounts receivable and other 29 (29) 1

Trade receivable and other 29 29 1

Distributions receivable 65 65

Assets held for sale 779 779

Total current assets 1,036 1,036

Non-current assets

Property, plant & equipment 315 315

Intangible assets and goodwill 45 45 2

Investments in jointly-controlled businesses 1,535 1,535

Investments held at cost 1,804 1,804

Intangible assets 45 (45) 2

Due from jointly-controlled businesses 3 (3) 3

Other assets 2 (2) 3

Other receivables 5 5 3

TOTAL ASSETS 4,740 4,740

LIABILITIES

Current liabilities

Accounts payable and other 57 (57) 4

Deferred revenue 4 (4) 5

Trade payables and accrued liabilities 57 51 4

4 5

(10) 6

Taxes payable 10 10 6

Dividends payable 26 26

Loans and borrowings 4 4 7

Current portion of long-term senior debt 4 (4) 7

Liabilities associated with assets held for sale 173 173

Total current liabilities 264 264

Non-current liabilities

Loans and borrowings 1,425 1,425 8

Long-term senior debt 1,425 (1,425) 8

Deferred tax liabilities 223 223

Other long term liabilities 47 (47) 9

Other liabilities 47 47 9

Total Liabilities 1,959 1,959

EQUITY

Common share capital 3,482 3,482

Preferred share capital 536 536

Deficit (1,527) (1,527)

Additional paid-in capital 28 28

Accumulated other comprehensive income 262 262

Total Equity 2,781 2,781

TOTAL LIABILITIES & EQUITY 4,740 4,740

1 Accounts receivable of $29 million to trade receivable and other

2 Intangible assets of $45 million to intangible assets and goodwill

3 Due from jointly-controlled businesses ($3 million) and other assets ($2 million) to other receivables 4. Accounts payable and other of $57 million to trade payable and other

5 Deferred revenue of $4 million to trade payable and other6 Taxes payable of $10 million from accounts payable and other

7 Current portion of long term senior debt of $4 million to loans and borrowings (current portion)

8 Long term senior debt of $1,425 million to loans and borrowings9 Other long term liabilities of $47 million to other liabilities

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APPENDIX J

INFORMATION CONCERNING VERESEN INC.

TABLE OF CONTENTS

NOTICE TO READER .............................................................................................................................................J-2 FORWARD-LOOKING STATEMENTS .................................................................................................................J-2 NON-U.S. GAAP MEASURES ................................................................................................................................J-2 DOCUMENTS INCORPORATED BY REFERENCE ............................................................................................J-2 VERESEN INC. ........................................................................................................................................................J-3 RECENT DEVELOPMENTS ...................................................................................................................................J-3 DESCRIPTION OF SECURITIES ............................................................................................................................J-4 CONSOLIDATED CAPITALIZATION OF VERESEN ..........................................................................................J-5 PRIOR SALES ..........................................................................................................................................................J-6 PRICE RANGE AND TRADING VOLUME OF SECURITIES .............................................................................J-6 INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS ........................................................J-7 AUDITORS, REGISTRAR AND TRANSFER AGENT ..........................................................................................J-7 RISK FACTORS .......................................................................................................................................................J-8 ADDITIONAL INFORMATION..............................................................................................................................J-8

J-2

NOTICE TO READER

Unless the context indicates otherwise, capitalized terms which are used in this Appendix J and not otherwise defined

in this Appendix J have the meanings given to such terms under the heading “Glossary of Terms” in the Information

Circular.


Certain statements contained in this Appendix J, and in the documents incorporated by reference into this Appendix

J, constitute forward-looking statements and forward-looking information (collectively referred to as “forward-

looking statements”) within the meaning of applicable securities laws. Such forward-looking statements relate to

future events or Veresen’s future performance. See “Forward-Looking Statements” in the Information Circular.

Readers should also carefully consider the matters and cautionary statements discussed under the heading “Risk

Factors” in the Information Circular, and under the heading “Risk Factors” in this Appendix J and the Veresen AIF.

NON-U.S. GAAP MEASURES

In certain documents incorporated by reference into this Appendix J, there are references to the terms EBIDTA,

distributable cash, distributable cash per Common Share and adjusted net income attributable to Common Shares.

These non-U.S. GAAP financial measures do not have standardized meanings prescribed by U.S. GAAP and are

therefore unlikely to be comparable to similar measures presented by other issuers. Veresen cautions Shareholders not

to consider these non-U.S. GAAP financial measures as an alternative to, or more meaningful than measures of

financial performance as determined in accordance with U.S. GAAP. Veresen further cautions Shareholders not to

place undue reliance on any one financial measure.

For more information, see the Veresen AIF, the Veresen Annual MD&A and the Veresen Interim MD&A, each of

which is incorporated herein by reference.

DOCUMENTS INCORPORATED BY REFERENCE

Information has been incorporated by reference in this Information Circular, including this Appendix “J”,

from documents filed with securities commissions or similar authorities in Canada. Copies of the documents

incorporated herein by reference may be obtained on request without charge from Autumn Howell, Corporate

Secretary of Veresen, at Suite 900, Livingston Place, 222 - 3rd Avenue S.W., Calgary, Alberta T2P 0B4, Phone: (403)

296-0140 or (403) 213-3633 (Investor Relations). In addition, copies of the documents incorporated herein by

reference may be obtained by accessing the disclosure documents available on the SEDAR website at www.sedar.com.

The following documents of Veresen are filed with the various securities commissions or similar authorities in the

provinces of Canada and are specifically incorporated by reference into and form an integral part of the Information

Circular:

(a) the Veresen AIF;

(b) the Veresen Annual Financial Statements;

(c) the Veresen Interim Financial Statements;

(d) the Veresen Annual MD&A;

(e) the Veresen Interim MD&A;

(f) the information circular of Veresen dated March 14, 2017 relating to the annual meeting of

shareholders held on May 3, 2017;

(g) the material change report of Veresen dated February 27, 2017; and

(h) the material change report of Veresen dated May 1, 2017.

J-3

Any documents of the type required by National Instrument 44-101 – Short Form Prospectus Distributions to be

incorporated by reference in a short form prospectus, including any material change reports (excluding confidential

reports), comparative interim financial statements, comparative annual financial statements and the auditor’s report

thereon, management’s discussion and analysis of financial condition and results of operations, information circulars,

annual information forms, marketing materials and business acquisition reports filed by Veresen with the securities

commissions or similar authorities in Canada subsequent to the date of the Information Circular and before the

Effective Date, are deemed to be incorporated by reference in this Information Circular including Appendix J.

Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall

be deemed to be modified or superseded for the purposes of the Information Circular to the extent that a

statement contained herein or in any other subsequently filed document which also is, or is deemed to be,

incorporated by reference herein modifies or supersedes such statement. The modifying or superseding

statement need not state that it has modified or superseded a prior statement or include any other information

set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement

shall not be deemed an admission for any purposes that the modified or superseded statement, when made,

constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact

that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances

in which it was made. Any statement so modified or superseded shall not be deemed, except as so modified or

superseded, to constitute a part of this Information Circular.

VERESEN INC.

Veresen is a publicly traded corporation based in Calgary, Alberta, that owns and operates energy infrastructure assets

across North America. Veresen is engaged in two principal businesses:

(a) a pipeline transportation business comprised of interests in three pipeline systems, the Alliance

Pipeline, the Ruby Pipeline and the Alberta Ethane Gathering System; and

(b) a midstream business comprised of a partnership interest in Veresen Midstream, which owns assets

in western Canada, and an ownership interest in Aux Sable, which owns a world-class NGL

extraction facility near Chicago and other natural gas and NGL processing facilities.

Veresen is also actively developing a number of projects including the Jordan Cove LNG export terminal proposed to

be constructed in Coos Bay, Oregon, and the Pacific Connector Gas Pipeline proposed to originate in Malin, Oregon

and terminate at the related Jordan Cove LNG export terminal, and the ethane storage facility currently under

construction near Burstall, Saskatchewan.

Veresen Inc. was incorporated as 1560941 Alberta Ltd. on October 1, 2010 pursuant to the provisions of the ABCA.

On October 15, 2010, 1560941 Alberta Ltd. filed articles of amendment to change its name to Veresen Inc. 1560941

Alberta Ltd. was incorporated for the sole purpose of participating in a plan of arrangement whereby Fort Chicago

Energy Partners L.P. was converted to a corporate structure, as Veresen Inc., effective January 1, 2011.

For a complete description of Veresen’s organizational structure and material subsidiaries, see “Subsidiaries and

Operating Entities” in the Veresen AIF, incorporated by reference into this Information Circular. In addition, further

details concerning Veresen, including information with respect to Veresen’s assets, operations and history, are

provided in the Veresen AIF. Readers are encouraged to thoroughly review this document as it contains important

information about Veresen.

Veresen’s head, principal and registered office is located at Suite 900, Livingston Place, 222 - 3rd Avenue S.W.,

Calgary, Alberta T2P 0B4.

RECENT DEVELOPMENTS

The Arrangement

On May 1, 2017, Veresen entered into the Arrangement Agreement with Pembina, pursuant to which Pembina

proposes to acquire all of the issued and outstanding Veresen Shares by way of a plan of arrangement under the ABCA.

J-4

For a full description of the Arrangement and the Arrangement Agreement, see “The Arrangement” and “Pro Forma

Information of Pembina after Giving Effect to the Arrangement” in the Information Circular. Also see Appendix I –

“Pro Forma Consolidated Financial Statements of Pembina Pipeline Corporation” and Appendix K – “Information

Concerning Pembina Pipeline Corporation”.

Veresen Power Business Sale

On April 13, 2017, Veresen announced that it closed the previously announced sale of its gas-fired power assets

pursuant to the Veresen Power Business Sale. Veresen continues to expect the sale of its remaining power assets

pursuant to the Veresen Power Business Sale to be completed during the second quarter of 2017, subject to the receipt

of all necessary approvals. See “Our Power Business” in the Veresen AIF.

DESCRIPTION OF SECURITIES

Veresen is entitled to issue an unlimited number of Common Shares and a number of Preferred Shares, issuable in

series, to be limited to an amount equal to not more than one-half of the number of Common Shares issued and

outstanding at the time of issuance of such Preferred Shares. Veresen currently has outstanding Common Shares,

Veresen Series A Shares, Veresen Series C Shares and Veresen Series E Shares.

The following is a summary of the rights, privileges, restrictions and conditions attaching to the securities that

comprise Veresen’s existing share capital.

Common Shares

Each Common Share entitles the holder to one vote at all meetings of Common Shareholders, except meetings at

which only holders of a specified class of shares are entitled to vote. Subject to the prior rights and privileges attaching

to any other class of shares of Veresen, holders of Common Shares have the right to receive any dividend declared by

the Board of Directors on the Common Shares and the right to receive the remaining property and assets of Veresen

upon dissolution.

On January 1, 2011, Veresen implemented a shareholder rights plan (the “Existing Rights Plan”), the terms and

conditions of which are set out in the Shareholder Rights Plan Agreement dated as of January 1, 2011 (“2011 Rights

Plan Agreement”) between Veresen and Computershare Trust Company of Canada, as rights agent (the “Rights

Agent”). At the annual meeting of Common Shareholders held on May 6, 2014, the Common Shareholders approved

the continuation of the Existing Rights Plan until the termination of the annual meeting of Common Shareholders in

the year 2017 and the Amended and Restated Shareholder Rights Plan Agreement dated as of May 6, 2014 (the “2014

Rights Plan Agreement”) between Veresen and the Rights Agent, which amended and restated the 2011 Rights Plan

Agreement, and continued the rights issued thereunder. At the annual meeting of Common Shareholders held on May

3, 2017, the Common Shareholders approved the continuation of the Existing Rights Plan until the termination of the

annual meeting of shareholders in the year 2020 and the Amended and Restated Shareholder Rights Plan Agreement

dated as of May 3, 2017 (the “2017 Rights Plan Agreement”) between Veresen and the Rights Agent, which amended

and restated the 2014 Rights Plan Agreement, and continued the rights issued thereunder. The 2017 Rights Plan

Agreement provides that it will terminate following the termination of the annual meeting of Common Shareholders

in the year 2020 unless the continued existence of the Existing Rights Plan is ratified at such annual meeting.

Preferred Shares

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 the Board of Directors, provided that the

number of Preferred Shares of all series shall be limited in number to an amount equal to not more than one-half of

the Common Shares issued and outstanding at the time of issuance of such Preferred Shares. Subject to the provisions

of the ABCA, the Board of Directors may fix from time to time, before the issue thereof, the designation, rights,

privileges, restrictions and conditions attaching to each series of the Preferred Shares.

