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6
SHAREHOLDERS' AGREEMENT
AMONG
CANADIAN 88 ENERGY CORP.,
DUKE ENERGY HYDROCARBONS, L.L.C.
AND
GREG S. NOVAL
DATED MARCH 24, 2000
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TABLE OF CONTENTS
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ARTICLE 1 INTERPRETATION 4
1.1 Definitions 4
1.2 Rules of Construction 5
1.3 Recitals and Headings 5
ARTICLE 2 BOARD OF DIRECTORS AND OFFICERS 5
2.1 Nominees for Election to the Board of Directors 5
2.2 Resident Canadian Requirements 6
2.3 Transitional Provisions re Directors 6
2.4 Future Changes to the Board of Directors 7
2.5 Size of the Board of Directors 7
2.6 Committees of the Board of Directors 8
2.7 Qualification as a Director or Committee Member 8
2.8 Chairman, President and Chief Executive Officer 8
2.9 Carrying Out Agreement 9
ARTICLE 3 BUSINESS COMBINATION TRANSACTIONS AND SOLICITATIONS 9
3.1 Limitation on Business Combination Transactions 9
3.2 Limitation on Solicitations, Etc. 9
3.3 Share Price Performance Exception 10
ARTICLE 4 DEH ACQUISITION RIGHTS 12
4.1 Limitation on Acquisition of Additional Shares by DEH 12
4.2 Right to Make Market Purchases 12
4.3 Right to Participate in Private Placements 12
4.4 Right to Participate in Public Offerings 13
4.5 Acquisition of Additional Shares Due to Share Compensation Arrangement 13
4.6 Right to Participate in Other Distributions 14
4.7 Acquisition of Additional Shares if Take-over Bid Commenced 14
4.8 Consequential Canadian 88 Restrictions 14
ARTICLE 5 NOVAL ACQUISITION RIGHTS 15
5.1 Limitation on Acquisition of Additional Shares by Noval 15
5.2 Right to Make Market Purchases 15
5.3 Right to Participate in Issues 15
ARTICLE 6 DEH TRANSFER RIGHTS 15
6.1 Permitted Transfers of Shares by DEH 15
6.2 Right of First Refusal 16
ARTICLE 7 VOTING MATTERS 17
7.1 Voting With Respect to Directors 17
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ARTICLE 8 REPRESENTATIONS, WARRANTIES AND COVENANTS 17
8.1 Representations and Warranties 17
8.2 Cooperation Regarding Filings, Etc. 19
ARTICLE 9 TERMINATION 19
9.1 Termination 19
ARTICLE 10 GENERAL PROVISIONS 19
10.1 Notices 19
10.2 Amendment and Waiver 21
10.3 Injunctive Relief 21
10.4 Governing Law 21
10.5 Further Assurances 21
10.6 Severability 21
10.7 Entire Agreement 22
10.8 Assignment 22
10.9 Benefit of Agreement 22
10.10 Counterparts 22
10.11 Fax Delivery 22
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9
SHAREHOLDERS' AGREEMENT
Made as of March 24, 2000,
AMONG:
Canadian 88 Energy Corp., a corporation incorporated under the laws of
Canada ("Canadian 88"),
- and -
Duke Energy Hydrocarbons, L.L.C., a limited liability company
incorporated under the laws of Delaware ("DEH"),
- and -
Greg S. Noval, an individual resident in Turner Valley, Alberta
("Noval").
WHEREAS Canadian 88 has offered DEH the opportunity to act as a strategic
equity investor so as to allow Canadian 88 to continue to actively develop its
inventory of exploration and development prospects in Western Canada;
WHEREAS DEH has, pursuant to the Subscription Agreement, acquired
24,412,500 Common Shares of Canadian 88, which when combined with 1,380,200
Common Shares previously acquired by DEH constitutes 19.6% of the outstanding
number of Common Shares; and
WHEREAS Noval is the Beneficial Owner of 7,273,410 Common Shares of
Canadian 88, being 5.5% of the outstanding number of Common Shares, and also
holds options to acquire a further 1,250,000 Common Shares.
NOW THEREFORE the parties agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Additional Directors" has the meaning set forth in Section 2.1(c);
(b) "Affiliate" has the meaning set forth in the Securities Act (Alberta);
(c) "Beneficial Ownership" means direct or indirect beneficial ownership of, or
control or direction over, and "Beneficially Own" and "Beneficial Owner"
have corresponding meanings;
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(d) "Business Combination Transaction" means:
(i) an amalgamation, arrangement, merger, share exchange, reorganization
or similar transaction (a "Transaction") involving Canadian 88;
(ii) a sale, lease, exchange, transfer or other disposition of 50% or
more of the assets of Canadian 88 and its Subsidiaries, taken as a
whole, in a single transaction or series of transactions; or
(iii) the acquisition by a person or entity, or any persons or entities
acting jointly or in concert, of Beneficial Ownership or the right
to acquire Beneficial Ownership of 50% or more of the outstanding
Voting Shares, by Take-over Bid or otherwise;
provided that a Transaction in which the Beneficial Ownership of the share
capital of Canadian 88 or other resulting entity of the Transaction
immediately after the consummation of the Transaction is substantially the
same as the Beneficial Ownership of the share capital of Canadian 88
immediately prior to the consummation of the Transaction shall be deemed
not to be a Business Combination Transaction;
(e) "Board of Directors" means the board of directors of Canadian 88;
(f) "Business Day" means any day excluding Saturdays, Sundays and statutory
holidays in Alberta or Texas;
(g) "Canada Business Corporations Act" means the Canada Business Corporations
Act, as amended, or any successor statute, as in effect from time to time;
(h) "Common Shares" means the common shares of Canadian 88 as constituted on
the date hereof;
(i) "Convertible Securities" means any securities convertible into,
exchangeable for or exercisable for Voting Shares, including convertible
debentures, convertible preferred shares, warrants and rights but excluding
employee stock options and other convertible securities of Canadian 88
issued pursuant to a Share Compensation Arrangement;
(j) "Current Market Price" means, in respect of a Common Share or other
securities valued hereunder (for the purposes of this definition, the
"shares") at any date, the weighted average price per share for the ten
consecutive trading days ending on the trading day prior to such date on
The Toronto Stock Exchange (or on any other Canadian or United States stock
exchange on which the shares are then listed and designated by the
directors of Canadian 88 for such purpose if the shares are not then listed
on The Toronto Stock Exchange). The weighted average price shall be
determined by dividing the aggregate of the sale prices of all such shares
sold on the said exchange during the said ten consecutive trading days by
the total number of such shares so sold. If (i) the shares are not listed
on a stock exchange in Canada or the United States or (ii) within such ten
consecutive trading days there have not been at least five days in which at
least 100 shares have traded, the Current Market Price in respect of a
share shall be determined,
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subject to regulatory approval, by agreement between Canadian 88, DEH and
Noval or, failing such agreement, by an investment banking firm of national
reputation selected by a majority of the Additional Directors, with the
consent of DEH and Noval, which consent shall not be unreasonably withheld.
