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EXHIBIT 10.3
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SHAREHOLDERS' AGREEMENT
AMONG
CANADIAN 88 ENERGY CORP.,
DUKE ENERGY HYDROCARBONS, L.L.C.
AND
XXXX X. XXXXX
DATED MARCH 24, 2000
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TABLE OF CONTENTS
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
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ARTICLE 7
VOTING MATTERS..........................................................................................17
7.1 Voting With Respect to Directors...............................................................17
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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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 -
XXXX X. XXXXX, an individual resident in Xxxxxx 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, 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
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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 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;
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(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;
(aa) "TAKE-OVER BID" has the meaning assigned to such term in the
Securities Act (Alberta);
(bb) "TRANSFER" has the meaning set forth in Section 6.1; and
(cc) "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.
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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
(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:
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(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 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.
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(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.
(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.
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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
(a) Xxxxx X. Xxxxxxx 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) Xxxxxx X. Xxxxxxxxx, 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 Xx. Xxxxxxxxx
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.
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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
(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);
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(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
(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
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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:
(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.
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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 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.
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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 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
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(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:
(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
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(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 XXXXX
Xxxxx 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;
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(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 (other than DEH,
any Affiliate of DEH or Noval) who has
commenced a Takeover Bid for Voting
Shares; and
(iii) any other material terms of the proposed sale.
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(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
prearranged 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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(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
(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.
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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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Canadian 88 Energy Corp. with a copy to:
Suite 700 XxXxxxxx Xxxxxxxx
000 - 0xx Xxxxxx X.X. Xxxxx 0000, 421 - 7th Avenue S.W.
Calgary, AB T2P 4H2 Xxxxxxx, XX X0X 0X0
Attn: Xxxxxx X. Xxxxxxx Attn: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000 Fax: (000) 000-0000
and:
Carscallen Lockwood
#0000, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, XX X0X 0X0
Attn: Xxxx Xxxxxxxxxx
Fax: (000) 000-0000
(ii) to DEH:
Duke Energy Hydrocarbons, L.L.C. with a copy to:
10777 Westheimer Xxxxxxx Xxxxx
Xxxxx 000 0000, 000 - 0xx Xxxxxx X.X.
Houston, TX 77042 Xxxxxxx, XX X0X 0X0
Attn: President Attn: Xxxx XxxXxxx/Xxxxxxxx Xxxxx
Fax: (000) 000-0000 Fax: (000) 000-0000
(iii) to Noval:
Xxxx X. Xxxxx with a copy to:
c/o Canadian 88 Energy Corp. Fraser Xxxxxx
000, 000 - 0xx Xxxxxx X.X. 3000, 234 - 4th Avenue S.W.
Calgary, AB T2P 4H2 Xxxxxxx, XX X0X 0X0
Attn: Xxxx X. Xxxxx Attn: Xxxxxxx X. Xxxxxxx
Fax: (000) 000-0000 Fax: (000) 000-0000
(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 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.
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(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.
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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.
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.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first written above.
CANADIAN 88 ENERGY CORP.
By:
------------------------------------
Xxxxx X. Xxxxxxx,
Chairman
By:
------------------------------------
Xxxxxx X. Xxxxxxx,
Chief Financial Officer
DUKE ENERGY HYDROCARBONS, L.L.C.
By:
------------------------------------
Name:
Title:
SIGNED by Xxxx X. Xxxxx in the presence of: )
)
)
)
)
)
WITNESS as to the signature of ) XXXX X. XXXXX
Xxxx X. Xxxxx )
)