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Series A Preferred Shares

In February 2012, Veresen issued 8,000,000 Veresen Series A Shares. The holders of Veresen Series A Shares are

entitled to receive fixed cumulative dividends at an annual rate of 4.40%, payable quarterly, commencing June 30,

2012, for an initial period up to but excluding September 30, 2017, as and when declared by the Board of Directors.

The dividend rate will reset on September 30, 2017 and every five years thereafter at a rate equal to the sum of the

then five-year Government of Canada bond yield plus 2.92%. The Veresen Series A Shares are redeemable by

Veresen, at its option, on September 30, 2017 and on September 30 of every fifth year thereafter.

Holders of Veresen Series A Shares will have the right to convert all or any part of their shares into the Veresen Series

B Shares subject to certain conditions, on September 30, 2017, and on September 30 of every fifth year thereafter.

The holders of Veresen Series B Shares will be entitled to receive quarterly floating rate cumulative dividends, as and

when declared by the Board of Directors, at a rate equal to the sum of the then 90-day Government of Canada treasury

bill rate plus 2.92%.

Series C Preferred Shares

In October 2013, Veresen issued 6,000,000 Veresen Series C Shares. The holders of Veresen Series C Shares are

entitled to receive fixed cumulative dividends at an annual rate of 5.00%, payable quarterly, commencing December

31, 2013, for an initial period up to but excluding March 31, 2019, as and when declared by the Board of Directors.

The dividend rate will reset on March 31, 2019 and every five years thereafter at a rate equal to the sum of the then

five-year Government of Canada bond yield plus 3.01%. The Veresen Series C Shares are redeemable by Veresen, at

its option, on March 31, 2019 and on March 31 of every fifth year thereafter.

Veresen Series C Shares will have the right to convert all or any part of their shares into the Veresen Series D Shares

subject to certain conditions, on March 31, 2019, and on March 31 of every fifth year thereafter. The holders of

Veresen Series D Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared

by the Board of Directors, at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus

3.01%.

Series E Preferred Shares

In April 2015, Veresen issued 8,000,000 Veresen Series E Shares. The holders of Veresen Series E Shares are entitled

to receive fixed cumulative dividends at an annual rate of 5.00%, payable quarterly, commencing June 30, 2015, for

an initial period up to but excluding June 30, 2020, as and when declared by the Board of Directors. The dividend rate

will reset on June 30, 2020 and every five years thereafter at a rate equal to the sum of the then five-year Government

of Canada bond yield plus 4.27%. The Veresen Series E Shares are redeemable by Veresen, at its option, on June 30,

2020 and on June 30 of every fifth year thereafter.

Holders of Veresen Series E Shares will have the right to convert all or any part of their shares into Veresen Series F

Shares subject to certain conditions, on June 30, 2020, and on June 30 of every fifth year thereafter. The holders of

Veresen Series F Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared

by the Board of Directors, at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus

4.27%.

CONSOLIDATED CAPITALIZATION OF VERESEN

There have been no material changes in the share capital or indebtedness of Veresen on a consolidated basis since

March 31, 2017, other than Veresen’s outstanding indebtedness under its revolving credit facility was reduced by

approximately $235 million on April 17, 2017 utilizing net proceeds received from the sale of Veresen’s gas-fired

power assets pursuant to the Veresen Power Business Sale.

See the Veresen Interim Financial Statements and Veresen Interim MD&A incorporated by reference into this

Information Circular for more information about Veresen’s consolidated capitalization.

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PRIOR SALES

Veresen has not sold or issued any Common Shares or Preferred Shares or securities convertible into Common Shares

or Preferred Shares during the 12 month period prior to the date of the Information Circular other than as follows:

an aggregate of 4,746,202 Common Shares were issued during this period pursuant to Veresen’s Premium

DividendTM and Dividend Reinvestment Plan at a weighted average issue price of $10.6834 per Common

Share for aggregate consideration of approximately $50.7 million; and

an aggregate of 23,926 Common Shares were issued in settlement of Veresen RSUs pursuant to the terms of

the Veresen LTIP.

PRICE RANGE AND TRADING VOLUME OF SECURITIES

Common Shares

The Common Shares are listed and trade on the TSX under the symbol “VSN”. The following table sets forth the price

range and trading volume of the Common Shares on the TSX as reported by the TSX for the periods indicated.

Price Range

Date High ($) Low ($) Trading Volume

2016 June 11.16 9.97 23,785,387

July 11.56 10.51 14,664,679 August 13.19 10.76 24,916,904

September 13.525 12.35 22,820,257

October 13.78 11.81 17,281,172 November 12.95 11.62 22,302,033

December 13.27 11.40 24,039,171

2017 January 14.13 12.74 18,730,376

February 14.41 13.02 21,131,317

March 14.73 13.23 21,178,304 April 16.16 14.56 16,607,690

May 18.76 17.92 70,858,700

June (1-5) 18.66 18.32 3,266,760

Veresen Series A Shares

The Veresen Series A Shares are listed and trade on the TSX under the symbol “VSN.PR.A”. The following table sets

forth the prices range and the trading volume of the Veresen Series A Shares on the TSX as reported by the TSX for

the periods indicated.

Price Range


2016

June 14.60 13.39 294,836

July 14.95 13.77 190,359 August 15.28 14.15 136,543

September 15.04 14.37 120,389

October 15.75 14.30 180,666 November 16.28 15.56 358,892

December 18.02 16.02 297,881

2017 January 19.97 17.83 892,509

February 20.98 19.60 130,791

March 21.40 20.11 125,370 April 21.99 20.90 184,093

May 23.11 20.25 192,065

June (1-5) 20.38 19.94 7,606

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Veresen Series C Shares

The Veresen Series C Shares are listed and trade on the TSX under the symbol “VSN.PR.C”. The following table sets

forth the prices range and the trading volume of the Veresen Series C Shares on the TSX as reported by the TSX for


Price Range


2016

June 16.61 14.74 94,094 July 16.84 15.68 136,444

August 18.01 16.12 177,723

September 17.35 16.72 153,133 October 18.46 16.98 116,117

November 19.15 18.30 215,935

December 21.00 19.03 182,888

2017

January 22.80 21.08 132,273

February 23.00 22.25 95,111 March 23.58 22.21 120,838

April 23.70 22.37 57,734

May 24.14 22.32 99,311 June (1-5) 22.51 22.18 1,411

Veresen Series E Shares

The Veresen Series E Shares are listed and trade on the TSX under the symbol “VSN.PR.E”. The following table sets

forth the prices range and the trading volume of the Veresen Series E Shares on the TSX as reported by the TSX for