Any determination of the Current Market Price of the shares shall be made
within three Business Days of the date of selection and notification of the
investment banking firm. The costs and expenses of any such investment
banking firm shall be borne as to one half by Canadian 88 and as to the
remaining one half by DEH and Noval in proportion to their respective
interest in the transaction for which the determination of Current Market
Price is made;
(k) "DEH Nominees" has the meaning set forth in Section 2.1(a);
(l) "DEH Ownership Percentage" means the percentage of the Voting Shares
Beneficially Owned by DEH at the time of determination, including for the
purposes hereof any unissued Common Shares which may be issued under any
Convertible Securities held by DEH;
(m) "Exchangeable Security" means a security of any type, including but not
limited to debt, equity, warrants or other rights, issued by DEH and which
includes or represents the right to acquire Voting Shares from DEH upon
exchange, conversion or exercise thereof;
(n) "Fundamental Change" means the approval by the holders of Voting Shares of
any of the matters referred to in Sections 173, 183, 188, 189 or 192 of the
Canada Business Corporations Act;
(o) "Noval Nominees" has the meaning set forth in Section 2.1(b);
(p) "Noval Ownership Percentage" means the percentage of the Voting Shares
Beneficially Owned by Noval at the time of determination, including for the
purposes hereof any unissued Common Shares which may be issued under any
Convertible Securities held by Noval;
(q) "Person" has the meaning assigned to such term in the Securities Act
(Alberta);
(r) "Private Placement" means a distribution for cash (other than pursuant to a
Share Compensation Arrangement) under an exemption from the requirement to
file and obtain a receipt for a prospectus from, or file and have declared
effective a registration statement by, the securities regulatory authority
of a jurisdiction under the securities legislation of that jurisdiction;
(s) "Public Offering" means a "best efforts" agency offering, a firm commitment
underwritten offering or a "bought deal" for cash pursuant to a prospectus
for which a final receipt has been issued, or in respect of which a
registration statement has been declared effective, by the securities
regulatory authority of a jurisdiction under the
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securities legislation of that jurisdiction;
(t) "Qualified Bid" means a Take-over Bid for Voting Shares that:
(i) is made to all holders of Voting Shares, Convertible Securities and
employee stock options or other convertible securities of Canadian 88
issued pursuant to a Share Compensation Arrangement, as registered on
the books of Canadian 88, other than the offeror;
(ii) is for a price per Voting Share at least 10% greater than the Current
Market Price of the Voting Shares calculated on the date of the
public announcement of such Take-over Bid or the date of public
announcement of any previously announced Take-over Bid that has not
been withdrawn;
(iii) contains, and the take-up and payment for Voting Shares tendered or
deposited is subject to, an irrevocable and unqualified provision
that no Voting Shares will be taken up or paid for pursuant to the
Take-over Bid unless more than 50% of the Voting Shares held by
holders of Voting Shares other than the offeror, its Affiliates or
any person acting jointly or in concert with the offeror shall have
been deposited or tendered pursuant to the Take-over Bid and not
withdrawn;
(iv) contains an irrevocable and unqualified provision that if the deposit
condition set forth in (iii) above is satisfied the offeror will make
a public announcement of that fact and the Take-over Bid will remain
open for deposits and tenders of Voting Shares for not less than ten
Business Days from the date of such public announcement; and
(v) is subject to no conditions other than customary conditions;
(u) "Related Party Transaction" has the meaning assigned to such term in
Ontario Securities Commission Policy 9.1 (until April 30, 2000) or Rule 61-
501 (from May 1, 2000);
(v) "Resident Canadian" has the meaning set forth in the Canada Business
Corporations Act;
(w) "Securities Act (Alberta)" means the Securities Act (Alberta), as amended,
or any successor statute, as in effect from time to time;
(x) "Share Compensation Arrangement" has the meaning assigned to such term in
Section 627 of The Toronto Stock Exchange Company Manual;
(y) "Subsidiary" means, with respect to any Person, any other Person of which
at least a majority of the voting power of the voting equity securities or
voting equity interest is Beneficially Owned by such Person;
(z) "Subscription Agreement" means the subscription agreement dated March 17,
2000 between DEH and Canadian 88;
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(aa) "Take-over Bid" has the meaning assigned to such term in the
Securities Act (Alberta);
(ab) "Transfer" has the meaning set forth in Section 6.1; and
(ac) "Voting Shares" means the Common Shares and any other securities of
Canadian 88 having voting power under ordinary circumstances with
respect to the election of directors of Canadian 88.
1.2 Rules of Construction
Unless the context otherwise requires, as used in this Agreement: (a) a
term has the meaning ascribed to it; (b) an accounting term not otherwise
defined has the meaning ascribed to it in accordance with generally
accepted accounting principles as in effect in Canada from time to time;
(c) "acting jointly and in concert" shall be interpreted in accordance with
the provisions of the Securities Act (Alberta); (d) "including" means
"including, without limitation"; and (e) words in the singular include the
plural and words in the plural include the singular.
1.3 Recitals and Headings
The recitals and descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
ARTICLE 2
BOARD OF DIRECTORS AND OFFICERS
2.1 Nominees for Election to the Board of Directors
In connection with each election of directors of Canadian 88, whether at an
annual or special meeting, Canadian 88 will nominate for election to its
Board of Directors, in accordance with its procedures for the nomination of
directors as provided in its by-laws and applicable law:
(a) the number of persons designated by DEH (the "DEH Nominees") that is
equal to the greater of:
(i) two; and
(ii) the product (rounded to the nearest whole number, but subject to
Section 2.1(b)(i)) of: (A) the total number of directors
constituting the entire Board of Directors, multiplied by (B) the
DEH Ownership Percentage;
(b) the number of persons designated by Noval, one of whom may be Noval
(the "Noval Nominees"), that is equal to the greater of:
(i) two; and
(ii) the product (rounded to the nearest whole number, but subject to
Section 2.1(a)(i)) of: (A) the total number of directors
constituting the entire Board of Directors, multiplied by (B) the
Noval Ownership Percentage; and
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(c) as the remaining nominees for election, persons who are independent of
DEH and Noval within the meaning of Ontario Securities Commission
Policy 9.1 (until April 30, 2000) or Rule 61-501 (from May 1, 2000)
(the "Additional Directors") (provided that the initial Additional
Directors appointed on the date of this agreement shall be the persons
named in the Corporate Governance and Transition Arrangements letter
dated March 17, 2000 from DEH to Canadian 88 and Noval). The
Additional Directors shall be chosen in the following manner:
(i) if the number of Additional Directors to be nominated for
election is the same as the number of Additional Directors then
in office who have indicated a willingness to be nominated for
re- election, then the Additional Directors then in office shall
be nominated for re-election;
(ii) if the number of Additional Directors to be nominated for
election is greater than the number of Additional Directors then
in office who have indicated a willingness to be nominated for
re- election, then such Additional Directors then in office
shall be nominated for re-election and the remaining persons to
be nominated for election as Additional Directors shall be
chosen by the nominating committee of the Board of Directors; or
(iii) if the number of Additional Directors to be nominated for
election is less than the number of Additional Directors then in
office who have indicated a willingness to be nominated for re-
election, then the persons to be nominated for election as
Additional Directors shall be chosen by the nominating committee
of the Board of Directors from the Additional Directors then in
office.
(d) Canadian 88 shall, for so long as DEH is entitled to designate DEH
Nominees and Noval is entitled to designate Noval Nominees under this
Agreement, solicit proxies for the election of DEH Nominees and Noval
Nominees in the same manner and at the same time as it solicits
proxies for the election of the Additional Directors to the Board of
Directors.
2.2 Resident Canadian Requirements
(a) The DEH Nominees shall be Resident Canadians in the numbers set forth
below, unless waived by a majority of the Additional Directors:
NUMBER OF DEH NOMINEES MINIMUM NUMBER OF RESIDENT CANADIANS
2 0
3 1
4 or 5 2
6 or more 3
(b) Each of the Noval Nominees shall be Resident Canadians.
(c) The Additional Directors shall be Resident Canadians in the numbers as
will result in the Board of Directors as a whole meeting the Resident
Canadian requirements of the
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Canada Business Corporations Act.
2.3 Transitional Provisions re Directors
(a) DEH shall advise Canadian 88 and Noval on the date of this Agreement
(or has previously advised) who the initial DEH Nominees will be.
Canadian 88 shall use reasonable efforts to cause two of the current
members of the Board of Directors to resign on the date of this
Agreement (in a sequential manner, if required) so that the vacancies
resulting thereby may be filled by the remaining directors of Canadian
88 with the initial DEH Nominees.
(b) Noval shall advise Canadian 88 and DEH on the date of this Agreement
(or has previously advised) who the initial Noval Nominees are among
the current directors of Canadian 88.
(c) DEH and Noval shall advise Canadian 88 on the date of this Agreement
(or have previously advised) who the initial Additional Directors will
be. To the extent that the initial Additional Directors are not among
the current directors of Canadian 88, Canadian 88 shall use reasonable
efforts to cause current members of the Board of Directors to resign
on the date of this Agreement (in a sequential manner, if required) so
that the vacancies resulting thereby may be filled by the remaining
directors of Canadian 88 with such initial Additional Directors.
2.4 Future Changes to the Board of Directors
(a) If any DEH Nominee shall cease to serve or fails to be elected as a
director of Canadian 88 for any reason other than as set forth in
Section 2.4(d), then the vacancy resulting thereby shall be filled by
the remaining directors of Canadian 88 with a new DEH Nominee, and
such new DEH Nominee shall thereafter serve until the expiration of
the term of the DEH Nominee replaced by such new DEH Nominee.
(b) If any Noval Nominee shall cease to serve or fails to be elected as a
director of Canadian 88 for any reason other than as set forth in
Section 2.4(e), then the vacancy resulting thereby shall be filled by
the remaining directors of Canadian 88 with a new Noval Nominee, and
such new Noval Nominee shall thereafter serve until the expiration of
the term of the Noval Nominee replaced by such new Noval Nominee.
(c) If any Additional Director shall cease to serve as a director of
Canadian 88 for any reason, then the vacancy resulting thereby shall
be filled by the remaining directors of Canadian 88 with a new
Additional Director chosen by the nominating committee of the Board
of Directors,and such new Additional Director shall thereafter serve
until the expiration of the term of the Additional Director replaced
by such new Additional Director.
(d) If at any time the DEH Ownership Percentage decreases so that DEH is
no longer entitled to designate DEH Nominees to be nominated for
election as directors of Canadian 88, then DEH shall, unless a
majority of the Additional Directors determine otherwise, use
reasonable efforts to cause the DEH Nominees serving as Canadian 88
directors to immediately resign.
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(e) If at any time the Noval Ownership Percentage decreases so that Noval
is no longer entitled to designate Noval Nominees to be nominated for
election as directors of Canadian 88, then Noval shall, unless a
majority of the Additional Directors determine otherwise, use
reasonable efforts to cause the Noval Nominees serving as Canadian 88
directors to immediately resign.
2.5 Size of the Board of Directors
The number of persons to be elected to the Board of Directors at any
meeting of the shareholders of Canadian 88 will be set at nine and shall
not be increased without the consent of DEH and Noval.
2.6 Committees of the Board of Directors
(a) The Board of Directors shall, on the date of this Agreement, create
(if not already created) and appoint the members of the following
committees of the Board of Directors, each of which shall have three
members:
(i) an audit committee, which shall perform the functions required
by applicable law;
(ii) an executive committee, which shall have the powers and
authority, consistent with applicable law, determined from time
to time by the Board of Directors. Notwithstanding the by-laws
of Canadian 88, motions made at any meeting of the executive
committee shall be carried only by a unanimous vote; and
(iii) a nominating committee, which shall perform the functions
described in this Agreement.