Price Range


2016 June 21.04 20.05 185,877

July 20.92 20.25 78,846

August 21.99 18.05 144,267 September 21.69 18.76 202,586

October 22.83 20.05 133,218

November 23.22 20.35 165,213 December 24.12 20.65 165,139

2017

January 24.79 23.06 118,141 February 24.75 24.02 249,769

March 24.82 24.09 332,038

April 25.10 24.06 185,996 May 25.45 24.60 637,123

June (1-5) 24.97 24.75 25,825

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

Other than as set forth under “Interests of Certain Persons of Companies in the Arrangement” in the Information

Circular, there were no material interests, direct or indirect, of Veresen’s directors or executive officers, or any director

or executive officer of a subsidiary of Veresen or any person who beneficially owns, or controls or directs, directly or

indirectly, more than 10% of the outstanding Common Shares, or any associate or affiliate of such persons, in any

transaction since the commencement of Veresen’s last completed financial year or in any proposed transaction which

has materially affected, or would materially affect, Veresen or any of its subsidiaries.

AUDITORS, REGISTRAR AND TRANSFER AGENT

The auditors of Veresen are PricewaterhouseCoopers LLP, Chartered Accountants, Suite 3100, 111 – 5th Avenue

S.W., Calgary, Alberta T2P 5L3.

J-8

Computershare Trust Company of Canada, at its principal offices in Calgary, Alberta and Toronto, Ontario is the

registrar and transfer agent of the Common Shares and Preferred Shares.

RISK FACTORS

An investment in the securities of Veresen is subject to certain risks. Shareholders should carefully consider the risk

factors described under the heading “Risk Factors” in the Veresen AIF, which incorporated by reference herein, the

risk factors described under the heading “Risk Factors” in the Pembina AIF, which is incorporated by reference in

Appendix K to this Information Circular, as well as the risk factors set forth elsewhere in this Information Circular. If

any of the identified risks were to materialize, Veresen’s business, financial position, results and/or future operations

may be materially affected.

ADDITIONAL INFORMATION

Additional information relating to Veresen is available on SEDAR at www.sedar.com. Financial information

concerning Veresen is provided in the Veresen Annual Financial Statements and the Veresen Annual MD&A, which

can be accessed on SEDAR at www.sedar.com.

K-1

APPENDIX K

INFORMATION CONCERNING PEMBINA PIPELINE CORPORATION

TABLE OF CONTENTS

NOTICE TO READER ........................................................................................................................................... K-2 FORWARD-LOOKING STATEMENTS ............................................................................................................... K-2 NON-GAAP MEASURES ...................................................................................................................................... K-2 DOCUMENTS INCORPORATED BY REFERENCE .......................................................................................... K-2 PEMBINA PIPELINE CORPORATION ................................................................................................................ K-3 RECENT DEVELOPMENTS ................................................................................................................................. K-3 DESCRIPTION OF SECURITIES .......................................................................................................................... K-4 CONSOLIDATED CAPITALIZATION OF PEMBINA ........................................................................................ K-6 PRIOR SALES ........................................................................................................................................................ K-6 PRICE RANGE AND TRADING VOLUME OF SECURITIES ........................................................................... K-7 INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS ...................................................... K-8 AUDITORS, REGISTRAR AND TRANSFER AGENT ........................................................................................ K-9 RISK FACTORS ..................................................................................................................................................... K-9 ADDITIONAL INFORMATION............................................................................................................................ K-9

K-2

NOTICE TO READER

Unless the context indicates otherwise, capitalized terms which are used in this Appendix K and not otherwise

defined in this Appendix K have the meanings given to such terms under the heading "Glossary of Terms" in this



Certain statements contained in this Appendix K, and in the documents incorporated by reference into this Appendix

K, constitute forward-looking statements and forward-looking information (collectively referred to as "forward-

looking statements") within the meaning of applicable securities laws. Such forward-looking statements relate to

future events or Pembina's future performance. See "Forward-Looking Statements" in this Information Circular.

Readers should also carefully consider the matters and cautionary statements discussed under the heading "Risk

Factors" in this Information Circular, and under the heading "Risk Factors" in this Appendix K and the Pembina

AIF.

NON-GAAP MEASURES

In certain documents incorporated by reference into this Appendix K, there are references to the terms "net

revenue", "adjusted EBITDA" (adjusted earnings before interest, taxes, depreciation and amortization), "adjusted

cash flow from operating activities", "cash flow from operating activities per common share", "adjusted cash flow

from operating activities per common share" (also referred to as "cash flow per share" and "adjusted cash flow per

share", respectively), "operating margin", and "total enterprise value". These terms are considered Non-GAAP

Financial Measures and do not have any standardized meaning as prescribed by Canadian generally accepted

accounting principles ("GAAP") and, therefore, they may not be comparable with the calculation of similar

measures presented by other issuers and should not be construed as an alternative to revenue, earnings, cash flow

from operating activities, gross profit or other measures of financial performance calculated in accordance with

GAAP.

These terms have the meanings as set out in the Pembina Annual MD&A which is incorporated by reference herein.

The specific rationale for , and incremental information associated with each Non-GAAP Financial Measure,

including a reconciliation of the most directly comparable measure calculated in accordance with GAAP, are also

discussed therein. Pembina further cautions Pembina shareholders not to place undue reliance on any one financial

measure.

For more information, see the Pembina AIF, the Pembina Annual MD&A and the Pembina Interim MD&A, each of

which is incorporated herein by reference.

DOCUMENTS INCORPORATED BY REFERENCE

Information has been incorporated by reference in this Information Circular, including this Appendix "K",

from documents filed with securities commissions or similar authorities in Canada. Copies of the documents

incorporated herein by reference may be obtained on request without charge from the Corporate Secretary of

Pembina at #4000, 585 - 8th Avenue S.W., Calgary, Alberta, Canada, T2P 1G1, Phone: (403) 231-7500. In addition,

copies of the documents incorporated herein by reference may be obtained by accessing the disclosure documents

available under Pembina's profile on the SEDAR website at www.sedar.com.