(b) The Board of Directors shall appoint one director then serving as a
DEH Nominee, one director then serving as a Noval Nominee and one
director then serving as an Additional Director to each of the audit,
executive and nominating committees of the Board of Directors and to
each other committee of the Board of Directors as may be appointed
from time to time. Each such appointee must meet the individual
requirements for committee membership contained in the Canada Business
Corporations Act and the respective residency of the members of each
committee must meet the Resident Canadian requirements of the Canada
Business Corporations Act. DEH shall not be obligated to nominate any
Resident Canadians for committee membership.
2.7 Qualification as a Director or Committee Member
All DEH Nominees and Noval Nominees shall have consented in writing to
serve as a director of Canadian 88 (unless they have previously done so)
and shall meet the qualification requirements to serve as a director and,
if applicable, a committee member under the Canada Business Corporations
Act, provided that DEH Nominees will be required to be Resident Canadians
only to the extent required by Section 2.2.
2.8 Chairman, President and Chief Executive Officer
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(a) James D. Raymond shall continue as the chairman of the Board of
Directors for so long as the Board of Directors determines.
(b) On the date of this Agreement:
(i) Noval shall resign as the President and Chief Executive Officer
of Canadian 88; and
(ii) Joseph L. Pritchett, III (the current Executive Vice President
Exploration and Production of DEH) shall be appointed as the
President and Chief Executive Officer of Canadian 88 in place of
Noval. Upon such appointment, Canadian 88 shall enter into the
executive employment agreement with Mr. Pritchett that is
referred to in and attached to Corporate Governance and
Transition Arrangements letter dated March 17, 2000 from DEH to
Canadian 88 and Noval.
2.9 Carrying Out Agreement
(a) DEH and Noval will use their respective best efforts to cause the DEH
Nominees and the Noval Nominees, if they are elected to the Board of
Directors and to the extent permitted by law, to act and vote as
directors of Canadian 88 so as to carry out the provisions and intent
of this Agreement.
(b) Notwithstanding (a) above, Canadian 88, DEH and Noval acknowledge that
all members of the Board of Directors have an obligation to act as
directors in a manner that is consistent with their statutory and
fiduciary duties and that nothing in this Agreement is intended to
interfere with the proper discharge by them of those duties.
ARTICLE 3
BUSINESS COMBINATION TRANSACTIONS AND SOLICITATIONS
3.1 Limitation on Business Combination Transactions
DEH and Noval shall not engage in any Business Combination Transaction or
any Related Party Transaction with Canadian 88, except in the following
cases:
(a) where otherwise permitted by this Agreement; or
(b) with the prior written consent of a majority of the Additional
Directors.
3.2 Limitation on Solicitations, Etc.
Except as otherwise permitted by this Agreement or unless a majority of the
Additional Directors shall have consented in writing to such action, DEH
and Noval shall not (except through a DEH Nominee or a Noval Nominee, as
the case may be, acting in his capacity as a director of Canadian 88 at a
meeting of the Board of Directors):
(a) solicit proxies or consents or become a participant in a
"solicitation" (as such term is defined in the Securities Act
(Alberta)) of proxies or consents with respect to securities of
Canadian 88 with regard to:
(i) the election of directors of Canadian 88; or
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(ii) any Business Combination Transaction, Fundamental Change or
Related Party Transaction involving Canadian 88 or the holders
of Voting Shares;
(b) do any of the following:
(i) seek to control the Board of Directors, except through the
participation of the DEH Nominees and the Noval Nominees as
directors of Canadian 88 and the exercise by DEH and Noval of
the voting rights attached to the Voting Shares Beneficially
Owned by DEH and Noval (subject to compliance with Article 7);
(ii) seek to advise, encourage or influence any Person with respect
to the voting of any securities of Canadian 88 against:
(A) the nominees for election to the Board of Directors named
in; or
(B) a recommendation with respect to any proposed Business
Combination Transaction, Fundamental Change or Related
Party Transaction contained in;
a management proxy circular of Canadian 88; or
(iii) seek to induce or in any manner to assist any Person to initiate
any shareholder proposal in respect of a meeting of shareholders
of Canadian 88, requisition a meeting of shareholders of
Canadian 88 or initiate any Business Combination Transaction,
Fundamental Change, Related Party Transaction, Take-over Bid for
securities of Canadian 88 or other extraordinary transaction
involving Canadian 88, including the entering into of any "lock-
up" or similar agreement for such purpose (except that DEH, any
of its Affiliates or Noval may make a confidential proposal to
the Board of Directors with respect to any such matter);
(c) make any public announcement (except as required by law or stock
exchange policy) or make any written or oral proposal relating to any
Business Combination Transaction, Fundamental Change, Related Party
Transaction, Take-over Bid for securities of Canadian 88 or other
extraordinary transaction involving DEH, any of its Affiliates or
Noval and Canadian 88 (except that DEH, any of its Affiliates or Noval
may make a confidential proposal to the Board of Directors with
respect to any such transaction);
(d) deposit any securities of Canadian 88 in a voting trust or subject any
securities of Canadian 88 to any arrangement or agreement with respect
to the voting of securities of Canadian 88; or
(e) form, join or in any way participate in a partnership, limited
partnership, syndicate or other group (or otherwise act jointly or in
concert with any other Person) for the purpose of acquiring, holding,
voting or disposing of securities of Canadian 88 or taking or
resulting in any other actions restricted or prohibited under clauses
(a) through (d) of this Section 3.2.
3.3 Share Price Performance Exception
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(a) If the Current Market Price of the Common Shares is less than:
(i) Cdn. $3.00 as at March 24, 2001 or any time after such date; or
(ii) Cdn. $4.00 as at September 24, 2001 or any time after such date;
then DEH and Noval (as the case may be) shall be released from
Sections 3.1, 3.2, 4.1, 5.1, 6.1 and 6.2 and DEH or Noval may (i) make
to, engage in with or propose to Canadian 88 or the holders of Voting
Shares a Business Combination Transaction, Fundamental Change, Related
Party Transaction, Take-over Bid or any other transaction involving
Canadian 88 or the holders of Voting Shares or (ii) encourage a third
party to make or propose any of the foregoing; and DEH, Noval or such
third party may take all action necessary in respect of the foregoing.
(b) Canadian 88 shall, in connection with any transaction referred to in
(a) above:
(i) provide DEH, Noval or any third party identified by DEH or Noval
with access to confidential information concerning Canadian 88
and its operations, upon the entering into of a customary form
of confidentiality agreement (but which agreement does not
obligate DEH, Noval or such third party to obtain the consent of
the Board of Directors to make a proposal to Canadian 88 or the
holders of Voting Shares for a transaction referred to in (a)
above if all holders of Voting Shares are treated equally under
such transaction);
(ii) supervise the preparation of any formal valuation required by
applicable law;
(iii) if shareholder approval is required by applicable law, place
such transaction before the holders of Voting Shares at a
meeting of such holders;
(iv) expeditiously convene any meeting of holders of Voting Shares
requisitioned by DEH or Noval; and
(v) refrain from acting in a manner which prevents holders of Voting
Shares from voting in respect of or accepting a transaction
referred to in (a) above.
(c) Without derogating from the specific obligations of Canadian 88
described therein, nothing in (b) above shall:
(i) obligate Canadian 88 or the Board of Directors to enter into any
agreement (other than the confidentiality agreement referred to
in (b)(i) above), recommend any transaction or take any other
action unless to do so would be in the best interests of
Canadian 88 and consistent with the discharge by the Board of
Directors of its fiduciary duties; or
(ii) prevent Canadian 88 or the Board of Directors from:
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(A) obtaining advice from financial and legal advisers to assist
Canadian 88 or the Board of Directors in considering a
proposed transaction and any alternatives to such
transaction; or
(B) taking any other action that would be in the best interests
of Canadian 88 and consistent with the discharge by the
Board of Directors of its fiduciary duties.
ARTICLE 4
DEH ACQUISITION RIGHTS
4.1 Limitation on Acquisition of Additional Shares by DEH
DEH shall not acquire Beneficial Ownership of any Voting Shares or
Convertible Securities in addition to the Voting Shares Beneficially Owned
by DEH as of the date hereof, except in the following cases:
(a) where otherwise permitted by this Agreement; or
(b) with the prior written consent of a majority of the Additional
Directors; or
(c) pursuant to the exercise of rights under Section 6.2.
4.2 Right to Make Market Purchases
DEH shall have the right, notwithstanding any other provision of this
Agreement, to purchase at any time, subject to compliance with applicable
securities laws and stock exchange rules, in market, private or other
transactions, Beneficial Ownership of previously issued Voting Shares so as
to increase its Beneficial Ownership of Voting Shares to 25%, less one
Voting Share.
4.3 Right to Participate in Private Placements
(a) If Canadian 88 determines to issue any Voting Shares, Convertible
Securities or combination thereof in a Private Placement, then
Canadian 88 shall provide written notice of such determination to DEH,
which notice shall include the proposed size and other terms of the
Private Placement and shall offer to DEH the right to purchase, at the
same price and on the same terms (or as otherwise required by
applicable stock exchange rules), Beneficial Ownership of up to the
DEH Ownership Percentage of the Voting Shares or Convertible
Securities (or both in the case of a combined offering) to be included
in the Private Placement (for the purposes of this Section 4.3, the
"Offer Notice").
(b) If DEH determines to accept the offer contained in the Offer Notice,
DEH shall deliver a written notice to Canadian 88 indicating its
acceptance within five Business Days after its receipt of the Offer
Notice, which notice shall indicate whether DEH has accepted such
offer and specifying the number or amount of Voting Shares or
Convertible Securities (or both in the case of a combined offering)
that DEH is willing to purchase (for the purposes of this Section 4.3,
an "Acceptance Notice").
(c) Any acceptance of the offer contained in an Offer Notice by delivery
of an Acceptance Notice shall be irrevocable and shall constitute a
commitment by DEH to purchase from
<PAGE>
21
Canadian 88, upon the terms contained in the Offer Notice, the number
or amount of Voting Shares or Convertible Securities (or both in the
case of a combined offering) covered by such Acceptance Notice,
limited to the DEH Ownership Percentage of the total number or amount
of Voting Shares or Convertible Securities (or both) actually issued
in the Private Placement.
4.4 Right to Participate in Public Offerings
(a) If Canadian 88 determines to issue any Voting Shares, Convertible
Securities or combination thereof by way of a Public Offering, then
Canadian 88 shall provide written notice of such determination to DEH,
which notice shall include the proposed size and other terms of the
Public Offering and may include a minimum and maximum size and price
range, to the extent then known, the name of the managing underwriter
for the Public Offering and the date when it is proposed that such
Public Offering will be made (for the purposes of this Section 4.4,
the "Offer Notice").
(b) If DEH determines to participate in the Public Offering, DEH shall
deliver a written notice to Canadian 88, within five Business Days
after its receipt of the Offer Notice in the case of a marketed
transaction or within one Business Day after its receipt of the Offer
Notice in the case of a "bought deal", indicating its desire to
participate and specifying the number or amount of Voting Shares or
Convertible Securities (or both in the case of a combined offering)
that DEH is willing to purchase, up to the DEH Ownership Percentage of
the Voting Shares or Convertible Securities (or both in the case of a
combined offering) to be included in the Public Offering (for the
purposes of this Section 4.4, the "Acceptance Notice").
(c) Any Acceptance Notice shall be irrevocable if the terms of the Public
Offering are within the parameters contained in the Offer Notice and
Canadian 88 shall cause the underwriters of the Public Offering to
offer to DEH the right to purchase from the underwriters of the Public
Offering, at the public offering price set forth on the cover page of
the prospectus or prospectus supplement for the Public Offering, the
number or amount of Voting Shares or Convertible Securities (or both
in the case of a combined offering) specified by DEH in the Acceptance
Notice, limited to the DEH Ownership Percentage of the total number or
amount of Voting Shares or Convertible Securities (or both) actually
issued in the Public Offering, and DEH shall accept such offer.