The following documents of Pembina are filed with the various securities commissions or similar authorities in the

provinces of Canada and are specifically incorporated by reference into and form an integral part of this Information

Circular:

(a) the Pembina AIF;

(b) the Pembina Annual Financial Statements;

(c) the Pembina Interim Financial Statements;

K-3

(d) the Pembina Annual MD&A;

(e) the Pembina Interim MD&A;

(f) the information circular of Pembina dated March 16, 2017 relating to the annual meeting of

shareholders held on May 5, 2017; and

(g) the material change report of Pembina dated May 3, 2017.

Any documents of the type required by National Instrument 44-101 – Short Form Prospectus Distributions to be

incorporated by reference in a short form prospectus, including any material change reports (excluding confidential

reports), comparative interim financial statements, comparative annual financial statements and the auditor's report

thereon, management's discussion and analysis of financial condition and results of operations, information

circulars, annual information forms, marketing materials and business acquisition reports filed by Pembina with the

securities commissions or similar authorities in Canada subsequent to the date of this Information Circular and

before the Effective Date, are deemed to be incorporated by reference in this Information Circular including

Appendix K.

Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall

be deemed to be modified or superseded for the purposes of this Information Circular to the extent that a

statement contained herein or in any other subsequently filed document which also is, or is deemed to be,

incorporated by reference herein modifies or supersedes such statement. The modifying or superseding

statement need not state that it has modified or superseded a prior statement or include any other

information set forth in the document that it modifies or supersedes. The making of a modifying or

superseding statement shall not be deemed an admission for any purposes that the modified or superseded

statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission

to state a material fact that is required to be stated or that is necessary to make a statement not misleading in

light of the circumstances in which it was made. Any statement so modified or superseded shall not be

deemed, except as so modified or superseded, to constitute a part of this Information Circular.


Pembina Pipeline Corporation is a leading transportation and midstream service provider that has been serving

North America's energy industry for over 60 years. Pembina owns and operates an integrated system of pipelines

that transport various products derived from natural gas and hydrocarbon liquids produced primarily in western

Canada. Pembina also owns and operates gas gathering and processing facilities and an oil and natural gas liquids

infrastructure and logistics business. Pembina's integrated assets and commercial operations along the majority of

the hydrocarbon value chain allow it to offer a full spectrum of midstream and marketing services to the energy

sector. Pembina is committed to working with its community and aboriginal neighbours, while providing value for

investors in a safe, environmentally responsible manner. This balanced approach to operating ensures the trust

Pembina builds among all of its stakeholders is sustainable over the long term. See "Description of Pembina's

Business and Operations" in the Pembina AIF and "Conventional Pipelines – Business Overview", "Oil Sands &

Heavy Oil – Business Overview", "Gas Services – Business Overview" and "Midstream – Business Overview" in the

Pembina Annual MD&A, which documents are incorporated by reference herein, for a description of the business

and operations of Pembina and the operating subsidiaries of Pembina.

The registered office and principal place of business of Pembina is at #4000, 585 - 8th Avenue S.W., Calgary,

Alberta, Canada, T2P 1G1.

RECENT DEVELOPMENTS

The Arrangement

On May 1, 2017, Pembina entered into the Arrangement Agreement with Veresen, pursuant to which Pembina

proposes to acquire all of the issued and outstanding Veresen Shares by way of a plan of arrangement under the

ABCA. For a full description of the Arrangement and the Arrangement Agreement, see "The Arrangement" and

"Pro Forma Information of Pembina after Giving Effect to the Arrangement" in this Information Circular. Also see

K-4

Appendix I – "Pro Forma Consolidated Financial Statements of Pembina Pipeline Corporation" and Appendix J –

"Information Concerning Veresen Inc."

On May 15, 2017, Pembina announced that it and Petrochemical Industries Company K.S.C. of Kuwait had

executed 50/50 joint venture agreements for the previously announced proposed integrated propylene and

polypropylene production facility in Sturgeon County, Alberta (the "Project"), which include binding terms in

support of the Project and have formed a new entity, Canada Kuwait Petrochemical Corporation ("CKPC").

Additionally, Pembina announced that CKPC will proceed with activities for front end engineering design for the

Project.

DESCRIPTION OF SECURITIES

The authorized capital of Pembina consists of an unlimited number of Pembina Common Shares, a number of

Pembina Class A Preferred Shares, issuable in series, not to exceed twenty percent of the number of issued and

outstanding Pembina Common Shares at the time of issuance of any Pembina Class A Preferred Shares, and an

unlimited number of Pembina Class B Preferred Shares (together with the Pembina Class A Shares, the "Pembina

Preferred Shares") which are deemed to be automatically redeemed if a holder ceases to be a wholly-owned

subsidiary of Pembina.

The following is a summary of the rights, privileges, restrictions and conditions attaching to the Pembina Common

Shares, the Pembina Class A Preferred Shares and the Pembina Class B Preferred Shares.

Pembina Common Shares

Holders of Pembina Common Shares ("Pembina Common Shareholders") are entitled to receive notice of and to

attend all meetings of Pembina Common Shareholders and to one vote at such meetings for each Pembina Common

Share held. Pembina Common Shareholders are, at the discretion of the Pembina Board and subject to applicable

legal restrictions, entitled to receive any dividends declared by the Pembina Board on the Pembina Common Shares,

and are entitled to share in the remaining property of Pembina upon liquidation, dissolution or winding-up, subject

to the rights of the Pembina Class A Preferred Shares and Pembina Class B Preferred Shares.

Pembina has a shareholder rights plan (the "Plan") that was adopted to ensure, to the extent possible, that all

Pembina Common Shareholders are treated fairly in connection with any take-over bid for Pembina and to ensure

that the Pembina Board is provided with sufficient time to evaluate unsolicited take-over bids and to explore and

develop alternatives to maximize Pembina Common Shareholder value. The Plan creates a right that attaches to each

present and subsequently issued Pembina Common Share. Until the Separation Time (as defined in the Plan), which

typically occurs at the time of an unsolicited take-over bid, whereby a person acquires or attempts to acquire 20

percent or more of the Pembina Common Shares, the rights are not separable from the Pembina Common Shares,

are not exercisable and no separate rights certificates are issued. Each right entitles the holder, other than the 20

percent acquirer, from and after the separation time and before certain expiration times, to acquire one Pembina

Common Share at a substantial discount to the market price at the time of exercise. The Pembina Board may waive

the application of the Plan in certain circumstances. The Plan was reconfirmed by Pembina Common Shareholders

at Pembina's 2016 annual meeting and must be reconfirmed at every third annual meeting thereafter. A copy of the

agreement relating to the current Plan has been filed on Pembina's SEDAR and EDGAR profiles on May 13, 2016

and May 31, 2016, respectively.