4.5 Acquisition of Additional Shares Due to Share Compensation Arrangement
(a) If Canadian 88 issues any Voting Shares pursuant to a Share
Compensation Arrangement, then Canadian 88 shall provide written
notice of such issuance to DEH, which notice may be in the form of a
copy sent to DEH of the periodic reporting notice of such issuance
required to be sent by Canadian 88 to any stock exchange on which its
securities are listed for trading (the "Issue Notice").
(b) DEH shall have the right, exercisable until the end of the calendar
quarter following the calendar quarter in which the Issue Notice is
dated, to purchase Beneficial Ownership of up to the DEH Ownership
Percentage of the total number of Voting Shares indicated in
<PAGE>
22
the Issue Notice as having been issued, plus those issued to DEH
pursuant to this Section 4.5, in the following manner:
(i) if the Current Market Price of the Voting Shares to be purchased
by DEH is less than Cdn. $500,000, then DEH may purchase Voting
Shares in market, private or other transactions; and
(ii) if the Current Market Price of the Voting Shares to be purchased
by DEH is Cdn. $500,000 or more or if DEH is prevented by
applicable securities laws from purchasing Voting Shares in
market, private or other transactions, then DEH shall have the
right to require Canadian 88 to issue the Voting Shares to DEH,
at the greater of the Current Market Price and the price
required by applicable stock exchange rules.
4.6 Right to Participate in Other Distributions
(a) If Canadian 88 determines to issue any Voting Shares, Convertible
Securities or combination thereof in a transaction other than a
Private Placement, Public Offering or Share Compensation Arrangement
(an "Issue"), then Canadian 88 shall provide written notice of such
determination to DEH, which notice shall include the proposed size and
other terms of the Issue and shall offer to DEH the right to purchase,
at the greater of the Current Market Price and the price required by
applicable stock exchange rules, Beneficial Ownership of up to the DEH
Ownership Percentage of the total number or amount of the Voting
Shares or Convertible Securities (or both in the case of a combined
offering) to be included in the Issue, plus those issued to DEH
pursuant to this Section 4.6 (for the purposes of this Section 4.6,
the "Offer Notice").
(b) If DEH determines to accept the offer contained in the Offer Notice,
DEH shall deliver a written notice to Canadian 88 indicating its
acceptance within five Business Days after its receipt of the Offer
Notice, which notice shall indicate whether DEH has accepted such
offer and specifying the number or amount of Voting Shares or
Convertible Securities (or both in the case of a combined offering)
that DEH is willing to purchase (for the purposes of this Section 4.6,
an "Acceptance Notice").
(c) Any acceptance of the offer contained in an Offer Notice by delivery
of an Acceptance Notice shall be irrevocable and shall constitute a
commitment by DEH to purchase from Canadian 88, upon the terms
contained in the Offer Notice, the number or amount of Voting Shares
or Convertible Securities (or both in the case of a combined offering)
covered by such Acceptance Notice, limited to the DEH Ownership
Percentage of the total number or amount of Voting Shares or
Convertible Securities (or both) actually issued in the Issue, plus
those issued to DEH pursuant to this Section 4.6.
4.7 Acquisition of Additional Shares if Take-over Bid Commenced
DEH may acquire, by a Qualified Bid, Beneficial Ownership of previously
issued Voting Shares and Convertible Securities if any Person (other than
DEH or any Affiliate of DEH) has commenced a Take-over Bid for Voting
Shares.
4.8 Consequential Canadian 88 Restrictions
Canadian 88 shall not repurchase any of its Voting Shares for cancellation:
<PAGE>
23
(a) if the result of doing so would be to increase the DEH Ownership
Percentage to 20% or more in the first instance or 25% or more in the
second instance, except with (in each such instance) the prior written
consent of DEH; or
(b) pursuant to a normal course issuer bid or a substantial issuer bid,
except with the prior written consent of DEH.
ARTICLE 5
NOVAL ACQUISITION RIGHTS
5.1 Limitation on Acquisition of Additional Shares by Noval
Noval shall not acquire Beneficial Ownership of any Voting Shares or
Convertible Securities in addition to the Voting Shares Beneficially Owned
by Noval as of the date hereof, except in the following cases:
(a) where otherwise permitted by this Agreement; or
(b) with the prior written consent of a majority of the Additional
Directors; or
(c) pursuant to the exercise of rights under Section 6.2.
5.2 Right to Make Market Purchases
Noval shall have the right, notwithstanding any other provision of this
Agreement, to purchase at any time, subject to compliance with applicable
securities laws and stock exchange rules, in market, private or other
transactions, Beneficial Ownership of previously issued Voting Shares so as
to increase his Beneficial Ownership of Voting Shares to 15%, less one
Voting Share.
5.3 Right to Participate in Issues
If Canadian 88 determines to issue any Voting Shares, Convertible
Securities or combination thereof, then Noval shall have the right to
purchase up to the Noval Ownership Percentage of the Voting Shares or
Convertible Securities (or both in the case of a combined offering) to be
included in such issue, in the same manner as described in Sections 4.3,
4.4, 4.5 and 4.6, with the necessary changes.
ARTICLE 6
DEH TRANSFER RIGHTS
6.1 Permitted Transfers of Shares by DEH
DEH may sell, transfer or otherwise convey ("Transfer") Beneficial
Ownership of any Voting Shares or Convertible Securities (including Voting
Shares or Convertible Securities subject to Exchangeable Securities) only
in the following cases:
(a) a Transfer to an Affiliate of DEH if the Affiliate agrees to be bound
by all of the terms of this Agreement otherwise applicable to DEH;
(b) a Transfer pursuant to an unsolicited broker's transaction or
transactions of Voting Shares in the open market (including pre-
arranged or "cross" trades), limited in each calendar quarter to 10%
of the number of Voting Shares that DEH Beneficially Owns on the date
of this Agreement;
<PAGE>
24
(c) a Transfer to Noval pursuant to exercise of the right of first refusal
described in Section 6.2;
(d) in respect of any Voting Shares or Convertible Securities for which
Noval does not exercise the right of first refusal described in
Section 6.2:
(i) a Transfer pursuant to:
(A) a Public Offering;
(B) a Private Placement, including for this purpose a
distribution for other than cash; or
(C) the procedures for a distribution from the holdings of a
control person contained in Section 112 of the Securities
Act (Alberta) (and/or the corresponding provisions of other
applicable securities laws) and the rules of The Toronto
Stock Exchange;
if DEH can evidence to the satisfaction of Canadian 88 that no
Person will be or become the Beneficial Owner of 10% or more of
the then outstanding Voting Shares as a consequence of the
Transfer; or
(ii) a Transfer to any Person (other than DEH or any Affiliate of DEH)
who has commenced a Take-over Bid for Voting Shares.
6.2 Right of First Refusal
(a) If either DEH or Noval (the "Offeror") desires to sell all or any of
its or his Beneficial Ownership in Voting Shares, the Offeror shall
give notice of such proposed sale (the "Offer Notice") to Canadian 88
and the other party to this Agreement and shall set out in the Offer
Notice:
(i) the number of its or his Voting Shares proposed to be sold (the
"Offered Shares");
(ii) the "Purchase Price", being (as the case may be):
(A) the price at which it or he desires to sell the Offered
Shares;
(B) a range of prices (with the "high" price not more than 20%
greater than the "low" price) in the case of a Transfer by
DEH pursuant to a Public Offering described in Section
6.1(d)(i)(A) or a control person distribution described in
Section 6.1(d)(i)(C); or
(C) the Take-over Bid offer price in the case of a Transfer to
any Person
<PAGE>
25
(other than DEH, any Affiliate of DEH or Noval) who has
commenced a Take-over Bid for Voting Shares; and
(iii) any other material terms of the proposed sale.
(b) Upon the Offer Notice being given, DEH or Noval, as the case may be
(the "Offeree"), shall have the right to purchase all, but not less
than all, of the Offered Shares for the Purchase Price.
(c) If the Offeree desires to purchase the Offered Shares, it or he shall
give notice to the Offeror and to Canadian 88 within 10 days days of
having been given the Offer Notice and the transaction of purchase and
sale shall be completed in accordance with the terms set out in the
Offer Notice.
(d) If the Offeree does not give notice in accordance with the provisions
of Section 6.2(c) that it or he is willing to purchase all of the
Offered Shares, the rights of the Offeree, subject as hereinafter
provided, to purchase the Offered Shares shall cease and the Offeror
may sell the Offered Shares to any Person within 30 days after the
expiry of the 10 period referred to in Section 6.2(c), for a price not
less than the Purchase Price, on other terms no more favourable to
such person than those set forth in the Offer Notice and in compliance
with Section 6.1. If the Offered Shares are not sold within such 30
day period on such terms, the rights of the Offeree pursuant to this
Section 6.2 shall again take effect and so on from time to time.
(e) Each of DEH and Noval may sell in each calendar quarter, exempt from
the procedures set forth in Sections 6.2(a) to (d) above, up to 10% of
the number of Voting Shares that DEH or Noval (as the case may be)
owns at the date of this Agreement, pursuant to an unsolicited
broker's transaction or transactions of Voting Shares in the open
market (including pre-arranged or "cross" trades).
ARTICLE 7
VOTING MATTERS
7.1 Voting With Respect to Directors
(a) DEH agrees that, at any meeting of holders of Voting Shares at which
an item of business is the election of members of the Board of
Directors, it will not withhold from voting any of its Voting Shares
in respect of, or vote any of its Voting Shares against, the election
of the Noval Nominees or the Independent Directors.
(b) Noval agrees that, at any meeting of holders of Voting Shares at which
an item of business is the election of members of the Board of
Directors, he will not withhold from voting any of his Voting Shares
in respect of, or vote any of his Voting Shares against, the election
of the DEH Nominees or the Independent Directors.
ARTICLE 8
REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 Representations and Warranties
(a) Canadian 88 represents and warrants to DEH and Noval that:
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26
(i) Canadian 88 is a corporation duly organized, validly existing
and in good standing under the Canada Business Corporations Act
and has the corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder;
(ii) the execution and delivery of this Agreement by Canadian 88 and
the consummation by Canadian 88 of the transactions contemplated
hereby have been duly authorized by all necessary corporate
action on the part of Canadian 88 and no other corporate
proceedings on the part of Canadian 88 are necessary to
authorize this Agreement or any of the transactions contemplated
hereby; and
(iii) this Agreement has been duly executed and delivered by Canadian
88 and constitutes a valid and binding obligation of Canadian
88, and, assuming this Agreement constitutes a valid and binding
obligation of DEH and Noval, is enforceable against Canadian 88
in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance
and similar laws affecting creditors' rights generally from time
to time and to general principles of equity.
(b) DEH represents and warrants to Canadian 88 and Noval that:
(i) DEH is a limited liability company duly organized, validly
existing and in good standing under the Limited Liability
Company Act (Delaware) and has the corporate power and authority
to enter into this Agreement and to carry out its obligations
hereunder;
(ii) the execution and delivery of this Agreement by DEH and the
consummation by DEH of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the
part of DEH and no other corporate proceedings on the part of
DEH are necessary to authorize this Agreement or any of the
transactions contemplated hereby; and
(iii) this Agreement has been duly executed and delivered by DEH and
constitutes a valid and binding obligation of DEH, and, assuming
this Agreement constitutes a valid and binding obligation of
Canadian 88 and Noval, is enforceable against DEH in accordance
with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance
and similar laws affecting creditors' rights generally from time
to time and to general principles of equity.
(c) Noval represents and warrants to Canadian 88 and DEH that:
(i) Noval has the capacity to enter into this Agreement and to carry
out his obligations hereunder; and
<PAGE>
27
(ii) this Agreement has been duly executed and delivered by Noval and
constitutes a valid and binding obligation of Noval and,
assuming this Agreement constitutes a valid and binding
obligation of Canadian 88 and DEH, is enforceable against Noval
in accordance with its terms, subject to applicable bankruptcy,
fraudulent conveyance and similar laws affecting creditors'
rights generally from time to time and to general principles of
equity.
8.2 Cooperation Regarding Filings, Etc.
DEH, Noval and Canadian 88 will cooperate with each other in connection
with the making of any filings with securities commissions, stock exchanges
or other regulatory authorities as may be required as a result of the
entering into or performance of this Agreement and DEH and Noval (as the
case may be) will promptly advise the other parties hereto of any changes
in their Beneficial Ownership of Voting Shares.