Pembina Class A Preferred Shares

Pembina Class A Preferred Shares were not intended to and will not be used by Pembina for anti-takeover purposes

without Pembina Common Shareholder approval. Subject to certain limitations, the Pembina Board may, from time

to time, issue Pembina Class A Preferred Shares in one or more series and determine for any such series, its

designation, number of shares and respective rights, privileges, restrictions and conditions. The Pembina Class A

Preferred Shares as a class have, among others, the provisions described below.

Each series of Pembina Class A Preferred Shares shall rank on parity with every other series of Pembina Class A

Preferred Shares, and shall have priority over the Pembina Common Shares, the Pembina Class B Preferred Shares

and any other class of shares ranking junior to the Pembina Class A Preferred Shares with respect to redemption, the

K-5

payment of dividends, the return of capital and the distribution of assets in the event of the liquidation, dissolution or

winding-up of Pembina. The Pembina Class A Preferred Shares of any series may also be given such preferences,

not inconsistent with the provisions thereof, over the Pembina Common Shares, the Pembina Class B Preferred

Shares and over any other class of shares ranking junior to the Pembina Class A Preferred Shares, as may be

determined by the Pembina Board.

In the event of the liquidation, dissolution or winding-up of Pembina, if any cumulative dividends or amounts

payable on a return of capital in respect of a series of Pembina Class A Preferred Shares are not paid in full, the

Pembina Class A Preferred Shares of all series shall participate rateably in: (a) the amounts that would be payable on

such shares if all such dividends were declared at or prior to such time and paid in full; and (b) the amounts that

would be payable in respect of the return of capital as if all such amounts were paid in full; provided that if there are

insufficient assets to satisfy all such claims, the claims of the holders of the Pembina Class A Preferred Shares with

respect to repayment of capital shall first be paid and satisfied and any assets remaining shall be applied towards the

payment and satisfaction of claims in respect of dividends. After payment to the holders of any series of Pembina

Class A Preferred Shares of the amount so payable, the holders of such series of Pembina Class A Preferred Shares

shall not be entitled to share in any further distribution of the property or assets of Pembina in the event of the

liquidation, dissolution or winding-up of Pembina.

Holders of any series of Pembina Class A Preferred Shares will not be entitled (except as otherwise provided by law

and except for meetings of the holders of Pembina Class A Preferred Shares or a series thereof) to receive notice of,

attend at, or vote at any meeting of shareholders of Pembina, unless the Pembina Board shall determine otherwise in

the terms of a particular series of Pembina Class A Preferred Shares, in which case voting rights shall only be

provided in circumstances where Pembina shall have failed to pay a certain number of dividends on such series of

Pembina Class A Preferred Shares, which determination and number of dividends and any other terms in respect of

such voting rights, shall be determined by the Pembina Board and set out in the designations, rights, privileges,

restrictions and conditions of such series of Pembina Class A Preferred Shares. Other than as set out below, the

material characteristics of each series of Pembina Class A Preferred Shares are substantially the same.

The table below outlines the number of outstanding, and the material provisions of, each of the issued series of

Pembina Class A Preferred Shares.

Series Issue Date

Issued and

Outstanding Amount (C$)

Annual

Dividend

Rate(1)

Redemption

and

Conversion

Option

Date(2)(3)

Reset

Spread(3)

Per Share

Base

Redemption/

Liquidation

Value

Right to

Convert

on a one

for one

basis(4)

1 July 26, 2013 10,000,000 $250,000,000 $1.0625 Dec. 1, 2018 2.47% $25.00 Series 2

3 Oct. 2, 2013 6,000,000 $150,000,000 $1.1750 Mar. 1, 2019 2.60% $25.00 Series 4

5 Jan. 16, 2014 10,000,000 $250,000,000 $1.2500 June 1, 2019 3.00% $25.00 Series 6

7 Sept. 11, 2014 10,000,000 $250,000,000 $1.1250 Dec. 1, 2019 2.94% $25.00 Series 8

9 Apr. 10, 2015 9,000,000 $225,000,000 $1.1875 Dec. 1, 2020 3.91% $25.00 Series 10

11 Jan. 15, 2016 6,800,000 $170,000,000 $1.4375 Mar. 1, 2021 5.00%(5) $25.00 Series 12

13 Apr. 27, 2016 10,000,000 $250,000,000 $1.4375 June 1, 2021 4.96%(5) $25.00 Series 14

Notes:

(1) The holder is entitled to receive a fixed, cumulative preferential dividend per year payable quarterly on the 1st day of March, June,

September and December, as declared by the Pembina Board.

(2) Pembina may, at its option, redeem all or a portion of an outstanding series of Pembina Class A Preferred Shares on the Redemption Option Date and every fifth year thereafter for the Base Redemption Value per share plus all accrued and unpaid dividends.

(3) The dividend rate will reset on the Redemption and Conversion Option Date and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus the applicable Reset Spread noted above.

(4) A holder has the right, subject to certain conditions, to convert their Pembina Class A Preferred Shares into cumulative redeemable

Pembina Class A Preferred Shares of a specified series on the Conversion Option date and every fifth anniversary thereafter. The even numbered series of Pembina Class A Preferred Shares carry the right to receive floating, cumulative preferential dividends at a

rate, reset quarterly, equal to the sum of the then 90 day Government of Canada treasury bill rate plus the applicable reset spread.

(5) The dividend rate will reset on the Redemption and Conversion Option Date and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus the applicable Reset Spread noted above, provided that in any event, the

rate for the Pembina Series 11 Shares and Pembina Series 13 Shares shall not be less than 5.75 percent.

K-6

Pembina Class B Preferred Shares

Pembina Class B Preferred Shares were not intended to and will not be used by Pembina for anti-takeover purposes

without Pembina Common Shareholder approval. If at any time a holder of Pembina Class B Preferred Shares

ceases to be, or is not, a direct or indirect wholly owned subsidiary of Pembina, Pembina, with or without

knowledge of such event, shall be deemed, without further action or notice, to have automatically redeemed all of

the Pembina Class B Preferred Shares held by such holder in exchange for the redemption amount as set out in

Pembina's articles per share together with all declared but unpaid dividends thereon (the "Redemption Amount").