ARTICLE 9
TERMINATION
9.1 Termination
(a) This Agreement may be terminated in its entirety by the mutual written
consent of the parties hereto.
(b) This Agreement shall terminate on March 24, 2003.
(c) This Agreement shall terminate before March 24, 2003:
(i) with respect to DEH if the DEH Ownership Percentage decreases to
less than 5%;
(ii) with respect to Noval if the Noval Ownership Percentage
decreases to less than 2%; or
(iii) in its entirety if the DEH Ownership Percentage decreases to
less than 5% and the Noval Ownership Percentage decreases to
less than 2%.
(d) If this Agreement is terminated with respect to DEH or Noval pursuant
to Sections 9.1(c)(i) or 9.1(c)(ii), then the rights and obligations
of DEH or Noval, as the case may be, under this Agreement will be
terminated but this Agreement will continue in force with respect to
the rights and obligations of Canadian 88 and the other remaining
party.
(e) No termination shall relieve any party from liability for any breach
of this Agreement that occurred prior to its termination.
ARTICLE 10
GENERAL PROVISIONS
10.1 Notices
(a) The addresses and fax number of each party for notices shall be as
follows:
(i) to Canadian 88:
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28
<TABLE>
<S> <C>
Canadian 88 Energy Corp. with a copy to:
Suite 700 McCarthy Tetrault
400 - 3/rd/ Avenue S.W. Suite 3300, 421 - 7/th/ Avenue S.W.
Calgary, AB T2P 4H2 Calgary, AB T2P 4K9
Attn: Donald R. Gardner Attn: David F. Phillips
Fax: (403) 216-2359 Fax: (403) 260-3501
and:
Carscallen Lockwood
#1500, 407 - 2/nd/ Street S.W.
Calgary, AB T2P 2Y3
Attn: Stan Carscallen
Fax: (403) 262-2952
(ii) to DEH:
Duke Energy Hydrocarbons, L.L.C. with a copy to:
10777 Westheimer Bennett Jones
Suite 650 4500, 855 - 2/nd/ Street S.W.
Houston, TX 77042 Calgary, AB T2P 4K7
Attn: President Attn: John MacNeil/Margaret Lemay
Fax: (713) 260-8601 Fax: (403) 265-7219
(iii) to Noval:
Greg S. Noval with a copy to:
c/o Canadian 88 Energy Corp. Fraser Milner
700, 400 - 3/rd/ Avenue S.W. 3000, 234 - 4/th/ Avenue S.W.
Calgary, AB T2P 4H2 Calgary, AB T2P 4X7
Attn: Greg S. Noval Attn: William K. Jenkins
Fax: (403) 974-8868 Fax: (403) 268-3100
</TABLE>
(b) Any notice, communication or statement (a "notice") required,
permitted or contemplated hereunder shall be in writing and shall be
delivered as follows:
(i) by delivery to a party between 8:00 a.m. and 4:00 p.m. on a
Business Day at the address of such party for notices, in which
case the notice shall be deemed to have been received by that
party when it is delivered; or
(ii) by fax to a party to the fax number of such party for notices,
in which case, if the notice was faxed prior to 4:00 p.m. on a
Business Day the notice shall be deemed to have been received by
that party when it was faxed and if it is faxed on a day
<PAGE>
29
which is not a Business Day or is faxed after 4:00 p.m. on a
Business Day, it shall be deemed to have been received on the
next following Business Day.
(c) A party may from time to time change its address for service or its
fax number for service by giving written notice of such change to the
other party.
10.2 Amendment and Waiver
No amendment to this Agreement shall be valid or binding unless set forth
in writing and duly executed by all of the parties hereto. No waiver of
any breach of any provision of this Agreement shall be effective or binding
unless made in writing and signed by the party purporting to give the same
and, unless otherwise provided in the written waiver, shall be limited to
the specific breach waived.
10.3 Injunctive Relief
Each of the parties hereto hereby acknowledges that, in the event of a
breach by any of them of any material provision of this Agreement, the
aggrieved party may be without an adequate remedy of law. Each of the
parties therefore agrees that in the event of a breach of any material
provision of this Agreement the aggrieved party may elect to institute and
prosecute proceedings in any court of competent jurisdiction to enforce
specific performance or to enjoin the continuing breach of such provision,
as well as to obtain damages for breach of this Agreement. By seeking or
obtaining any such relief, the aggrieved party will not be precluded from
seeking or obtaining any other relief to which it may be entitled in equity
or at law.
10.4 Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of Alberta and the laws of Canada applicable therein. Each party
attorns to the jurisdiction of the courts of Alberta.
10.5 Further Assurances
Each party to this Agreement shall, from time to time, at the request of
either of the other parties, and without further consideration, do all such
acts and execute and deliver all such further documents as are reasonably
required to fully perform the terms of this Agreement.
10.6 Severability
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto 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.
10.7 Entire Agreement
This Agreement and the Corporate Governance and Transition Arrangements
letter dated March 17, 2000 from DEH to Canadian 88 and Noval constitutes
the entire agreement among the parties with respect to the subject matter
hereof and supersedes all prior agreements and undertakings, both written
and oral, among the parties, or any of them, with respect to the subject
matter hereof.
<PAGE>
30
10.8 Assignment
Except as may be expressly provided in this Agreement (including, in
particular, in Section 6.1(a)), none of the parties hereto may assign it
or his rights or obligations under this Agreement without the prior
written consent of all of the other parties hereto, which consent may be
arbitrarily withheld.
10.9 Benefit of Agreement
This Agreement shall be binding upon and inure solely to the benefit of
each party hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.
10.10 Counterparts
This Agreement may be executed in one or more counterparts, each of which
when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
10.11 Fax Delivery
This Agreement may be executed in one place and delivered to another by
fax and, when received, shall be deemed to be the delivery of an
originally executed signature.
<PAGE>
31
IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
first written above.
Canadian 88 Energy Corp.
By:_________________________
James D. Raymond,
Chairman
By:_________________________
Donald R. Gardner,
Chief Financial Officer
Duke Energy Hydrocarbons, L.L.C.
By:_________________________
Name:
Title:
SIGNED by Greg S. Noval in the presence of: )
)
)
)
)
WITNESS as to the signature of ) Greg S. Noval
Greg S. Noval )
)