All of the issued Pembina Class B Preferred Shares were cancelled pursuant to the amalgamation between Pembina

and its wholly-owned subsidiary Alberta Oil Sands Pipeline Ltd. on October 1, 2015. There are currently no

Pembina Class B Preferred Shares outstanding.

Holders of Pembina Class B Preferred Shares are not entitled to receive notice of, to attend or to vote at any meeting

of the Pembina shareholders, except as required by law. The Pembina Class B Preferred Shares are retractable and

redeemable at the option of the holder thereof and Pembina, respectively.

The holders of Pembina Class B Preferred Shares shall be entitled to receive, if and when declared by the Pembina

Board, preferential non-cumulative dividends and upon the liquidation, dissolution or winding-up of Pembina, the

holders of Pembina Class B Preferred Shares shall be entitled to receive for each such share, in priority to the

holders of Pembina Common Shares, the Redemption Amount.

CONSOLIDATED CAPITALIZATION OF PEMBINA

There have been no material changes in the share capital or indebtedness of Pembina on a consolidated basis since

March 31, 2017. See the Pembina Interim Financial Statements and Pembina Interim MD&A incorporated by

reference into this Information Circular for more information about Pembina's consolidated capitalization and the

table under the heading "Pro Forma Consolidated Capitalization of Pembina" in this Information Circular for more

information about Pembina's consolidated capitalization both before and after giving effect to the Arrangement.

PRIOR SALES

Pembina has not sold or issued any Pembina Common Shares, Pembina Preferred Shares or securities convertible

into Pembina Common Shares or Pembina Preferred Shares during the 12 month period prior to the date of this

Information Circular other than as follows:

an aggregate of 10,508,374 Pembina Common Shares were issued pursuant to Pembina's Premium

DividendTM and Dividend Reinvestment Plan during June 5, 2016 until Pembina's Premium DividendTM

and Dividend Reinvestment Plan was suspended effective April 25, 2017 at a weighted average issue price

of $39.29 per Pembina Common Share for approximately $412,161,760; and

options to purchase an aggregate of 4,417,828 Pembina Common Shares were issued during this period

pursuant to the Pembina Option Plan.

K-7

PRICE RANGE AND TRADING VOLUME OF SECURITIES

The Pembina Common Shares are listed and traded on the TSX under the symbol "PPL". The Pembina Common

Shares are also listed on the NYSE under the trading symbol "PBA". The following table sets forth the price ranges

for and trading volumes of the Pembina Common Shares on the TSX for June 2016 through June 5, 2017, as

reported by the TSX, and on the NYSE for June 2016 through June 5, 2017, as reported by NYSE.

TSX (PPL) NYSE (PBA)

Month High ($) Low ($) Close ($) Volume High (US$) Low (US$) Close (US$) Volume

2016

June 41.00 37.31 39.26 22,164,093 32.31 28.66 30.34 6,031,071

July 40.25 37.21 38.08 14,892,316 31.18 28.16 29.13 5,048,124 August 39.98 37.35 39.46 12,923,414 31.14 28.20 30.16 4,077,993

September 40.56 38.01 39.98 15,529,438 31.46 28.79 30.46 3,647,586

October 41.98 39.33 41.21 14,793,957 31.75 29.66 30.76 2,794,815 November 41.34 37.25 39.47 20,735,405 30.94 27.44 29.41 3,878,095

December 42.73 39.03 41.96 17,200,999 31.92 29.36 31.32 3,869,202

2017

January 42.70 40.17 40.37 12,946,131 32.72 30.64 31.01 3,944,447

February 43.49 39.90 42.92 17,777,923 33.24 30.49 32.31 6,364,676

March 43.90 41.89 42.14 21,344,682 32.61 31.28 31.71 6,405,672 April 44.65 41.71 43.50 22,392,728 33.52 31.12 31.88 5,804,260

May 44.43 41.42 43.17 34,686,299 32.93 30.32 31.96 8,238,070

June (1-5) 44.20 43.06 44.08 2,636,410 32.81 31.89 32.70 819,947

In April 2012, Pembina assumed 5.75 percent Series F convertible unsecured subordinated debentures maturing

December 31, 2018 issued by Provident Energy Ltd. on April 29, 2011 (the "Series F Convertible Debentures")

which are listed and traded on the TSX under the symbol "PPL.DB.F". The following table sets forth the price range

for and trading volume of the Pembina Series F Convertible Debentures on the TSX for June 2016 through June 5,

2017, as reported by the TSX.

Month High ($) Low ($) Close ($) Volume

2016

June 139.00 129.72 133.00 9,140

July 135.59 127.15 129.40 3,715

August 135.28 127.59 132.85 4,870

September 137.00 129.61 136.53 6,290

October 142.00 136.00 140.00 27,500 November 135.50 127.24 135.50 5,340

December 145.00 134.13 142.40 3,900

2017 January 143.00 136.79 137.50 33,550

February 146.50 136.65 146.50 6,310

March 146.96 143.00 143.00 6,940 April 150.00 145.64 148.25 1,310

May 150.00 143.48 147.49 2,530

June (1-5) 148.50 147.20 147.81 1,650

The Pembina Series 1 Shares, Pembina Series 3 Shares, Pembina Series 5 Shares, Pembina Series 7 Shares, Pembina

Series 9 Shares, Pembina Series 11 Shares and Pembina Series 13 Shares are listed and traded on the TSX under the

symbols "PPL.PR.A", "PPL.PR.C", "PPL.PR.E", "PPL.PR.G", "PPL.PR.I", "PPL.PR.K" and "PPL.PR.M",

respectively. The following tables set forth the price range for and trading volume of the Pembina Series 1 Shares,

Pembina Series 3 Shares, Pembina Series 5 Shares, Pembina Series 7 Shares, Pembina Series 9 Shares, Pembina

Series 11 Shares and Pembina Series 13 Shares on the TSX for June 2016 through June 5, 2017, all as reported by

the TSX.

K-8

Series 1 (PPL.PR.A) Series 3 (PPL.PR.C) Series 5 (PPL.PR.E)

Month

High

($)

Low

($)

Close

($) Volume

High

($)

Low

($)

Close

($) Volume

High

($)

Low

($)

Close

($) Volume

2016 June 15.81 14.00 14.95 191,060 17.12 15.19 16.87 170,436 19.15 16.75 18.30 146,748

July 15.98 14.42 15.86 167,588 17.55 16.33 17.33 186,925 19.23 17.75 19.22 183,822

August 17.15 15.85 16.91 161,194 18.76 16.97 18.25 163,112 20.50 19.05 20.19 153,665 September 17.00 16.33 16.69 172,236 18.25 17.75 18.13 70,434 20.20 19.78 20.09 262,980

October 17.93 16.13 17.90 305,163 19.00 17.68 19.00 99,281 21.01 19.43 21.01 262,297

November 18.50 17.51 17.73 268,772 19.43 18.22 18.79 133,854 21.37 19.72 20.82 354,837 December 19.00 17.37 18.75 284,997 20.00 18.34 19.75 196,736 21.89 20.31 21.84 287,772

2017

January 20.34 18.65 20.21 266,137 21.09 19.70 20.99 94,310 23.20 21.71 22.88 269,216 February 20.92 19.90 20.50 207,523 21.60 20.53 21.36 99,378 23.30 22.40 23.14 154,545

March 21.37 20.31 20.93 349,290 22.30 21.23 21.91 134,302 24.00 22.98 24.00 191,818

April 21.55 20.75 20.80 131,277 22.54 21.71 21.80 110,818 24.33 23.46 23.50 186,274 May 21.20 20.07 20.21 76,760 22.22 21.17 21.25 106,830 23.89 23.00 23.09 106,753

June (1-5) 20.20 19.72 19.79 13,865 21.24 20.93 20.93 7,187 23.11 22.57 22.63 12,544

Series 7 (PPL.PR.G) Series 9 (PPL.PR.I) Series 11 (PPL.PR.K)

Month

High

($)

Low

($)

Close

($) Volume

High

($)

Low

($)

Close

($) Volume

High

($)

Low

($)

Close

($) Volume

2016

June 18.28 15.33 17.24 183,982 21.19 19.12 20.07 180,806 25.80 25.25 25.79 180,380 July 18.29 16.60 18.29 157,923 21.92 19.93 21.65 103,194 26.88 25.71 26.16 86,575

August 19.57 18.19 19.11 132,555 23.47 21.65 23.20 171,068 26.59 25.83 25.89 107,440

September 19.06 18.65 18.89 181,339 23.37 22.50 22.90 138,995 26.27 25.75 26.00 64,304 October 19.96 18.27 19.88 296,622 23.52 22.08 23.50 106,776 26.53 25.93 26.25 156,371

November 20.17 19.19 19.54 165,695 24.12 22.89 23.25 152,688 26.33 25.51 25.89 163,270

December 20.76 19.22 20.70 244,907 24.85 23.09 24.58 142,580 26.53 25.67 26.48 98,500

2017

January 21.90 20.65 21.60 353,809 25.01 24.43 24.90 457,160 26.75 25.84 25.84 190,228

February 22.26 21.05 22.04 187,894 24.99 24.67 24.87 143,030 26.54 25.80 26.39 159,661 March 23.28 21.98 23.15 121,652 25.18 24.50 24.98 122,842 26.58 26.09 26.35 258,940

April 23.71 22.72 22.79 111,888 25.18 24.48 24.72 127,374 26.85 26.35 26.36 127,146

May 23.09 22.12 22.25 102,517 24.94 24.33 24.51 174,172 26.48 26.13 26.28 165,000

June (1-5) 22.32 21.89 21.89 11,016 24.50 24.25 24.28 8,675 26.44 26.31 26.37 45,588

Series 13 (PPL.PR.M)

Month

High

($)

Low

($)

Close

($) Volume

2016 June 25.87 25.20 25.86 467,289

July 26.65 25.67 26.21 386,494

August 26.43 25.82 25.90 338,087

September 26.28 25.81 26.06 254,437 October 26.39 25.90 26.26 229,188

November 26.33 25.41 25.89 321,245

December 26.45 25.71 26.39 141,533

2017

January 26.64 25.93 25.95 195,341

February 26.55 25.79 26.49 344,331 March 26.50 26.10 26.45 1,119,833

April 26.83 26.43 26.48 98,192

May 26.48 26.14 26.43 378,469 June (1-5) 26.45 26.29 26.29 8,326

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

There were no material interests, direct or indirect, of Pembina's directors or executive officers, or any director or

executive officer of a subsidiary of Pembina or any person who beneficially owns, or controls or directs, directly or

indirectly, more than 10% of the outstanding Common Shares or Pembina Common Shares, or any associate or

affiliate of such persons, in any transaction since the commencement of Pembina's last completed financial year or

in any proposed transaction which has materially affected, or would materially affect, Pembina or any of its

subsidiaries.

K-9

AUDITORS, REGISTRAR AND TRANSFER AGENT

The auditors of Pembina are KPMG LLP, Chartered Accountants, Calgary, Alberta, Canada.

The transfer agent and registrar for the Pembina Common Shares, Pembina Series F Convertible Debentures,

Pembina Series 1 Shares, Pembina Series 3 Shares, Pembina Series 5 Shares, Pembina Series 7 Shares, Pembina

Series 9 Shares, Pembina Series 11 Shares and Pembina Series 13 Shares is Computershare Trust Company of

Canada at its principal offices in Calgary, Alberta and Toronto, Ontario.

RISK FACTORS

An investment in the securities of Pembina is subject to certain risks. Pembina shareholders should carefully

consider the risk factors described under the heading "Risk Factors" in the Pembina AIF, which is incorporated by

reference herein, the risk factors described under the heading "Risk Factors" in the Veresen AIF, which is

incorporated by reference in Appendix J to this Information Circular, as well as the risk factors set forth elsewhere

in this Information Circular. If any of the identified risks were to materialize, Pembina's business, financial position,

results and/or future operations may be materially affected.

ADDITIONAL INFORMATION

Additional information relating to Pembina is available under its profile on SEDAR at www.sedar.com. Financial

information concerning Pembina is provided in the Pembina Annual Financial Statements and the Pembina Annual

MD&A, which can be accessed on SEDAR at www.sedar.com.

Questions? Need Help Voting?

Please contact our Strategic Shareholder Advisor and Proxy

Solicitation Agent, Kingsdale Advisors

1-888-518-6554